· Determining the
Focus: Companies sometimes set up Advisors to focus on Technical, Strategic,
Financial, and/or Operational issues – in other words from everyday issues to long range planning. Some companies want
Advisors to exploit their contacts (marketing), industry experience (reputation), or management expertise (proven executive).
Topics at meetings often include: industry trends or technical innovations (Technical); long range plans, expansion, divestiture
and succession planning (Strategic); capital needs, sources of capital, acquisitions, budgets, cash flow (Financial); infrastructure
changes, employee relations, marketing/sales, human resources, management (Operational); and various other problems. Many
Advisory Boards include members covering all categories above. Others have only single purpose Boards (e.g. Technical Advisory
Board). The focus is set by the needs of the company.
· Selecting Experience
Matching Focus: Advisors need practical experience in the focus area
the Owner/CEO has selected, but be careful. A young company should not select a former Fortune 500 senior marketing Advisor if that individual knows nothing about marketing for
a small business. Do not select a Technical Advisor if that individual advises
or represents any competitor (unless you are careful about your proprietary technology). Do
select Financial or Operational advisors from non-competing businesses. Do select
Advisors who are not afraid to voice their opinions and are willing to argue with you – and listen to their logic and
experience.
· Developing a Long
Term Relationship: Since a wide range of topics may be considered by
the Advisors, often including proprietary, confidential, or privileged information, and since the Owner/CEO presumably will
listen to the advice, he/she must develop a long term relationship with each trustworthy individual selected. It usually takes
a year or more for a Board to have sufficient experience with a company for its performance to be evaluated by the Owner/CEO.
A “chemistry” or rapport must be achieved to earn confidence in the opinions offered by each Advisor. This is
true between Board members, too.
McNichols
& McNichols, Inc. – P.O. Box 2226 – Middleburg, VA
20117 – (703) 477-7158
