Your choice: (1) An advisory board which, if it is typical, meets quarterly at dinner to listen and offer advice on issues raised by management or (2) what Cindy Burrell would classify as a series of outside consultants who offer advice on issues raised by management.
Oh yes. Advisory board members typically are not paid.
Small businesses "absolutely should have an advisory board," Burrell says. "It's a very cost-effective way" to tap into outside experience and knowledge -- adding wryly that "An advisory board is cheaper than five consultants."
Burrell knows. President and founder of Chicago-based Diversity in Boardrooms, she helps CEOs at businesses of all sizes find members for both traditional boards of directors, which typically have serious power, and less typical advisory boards, which have no real authority but whose advice can be invaluable at small and mid-size businesses.
Last month I stepped down after completing a seven-year stint on the Client Advisory Board at The Hannon Financial Group. CAB members all are clients of the Oak Brook based advisory firm, chosen to broadly represent a blend of both client and prospect demographics.
President Terry Hannon's basic approach to her board is to explain marketing-product-service options THFG is considering and ask board members, "What do you think?"
She listens; probes for reasons why an advisory board member makes a statement; draws other CAB members into the discussion; takes often voluminous notes and, in the few days following a meeting, makes her decision.
There's no vote. In an advisory board setting, decision-making stays with management. The advisory board offers opinions and advice.
That makes board membership important.
"You need expertise the company doesn't necessarily have," Burrell says. "You don't want your closest friends on the (advisory) board. They already hear everything about your company.
"Ask your banker or accountant who they respect -- and might suggest for your advisory board," Burrell says. "Look for diversity of gender, ethnicity, age, expertise and background -- because diversity will lead to more diverse ideas."
The details differ by company, but regardless of structure the advisory board role is pretty basic: Provide senior management with member knowledge and experience.
At Simmons Knife & Saw, Glendale Heights, President Colin Murphy uses his advisory board "to vet higher level ideas. I'm looking for strategic input" on investments, new marketing opportunities and a "wide-ranging" list of other topics, he says.
This is Murphy's second go-round with the Simmons advisory board. He joined the company in 2011 as general manager and acting director of sales and marketing -- and heir apparent. Murphy and his wife, Kara, purchased Simmons late last year from her parents, continuing a family ownership process that makes the Murphys fourth-generation owners.
"I did a lot more talking" on what he refers to as Advisory Board 1.0, Murphy says. "I have a different perspective now."
Simmons' seven-member advisory board includes both insiders and outsiders: The two Murphys; Bruce Gillilan (Dad, father-in-law and with wife Marta former owner; the company's human resources director; and three outsiders.
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