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It’s not the idea of an advisory board that is important – it is the implementation of the idea that determines how potent it will be in contributing to the growth of any company. Knowing is not the same as doing – and doing is the real test.
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 them up and managing the Boards is one of the most fulfilling roles that I play. It is a journey that begins with a first contact.
Often I am the first contact with CEOs who have become frustrated with the lack of effectiveness of their business development strategies and have decided to seek out another way. CEOs might read one of my articles on Advisory Boards and contact me to see if our approach could make a difference with their company. Others are referred by friends who are trying to help. However it occurs it is most often the first step in a journey that changes forever the way the CEO looks at the process of business development and their role in it.
Many of these companies already have advisory boards that haven’t been very productive. Dissatisfaction with the lack of results is often a primary driver. Mostly CEOs are frustrated by unfilled promises and are determined to find a better way. These conversations, and the engagements that have followed, have yielded a pile of war stories over the years. Patterns have emerged – here are seven of the most common reasons that advisory boards fail to produce significant value:
The Logical Imperative: Advisory boards get formed for all sorts of reasons – most of them ineffectual and some flatly unwise. In most cases boards seemed to have been formed under what I call the ‘logical imperative’. “Of course we’ll have a board! Let’s pull one together just like those guys did. Of course it will focus on advising us on technology issues – or management issues. It will be like a coffee clutch – a collegiate meeting of like minds. We’ll meet once a month – or (somewhat later) once a quarter. It will be great!” Well, maybe you get the picture. The point is that the founders have not thought through why they are forming the board before they form it. For the most part they have not even thought through the proper mission of such a board. Most have no real experience with a highly productive board and end up doing what seems like the logical thing to do at the time. It all seems so intuitive that the board seems to form itself. Many times it is a ‘peer-gathering’ group – “I’ll be on your board and you on mine.” These boards are almost always net-zero undertakings at best and net-negative in the long run. Logical imperatives lead to ineffectual gaggles rather than productive, working boards.
Dangerous Liaisons: For some reason lots of CEOs never seem to put the words ‘corporate’ and ‘espionage’ together. They build advisory boards (I suspect out of a suspicion of personal or professional inadequacy) to advise them on technology and/or management issues. Over and over I come across boards that regularly see the latest and neatest advances of a company – boards that are populated with people who have interests outside their board participation. “Oh, no – I trust these people,” I am often told. These statements remind me of a story about a young woman who was visiting her spinster aunt. While they were having tea in the parlor a cat wandered in with a litter of new kittens. “Oh, aren’t they so cute,” said the visitor. “Yes they are – but I can’t figure out how they happened. Fluffy is a house cat and she never goes outside.” As she was talking a clearly virile tom cat came into the room and stretched sensuously. “What about him,” inquired the girl? “Oh no, couldn’t be Tom,” said the aunt. “He’s her brother!” I leave the reader to follow the story where it leads – but the point should be clear enough. Too late smart is, first and foremost, too late.
Who’s Minding the Store: Often when reviewing the history and mission of ineffective boards we often find that there is no clear mission for the board, no defined strategy for managing the board and no formal metrics for measuring effectiveness and performance. The CEO is nominally in charge but the board is managed effectively only during the times just preceding and following meetings. For the rest of the time it is mostly ignored with little contact between board members and the senior team. Additionally, the lack of clear, effective and enforced metrics has defined a culture that virtually guarantees little or no production from the board. Many times board members serve based on a ‘verbal agreement’ as to what the company expects from them – and as Jack Warner used to say “a verbal agreement is not worth the paper it’s written on!” It is as if this section of the company has been set aside – a kind of sandbox. Within this strange area you see leadership without purposefulness and participation without responsibility. Meetings of this kind of board tend to be rambling discussions on management style, Monday morning quarterbacking the CEO and water cooler type hashing and re-hashing of corporate gossip. Board members, who see a leadership without apparent purpose or concern with purpose, react similarly. Over time these boards tend to discuss the same issues over and over again until they all get bored and the merry-go-round just slows down and finally stops.
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