4 Reasons You Should Have a Board of Advisors It's an opportunity to fill skill gaps in your leadership, and get unbiased perspective on the long game.
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A board of advisors is a group of individuals who are appointed to provide counsel, advice, and support for businesses and their leaders. Unlike a board of directors, which brings with it formality, liability, and expense, a board of advisors is an informal and inexpensive way to have a group that offers guidance. A board of advisors has no formal power or legal authority — instead think of it as an informal team of experts.
All businesses can benefit from a board of advisors, but they are particularly helpful for startups and businesses that are growing. Reid Hoffman, LinkedIn co-founder, tells leaders, "The fastest way to change yourself is to hang out with people who are already the way you want to be." For many businesses, a board of advisors can serve as those people and can help to guide businesses to where they want to be. Here are 4 key ways that a board of advisors can add value to your business.
Offering an outside perspective
One of the greatest advantages that a board of advisors can bring your business is an outside perspective on important issues. Advisors bring different opinions, perspectives, and experiences than your leadership team has. They are able to look at issues like business performance, market trends, and long-term strategy through a different lens and in an unbiased way. Having this perspective can help to identify blindspots and problem areas and can be invaluable when it comes to strategic planning. As a result, the ability to get an unbiased, outside perspective from knowledgeable individuals is perhaps the key benefit of having a board of advisors.
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Expanding your business's network
A strong board of advisors can also help to expand your business's network, which is especially important for startups and small businesses. Having a well-connected board immediately expands your organization's contacts and can help you to build or expand your presence in relevant markets. Additionally, your board members can utilize connections to help with funding, establishing strategic partners, connecting with vendors, and connecting with other industry experts. A strong network is key to growing and developing your business, and a board of advisors is an effective way to quickly expand your network and to add key contacts.
Supplementing and expanding organizational leadership
A board of advisors is first and foremost there to support, guide, and advocate for your leaders and executive team. As such, they provide two key leadership benefits: They are able to fill skill and expertise gaps while also developing the skills of your leadership team.
A strong board of advisors is selected to offer different areas of expertise and experience than your corporate leadership possesses. As a result, they are able to offer advice that increases the effectiveness of your leadership team.
More importantly, perhaps, they can help your leadership build skills and become more effective. It's important that your executive team is consistently growing and developing, and a board of advisors is an effective way for your team to get the support and guidance needed to ensure that they're regularly becoming more effective leaders and managers.
Increasing your credibility with investors, clients, and vendors
Another way that a board of advisors can add value to your organization is by building credibility with investors, clients, and vendors. Having a board of advisors instantly gives your business more credibility, which only increases if you have a strong board of advisors made up of industry experts and community leaders. This can help build trust with investors and potential investors while also making customers and vendors more willing to work with you. Having a board of advisors improves your community relations and public relations and is an effective way to immediately gain credibility with key stakeholders and clients.
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Be clear about what you need and what you want to accomplish
Having a board of advisors adds value to your business in many ways and can provide invaluable support, guidance, and advocacy for your executive team. For many businesses that want to avoid the expense, formality, and liability associated with a board of directors, a board of advisors can be an informal, inexpensive, and effective way to develop a team of experts. That said, to get the most out of this team, it's important to be strategic about how it's developed.
When considering creating a board of advisors, first consider the strengths and weaknesses of your management team and work to build a board with the skills to address and compensate for some of the weaknesses. Additionally, before developing your board, it's helpful to have some clear goals about what you want the board to accomplish. Finally, going into it with a general idea of the size and structure of the board can help make this process smoother.
In addition to suggesting that it's helpful to spend time with trusted advisors, veteran sports PR and marketing executive and Columbia University professor (and member of many company boards) Joe Favorito, more specifically advises, "We always need to grow personally and professionally and the best way to do that is to have people from different backgrounds and areas of expertise around us. They can both reaffirm strategy and hopefully challenge us on next steps. It's easy to surround yourself with those who will tell you how great you are. What's better is to have people who show you how great you can be, if you open your mind to different strategies and opportunities." A board of advisors is a great way for your business to do just that.