The Role of an Advisory Board

A good advisory board can play a number of important roles:

• Objective brainstorming. Typically advisors are not mired in deep knowledge of your market and its history. They can bring a fresh perspective and insight even though many of their ideas may be naïve, already in use, previously discarded, or impractical. But, there may be a few gems of ideas that emerge simply because they are not involved in day-to-day operations.
• Devil’s advocates. Many outsiders are by definition naysayers. They may poke holes in all of the things you have gotten excited about. Defending your position and making sure that their negatives are not real issues can be of great value.
• Course correctors. Advisors can raise issues that you missed, didn’t think were important, or skimmed over. They can question both your strategies and tactics with very critical eyes, picking up things you may have missed.
• Analysts. When you are involved in a variety of day-to-day tasks, you may think that you are monitoring the most important issues and working through them, but an advisory board can really make you think through the issues in ways that may not have occurred to you.
• Brutal honesty. A properly selected advisory board will have no hidden agendas and will tell you things that subordinates and very likely even superiors will not tell you. They will be polite, but will not sugar coat the basic facts. You may need a tough skin to listen to them, but if you are open and really listen they can give you great insight.

Who should be asked to join your advisory board? Sometimes it may be other people from within your company who have no daily involvement with your department or its people. Disinterested objectivity is the goal. There are also a number of outside sources, however, that can be helpful.

• University professors are often flattered to serve and are interested because it enhances their resumes for other consulting assignments and it gives them case material for classes they teach.
• Retired executives have a wealth of experience and knowledge that they would love to share. They can do you a great favor by lending objectivity and you do them a favor by keeping them intellectually challenged and involved.
• Marketing service providers that you do not currently employ can be great resources, but you have to be careful that you choose ones who do not serve because they think they may get an assignment as a result of their service on the board.
• Professionals who are not normally involved in marketing in any way can be great contributors because it is such a departure from what they do every day. Accountants, lawyers, engineers and other bright professionals may bring an entirely different perspective that may stimulate creativity and new ways of looking at your issues.

Until now we have not mentioned the obvious. Getting the actual users of your products or potential prospects can be extremely valuable. Having them involved in an advisory board is a step much deeper than their participation as a marketing research subject or even a member of a focus group. Bringing their experience using comparable products, either competitors’ or earlier versions of your products, can be invaluable. The most difficult task in finding users is finding people who can be objective and see beyond their own particular needs. Talking about their own experiences is valuable, but you need people who can see beyond their own needs to those of other demographic and user groups as well.

Working with Advisory Boards

The most important thing you can do in working with an advisory board is to clearly outline what it is you would like them to accomplish in their time together. Clearly framing issues and objectives is critical. Just getting people together to review your plans or discuss product development is not enough. They need to know why they have been drawn together and what you hope to gain as a result of the meeting.

The Danger of Dominance

Just as in focus groups, occasionally you will have a member of an advisory group that dominates the conversation and may even bully others. You must be very quick to either put that person in their place or remove them from the group. Not only are you liable to get biased answers, but it will turn off other members of the board.

Meeting Length

Meetings can go all day if they are very interesting and interactive, but four hours is probably a good target to use in starting with a new board. Sometimes the meeting can start at 10:00 a.m., and then continue for a couple of hours after lunch—if there is a well thought out agenda and people can get reinvigorated after the break. After a meeting or two, the board will tell you how long the meeting should be. At the end of every meeting, ask the group what they thought of the meeting, how valuable it was for them as participants, and tell them what you plan to do about what was raised. Take minutes and distribute them to members of the board. Their review of the minutes may help correct a misimpression, but also may trigger additional new thinking. At subsequent meetings, give them feedback on what happened since their last meeting and be sure to comment on any positive developments that were a result of their input.

An annual retreat, probably no longer than two and a half days, with breaks for golf or other diversions may be possible with the right make up of board members.

Meeting Frequency

Advisory boards that meet more frequently than quarterly, unless there is a very specific task for them to focus on, can burn out pretty quickly. You have to have enough to keep them focused, interested and engaged to make the meetings worthwhile. For some companies, semi-annual or annual meetings may be more than adequate.

Compensating Advisory Boards

There are no hard and fast rules about compensation. Some committee members are willing to serve just for the recognition and intellectual stimulation that they gain from the sessions. Most, however, will require some form of compensation. In some cases, the compensation may be a nice gift, and in others it may be cash. To ask a professional to devote a day of time will probably require a payment of $1,000. A half-day might be $500-600. Including a lunch or dinner where everyone can interact is often a very worthwhile investment.

Using Outside Resources

There are a number of consulting firms that will help you gather outside professionals and facilitate your advisory meetings. They can be particularly helpful in getting you started the first time.

In conclusion, don’t forget that there is usually no shortage of good ideas. It takes real skill, however, in converting those ideas into tangible plans that can help you and your company. Managing the egos of advisory board members requires some skill, but the rewards can be very worthwhile.

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James S. Twerdahl is Managing Director of James S. Twerdahl & Associates, a marketing and strategic planning firm in Los Angeles. Please visit www.TwerdahlAssoc.com.