Is a Formal Business Advisory Board Right for You?
Advisory Boards aren’t right for every business or every stage of business. But growing a company is challenging and often you need you need, external, independent help!
The strategies, thinking and sometimes even team members that got you to where you are today, won’t necessarily get you to where you want to go. And you can’t be an expert in everything. A formal Advisory Board can help you if:
- You’re facing some major strategic decisions or changes in direction and want to raise the quality of dialogue around your options
- You’re thinking of stepping back, or stepping out and need to prepare the business for an exit
- Your team lacks the experience to develop the growth strategies that will allow you to tackle your next growth horizon
- Building organizational foundations to enable scale is outside your comfort zone, skillset or interest
- You’re considering taking on some investment to take chips off the table or to accelerate growth, or both
- You’re experiencing rapid growth and you want to maximize the opportunities available to you
- You’re considering developing a new product, service or business model and want to reduce the risk of wasting time and money
- You need to digitize your offerings or use technology to transform your business, but aren’t sure where to start
What are the Benefits of a Formal Advisory Board?
Business owners and executives often comment that by having an Advisory Board, they:
- Are spending more time working on their business, rather than in it
- Value having their ideas, perspectives and strategic options road-tested and constructively challenged in a judgement-free environment
- Are making better, more-informed strategic decisions
- Accelerating towards their financial goals faster
- Enjoy their business more
- Waste less time wondering which is the right, or best way to turn next to achieve their goals
- Save money by not wasting resources on strategies that aren’t a good fit for them
- Experience less stress as a result of knowing they have an expert team there to support them when they hit tough challenges
- Are spending less time putting out fires as they’re getting better at prioritizing, delegating and leadership generally
Who Aren’t Formal Advisory Boards For?
A Growth Board might not be for you if:
- You’re uncomfortable having your ideas rigorously challenged by passionate experts who speak frankly
- You’re not predisposed to taking real action or making changes in order to move your business forward
- You’re looking for people to lend their credibility to your existing business for the benefit of staff or external stakeholders only
- Your business is engaged in legally or ethically questionable activity
- You’re at risk of insolvency
If this is you, you’re not likely to get value for money or a return-on-effort in building a formal Advisory Board. You may want to consider a Consultant, CFO or other expert who’s a better fit for your immediate needs.
How Does A Formal Business Advisory Board Work?
The principal purpose of establishing a formal Advisory Board is to get the independent thinking partners around you who will provide quality, non-binding strategic advice to help you grow, manage or transition your company. They’ve got your back, they work for you and their sole intention is to see you succeed.
Here’s what a best-practice, formal Advisory Board looks like:
- It’s made up of you as the Founder(s), a Certified Chair, usually 1-2 additional Approved Advisors and from time-to-time key leaders from your organization
- You appoint the Chair, and the Advisors
- The full formal Advisory Board meets with you quarterly and you meet with the Chair in the intervening months
- Strategic priorities for the business are explored, discussed, debated and you walk away with insights and actions from each session with your Chair and full Advisory Board meeting
- It takes as little as 30 days to get your formal Advisory Board established and you’ll then generally keep the structure in place for 18 months or 3 years depending on your goals and strategic priorities
- Your Chair’s job is to provide advice and mentoring in the 1:1 sessions, help you establish the formal Advisory Board and act as both Facilitator and Advisor in your Advisory Board meetings . Your job is to prepare properly, actively participate in the process, take action, reflect on progress and ensure your internal team are working on the right priorities to help you achieve your goals in the shortest possible timeframe
How Is A Formal Advisory Board Different From A Board Of Directors?
Advisory Boards aren’t better or worse than Governance Boards, they just serve an entirely different purpose.
Some of the key differences between formal Advisory Board and Governance Boards are that formal Advisory Boards:
- Are problem-solving oriented, not decision-making oriented. They don’t require you to give up any decision-making control or equity. The decisions about what to do with the advice is entirely up to you
- Don’t make any capital allocation or budget decisions that influence how you run your business
- Aren’t forever. They’re generally in place for up to 3 years
- Are flexible. Whilst it’s likely that you’d maintain continuity with your Chair for the full duration of your formal Advisory Board, your Advisors can be interchanged along the way if your strategic priorities change
When you establish a formal Advisory Board, your first step is to find the right Independent Chair. That Chair works with you 1:1 on a monthly basis, with other Advisors joining in for the quarterly Advisory Board meetings. The Chair therefore wears three hats; Mentor when working with you 1:1 and both Chair and Advisor in your Advisory Board meetings. As a result, finding a Chair that is a good fit for your style, objectives and challenges is the first and most important step.
If you’re considering working with Tom Adams, you’ll want to have a deeper conversation to assess whether he’s a good fit for your needs. Tom holds the Certified Chair designation from the Advisory Board Centre. From its home base in Australia, the Advisory Board Centre is the leading professional body globally, improving the advisory board sector through research, best practice frameworks and certifications.
Fees for a Formal Advisory Board
Your fees for engaging Tom Adams as your Certified Independent Chair for your formal Advisory Board are $3,500 per month. Each Independent Advisor will generally charge between $2k and $4k per quarterly Board meeting. This means your total annual investment will be $40,000 for your Chair, and $8k-$12k per additional Advisor. This total investment of $56k – $75k if you engage Tom as an Independent Chair plus 2 independent Advisors on your formal Advisory Board, compared to $100k-$250k for a Board of Directors structure. Again they serve different purposes so are not an apples and apples comparison, but it gives you a sense of the comparative investment parameters.