27 Nov Are you allergic to cowboy advisors?
I think it’s fair to say most entrepreneurs and business owners do not like advisors. Particularly the cowboys that come in and tell them what to do in a “paint-by-numbers” fashion, then disappear leaving the founder to do all the hard work without much real guidance.
Whether those advisors are called coaches, consultants or just advisors they’re unfortunately not exactly ‘Mr Popular’ around the traps. But it didn’t have to be that way.
Then there are advisory board members. They still have that ‘advisor’ word attached to them, so are they any different? And what role do they fill relative to the normal board of directors?
Board advisor and coach James Cowie says: “people should expect their advisory board member or their non-executive directors to make the company significantly more money than your investment in them ”
“If they can’t do that, they should fire themselves”, continues James.
So what happens with advisory boards? Is that really a board or not?
Business Connector’s Joanne Jacobs says “advisory boards provide the owner more flexibility than a formal board of directors, and it’s often a good stepping stone along the way to establishing a formal board of directors.”
“However directors should be aware that under the law you don’t lessen your responsibility or liability just because it’s called an advisory board,” continued Ms Jacobs.
Why are advisory boards the best solution for a rapidly growing business? Because at the early stage you often need to change direction more often.
David Close, Professional Director and Management Consultant in Brisbane says “Advisory boards are admittedly a hybrid – they can act as a board but can also act as individual advisers. It’s a powerful combination that is helpful for international expansion, capital raises and many other significant events in the growth of a business”
“As you nurture a business from concept to rapidly growing success, it is important to go beyond just recruiting the best talent. Scalable structures, processes and workflows have to be created to support the business and its growth. Establishing what may initially be just a small advisory board is a great way for a company to start developing such mechanisms making it ready to rapidly scale to a much bigger game,” says international management consultant Jai Gill. “Expertise is required to guide the business, particularly when funds are limited.”
Drawing on top expertise and at the same time having people with you on your journey who care beyond the next invoice or paycheck is essential to growing a truly successful business – many consultants don’t want to bite the hand that feeds them so they aren’t necessarily telling it like it is to the business owners whereas a board member has a vested interest in doing just that.
Drew Young, a top telco CFO and advisory board member remind us “the purpose of a business is to generate a return for shareholders and other stakeholders. Establishing a board is an essential part in the process of ensuring this return is generated and there is a body overseeing the decisions of the founder and CEO — not to mention being there to provide guidance and support towards success for all.”
PS. And no, there’s nothing wrong with most advisors/consultants and the work they do—however, the effects of a few cowboys are…. lingering.
Are you thinking about how to structure your board or advisory board? Join the conversation here, or, if you want a more confidential discussion, connect with me direct (email@example.com).