You’ve recruited three outside directors to staff your new advisory board and bring fresh, unbiased perspective to your growing enterprise. However, without clear expectations and a disciplined process, boards can easily become mired in routine, and even dysfunction. How will you engage board members to keep them invigorated and contributing to maximize your return on investment?
The helping trap and how to avoid it
New board members are often in a hurry to demonstrate value. You’re compensating them for their sage advice, or so they think. In their eagerness to help, they may throw out ready-made solutions that worked in a different setting, without fully understanding the dynamics at play in your business.
What board members often don’t realize is the greatest value they can provide stems from their ability to ask penetrating questions and offer astute perspectives and insights that ultimately enable you to solve your own problems. To be truly helpful, they must learn about your industry, the drivers of the markets you serve, key customer segments, the economics of your business, the growth and profitability strategies you are pursuing and the essence of your competitive differentiation. The board should have a deep understanding of your ownership aspirations and objectives for the business, financial targets and core values. In addition, you must take the time to educate advisors about your operating model, company culture, talent mix, management structure and key personnel. The best way to channel the heartfelt desire to help is to give your board substantive issues to work on. Never present an issue as a “done deal,” but rather as a question that invites open-ended inquiry. You will discover that a robust, exploratory discussion often results in a redefinition of the perceived problem. While a typical agenda will include a review of recent financial performance and operational updates, you’ll want to spend the bulk of precious meeting time on strategic issues, leadership challenges and organizational or operational questions.
Role clarity: governance vs. management
It’s important that you and your advisors are aligned in terms of board purpose and focus and the rules of engagement. New board members may be tempted to stray from their governance role into operations, because the territory is familiar, or because they lack confidence in management. The result is an unhealthy friction between directors and executive leaders. The advisor’s role is to question, challenge, monitor and evaluate, advise, guide and support. The best board members see themselves as stewards of the enterprise, rather than super managers.
Maximize meeting value
An advisory board is a working board, so design the meeting accordingly. Consider developing an agenda template, which you can populate with current topics prior to each meeting and include in the board meeting package. The standard format will help to establish a predictable flow and facilitate time management. Every element of the agenda should have a clearly articulated purpose and, in some instances, a desired outcome, so board members know what’s expected of them. Are you informing or educating, looking for perspective or guidance, asking for input, options or recommendations?
Make sure you have at least one “deep dive” topic on the agenda. Reserve time for updates to “close the loop” on issues previously discussed. This will help to build continuity between meetings and between the board and management. Conclude the meeting with suggestions for improvement and a solicitation of topics for future board meetings.
Build camaraderie
The multiplier impact of a truly collaborative board, operating as part of a larger team with owners and managers can be profound. How do you foster the kind of synergy that enhances value?
First, recognize that the advisory board is not just a business entity; it is an interpersonal experience. Include social and bonding elements in each meeting. Open the meeting with personal updates, perhaps over lunch. Vary the topics. Plan one social event a year, like a cocktail reception including key management personnel. Introduce owner spouses to the board. Include board members in celebrations of major company accomplishments or milestones.
At least once a year, conduct an informal evaluation of board process, effectiveness and accomplishments. Ask members privately about their level of personal satisfaction with their participation and contribution and obtain their input on areas of concern.
Finally, find a way to communicate to your employees the value and professionalism the board brings to your business.
