Many small businesses use advisory boards to augment their existing leadership structure.
A good advisory board can offer insights and wisdom you can't get from internal company assets. In a best case scenario, your board will be stocked with acknowledged experts from a broad range of fields and areas of expertise.
However, it's unlikely that you're going to be able to nail down the most sought-after business leaders for your advisory board. For starters, top-tier leaders have extremely tight schedules and reserve their advisory commitments to a handful of cherry-picked organizations. So the challenge becomes picking the best possible advisory board members based on the field of available candidates and your company's advisory needs.
Remember: An advisory board is not a formal governing board and its members won't have any real financial stake in your organization, even if you pay them a small honorarium for their service. The people that join your board will do so for largely altruistic reasons, so be sure to treat them with respect and gratitude.
- Expertise. Advisors should be experts in their fields. If your advisory board consists of enthusiastic but unproven professionals, you run the risk of receiving bad advice and potentially jeopardizing your company's future. Board members don't necessarily have to be captains of industry, but their words do need to carry a certain amount of weight.
- Objectivity. Advisory boards give business owners and company leaders an objective, third-party perspective about the organization and its strategic direction. During the course of business, personal passions can interfere with objective decision-making. Advisors have no stake in the outcome and are more likely to tell it like it is – as long you have diligently avoided recruiting advisors who have a conflict of interest.
- Diversity. The best advisory boards are highly diverse with members from a broad range of backgrounds. Monolithic boards offer depth, but they lack the diversity to offer sound advice in other areas. Consider recruiting advisors with backgrounds in marketing, sales, finance, legal, HR, and other business areas based on your short-term and long-term objectives.
- Connections. An effective advisory board significantly expands your company's reach in your industry and in the general business community. Advisors who are fully onboard will happily reach out to their network on behalf of your company.
- Professionalism. Prospective advisors need to understand the nature of advisory boards and be willing to function in a professional manner. They especially need to realize the difference between an advisory board and a board of directors since they will have no real authority in your company.