6 Ways to Set Up the Ideal Advisory Board
Advisory boards are terrific for entrepreneurs on many levels. They're useful in providing an objective, third-party viewpoint and reality check on leadership matters, and in filling in knowledge gaps in your organization. Well-placed advisors also bring their credibility and substantial network to new businesses and play an important role in helping them gain momentum.
A functional advisory board should operate as a seamless part of your culture rather than a group of outsiders you happen to assemble periodically. Here are 6 things to keep in mind as you create and solidify your board.
Ideally, your culture will be one in which you pay people fairly for their work. Advisors are no exception. The most common way to compensate advisors is to share a percentage of equity, which can range from 1 to 2 percent depending on the level of involvement. Put all agreements in writing, and while you’re at it, have your advisors sign a nondisclosure and an indemnification clause so they aren’t liable in any business-related lawsuits.
You will get the most value from your advisors if you're honest with them upfront. That means opening your vest about your business’s challenges—cultural and otherwise. Lay out your business plan or short- and long-term goals. Share how you think each particular advisor might be able to help and solicit their feedback. Hopefully, you and your advisors overlap on the most critical values and philosophies.
Assess Cultural Fit
Ensuring that advisors fit seamlessly into your organizational culture is just as important as it is for leaders and employees. Before they sign on, provide all potential advisors with as much written documentation on your culture as possible, and if you're already using an assessment in-house, perhaps adapt it for advisor candidates.
Delegate Board Management
A well-run advisory board will operate like an integrated extension of your business, and this means someone has to spend a significant chunk of time doing the organizational heavy lifting. Advisory board tasks can easily add up to a full-time job, so don’t be afraid to outsource or delegate the task if necessary. Just make sure whoever takes over understands your culture and the advisory board’s role in it as well as you do.
Publicize Your Board
Work with your communications team to craft culturally appropriate internal and external messages announcing your advisory board and its activities. The advisory board should be a part of all companywide initiatives and marketing materials, including your website and social networks.
Members should convene regularly with your leaders so everyone is working in lock step. And finally, just as strong culture in general requires ongoing effort, so does a vibrant advisory board. Keep semi-annual gatherings on the calendar and set up systems for back-and-forth communication between members.
Should you find out too late that an advisory board member is not the best fit for your culture, don’t despair. It happens. If the person is influential, it’s probably not worth it to dismiss them. Rather, consider how their presence might contribute positively to your culture in a less conventional way, or reduce their involvement so clashes aren’t obvious.
Board Member Equals Mentor
An advisory board can offer many benefits, from advice on research and development, organizational structure, investment opportunities and lead generation to tangible ROI such as reduced costs and increased productivity. The right advisors will tell you honestly when you’ve screwed up or are about to screw up. They’re simultaneously responsible for nurturing your business and mentoring you as the chief—and that’s priceless. Now, to make it work, you just have to be certain that your culture supports them.
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