Eight tips for first-time board advisors
There seems to be a limitless pool of advice for early-stage founders, and even investors are flooded with tips and tricks on investing in startups. But for board advisors, it can often seem that the prevailing attitude is that, as their name would suggest, advisors shouldn’t need advising themselves.
For any first-time board advisor, the experience can be daunting, and you’re expected to know exactly how to guide and support founders on their growth journey from the get-go. Most likely, you have far more experience on the other side of the table, as an executive responsible for growth and seeking advice yourself from external advisors.
Here we examine the behaviors, approach and skills needed to become an invaluable board advisor to the company you’re working with.
1. Be the best of both worlds
Startup founders value two key qualities in advisors: lengthy experience and expertise in the area of business in which they need advice, and the skill to unpack that knowledge through the art of advising.
Advisors usually sit somewhere between these two points. The way you can show real value is by bringing/offering the best of both worlds. Get skilled up on advising – there really is an art to it – and make sure you know everything there is to know about your speciality. And there’s a way to achieve the latter quickly.
2. Get specific
Building knowledge is of course a fundamental part of becoming an expert in a particular area - but shrinking that area gets you there a lot quicker.
If you feel comfortable covering a broad range of areas within a business, but you know you’re the best person to go to on one particular specialism, only offer advisory services for that one subject. You’ll have the answers to any questions the founder might ask and you’ll feel confident in your ability to act as an advisor. By building your experience through a narrow focus on your area of expertise, you’ll be able to build out your wider advisory skills and move into different areas in subsequent roles. Connectd offer a range of resources and tools, alongside our Transition to Portfolio programme, to help professionals build board level skills.
3. Communication is key
When you become a board advisor for the first time, the first step you should take is determining exactly what the company expects of you. The role of an advisor is incredibly varied and expectations differ from one organization to the next. Some founders expect an advisor to be there only in times of difficulty or to advise through a big business challenge, while other founders expect an advisor to be a little more hands-on and broadly available.
Define the amount of time you’re prepared to devote to the company and make sure they’re on the same page, and make sure everyone is clear on your role and your responsibilities within the company.
As a first-time advisor within the early-stage space, you maybe working with a first-time founder, who has never previously had an advisor. If this is the case, proactively identify the areas they most need help with, as they are likely to be unsure and a little hesitant in this area. Try to compensate for their weak spots; by identifying where they lack skills or experience, you’ll be of most help in growing the company.
4. Investigate like you’re investing
You may not be parting with cash, but you’ll be investing a lot of your valuable time into this company. You need to make sure it’s worth it, so approach the opportunity like you’re about to hand them a big sum of money that you expect a return on.
This means conducting thorough research, getting to grips with the financials, and delving into the less quantifiable aspects of the business, like the character of the founder. Make a note of any questions that come to mind when doing so.
You’re also going to be investing time into the founder, perhaps even more so than the company itself. Extend your research beyond the nuts and bolts of the business proposition to ensure you have confidence in the person (or people) behind the company.
5. Try to avoid the 80/20 rule
There’s a trend frequently seen in the advisory world, often referred to as the 80/20 rule. Simply put, 80% of an advisor’s time is typically spent on getting the mechanics of the business right. They work on areas such as recruiting, PR and equity splits - basically, reducing friction within the business.
The other 20% is spent on real strategic advice and guidance. This is what has the biggest impact on the company, but it’s what advisors only dedicate 20% of their time to.
Try and avoid falling into the 80/20 trap. You want to have maximum positive impact and demonstrate your long-term value, so try to make introductions to other professionals who can help with operational tasks and reduce friction, allowing you to dedicate the bulk of your time to being a strategic advisor.
6. Critical feedback is essential
While it’s important to build a good rapport with the business owners, you also have to provide critical and constructive feedback where necessary to ensure growth.
Some founders have a hard time accepting this, which is understandable as most founders see their business as their ‘baby’. Make sure you set expectations that it’s your responsibility to provide critical feedback and that founders should be receptive and welcoming of this. Stress that a healthy relationship is contingent on being open and honest, even if the dialogue can be challenging at times. By setting out responsibilities and working dynamics at the start of your appointment, you’ll avoid messy fallout later on down the line. Which leads me on to my next tip to first-time advisors…
7. You are the editor, not the creator
Sometimes an advisor can get a little too involved in steering the activity, strategy and direction of a startup. It’s helpful to think of your role as the editor of the business owner’s decisions, while the founder is the creator, moving the business in the direction they see fit. You come in to edit those decisions based on your own experience not to take the steering wheel from them!
8. Forge a close relationship
It’s incredibly worthwhile connecting with founders outside of board meetings. Schedule time to get to know them better so you can understand their way of working and thought processes, and for them to get the most from you as an advisor. By connecting on a more personal level, you will undoubtedly be able to work better together on big business decisions.
This is important, but remember that time is valuable, to both you and the founder. Make sure catch ups outside of the boardroom are not wasted.
These eight pieces of advice to advisors will go a long way in generating success for both you, the founder and the company, especially to those in the role for the first time. It can be difficult when first stepping into any role, let alone one which relies on self-directed learning and independently transitioning and building skills.