1. Determine the objective
Identify the business need and the challenges being faced, such as adopting new technology or going global. Advisory boards can provide timely knowledge about trends and competitors, as well as identifying upcoming political, legislative and regulatory developments. They can help you enter new markets and identify new opportunities. Advisory boards can be general in scope or targeted to specific markets, industries or issues. They encourage you to look at your own operations with an open mind. Advisory boards can also be made up of customers and prospects who provide insights into product development and marketing issues.
2. Choose the right people
When forming an advisory board seek the specific skills that suit the organisation’s purpose. Look for diverse skills, expertise and experience. Ideal candidates will be open-minded, problem solvers, fast learners, and have strong communications skills. Well-known experts or professionals can be a bonus; but not always. Getting a heavyweight on your board of advisers can give you credibility, but the talents of the group may be overshadowed by one big personality. It is important to have members who can dedicate the time to give you thoughtful advice, or are well connected and willing to make introductions.
3. Set clear expectations
When inviting a prospective member to join your advisory board, establish the ground rules about what is expected in terms of time, responsibilities and term of office. Specify the areas in which you’re seeking help. If the advisory board is going to discuss issues that include private information, members should be notified that they may be asked to sign a confidentiality agreement.
4. Remunerate appropriately
Depending on who you are asking and how involved you need them to be, compensation can vary from simply providing food and covering expenses, to equity options and cash payments; or a combination of the four. Keep in mind that your members will likely benefit themselves in a variety of ways just from being involved. Being on your advisory board might expose them to ideas and perspectives they may have otherwise missed. It will also expand their own networks and provide them with a way of giving something back to the business community.
5. Get the most out of meetings
Make the most of your advisory board’s valuable time by being well-prepared for meetings. Obtain input for the agenda, and distribute both it, and important information, well ahead of time. Choose a location that is comfortable and free of distractions. The meeting should have a facilitator/leader/chair who is confident drawing out expertise and stimulating discussion. Minutes, including recommendations on key issues and actions, should be written up and circulated to the group and relevant management staff as soon as possible after each meeting.
6. Ask for honesty
An advisory board must be open and frank, so don’t be offended if you hear things that don’t align with your own views, or challenge your approach or way of thinking. Your advisory board should not only identify issues but suggest ways of correcting the problems they identify. If appropriate, encourage members to tell you about their mistakes so you can avoid making the same ones. You can learn a lot by finding out what others have done wrong, and how they bounced back.
7. Consider alternative methods of feedback
Getting the entire board together on a regular basis may not be possible. Instead, meet or have conference calls with specific members about topics relevant to their expertise as needed. E-mail and group messenger services are a great way to reach everyone and have them respond at their convenience. The group could also have access to a file sharing facility.
8. Respect contribution but accept advice at your discretion
It is important to actively listen to the advice and feedback of the advisory board. Sometimes, a business owner or executive is so close to an issue, they cannot assess it objectively. Respect all contributions, but keep in mind that this group is not a corporate board, so you are free to choose the ideas that work for you. Ask yourself if the suggestions work for your company and if they sit well with you, then make a decision.
9. Keep everyone up to date
Maintain your advisory board’s enthusiasm and commitment to the business by including them in regular updates that highlight company news, achievements and challenges. Extend invitations to any internal or external events that may be of interest. Remember that these people are advocates for your business.
10. Replace ineffective members
If you realise an individual is not right for an advisory board after they have commenced in the role, you are free to remove that person from the group. Some individuals may not fit with the group dynamic, or may no longer be able to commit the time required to the advisory board and its activities. Unlike a board of directors, advisers can be replaced without legal issues.
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