Situation: A company has a high-powered Board of Directors. This Board is focused primarily on company strategy. The CEO wants to create a separate Advisory Board for technical and business development. How do you create and leverage an Advisory Board for technical and business development?
Advice from the CEOs:
- Be clear on the role and compensation of the Advisory Board.
- Create a clear set of expectations to initiate the process, and refine these expectations in early meetings of the Advisory Board.
- Early stage companies often pay out of pocket expenses for attending Advisory Board meetings, plus stock options. When business development is the focus, you may want to add a percentage of any new business brought to the company by the member.
- More mature companies may add a stipend for Advisory Board service.
- Not all Advisory Board members may be compensated equally, particularly if members receive a percentage of business that they help to create. You may also choose to compensate members differently based on their experience and influence.
- Choose Advisory Board members carefully.
- Go beyond personal contacts of the CEO and company officers. Look for individuals who are known and respected within the industry. You also want individuals who have exceptional contacts and who will agree to use them to benefit you.
- Look for individuals who are highly positioned within target companies – for example a VP of Operations or of Business Development. Also look for individuals who have excellent relationships with personnel in target companies
- Be open and clear about your expectations of individual Advisory Board members. Celebrate success.
- Establish metrics that the members are expected to fulfill.
- Record commitments made by Advisory Board members and include updates against commitments as part of Advisory Board meetings, as well as updates against metrics that expected of members.
- Celebrate successes of Advisory Board members and note individual and team contributions whenever the Advisory Board meets.