Building a Personal Board of Directors
Whether you’re in big business or an entrepreneur, you need advice from time to time. External perspectives can be incredibly valuable. They’ll round out your thinking, help you work through complex problems, and identify new opportunities for growth.
Unfortunately many of us don’t have a formalized group of advisors – we simply pick up the phone or stroll by the office of anyone who will listen. That construct is only partially effective. The advisor may not have time to chat. They might be unfamiliar with the issue you’re dealing with. They might not even care to help but you’ve imprisoned them for 30 minutes with your plaintive “can you please help me?” request. The result? You get suboptimal and, sometimes, even bad advice.
There’s a better way. You should create your own personal board of directors.
In the corporate world, a board of directors is composed of ostensibly wise outside senior advisors to the leadership team. Their job is to help set direction, solve complex problems, and hold the business accountable against a variety of standards. Their role is formalized (meet once a quarter, they’re compensated, they have employment agreements, etc.). There are expectations placed on these individuals both by those within the company and those outside it (shareholders, regulators, etc.).
Fortunately for you, setting up your own board of directors should be less cumbersome. No employment agreements. No shareholders. But you still need to set standards. Here’s how I use mine:
– My board is small (4 people)
– I check in with them regularly (at least every other month) for a quick call (30-90 minutes). They know I expect them to make the time and I know they expect me to check in.
– They know everything I’m working on.
– They know I expect them to push me hard either on my underlying assumptions, my prioritization, or the speed with which I’m executing against those projects
– It’s a long-term relationship. The better they understand where I’ve been, where I’m trying to go, and how I’ve performed along the way, the more robust their advice can be.
The result? I’ll offer a few examples of advice I’ve received:
– During difficult pricing negotiations with a client, a board member helped me think through where my “walk away” point was. Had we not established that in a fact-based manner, I could have lost the client.
– An idea a colleague had was great. Another board member made it 10x as big and expanded my view of the possibilities exponentially. It has turned into a huge business development opportunity in my near future.
– A board member knew my emerging sales business model and created a phenomenal opportunity for me through his network.
– A board member helped me expand one of my service lines into three service lines by expanding how I was looking at the market.
Find advisors who you trust. Include individuals who won’t always tell you what you want to hear but what you need to hear. Pick people who are willing to invest in your growth and development on a regular basis.
Oh, and by the way, look for opportunities where you can become part of someone else’s personal board of directors (I’m on a few). It’s rewarding and a great way to pay it forward.
Do you have your own board? How have they helped you? What advice do you have for others who are looking to build their own advisory group?
Mike,
Great post. Most small business owners don’t do this enough. There is either a fear of disclosing too much info or the fear of asking someone to provide such critical feedback.
Phyllis
Mike,
Good stuff – backed by concrete examples of benefits. Some added things to consider:
1) Give new directors an initial “term” so that if it doesn’t jell, separation can be easier.
2) Boards – advisory or legal – need direction in their roles – providing advice and counsel, auditing the leader’s performance against plan and being there to act in a crisis. With agendas linked to your plan, the Board can be very effective.
3) Board – advisory or legal? The answer depends on your plan for growth. In either case, if you don’t listen, the best directors will leave. If your directors want no liability and no real control over you and the business, the advisory board is the way to go. If you, or your investors, want a second set of “accountable” eyes, then the legal Board route is best.
As you say, the Board can be invaluable.
John Reddish, http://www.thesuccessionplanner.com
Keith Ferrazzi shares something very similar in his book Who’s Got Your Back. You need people who will tell you the truth, hold you accountable and keep you from failing. Check out http://www.greenlightcommunity.com.
People are forming groups in cities across the nation to help each other reach their goals. I have been leading up a monthly lunch for folks in Houston, and the next step is helping members get set up with a “motivator.” Eventually, we’ll have small groups of 4 to 5 whose members can build strong, trusting relationships with each other and serve as advisory boards for each other.
Great Mike! Something all of us how have moved into the freelance or personal business realm need to development. It helps my brother…who is one of my toughest critics and a businessman with a large company…is the “president” of my board of directors. I know he means well with whatever we discuss. When I’m not doing something right…he points it out without hesitation.
Thanks for yet another great post. I really appreciate your examples – knowing that you do what you talk about. Thanks also for taking time to advise me on a regular basis – I always walk away smarter than when I picked up the phone and as I implement your recommendations – I deliver more value to my clients. It is a win for all – thanks for your support!
Thanks for all the great perspectives folks. I’ve been out of the office for a while so apologies for the delayed reply. I’m happy to hear some of you are already instituting this practice and that it’s helpful. Thanks for sharing your experiences.