Sounding Board

We are in times where operating a business has become increasingly complex. This complexity comes from both an abundance of opportunities and much higher levels of risk. Making the right business decisions today is more important than ever, and a business’s tolerance for mistakes at all levels (processes, products, and people) is lower than ever.

As I have traveled around the country and observed companies big and small, I have encountered many business owners who are operating on their own, with only a mirror to help them see their business. While seeking advice and direction from within your company is valuable, in today’s environment getting an outside perspective can be priceless.

After years of experience with advisory boards both within and outside of the remodeling industry, I have identified several “themes” that can help anyone who is considering forming an advisory board or trying to improve an existing one.

Commitment

Think long term, not short term. An advisory board is dynamic. It grows and changes over time. Like many things in life, if you think of it as a five-year effort, it begins to look different from a one- or two-year experiment.

Relationships become more meaningful and the returns are greater if you let the advisory board evolve and grow along with the business that it serves. Lack of long-term commitment and vision can cause an advisory board to disband, wasting most of the previous investment in time and energy. To guard against this, it is also important to keep the board’s activities and agenda relevant to the times.

Diversity

Get the board member recipe right. I agree with the natural tendency to select board members whose opinions and successes you respect and admire, and to choose those people with whom you like to hang out.

But I also like to think about the board blend. Most successful boards include a mix of individuals with expertise in sales, marketing, finance, consumers, and general business.

The successful board blend also includes different dispositions. Some members may be more conservative than others; some may be more relationship-focused than analytical; some may be more energetic than low-key. All of these factors need to be considered in finding the right blend.

Consider also the size of the group. You may want to begin with five members and add more as the group evolves. After a couple of board meetings, you will be able to see what is missing or redundant. Then you can solicit help from the members to add the right people.

Mutual Benefit

Make it a win-win. Expense reimbursements and honoraria aren’t the only ways to compensate board members. More important is appealing to individual board-member interests. That could mean providing members with plenty of time to network and share their business interests, or bringing in a speaker to addresses a subject of broad interest both to your business and the board.

The advisory board needs to look forward to each meeting and find something rewarding in it. The more you accommodate member interests, the more you can expect in return. Once engaged and “deputized,” board members will begin to act as advisers outside of scheduled meetings — it is like another team dedicated to building your brand and improving your business.

Creating and maintaining advisory boards gets easier with experience, but the first time you attempt it can be especially difficult. To make sure you get started on the right foot, consider picking as your first board member someone who has experience either sitting on or putting together advisory boards. The initial effort you put into choosing the members and providing the board’s mission will pay dividends over time.

—Mark Richardson is the author of How Fit is Your Business? and co-chairman of Case and The Case Institute of Remodeling; mrichardson@casedesign.com , 301.229.9580.