Many of my leadership coaching engagements focus on the challenges that expansion brings. Some of them come because of a new direction in corporate strategy. One of the most daunting of these shows up when I am in the process of building an Advisory Board for a company.
In my recent book – Amazing Pace – Turbo-Charged Business Development – I described how an Advisory Board – when correctly structured and managed – can significantly accelerate the growth rate of a company. The process involves bringing together a number of very experienced individuals who are widely connected in the company’s space. These boards are the by far the most productive approach to driving the run-rate that I have ever found. However, they can bring challenges to a CEO and senior team.
The kind of advisers that I put on these boards is not the usual suspects – the ‘rent-a-name’ types who long ago ceased to work for a living. In Washington DC, where I live, there is no shortage of these. Most of them are making a living as consultants – living off their reputation and past career. I encounter company after company with unproductive Advisory Boards – and, in many cases, I have to tear them down before building a new one. The advisers who sit on my boards, are:
- Experienced in the company’s space
- Very well connected
- Credible as advocates
- Good generators of business opportunities
However, two other characteristics set them aside from the pack:
- They are prepared to be advocates for the company – as opposed to simply providing introductions and general references – the distinction between introductions and advocacy is essential to a well functioning Advisory Board
- They understand that they must accept an agreement with the company which has production metrics – ways to measure how well they are performing – in fact, the really good advisers insist on metrics
The first challenge to the senior team comes when we are recruiting members for the board. The CEO in particular is often hesitant to insist on metrics. Many candidates – being used to a more lax regime – expect that they will not have to be subject to any at all. The situation is difficult for many CEOs because they are negotiating with individuals who have much more experience and a much greater reputation. The test comes when the interests of the company demand the metrics and the CEO is hesitant to insist on them. Agreements, which are specific in one way and imprecise in another, are often the result.
A second set of challenges to corporate leadership comes when the board begins to go to work. Many CEOs have great difficulty in pushing Advisers for production. One client said to me “I can’t push these guys. It’s like shouting at Mount Rushmore!” However, the production of the board depends on the ability of the CEO and senior team to keep Advisers focused and productive. The senior team finds itself in a bind – either they stay in control of the company or cede it to the worldview of the Advisers.
One of the focuses of my leadership coaching engagements is the way a client reacts to major changes in operations or resourcing. An Advisory Board brings both types. The cost of indecisiveness or feelings of inadequacy can be very high. If an Advisory Board, populated by a group of very high profile individuals, proves ineffective, the company’s brand will be negatively impacted – sometimes in very substantial ways. If the company’s Advisory Board does not produce significant volumes of new business, management will be seen as ineffective in producing results even when they have major resources at their command.
A good Advisory Board involves:
- Advisers who are actively engaged as advocates for the company,
- Playing a critical role in bringing in new business,
- Opening important doors and supporting the developing relationships as the company’s team does the selling, and
- Significant earnings by the Advisers based on the levels of business that they help bring in.
The leadership challenge is to see that the efforts and commitment of resources accomplish just that – one of the greatest leadership challenges that any CEO will ever face.
© Dr. Earl R. Smith II