In recent posts, we celebrated the opportunity that awaits us on advisory boards. And we understand the role that generous and empathetic relationships play in becoming an advisor. With so much effort spent reaching this point, it’s tempting to gloss over the next step. Once invited, why do we need to do more than a victory lap?
Sustaining our attention through this portion of the process may save ourselves future frustration. Investor and corporate director Maynard Webb instructs founders to “date advisors, marry board members”. With so much emphasis placed on finding the right fiduciary board, organizations collect advisors more casually. It’s up to us then to ensure that an advisory role is a good fit.
One of my clients felt flattered by a recent advisory board invitation. He liked the founder, but wondered about his fit with the rest of the management team. Together, we examined the needs and trajectory of the organization, the mandate presented to the advisors, and the people involved. My client ultimately joined the board, with a perspective so thoroughly informed that he became the lead advisor.
We can learn from my client’s experience and leverage his commitment to due diligence. Considering these five questions can be revealing.
1. Will I work well with those seeking my advice?
Before joining advisory boards, we consider our fit with the board and management team:
- Do you respect the management team member(s) you are meant to support?
- Are you compatible in terms of problem solving styles and analytical approach?
- Will you look forward to seeing a weekly check-in call with management on your calendar?
There is no guarantee of financial gain via your advisory roles, so at a minimum you’ll want to enjoy the company you keep.
2. Do I trust those leading and supporting the organization?
An advisor tends to engage with a small group of leaders and typically has only limited interaction with the rest of the advisory board. As a first step, focus on the people with whom you’ll interact day to day. Do your working styles align?
Furthermore, we shouldn’t overlook the risk to our own reputation from any association with an organization. How does the industry view the key leaders and advisors? Are the financial backers known for investing in growth or stripping whatever they can from the balance sheet?
You can conduct a few background checks via your professional network, Google searches and employee review sites like Glassdoor. The exercise can do more than protect you from embarrassment. Researching what turns out to be a squeaky clean team will help you build relationships once you make the commitment.
3. What contribution will I make to the organization?
Some seasoned executives collect advisory roles like trophies or symbols of their accomplished careers. This may work well for everyone involved, especially if management is using the advisory board as a distraction to keep early investors off the fiduciary board.
An advisor can support the CEO, a division president, some other senior executive, or the board of directors generally. You could participate in a focus group for marketing, product development, sales techniques or other aspects of the business. The nature of what the organization seeks should be clear before you agree to join.
Once you understand the organization’s specific wish list, you can usually assess how well your skills and contacts align. It helps to clearly articulate your offer and objectively gauge how it addresses the opportunities and growing pains facing management.
4. Am I about to board a rocket ship?
When you hear management speak about the future, are you motivated to set aside your priorities and dive into theirs? At some point in time, there is a reasonable chance that your help will be needed at a time that is inconvenient for you. Is the company’s story so compelling that you will happily accommodate the interruption?
5. What is the potential downside?
Advisory boards impart significantly lower risk than boards of directors. You will carry some personal liability, however, related to conflicts of interest and misuse of confidential information. Technically speaking, you could be sued for giving negligent advice.
To mitigate these risks, it’s important to understand the arrangement upfront. The advisory board’s written mandate should make it clear that it does not make binding decisions. The presence of a functioning fiduciary board is also helpful, so you aren’t perceived as a de facto defender of stakeholder interests.
When you receive your next advisory board invitation, I will celebrate your success right with you. With some careful deliberation, you can ensure that the parade continues. Balanced consideration of a handful of questions can establish and sustain your reputation as a builder of thriving organizations.
Question: What factors have affected your decision to join an advisory board? Please tweet your thoughts and include @tamarapaton in your response.
