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Management

5 Reasons To Consider Forming An Advisory Board

August 26, 2016

CNC shop owners tend to be independent types. After all, that's why they run their own businesses. For some, this independent streak also means they seldom take advice from others. However, few of us are skillful in every aspect of owning and operating a business. That's why it makes sense to consider developing a board of advisors made up of people with various talents that compliment your own.

Ideally, these board members are successful business people who run or have run their own businesses and, therefore, bring real-world experience to the group.

Unlike a board of directors that can hire and fire CEOs, your advisory board has no ownership of your business, so you they have no fiduciary responsibility and cannot dictate to you. That means you continue to make your own business decisions. Why, then, should you have such a board?

  • Perspective: Being immersed in the day-to-day activities of your shop may make it hard to be objective on some issues. When faced with a difficult situation, having an advisory board gives you the opportunity to discuss your options and get feedback that may either validate your initial decision, or point you in a different direction.
  • Connectivity: Let's say you need a new supplier, accountant or other resource. With an advisory board you'll have access to people you can trust to make sound recommendations based on their personal experiences. Moreover, each of your board members know other business leaders they can tap into for additional suggestions.
  • Relieve isolation: It really is lonely at the top. Being the only decision maker on serious business matters can create enormous stress. Having advisory board members to turn to for input or to bounce ideas off of can help you feel less alone. Sometimes just hearing yourself articulate an issue to the board is a relief unto itself.
  • Clarification: Sometimes we think we understand an issue but what lies beneath the surface may be a root cause we haven't recognized. By challenging your take on the issue and asking clarifying questions, your advisory board can help you identify the real problem. For example, recognizing that a person you promoted isn't performing well not because he or she suddenly isn't trying, but because you put them in the wrong job.
  • Accountability: When you're the boss, it's easy to put off actions that can move the business forward while you're busy putting out fires. After all, your employees won't hold you accountable. However, if you bring an issue to your advisory board, commit to a course of action and then don't follow through, it can be pretty embarrassing to meet with them the next time.

Advisory boards are usually most effective when kept to about 68 people who are interested in working with fellow business leaders. Many such business people are flattered to be asked to be on an advisory board and may even wish to invite you to sit on their board.