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Creating Your Advisory Board
Just like everyone else, once upon a time - luckily well before having started my own gig - I too asked the question: “Why do I need advisors at all? I know what to do.” Then a mentor of mine asked me, “Tom if you know what to do, how to do it and that it would make a hell of a positive impact on your life, but you have not done it yet, there are two options. Either you are an idiot or you are a liar.”
In my case I was a bit of both. I knew what to do but did not fully understand how to do it.
A very important and potent line of defence against bad decisions and a line of offence to implement good decisions is a board of wise advisors. Here I am talking about a more informal advisory board, so your lawyer and accountant should not be automatically included. They are specialists, whereas you are seeking people from different areas of business, so they can offer you a very wide range of perspectives.
These people are not partners in your business in any shape of form, but outsiders. That is important because they can bring you more value than many internal partners could. These advisors have extensive experience in a broad range of – not necessary business – skills, who can give your unbiased advice and call you on your bullshit when you are about to blindly walk into a manhole or straight under a speeding steamroller.
However there is a little problem about how most service professionals select their advisors. The first problem is that most have no advisors besides their accountants and lawyers. The problem here is that you cannot run a firm by staring at the numbers all the time, but this is exactly what most accountants do. The other problem is that both lawyers and accountants are pretty risk, sales and marketing-allergic folks. You will not be able to do anything innovative because they will caution you all the time.
Let us look at a large company that once set out to be a great professional service firm: AT&T. Who was on the board of directors? All right, it is called board of directors, but they are basically advisors too.
So, who are on AT&T’s board: A retired oil executive, an economic consultant, a retired ex-CEO of a textile company, the at that time chairman of troubled Kodak, a retired ex-Caterpillar executive, a relationship consultant, a law professor and a former CEO of CBS who was dumped for poor performance.
Nobody on the board of a technology company had technical expertise to innovate or marketing expertise to take the new innovative services to the market.
The sad fact is that most business owners stuff their advisory boards with friends, relatives, their former teachers, their kids’ teachers, dogs, cats and parrots.
Here is a Line-Up I Can Imagine as a Good Advisory Board:
* A financial specialist (this must be more than a plain accountant)
* A talent specialist. You need this expertise if you plan to hire people in the future or if you already have some people working at your firm. Someone who knows how to attract great talents and how to keep them
* A marketing specialist. It is important that you can actually sell your services. This is vital. So many service professionals are diabolical at marketing. They just want to sell, but are not willing to market their services.
* A specialist in daily operations.
* A specialist in office and administration issues
* A your own business coach.
* Make sure you only include executive level advisors, and that these people have the courage to tell you what you need to hear, not only what you want to hear.
It is also important that you can take some no-holds-barred and no-punches-pulled feedback. If one of your advisors tells you, “I think you
are full of sh*t on this issue, and this is my evidence”, what do you do?
Remember the boardroom is not for politeness and niceties. It is for brutal bone honesty. If you advisors tell you something it may hurt your ego. But if the market tells you something, it can cost you big dough, or even can send you to the wall. Business is an emotional issue and during heated discussions four-letter words can fly sometimes uncontrollably. It is just part of the process.
Using Orson Welles’s words as Harry Lime, in “The Third Man”, “In Italy for 30 years under the Borgias they had warfare, terror, murder, bloodshed—and produced Michelangelo, da Vinci and the Renaissance. In Switzerland they had brotherly love, 500 years of democracy and peace, and what did they produce — the cuckoo clock.”
Once you have these advisors, let them push you into a little bit of boardroom warfare and bloodshed, and let them help you to become a da Vinci of your field. Nobody has ever been sweet-talked into excellence. Except if your vision is to build cuckoo clocks.
Sadly many business owners would throw these advisors out of their offices, which only confirm that so many business owners do not want advisors. They want a group of people who unanimously agree with the business owner’s choice and praise his/her god-like wisdom.
The other problem is when business owners do not even involve board members in decision making. They only call emergency meetings when the ship is sinking after repeated hard blows caused by a chain if decision icebergs.
Meet your advisors 2-4 times per year at least for one (two are better) full day. You do not have to pay them a fee but paying their expenses at a reasonable resort or a restaurant is the bare minimum.
What to Discuss with Your Advisors?
Keep your discussions as strategic as possible. Then when the strategy is done, you can ask for some help on tactical issues, but the main emphasis is on strategy. Include topics like...
* New people to hire
* Market movements
* Economic trends and indicators
* Current and upcoming management issues
* Your strategy in the current and future market climate
* Competition intelligence
* Your publishing ideas and intentions
Your personal growth and life plan (Business is just a means to an end, that is, to a better quality of life. The idea is not to balance your business AGAINST your life, but to seamlessly blend business into your whole life. With balance something has to give. With blending you can have your cake and eat it too. Watch that waste line!)
The final wisdom is this: “Only the Prince who himself is wise, can be wisely advised.” ~ Niccolo Machiavelli, The Prince. You can have the best advisors under the sun, but if you habitually ignore their advice, then nothing will happen.
So, what can you do today to bring objectivity to your firm through advisors?
Start shortlisting people whom you would have on your board and explain why. Make sure you avoid the typical Multilevel Marketing (MLM) problem. MLM people only mix with other MLM people within the same company. What is the wisdom there? It looks like incest to me.
Make a list of the first three issues you want to discuss with your advisor and get moving.
About the Author
Tom "Bald Dog" Varjan of Dynamic Innovations Squad helps professional service businesses to build high trust client relationships in which they can deliver higher value at higher fees, using less of their time and effort. You can request his e-booklet “Why Most Service Professionals Consistently and Persistently Undercharge for Their Services” by emailing booklet@di-squad.com. Reach him at www.di-squad.com.
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