This is a great question. As a business owner or CEO, is it your responsibility to ensure your advisory board suits your needs? Or is it the advisory board chair’s role to ensure you have the right board for you?
The answer is, it’s both.
When you create your advisory board, you should do a business growth report score and have three to five highly specific key performance indicators (KPIs) for your board.
For example, the first KPI might be to go from 10% to 15% EBITDA (earnings before interest, tax, depreciation and amortisation) in 12 months.
The second one might be to identify your micro-niche, then develop a sales funnel for that micro-niche.
The third one might be to achieve a 75% staff satisfaction rating within one year.
After 12 months, you should do your business growth report score again and compare your current score with your previous score. Your score will identify which advisors should go and which you will need next. It should also determine how you’re tracking and progressing with your KPIs.
When you initially set up your advisory board, the board charter identifies whether the lifespan of your advisory board is 18 months or three years. At the 12-month mark, your advisory board chair will sit down with you and review where your business is at and where you need it to go.
By the end of the 18-month period, you should have a succession plan in place for a new advisory board chair. You should start working on this around the 15-month mark, so you can ensure all the actions and activities identified by the previous chair can be handed over to the new one.
An advisory board chair is a bit like a mentor or coach. Their job is to upskill you to be more competent and capable than they are. They have your back and transition you to the next level, to become a person better than them.
One thing we find is that often, a business’s advisory board has the same advisors and the same advisory board chair year after year. This is a risk to the business because the purpose of an advisory board is to advise on specific issues that are important at that time. Once those issues have been resolved and a strategy implemented, you no longer need those advisors.
Sometimes, it’s challenging to change advisors and chairs. It’s like trading in a car. You’ve had your car for years, there’s nothing wrong with it, but it’s out of warranty, there are a few dents, some wear and tear, and you know it’s time to trade it in. And, from a business perspective, we all know we should trade in our cars at least every three years.
It’s the same with your advisory board. You need to upgrade your board and chair at the end of either an 18-month or three-year period. Ensure you have operational strategies in place so this happens, and you can level up your business.
We all outgrow our cars, and we all outgrow our advisory boards and chairs. Know that they were the best thing for you at the time you needed them, then upgrade and get the next model.
If you need help setting up or upgrading your business’s advisory board, email [email protected].