Unlike investors and customers, advisory board members are motivated to help your company succeed. However, this can only happen if your board members feel heard and their suggestions are implemented.
It means you need to focus on preparation and great meeting design. It also means that you need to evaluate the ROI of your advisory board regularly.
Strategic Planning
One of the main reasons businesses rely on advisory boards is to fill gaps in expertise. An executive team rarely has skills in every aspect of a business.
Canopy advisory group members typically come from diverse backgrounds and industries. The value they provide can be in the form of insight, perspective, and guidance. They can also drive strategic ideas that help the company move forward.
Innovation
An advisory board should offer the company unbiased advice and insights based on their expertise. The best boards are curated to include diverse members of age, gender, and race.
A study found that companies’ sales growth with an advisory board increased significantly. It also improved perceived and real service and generated higher-level sales opportunities.
Marketing
Often, business owners realize their skill set only covers some aspects of running the business. Advisory groups are an excellent way to fill these gaps and learn from those who have gone before.
Advisory boards are also a great way to help smooth leadership transitions when planning to sell the company. It can eliminate the emotion from decisions and focus on the best financial return.
Finance
An advisory board can provide an outside perspective on areas of your business you may need to become more familiar with. It can help identify key skill gaps at a lower cost than hiring for roles.
A study found that sales growth and productivity grew stronger after businesses implemented an advisory board. It is important to create a curated group of advisors with diversity in age, gender, and race.
Operations
An advisory board can help a business develop its operations. It’s a great way to bring in outside expertise on topics beyond the CEO’s current level of knowledge.
Make sure to have a regular cadence for core interactions with your advisory board — like monthly calls and quarterly in-person meetings. It prevents them from forgetting the context or being unavailable.
Human Resources
Business owners are often isolated from a broader network and spend most of their time with employees, customers, and vendors. An advisory board can help them build a bigger network and find people they may not have met otherwise.
Unlike formal directors, advisory boards do not have fiduciary liability. You can set term limits to ensure that members can be replaced as needed.
Legal
Advisory boards require commitment and time from both parties. Setting goals, measuring outcomes, and swapping out members who could be a better fit is important.
Unlike a formal board of directors with a fiduciary responsibility, advisory boards have lighter duties. However, the advice that they provide is invaluable. Advisory boards are becoming more common among small businesses.
Marketing Strategy
How formal you want your advisory group to be is up to you. However, most groups will have a contract or memorandum of understanding to establish compensation and expectations around participation.
Project advisory boards are a great way to bring expertise for specific goals or challenges, like entering new markets or raising investments. It’s also important to ensure that your board is diversified regarding background and experience.
Technology
Advisory groups can be established to provide advice on an individual evaluation or a whole evaluation function. They can also be used to make decisions about an evaluation, such as approving terms of reference or selecting an external evaluator.
Customer advisory boards can improve customer satisfaction and lead to increased customer loyalty. They can help companies identify additional functionality and tools to enhance products and increase customer engagement.
Sales
A well-designed customer advisory board can increase executive customer dialogue, improve perceived and real service, and generate higher-level sales opportunities. According to research, sales growth was stronger after implementing an advisory board.
An advisory board isn’t a “sounding board.” They work best over an extended time and should be curated carefully. They must also have clear milestones and KPIs that are measured over time.
