ADVISORY BOARDS: Not Just for Big Companies Anymore.

DO YOU EVER catch yourself saying, “why change, we’ve always done it this way” or “I mentioned that idea before, but no one listened” and “I wish we could do this, but it would hurt his feelings?” As small businesses, we have a unique ability to make clear- cut decisions and not get caught up in the bureaucracy. Unfortunately, this same advantage also goes against us, when we are faced with growing the business and making critical decisions. Everything works well when we are in agreement with each other about the strategic direction of the business. But when we are not on the same page, we get bogged down making decisions and deciding on the direction of the business, because our personal feelings often get in the way and impede us.

A Watered Down Board of Directors?

A good way to break through this barrier to decision-making is to seek outside help through an advisory board. Most people think of an advisory board as a watered-down board of directors, but it actually is quite different. An advisory board acts more like a formal “sounding board”. It is less threatening, and includes outside trusted people, who can lend an objective viewpoint, not influenced by family relationships. They are there to make recommendations and do not have any decision-making authority. The family retains full control over the business decision-making, but relies on the board’s advice to help guide them through sensitive decisions and prioritize strategic issues without harming family relationships and feelings.

Sounding Board.

Many people seeking an advisory board are actually looking for an effective method of overcoming communication issues within a family. An effective advisory board can act as a sounding board for business initiatives. Effective members have the ability to quickly grasp concepts and lend their expertise and advice. They can be invaluable in helping to validate pending issues and projects. You would be surprised how many important pent-up projects and programs your business may have that have been stalled in the family decision-making process.

 

Overcome Isolation.

Being a member of a family business can often feel lonely and isolating. Family businesses have unique issues. An effective advisory board is comprised of individuals who have worked within larger companies and can help with the later stages of business growth. It may also include professionals who have skill sets in a functional area that the family may be lacking.

 

Strategic Direction.

Sometimes we get too caught up in the day-to-day running of our businesses to step back and look at the big picture. An advisory group can help turn the focus away from the day-to-day issues and look at the bigger strategic direction of the business. Further examining the issues others face, helps put concerns in a new light, with a fresh perspective.

Just think of the pent-up opportunities that lie in your company that haven’t been acted on. This war chest of opportunities can be especially beneficial in this slow economy. Establishing a board of advisors is the single most important initiative that a family business can do.