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We all need help to convert data to information, then information to knowledge, knowledge to insight,
and insight to wisdom.
Ask for help from those who you think who have special knowledge and do it well. These are people
who know how to sort through all data, get key information, add perspective, and
integrate that new information within a whole. With perspective,
(seeing past-present-and-future as a whole), out of this new knowledge
come to insight, and with insight you can create value and then an abundance of value. This is the path to make the best possible
business decisions.
When you execute in this manner consistently, you
develop a successful business and a little bit of wisdom.
A Board of Advisors is a key to help you on your path to business success and
wisdom.
At Small Business School we strongly recommend that
every business have a board of advisors and we also recommend that this board
have people who are over 70 and have life perspective.
Look at the show about Opportunity
Knocks and read the wisdom of Jim Schell.
Working with SCORE, he has brought small busines
owners together to be their own Board of Advisors.
A board may be as small as three or four people and as many
as eight people. The faster you expect to grow the more diverse your board
should be. Start with the wisest person you know -- even if you are just
thinking about an idea for a business, Then, add people who respect you and
want to see you succeed. Of the people who are usually most conservative --
lawyers, bankers, and CPAs -- keep them in the minority; business is about
taking risk based on your interior judgements. But don't ignore them.
Just get one each. They will give you the kind of advice that will help you
keep your eyes open and your feet on the ground.
Also, check out the resources on the WWW for building your
board:
1. Our stories about family
business.
2. Your CPA would be glad to help.This tip
from a local CPAs in Massachusetts, Moody, Famiglietti & Andronico, LLP. (MFA) would be quickly echoed by the best local CPAs in your community. MCC said, "You
create a Board of Advisors to increase your company's success and
maximize its value. An independent Board of Advisors, hand-picked by company
owner(s) because of their business savvy and successful similar business experiences, can
be a significant strategic business asset."
But before you embark on creating an advisory board,
consider your reasons for doing so and your ability to take advice from outside
individuals.
If you are of the opinion that an advisory board may provide
fresh ideas, create opportunity, and promote financially lucrative initiatives,
then start the process. Begin by selecting high-quality board members and by
establishing effective board operational rules.
Reasons for creating an Advisory Board: A Board of
Advisors can expedite the decision-making process and it can also provide a
fair-minded forum for discussion that is devoid of family or company politics.
A Board of Advisors can do the following:
- Assistance in dispute resolution over operational and
strategic issues
- A sounding board for new ideas and problem solving.
- Access to an independent benchmark on the company.
- Additional business expertise for the company.
On another level, an outside advisory board that has
suggested or sanctioned major strategic initiatives and/or significant
financial commitments may be a source of comfort. The advisory board's "thumbs
up" may give company officials peace of mind that they are following the right
course.
Selecting the Board Members:
· Avoid
choosing personal associates professional peers will be far more
objective and effective. · Select advisors who have experience in the
area where your company is headed. Because they were successful in achieving
similar goals, they can mentor your company and provide invaluable advice.
·
- Focus on candidates with diverse experience and remember
that chemistry between the owners and advisors is also desirable.
- It is unnecessary and often inadvisable to
seek advisory board members who are in your direct industry.
- Also network with other professionals such as attorneys,
insurance advisors, accounting firms, or other professionals who might provide
referrals.
Advisors are usually paid for their time and are
reimbursed for expenses. In order to provide the breadth of experience that is
needed, an ideal number of advisors is three to four.
The Role of
an Advisory Board. The board's mandate is clear: to increase the company's
success and maximize its value. To do so, it needs to be in tune with the
company's needs and to work actively toward realizing the company's goals.
Advisors need to get involved with the company and share their experiences in
such a way that benefits the company and its shareholders. They can assist in
seeking a resolution to difficult issues and use their individual strengths to
focus on the company's bottom line.
Effective Meeting Rules.
How will the advisory board be run? Many effective advisory boards use the
consensus approach instead of formal voting. Consensus promotes dialogue and a
team approach to problem solving and creating business plans. Listing all the
decisions made with time lines for implementation at the end of each meeting is
not only efficient, but it facilitates the process. So does setting the agenda
for the next meeting prior to adjournment. This process is particularly
motivating for the management team since no one wants to report at the next
meeting that he or she failed to follow up on an initiative.
Interview your local CPAs and ask them what kind of assistance they could give
you in helping to evaluate both the need for and the benefits of instituting a
Board of Advisors as well as in identifying and selecting appropriate
candidates. |