How a Board Can Boost Your Business (Post 3 of 4)

Ever heard that old phrase, “stuck between a rock and a hard place?” That pretty much sums up how I was feeling a many years ago when one of our managers began pressuring me to make him a partner. Actually, his “persuasion” tactics were intended to intimidate through the use of veiled threats. He was great at his job and I thought he was an asset to our company. Yet his approach to professional advancement seemed to take clues from the Mafia, or, at the very least, a very manipulative toddler!

Needless to say, “giving in” to manipulative two year olds does not generally result in the development of responsible adults. Yet when it came to this employee, I felt stuck due to his importance in my business. Luckily, our board of advisors had absolutely no problem seeing the big picture! They assured me that his behavior was the exact opposite of what makes a good partner, who is expected to put the good of the company ahead of his own personal agenda. It was great advice and it gave me the push I needed to call his bluff and send him packing.

A similar situation arose a few years later with a high-level manager who could “talk a good game” but was not effective in actually delivering results at Intertech, even though he had previously had helped run a $1 billion company. His “big idea” was to outsource our sales/marketing operations to our top competitor! Call me skeptical, but I found that idea absurd. Still, I told him if he could convince our board, I’d look into it further.

He presented his proposal at a Board of Advisors meeting.  After just a few minutes, one of our members crumpled up the employees’ presentation, tossed it at him and asked “What else do you have?” Not surprisingly, there was no “plan B.” I was younger, less confident, and didn’t understand why this person who led a $1B firm couldn’t lead us in the right direction. My board did not let me down. They helped me to see that this “emperor had no clothes” and that Intertech would be better off without him.

Next time: how Intertech’s board of advisors keeps us sharp.

How a Board Can Boost Your Business (Post 2 of 4)

Why would the CEO of a private company proactively seek the guidance of a voluntary board of advisors? With no stockholders, there is no legal/fiduciary oversight responsibility for a board to uphold. Even so, I’m a firm believer in the benefit of working with a board of advisors.

If you’ve read my book, Building a Winning Business, you know I believe leaders should listen, seek to understand and solicit input from employees on a regular basis. But no matter how open the work environment, few – if any – employees are going to offer their candid perspective on how I’m doing (can you say “awkward”?!). Nor would it be appropriate for employees to advise me or my business partners on personnel decisions for example. An independent board of advisors is the perfect solution to the CEO thought-partner dilemma.

Intertech’s board of advisors is comprised of business leaders, who’ve lead successful companies. For the current and past members, their backgrounds and work experiences are varied and include experience with start-ups, turn-arounds, and, most important to me, growing highly profitable firms.  I choose members based ultimately on my personal regard for their business acumen and integrity.

Two of our members also brought an added bonus due to their strong experience in sales and finance/accounting (which I consider to be my weakest areas). Ironically, those board members have been most instrumental in helping me make some tough personnel decisions (Tom’s Takeaway: don’t select board members based on narrow experience criteria. Rather, find top-notch business professionals that you respect and admire.)

For the record, a board of advisors is quite different from a board of directors. Specifically, advisory board members do not have the authority to oust private-company CEOs like me, such as board of directors can do with CEOs of public companies. But that doesn’t mean they don’t have clout! Any advisory board member worth his or her proverbial salt will walk if they sense their relevant experience and advice is not being carefully considered and frequently followed.

That’s not a problem with Intertech’s board of advisors. I genuinely value the perspective of our board members. These are people who have vast experience and generously share their wisdom with me four times a year during meetings. Members agree to serve on our advisory board for three years. Our advisory members are compensated per meeting and receive options in our company, which gives them a stake in our future success.

Still not convinced you need a board of advisors? Next time I’ll share a few examples that might just change your mind.