An Advisory Board, or Board of Advisors, is an affordable, low risk and cost effective arrangement and can be the difference between business success or failure.
It is a known fact that too many small businesses fail. Not as a result of lack of effort, will, grit or taking risks.
The problem is that most small business owners do not have the complete skillset to build a business. Struggling to know what are the right things to do. Wasting valuable time involved in trying to learn skills that they should outsource. At the same time ignoring important parts that they don't understand!
Spending hours, days and weeks tangled in the weeds. While the business slowly collapses.
So, what’s the solution?
A Board of Advisors or Advisory Board
A Board consists of selected members having a defined role and focus. Their primary role is to help the founder, the owner or the leadership team make better decisions. With this in mind the chosen members will have specific and complementary skills and knowledge.
Besides facilitating business decisions they also hold the founder, owner or leadership team accountable. Both for what happens and what doesn't happen.
The Advisory Board are not shareholders or investors and hold no real power in the business. Yet their input will make a critical contribution to the business success.
John Francis, or better known as "Johnny Franchise", has spent a lot of time and energy helping to set up and organize advisory boards. These were for franchisors and founders, or brand CEO's, as well as for franchisees.
Francis says “I see the power and value that comes from these advisory boards builds a tremendous advantage”.
It is an underestimated or underutilized concept for helping founders, owners or CEOs make better decisions on a timelier basis.
The Board of Advisors forces focus on issues that matter. Whether this is strategy, prioritization, people, risks, opportunities or infrastructure. It ensures that there is accountability and the delivery of agreed action and results.
The Board brings a structured accountability process.
This is not an overnight solution as it takes time and it takes effort.
John states "I see the value. I've seen it before, putting a board in place and then looking at it a year or two later after a board has been in place." The transition or transformation of that business is effectiveness.
Eliminating Founders Syndrome
The Board also goes a long way reducing the drama and the frustration that happens when a founder gets in their own way.
An unconscious state called "founders syndrome". A real problem where the founder thinks they need to control and touch and handle every single thing that that happens in the business. This results in them becoming the bottleneck. They can also generate a lot of frustration throughout the operation. Which can drive away high performing staff because they're not allowed to do their jobs.
The Advisory Board will reduce the threat of an over controlling, bottleneck owner. They will simplify the strategies, the execution and the accountability and unleash the power inside that organization.
The Role of the Advisory Board
The Board members provide perspective and views on issues that the founder may not see or be aware. It should be emphasised that while these Boards are informal they should have the trust and respect of the business owner.
This structure should be used in all phases of a the business life cycle from initial business planning and justification to the sale of the business.
They are not a bunch of friends but skilled professionals hand-picked to add value.
Advisory board members should leverage their knowledge and network. Providing other vantage points and viewpoints. Think about their role along the lines of that of a non-executive director.
Advisory Board Performance
As this Board is a value adding element of the business it goes without saying that members will be remunerated.
Their performance and value should be evaluated and members changed to suit the circumstances. Within a year or two the Board should have made a significant impact on the business performance. With a structured operation with all the required internal workings in place. Resulting in a business delivering consistent and exceptional performance.
Francis says "It's very satisfying to see the impact of setting up the board and then serving on the board. But really rewarding is looking at the results a year or two later. Saying to the founder, “now look at your company, look at what you've done here”. Say we turned the founder into a CEO."
The Advisory Board is a mechanism to help make this happen. It is an affordable, low risk. high impact performance multiplier. With high potential for positive impact.
The result of having an effective, competent Board of Advisors will be to have more successful small and medium sized businesses. Avoiding the financial and emotional pain that goes with a failed business.If you think that an Advisory Board will benefit your business or you would like to discuss this concept further then please contact me.