Adding value - is an 'Adviser' or 'Advisory Board' for you?

Entrepreneurs don’t have to go it alone, and mostly recognise that whilst they may be experts in their field, there are still things they don’t know about running their business.

Having true clarity of where you stand, the current position, and how it is driving decision making, is as important as the clarity of vision. Without it setting strategy, navigating the route to the goal is just guesswork, and likely to fail.

 To do this requires one simple routine – a well structured, regular strategic meeting. Doing this as a natural part of business will mean racing ahead instead of recovering after the event. Your business will be the disruptive competitor that others fear, strong when markets turn down and stronger when the economy weakens. So, what's not to get?

Every business will be in a different stage of their growth journey, so at what point does the owner or manager recognise that an adviser or an advisory ‘board’ can be a powerful resource?

The role of an external adviser or advisory board is to ask questions that would not normally be considered or asked by a business and open up the conversation so that a company can be more strategic.  

 Advisers can also provide insight into marketplace trends, make introductions to customers, facilitate funding and suggest alliances. Other roles and responsibilities might include:

• Develop an understanding of the business,

• Give fresh insights and thinking on emerging or unfamiliar issues

• Provide “wise counsel” or “devil’s advocate” on issues raised by the owners/directors or management;

• Provide insights and ideas which can only come with distance from the day-to-day operations;

• Encourage and support the exploration of new business ideas;

• Act as a resource for owners/executives;

• Monitor business performance and challenge the directors and management to consider options for improving the business.

In order to create a high-performing advisory board, consider advisers being:

• People from industries different to your business

• People with experience based on the direction your business wants to go

• Someone experienced with larger businesses and greater revenue

• People who are willing to ask questions – not those who will tell you how to do things

Apart from those benefits already mentioned, having an advisory board brings numerous benefits to the company which may include:

• Enhancing the company’s reputation and credibility in the marketplace;

• Attracting superior employees by demonstrating a commitment to company growth;

• Identifying the most appropriate governance structure for your business

• Secure the long-term success of your organisation

• Drawing on the skills and knowledge of directors/advisers who have practical experience in growing a business;

• Advisory members may be a source of potential future directors, already familiar with the strategic objectives and key people to make a meaningful contribution early on in the appointment

If you’re considering an advisory board, it does not need to be significant in size, but can instead be made up of just two to three people and meet a handful of times a year. The members are not of themselves Directors so there are no legal or formal obligations required.

Companies must be clear on the purpose of the advisory board and what they hope it will achieve. Effective communication of a clearly defined purpose will contribute to the success of the board.  Advisory boards are generally created to focus on the big picture – to provide objective advice and contribute to strategic planning, but the ultimate aim is value creation.

 An adviser or advisory board adds value when there is open, frank and free-flowing discussion.