Accessing expertise beyond your company: A practical guide to building an advisory panel
There are many points in an entrepreneur’s journey where they will want to access specific, targeted guidance and experience beyond that of their employees, investors and professional advisors.
At RIG, we work with technology entrepreneurs to build the environments that will help them succeed, and this includes accessing strategically valuable external expertise.
There are a number of ways to do this. What comes into many people’s minds is going the Non-Executive Director route. While this can be done, the strategic advice that the entrepreneur needs can be separated from the fiduciary duties that go with being a director of a company. And in fact, many people that would volunteer to provide strategic advice would not want the responsibility of being a board member.
Our suggestion is to create an advisory panel. I say ‘panel’ rather than ‘board’ advisedly – in the research for our process, we spoke to many people who had set up advisory boards, and learned that in practice the word ‘Board’ can carry connotations, both internally and externally, of governance and decision-making responsibility.
The principal we follow is to design the best advisory panel that we can. Rather than working from who the entrepreneur knows, we work out what the objectives and requirements are and then find the best people we can to fill those roles.
Our starting point is to work with the entrepreneur to analyse the strategic needs and weaknesses of her company. By setting this against the vision of where she wants the company to get to, we can identify the areas where external advisors can add the most value. Some of these areas will be appropriate for an advisory panel to address, while some – such as coaching of senior management – are better kept out of scope and addressed by other means.
This analysis also prepares the ground for articulating a set of objectives to be given to the advisory panel. This shapes what the panel members will be asked to work on and what will be expected of them.
With the objectives clearly understood, the next step is to identify the ‘required’ versus ‘desired’ skills and experience for panel members. Knowing what these are, it is possible to think about where we might find the right people.
It’s important to remember that in building the panel, we are looking people not only with the right kind of experience; they will need to be able to identify with the entrepreneur and the journey that they are taking.
How large should an advisory panel be? It’s a trade-off between being large enough to provide a breadth of input, and small enough that all of the members are very involved. We have found that a panel of three or four is a good size to work with.
Knowing how many people you will have, it is then a question of finding the required mix of skills and experience. No one will have all the elements of experience, but the group should do overall. Importantly, they should work together well as a group, and this will be an important factor in determining which people are ultimately selected from the shortlist.