IEC Advisory Board: Creation, Development and Extracting Advantage

Given the pace of change and complexity in today’s business environment, advisory boards often lack resources for strategic, high-value information and guidance. The pressure is on the person or business owner to maintain a thriving business in a wildly chaotic and frenzied market.

It requires discipline in the long run and a reliable way to deal with new opportunities and unexpected adversities. The notion that a traditional strategic plan would aid in this fast environment is quickly losing momentum. Being strategic, however, has become the new leadership attribute that is allowing organizations to outdo others. A powerful tool to navigate this uncertainty and facilitate a greater level of strategic awareness is harnessing the power of an effective Advisory Board Management Team.

What is an advisory board and does your organization need one?

As the name suggests, an advisory board is a formally formed group of independent people who provide high quality, objective advice to business owners in areas of strategic importance.

A strong advisory board is a powerful tool to support decision making, especially for family-owned, entrepreneurial or SMEs. Small organizations benefit the most from the expert guidance of an Advisory Board without the expense or formality of the board of directors. This external advice is particularly beneficial for areas you would not otherwise advise.

An advisory board may have a broad focus or a narrow one depending on its specific purpose. For example, will the advisory board relate to the ‘big picture’ strategy and enhancements of the organization or are the advisors genuine stakeholders who provide their experience on a specific program and how it can be improved?

It is important to determine what the focus of the Advisory Board should be and ensure that it is well understood before doing it.

Some of the roles and responsibilities for Advisory Board members might include:

• A deep understanding of the organization and its environment
• Offering insights and resources to complement discussion raised by the owners
• Explore new business ideas or directions (with the benefit of distance from the day-to-day operations)
• Consider ways of improving operations and organizational efficiency.
• Sometimes a Board of Directors may choose to create an Advisory Board with a specific advisory role, whilst making it clear the board of directors has ultimate supervisory and fiduciary responsibility for all of the affairs of the organization. The Advisory Board does not share these responsibilities.

So, what are some situations that could benefit from an Advisory Board’s expertise?

Consider the following examples;

• Guiding start-ups companies in a rapid growth phase
• Creating a new product line;
• Moving into a new market segment or industry;
• Moving into a new geographic area;
• Making the transition from private to public and perhaps listing on a stock exchange;
• Restructuring and repositioning a company in the market;
• Implementing major new technology within the organisation;
• Staving off a serious competitive threat;
• Analyzing a potential takeover target.

For non-profits, there are a few different types of advisory committees explored by Interim Executive Consulting which advise, provide influence or fundraise, in support of the existing Board of Directors.

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