Harnessing the experience and expertise of a trusted team of advisors can help boost your company’s growth. But not all counsellors are created equal. The best people are always in demand, and might take some convincing to sign on to your advisory board.
Recently, we asked business owners and experienced experts for their advice on choosing and attracting great advisors. Here are some of our favourite responses.
Put it together early
“Advisory boards are more popular with mid-sized firms, but even smaller ones can benefit. If you’re generating revenue and have a vision for your business, you’ll find people interested in helping you. We did a study with Statistics Canada where we compared the performance of companies for three years before they created an advisory board, and three years afterward. On average, their sales increased by 66%. The results are really telling. Having an advisory board gives you a better vision of where you want to go, and will make your business perform better.”
—Pierre ClÃ©roux, VP research and chief economist, BDC, Montreal
Consider only those you trust
“The first person you need to find is the chair of your board. That’s your right-hand person. You work with them to put together the rest of your board. They don’t even need to have skills in your business—just your trust and your confidence. For the other members, sit down, list every candidate and rate them on a trust scale of one to 10. The nines and tens are the only ones you consider. As for what you should expect from them, they should at least respond to emails. If that doesn’t happen, I’d have a chat with them really early on. It’s harder to determine if they’re making a real contribution. You don’t want to have someone going to the meetings just to blabber. You want them to be working really hard to make a contribution. Every few months, assess the value each person brings.”
—Greig Clark, owner, Horatio Management Inc., Toronto
Offer them something in return
“You should speak to potential advisors the same way you speak to potential investors, except you’re not asking for money. Your job is to articulate to a potential advisor that you have an understanding of where to take the company. From there, they’re going to try to figure out if you’re a good entrepreneur or a bad entrepreneur. You should offer a specific value proposition to that potential advisory board member. More often than not, that’s done through offering equity in your company. The amount can vary between four to eight percent for the entire advisory board, not per person. You want to incentivize them by giving them some skin in the game. That’s the difference between a regular advisory board member and an advisory board member who’s going to pick up the phone on Sunday morning. But the easiest thing to do to keep them engaged is to be transparent about how you’re implementing their recommendations.”
—Tom Lowden,associate director of the Creative Destruction Lab, Rotman School of Management, Toronto
Prepare to be challenged
“Creating an advisory board was a game-changing move for us because it gave us credibility in our industry. I sought out people who had expertise in the areas that we needed in order to grow. If you look at the composition of our board, the members are very well-informed people, with backgrounds in everything from IT to insurance. They’ve helped us integrate within the business community and opened us up to new networks. It’s a mutually beneficial relationship as well. Board members provide advice, but it’s also worthwhile for them as we may hire them to do different things for our organization. My advice would be not to create an advisory board for the sake of saying you have one. Create one where you’re bringing in people who have different skills than you, and who are wiser than you in a variety of different areas. They have to be open to challenging you. Our group is not a group of “yes” people—that’s for sure.”
—Connie Clerici,president and CEO, Closing the Gap Healthcare Group, Mississauga, Ont.
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MORE ADVICE ON GETTING GREAT ADVICE:
- Where to Find Great Advisors »
- The 5 Advisors Who Cripple Companies »
- Get An Advisory Board, Triple Your Sales Growth »
- The 4 Advisors Who Could Save You from Yourself »
- What Makes a Great Mentor? »
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