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When I set out to write a book about how to turbo-charge business development, I met lots of people very interested in getting an advance copy. It made me realize that making business development work is one of the primary challenges that any CEO faces – no matter what industry the company is in.
I build and manage Advisory Boards as business development engines for emerging and well-established companies. They are the single most powerful component of business development that I have ever found – bar none! The process of setting up and managing the Boards is one of the most fulfilling roles that I play. It is also one of the most subtle and complex processes that I have ever been involved in.
My discussions with a CEO or Chairman about designing, building and managing a board generally begin with an initial contact which has been the result of a recommendation by a friend or business associate. Most often the recommendation comes out of a discussion about the lack of effectiveness of the company’s business development efforts or the revolving door that has become the company’s senior business development slot. During the initial call I usually recommend that the person read several of my articles on Advisory Boards and then call back if they are still interested in talking.
I confess that I make this suggestion purely out of enlightened self-interest. I want to filter out the instant gratification types who see the process of designing, populating and managing a productive advisory board as relatively simple and straightforward. If they will take the time to read and think about the articles, I take it as an indication that there is some hope that they are serious about engaging in ways that I have found necessary in order to produce a highly productive advisory board that will drive the company’s top line.
For those who call back there is yet another hurdle. I have learned that there is real benefit in running through a meticulous description of the process in person before there is any talk of an engagement. It is important that the CEO or Chairman clearly understands what they are signing up for. Later is no time to realize.
What follows is a typical presentation in which I outline the dynamics of the process, a typical engagement focused on the design, population and management of an Advisory Board and the areas that need to be thought through very carefully before embarking on the effort. Parts of my presentation will vary with the size, complexity, scope and intensity of any engagement. But this should give you a fairly good idea as to what is involved. So join me over lunch in a meeting with John Slate – the CEO of Rocket Science, a fictional company that has been in business around a decade and is currently doing roughly fifty million dollars annually in gross revenue.
It’s not normally a monologue, but I’ll streamline it for you. For purposes of brevity, I’ll skip the initial pleasantries and descriptions of the menu items selected! But I will have a martini and do think that food is not suitably dressed without wine.
Lunch with John Slate
John, I appreciate your interest in Advisory Boards and your willingness to sit through a description of that is involved in setting one up. One thing I have learned about setting up and managing advisory boards as business development engines is that preparation is a critical part of the process. Another is that the company, and particularly the CEO, needs to have a good grasp on what is involved in addition to what impact a Board can have on the future of the company.
I’m not a golfer – never found a decent recipe for those little white balls – so I fish instead – but I’m told that a key to the game is preparation and practice. It is much the same with designing, populating and managing an Advisory Board. I want to give you a fairly detailed briefing on what is involved. Some of this may seem tedious but I have found that going through it face-to-face and answering your questions afterwards is the best foundation for any engagement.
First and foremost, I want you to understand that this is an extended, complex and subtle process. You need to come to see that because sometimes tensions arise with CEOs who are anxious to get started – want to race through the ‘getting ready’ stage and get right to the ‘getting people on their board’ part. For this lunch, we must slow down and get your mind around the process – so that you can understand clearly what is involved and the foundation that needs to be created before a board can be launched.
First we need to make a baseline assessment. Rocket Science is not ready for an Advisory Board and there is much preparation necessary to get it ready. You have built a magnificent company that is very good at doing what it does – but managing and benefiting from an Advisory Board is something else again. Building a board prior to completing the foundational work would be like dropping a Ferrari engine into a VW frame. Without a good bit of re-engineering, pop the clutch and you get a pretzel not a race car! This is what potential advisers would see John and, in our experience, it is almost impossible to get high-potential members to make the kinds of commitments that a Board requires if they see a train wreck as one of the likely future scenarios.
In the broader context, advisory boards are dangerous undertakings because the barriers to entry are so low. Any CEO can form one and most, at one time or another, try to. You could probably form one in an afternoon if you so decided. The trick is not getting a board set up it is setting up a board that is highly productive when measured against a set of pre-established metrics. In this case the metrics are focused on driving the gross revenue of your company – very easy metrics to set up and monitor – harder ones to have a board meet.
Like most CEOs, you suffer from several limitations that reduce your chances of success. First, although you are very good at the business of your business, your experience with highly productive boards – how to design, build and manage them – is limited. Second your range of contacts with potential members is limited. My experience is that you need to contact close to a hundred candidates to fill one seat effectively on a board. Finally, you are very close to the trees but need a set of eyes that is looking at the forest – a strategic view that can give you a holistic handle on the thing. An effective advisory board will impact – and place burdens on – every part of Rocket Science.
Here is something that you need to think about. We will eventually be dealing with very sophisticated, experienced, well connected individuals who have had careers that often involve building and managing businesses much larger than Rocket Science. John they know good management when they see it. They will have built and managed very successful teams. We will be asking them to risk their reputations as strong advocates for your company – reputations that they have spent a lifetime carefully building. For them this is not just a consequential matter – it will be the central matter in their thinking. In every discussion they will be looking for indications that you and Rocket Science may drop the ball – not follow up effectively on the opportunities that they can bring to the table – and they are very good at spotting those weaknesses. You will be dealing with pros at the top of their game.
Remember we are talking about building a board which will subject its members to a strict set of performance metrics. Members will be expected to produce. They will want to be sure that neither you nor the company – either through ineptness, inefficiency or poor organization and resourcing – will interfere with that performance. And John, trust me, simply saying that you won’t won’t make any difference to them at all!
One of their security blankets will be the fact that you have brought in a set of professionals – steady and experienced hands – that they trust. They have to buy into the model before we would be willing to place them on any particular board. Lots of them will have had seats on non-productive boards. Most will have decided not to waste their time like that again. I help give them confidence that the process is being approached professionally and with careful planning and execution.
After listening to all of this, you may decide to try this on your on – and if you do, mazel tov. But at least listen to what I have to say. It will help you assess the risks.
If you rush through this or do it badly, you will lose – and end up doing much damage to the Rocket Science brand. Lots of CEOs have never thought of the negative branding that resulted from an unproductive board. But it is there – and the more influential your advisers the more broadly the negative branding will spread. That’s right John, the better the people you have on your board the more pervasive the consequences of screwing up. A couple of ‘A’ list advisers and a botched capture effort can turn Rocket Science into the proverbial ‘dead man walking’ long before your know it. Even talking to very influential people has a severe downside if you haven’t done the necessary spade work first.
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