Every entrepreneur needs a group of trusted advisors. You need not convene everyone to hem and haw over every decision, but a tight-knit group of people you trust to discuss ideas, brainstorm, and help you through rough patches can be invaluable.
The problem is, according to Ernst & Young principal Kerrie MacPherson in the Harvard Business Review, many start-ups don't set up their advisory boards because they find it "too daunting"--they don't know where to start and don't know how to keep the board running once they organize it.
While running the Entrepreneurial Winning Women program at EY, MacPherson collected five keys pointers for entrepreneurs struggling with building a board:
Think outside the usual circles.
MacPherson says that the first rule for building a solid board is to not round up your friends, mentors, or cheerleaders. "You're looking to drive new business opportunities and new ways of thinking with diverse experience, expertise, viewpoints, and skill sets. Work to find people outside your inner circle who have built successful businesses and can pass that knowledge on to you," she writes. "Think about who would be a constructively critical audience, and who can provide access to other valuable contacts, from potential customers, suppliers, and strategic partners to financiers, publicists, and other professional service vendors."
Recruit a community influencer.
The first member of your board should be one who is respected in the community. Once you get the influencer, more people will want to join. "There is a reason that film producers begin their projects by lining up the most bankable talent they can. Their involvement helps to attract others who want to work with them, or who simply see a star's commitment as reassurance the project will take off," MacPherson writes. "In the same way, entrepreneurs should work first to recruit the people who will attract others, and give an advisory board strong credibility from the start."
If you're not developing positive relationships with the members--and only using them for their advice--they won't stay long. "Since most are not compensated, their reward is the satisfaction of sharing their knowledge and experience and helping you succeed. So make them feel appreciated," she writes.
Establish goals right away.
"Usually, in-person meetings once every three to six months will suffice, but you may want to reserve the right to consult with individual members on an ad hoc basis if a particular issue comes up," MacPherson writes. "When the board does meet, make sure there is an agenda with specific goals. Your board members are busy professionals, so don't waste their time. Perform a yearly assessment of how the board is working. If you can afford it, invite them to an offsite at a comfortable locale at your expense to have them discuss the board's progress."
Know how to transition out members.
"As a high-growth entrepreneur, your business will evolve, and you will likely need advisors that bring different skills to the table at different phases of growth. Most will not have the time to serve on your board for more than two or three years, anyway. And others may not be as helpful as you had hoped," she writes. "So, make it clear up front that they serve as needed and spell out term limits."