Running a company is like navigating through ever-changing terrain. To avoid getting lost in this complex world, companies can benefit from the guidance and expertise of an advisory board. The advisory board plays an advisory role, offering insights and advice based on various skills and experiences, without holding formal decision-making power. The structure is flexible and informal, either temporary or ongoing. An advisory board shares its knowledge, experience, and network.

Advantages of an Advisory Board

• Expertise and experience: Members of an advisory board are seasoned professionals. Their expertise and experience can be invaluable when navigating complex issues or identifying growth opportunities. By leveraging their knowledge, the company can avoid mistakes and make better decisions.

• Network: Advisory board members often have extensive contacts, which can open doors to new business opportunities. This can be crucial for the company’s growth and expansion.

• Risk identification and management: With an outside perspective, an advisory board can conduct risk and consequence analyses, contributing to optimal risk management for the company.

• Minimizing decision-making isolation: It can be difficult for company leadership to remain objective when making decisions. An advisory board can provide an external viewpoint and act as an objective critic when needed.

• Inspiring confidence in the market: An advisory board can instill increased confidence among stakeholders such as customers, suppliers, and banks.

• Diversity of perspectives: Individuals with different experiences can provide the company with insights that might otherwise be overlooked. Diversity can help challenge the company’s assumptions and lead to new, innovative ideas.

When is the Right Time to Bring in an Advisory Board?

Bringing in an advisory board can be relevant when company management is primarily focused on operational matters. We live in a world of significant changes in many areas, and businesses need to work on development issues to avoid stagnation or closure. If the company has been in “firefighting mode” for an extended period, problems may worsen the longer it goes on. When the company lacks the necessary expertise for the next step, it is crucial to have resources with experience in development and transformation issues. Independent individuals can be helpful when the management team disagrees on the company’s direction, as resolving conflicts is essential to avoid losing momentum. In such cases, a clear outside perspective may be necessary and can facilitate a broader external analysis, which could be critical for the company’s survival.

Companies with growth ambitions need to allocate time for strategic work, and it can be a wise investment to bring in individuals with experience in this area, where an advisory board can be valuable. There may be a need to review routines and processes within the company, for instance, to improve profitability or increase efficiency. Technological shifts and digitalization, along with the rapid development in AI and rising cyber threats, also require information security and other measures. Workplace issues, such as increasing sick leave and dissatisfied employees, are another critical area to address. In all of these cases, it can be challenging to have the required expertise within the company, and an external perspective can provide new insights. A factor that many don’t consider is that a generational transition in family-owned businesses is a complex matter that often requires external help well in advance.

Tips to Consider When It’s Time to Bring in an Advisory Board

Creating an effective advisory board requires careful consideration and planning. Here are a few steps to keep in mind:

• Identify what the company leadership needs help with.
• Focus on diversity when recruiting.
• Set clear expectations.
• Hold regular meetings.
• Prepare agendas, meeting notes, and follow-ups.
• Communication and transparency are crucial.
• Be flexible and adaptable.