When to Use an Advisory Board a Consultant or Both To Help Grow Your Business

Earlier this month I had the opportunity to attend an EDI (Case Western University) program on boards of advisors.

I learned that boards of advisors, unlike directors, have no formal power or fiduciary duties, but rather serve at the pleasure of the business owner.

With clear direction, they can really assist a CEO to grow his/her firm, particularly if the CEOīs expertise is not in sales or marketing.

Using a Board of Advisors
If carefully recruited, a board of advisors can provide a CEO with unbiased knowledge, expertise and feedback.

Advisors seem to be best at evaluating and appraising the ideas or directions that the owner is contemplating or finalizing.

Most advisors are busy senior executives and modestly compensated to serve on a board. Accordingly, they are rarely able to fully contest or disprove the summary information they are given, which usually arrives on short notice.

Rather, they can react with wisdom, counsel, and "a second opinion" to a pre-developed idea or plan.

Advisors are like Focus Groups
The real value of a board of advisors appears to resemble that of a focus group. Focus groups are used by marketing executives as a way to predict the behavior of their market place prior to a product launch or other major promotion.

Successful focus groups demonstrate three common characteristics:

• They are used to react to new ideas, concepts and approaches, but never to invent a new idea
• The effectiveness of a focus group is largely the function of how well the moderator has prepared an agenda and a discussion guide for running the meeting
• They consist of intelligent, outspoken, and knowledgeable participants who constructively complement each otherīs opinions and reactions.

If Advisory Boards resemble focus groups, then the burden is on the CEO or President to serve as the moderator.

He or she must prepare all the analysis, invent the new ideas and ensure that implementation and other tactical plans are in place for a good board to absorb and provide a response. And this is where a consultant can help.

Consultants are like Employees
A good consultant can be invaluable to a company leader if a specific skill set is missing or overstretched within the company.

Consultants bring expertise, experience and are generally unbiased if they are not selling other products or over-extending their assignments. Accordingly, consultants can prepare all the analysis, invent the new ideas and ensure that execution and other tactical plans are in place.

Furthermore, in lieu of staff, consultants can develop information, create tactics and even implement programs. Boards cannot and will not do a companyīs work.

Use an Advisory Board and Consultants Together for Maximum Results.
Many presidents use an advisory board meeting as a forum for their employees and consultants to present progress on key projects.

This way a company leader can oversee the development, creation and production of the critical work and then have an advisory board react and respond to the results.

So, when should an owner or CEO use a board of advisors or a consultant to help grow their business? It does not need to be an either/or decision.

Rather, use a consultant to help you when you donīt know what you donīt know or to create what you donīt have. Then use a board of advisors for unbiased input when you know what you donīt know.

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