The primary purpose of an advisory board is—surprise—to advise. This handpicked group of individuals serves your organization by offering expertise, experience, and knowledge to support your company and your leadership team in achieving your goals.
But simply having an advisory board doesn’t guarantee success. By first understanding the roles, goals, and purpose of an advisory board, you’ll be ready to appoint your chosen advisory board members, establish an environment where they can flourish, and begin experiencing all they have to offer your organization.
Why You Need an Advisory Board
No matter how much experience, education, or training you have as a leader in your business, everyone needs outside advice sometimes. That’s the beauty of having an advisory board at your fingertips. You don’t have to have all the answers all the time because there is a talented, knowledgeable team prepared to weigh in. You not only have your own leadership skills and expertise to guide your business decisions but the proficiency of each member of your advisory board as well.
Advisory boards bring outside perspectives, new ideas, and a broad scope of thinking into an organization. You can achieve greater representation by seeking out diverse perspectives and different cultures when naming your board members. Rely on this group to challenge—and strengthen—your approach.
As a leader, it’s easy to get stuck in the weeds or have blind spots when it comes to your organization’s weaknesses. An advisory board can help the CEO focus on the big picture, think long term, and see beyond today’s challenges. Perspectives from outside the organization can also help reduce confirmation bias among leadership.
Advisory Boards versus Boards of Directors
An advisory board is distinct from a board of directors—the biggest differences are really who uses them and how they use them. Any organization can have an advisory board while boards of directors tend to serve public companies, nonprofit organizations, or organizations where there is significant outside capital invested.
Boards of directors tend to operate at a higher level with greater governance, greater fiduciary responsibilities, and greater public visibility than advisory boards. While boards of directors are more formal in structure and processes, advisory boards can evolve with the company and operate informally.
Advisory boards tend to focus much more on the details of the business than a board of directors does. They’re also more involved in mentorship and coaching, and advisory board members support the business with industry knowledge or business expertise in areas such as technology, recruitment, or development.
The Purpose of Advisory Boards
Advisory boards generally serve organizations by supporting goals and objectives; by providing experience sharing, guidance, or expertise; and by serving as mentors. It’s common for advisory boards to aid organizations in the following areas as well:
Navigate periods of uncertainty, change, and growth
Help raise money
Challenge the company vision
Provide input on personnel decisions and team culture
Advise on industry-specific challenges or issues
Devise strategy and direction
Push for finding the best Product Market fit
Your advisory board is there to serve your organization in whatever capacity you determine, and their expertise helps you avoid the mistakes they have made. This is especially valuable for start-up businesses. Young entrepreneurs embarking on new business ventures can greatly benefit from learning from others’ failures—rather than having to experience them firsthand.
Assembling an Advisory Board
Before you assemble your advisory board, you have to honestly consider if you’re open to receiving advice. Not all entrepreneurs or CEOs want to hear that. A lot of people think that they have everything figured out or that they should be the expert on all areas of their business. To benefit from an advisory board, however, you have to have a growth mindset and be open to advice.
When identifying individuals to serve on your organization’s advisory board, recruit people with experience in what you’re doing and expertise in what you need help with. Think of your advisory board as your team of coaches. Most often they are very experienced in specific areas of your business, and they’re there to support, motivate, advise, and challenge you.
Start Learning from Your Advisory Board Today
Input from a high-performing advisory board can make the difference in whether your organization sinks or swims. As a leader, it’s your responsibility to recognize the need for external input and then assemble—and empower—your advisory board. What are you waiting for?
Questions to Consider
What are your blind spots when it comes to leading your organization?
Are you open to change and willing to accept feedback from external sources?
Could your organization benefit from outside advice and expertise?
Do you have questions about how an advisory board can help your organization? Contact me to learn more about leadership development, coaching services, and additional resources.