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Most CEOs have had experiences with building and managing Advisory Boards – many have had one of more at their disposal. But much of that experience has been negative or neutral – in many cases Advisory Boards tend to be mostly window dressing. I have developed a new approach to the design, population and management of these boards – an approach which turns them into very potent business development resources. My book – Business Development Turbo-Charged: Advisory Boards as Business Development Engines – describes in detail how this is accomplished. In this article, I would like to focus on some of the ancillary benefits that these boards bring. In what follows, I will be talking about Advisory Boards as described in my book – not as they exist in their various and less effective forms.
In addition to driving revenue, Advisory Boards represent a deep pool of experience in growing and managing businesses. Individuals who should appropriately be placed on such Boards for their abilities to help management win more business also tend to have a history of successfully building and managing large companies or organizations. Some of this experience may be in the commercial space while others might have come from the military or senior government service. But the experience is relevant either way. So the first benefit that an Advisory Board brings – long before it ever targets its first piece of business – is the development of a series of mentoring relationships. As the Board begins to settle in, these relationships will begin to develop. The principal beneficiary of this process is the CEO … but other senior members of the Team (particularly the head of business development) also gain support and access to pools of wisdom and experience that it would be difficult for the company to buy outright.
Mentoring relationships are hard to form in this post-modern era. Many CEOs that I come in contact with have never developed one – although all of them have expressed a desire to have mentors. The Advisory Boards offer the opportunity for these mentoring relationships to develop. A Board represents a group of senior executives who are willing to share their experience, judgments and recommendations. This kind of mentoring can be particularly valuable to a CEO who is trying to grow his business but may not have the decades of experience that will be found on the Advisory Board. It has been my experience that each senior team member finds benefit in these mentoring relationships. In addition to the CEO, the head of business development receives invaluable advice; advice which would cost the company tens if not hundreds of thousands of dollars
Learning How To Win: During the first meetings, board members tend to be focused on the management tea and the company organization and resourcing. Remember that they have decided to put their reputations on the line for the company – and their first order of business is to make sure that that reputation will be enhanced rather than degraded. They will want to make sure that the company they have affiliated with, and risked their reputations on, takes the necessary steps both in organization and resourcing that will allow it to take advantage of the opportunities which board members can make available.
The initial series of meetings invariably focuses on the issues of resourcing and organization. Management is pressed to adopt best practices in corporate governance and resourcing. Over time, there tends to be a reduction of expenditures in the purely business development area and an increased emphasis on proposal development, capture team resourcing and management and red teaming. There also tends to be an improved focus in the area of marketing and the targeting of new areas for business development. The Board forces management to focus on the tactical problems of generating revenue. I have watched as management teams – which were addicted to high-level discussions about markets and strategy – were taken out behind the proverbial woodshed. One of the greatest gifts that an Advisory Board can give a CEO is to teach them that business is about doing business – not talking about doing business.
As a result of working with the Board, the management team develops a sharper understanding of what it takes to win, of what is truly excellent and what is merely good – the team raises their standards and takes a giant step in the direction of becoming a truly professional team.
Playing With the Pros: Another ancillary benefit is that, through the Advisory Board, senior management is brought into direct contact with senior decision makers and gate keepers. Board members tutor the senior team on how to approach these senior decision makers – helping them ‘up their game’ to meet much more stringent standards. Often these lessons are forcefully delivered. Advisers can be quite direct in outlining their expectations. They will insist that the company meet the standards – deliver on time and above requirements – and show that team members show themselves to be professionals. I once sat in on a session that a board member had with a Senior Vice President of Business Development. The lesson could be described as ‘How to talk to an Admiral’. Although it had to be repeated several time, eventually the SVP mastered the technique.
Learning to play with the pros is a lesson which can take decades to sink in if a CEO tries to learn it on their own. An Advisory Board can shorten this learning process dramatically – and guide the team members along the path towards professional status.
Forced Evolution: In the company which has reached the high teens in run rate, the CEO may still have maintained the habit of acting as chief-of-everything. In order for the company to grow, this CEO must reinvent himself and serve his creation in an entirely different manner than was adequate during the early stages. So much of the activities which filled a normal day must be offloaded. An Advisory Board can accelerate this process and help the CEO navigate through a stressful time.
The CEO must become the company’s senior business development officer. With the board in place, anywhere from half to three quarters of his time must be cleared for dealing with business development. That means the CEO needs to delegate significant responsibilities particularly in areas which are better served by others. For some CEOs this need can produce real trauma. Board members who have managed the change in themselves are uniquely qualified to help others through the same process.
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