Assembling an Effective Advisory Board for Your Business

The Value of External Perspectives

An advisory board is a powerful asset for any business leader. These individuals are not your business partners or employees; they are external advisors whose primary role is to provide objective advice and challenge your thinking. Unlike accountants and lawyers who focus on specific areas of your business, a well-rounded advisory board offers a broad spectrum of perspectives from various industries and disciplines.

Why You Need More Than Just Accountants and Lawyers

While accountants and lawyers are essential for their specialized knowledge, they often have a conservative approach to risk, sales, and marketing. This can stifle innovation and growth if their cautionary advice is the only guidance you receive. For instance, a study by the Association for Financial Professionals found that 49% of organizations rely on their accounting and finance departments for strategic decision-making (AFP, 2021). However, to truly thrive, businesses need to balance this financial prudence with bold, innovative strategies.

The Pitfalls of Homogeneous Advisory Boards

A common mistake among business owners is to populate their advisory boards with friends, family, or others within their immediate network. This can lead to a lack of diversity in thought and experience, which is detrimental to the business. For example, AT&T's board of directors at one point lacked members with technical or marketing expertise, which is crucial for a technology company. This oversight can prevent a company from effectively innovating and marketing its services.

Crafting the Ideal Advisory Board

When assembling your advisory board, aim for a mix of expertise that complements your business needs. Here's a suggested lineup:

• A financial strategist who goes beyond basic accounting
• A talent acquisition expert to help with hiring and retention
• A marketing guru to enhance your sales strategies
• An operations specialist to streamline daily activities
• An office and administration advisor to optimize your workspace
• A business coach to guide your personal and professional development

Ensure that your advisors are willing to provide candid feedback and that you are open to receiving it. The boardroom should be a place for honest, sometimes tough, conversations that drive your business forward.

Engaging with Your Advisory Board

It's recommended to meet with your advisory board at least 2-4 times a year for full-day sessions. While you don't need to pay them a fee, covering their expenses is a standard courtesy. During these meetings, focus on strategic discussions, including:

• Hiring plans
• Market trends
• Economic indicators
• Management challenges
• Competitive intelligence
• Publishing and content strategies
• Personal growth and life planning

Remember, the ultimate goal is to integrate your business strategies with your life goals, creating a harmonious blend rather than a constant balancing act.

Taking Action

To start building your advisory board, identify individuals who can bring diverse and valuable insights to your business. Avoid the echo chamber effect, where advice is merely a reflection of your own thoughts. Instead, seek out advisors who can challenge you and contribute to a dynamic exchange of ideas.

First Steps to Take

1. Shortlist potential advisors, considering their expertise and the unique value they can bring to your board.
2. Determine the top three issues you want to discuss with your advisors.
3. Reach out to your chosen candidates and begin the conversation about joining your advisory board.

In conclusion, an advisory board is not just a luxury for large corporations; it's a strategic necessity for businesses of all sizes. By assembling a group of wise and diverse advisors, you can gain the insights and guidance necessary to navigate the complexities of the business world and achieve excellence in your field.