Late last year, I led a working session of sixteen advisory clients – all but one of them managed in excess of $1B in assets (with at least two firms north of $2B in AUM). I was more than a little surprised to learn that not a single one of them had a professional advisory board (not even an informal one).
I’m not talking about a client advisory board. That’s a different animal – focused on relationship building, networking, and client service. Instead, I’m referring to a trusted source of business insights and advice from other entrepreneurs who’ve experienced the same or similar issues, challenges and concerns; a genuinely valuable sounding board for when you’re doing your SWOT analysis and long-term planning.
When you reach a certain size (whether organically or acquisitively), there’s a professionalism of the enterprise that needs to occur in terms of strategic thinking and governance. Not that you haven’t had to deal with those issues in some fashion already. But talking to other successful business leaders about how they’ve addressed a range of challenges related to people, processes, profitability, capacity, scaling the business, driving greater value for clients and improving the client experience can yield some fascinating and invaluable insights.
Anchoring a powerful vision
As a CEO, as you scale and grow your business, you want to anchor a powerful vision that allows your team to feel good about the progress you’re collectively making towards achieving it. But how do you communicate that in a structured way? Even if you don’t currently have a professional advisory board, it can still be a valuable exercise to sit down with your team and prepare a board presentation that addresses the following three topics:
- What are the previous quarter’s highlights? Reflect on your successes from the past quarter. Why was each one important to you and your team? And how will those achievements help you going forward?
- What are the crucial conversations that you need to have? What are the issues and opportunities that are on your mind right now as a leader? How do you plan to capitalize on or manage through each one? Why are each of these issues or opportunities important and what insights from others might help you address them? (e.g., Do we have the capacity to make a successful acquisition? Should we allow a key contributor to buy into the business and how do we do that?)
- If you were to make a Board Report on the state of the business and the state of the team, what would you say? In 400 words or less, try to clearly articulate your vision and your plan, the progress you’ve made, the progress you expect to make and the challenges and opportunities you anticipate.
At some point, being an entrepreneur can be a lonely existence. Perhaps you’ve never felt a need over the years to have a board. But it’s during times like these – when the unexpected and unprecedented arise – that the insights and experiences of other business leaders can truly be invaluable in helping to steer your business through turbulent waters. And if building your next generation of leaders is an ongoing concern, some form of advisory board can be an invaluable tool in teaching others how to lead effectively and be accountable.
Ultimately, the value of a professional board is all about maintaining a constant entrepreneurial mindset and creating structures to review the direction you’re headed and your progress towards that destination every 90 days.
Coaching Questions from this article:
- Who do you currently turn to as a sounding board for business advice, counsel and feedback on matters of strategy, governance and profitability? How might you add more structure to improve the frequency and quality of those interactions?
- What actions can you take to better anchor your vision for the firm’s future, and begin to institutionalize strategy, policies, processes and decision-making?
- If you had an hour to sit down with a leading Fortune 500 CEO, what are the 3-5 questions you would most like to ask to gather insights that could help guide your business going forward?
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