Wednesday, November 26, 2008

Board of Advisors - Accountability is the Driving Force

In my work consulting for early-stage companies - or just speaking with entrepreneurs at networking events, the question of professional advisors often comes up. Every early stage company should have a formal Board of Advisors (BoA). Ironically, what I've found is that most entrepreneurs look at these advisors as merely a networking opportunity or as outside validation. These are two very important components of a BoA, but accountability is just as critical.

Established, credible, intelligent, and well connected professionals within an entrepreneur's target market sector can indeed accelerate the development of a business. And getting suitable professionals on board is a must if an entrepreneur's idea is going to sprout legs. If an entrepreneur can't attract an impressive set of advisors, then one should ask whether there's really a business there at all.

A big trap that entrepreneurs fall into is that they "acquire" a set of advisors, post their bios to the company's website, and then they move on to another task - having achieved a "Good Housekeeping Seal of Approval" through association with their advisors. It seems silly to have to say this, but advisors WANT to advise. That's why they agreed to be on the BoA. Too often, however, they're ignored or under-utilized. A truly wasted resource.

A bigger issue is that many entrepreneurs - some out on their own for the first time in their careers - have no one to hold them accountable for their actions. They may not even have a Board of Directors yet. Entrepreneurs love independence - being their own boss, on their own time, running the show, and doing it their way. This is a double-edged sword. Entrepreneurs need to have someone there to tell them that they're not progressing quick enough or that they're making mistakes.

So, my advise to entrepreneurs is to document your goals with a timeline of projected milestones - and then send these goals to an advisor. This advisor might be a trusted friend or an established professional on your BoA. The point is that by having them come back to you in 30, 60, 90 days and asking you how you've done against those goals, will make you more compelled and responsible with regard to achieving your dream.

In summary, a Board of Advisors accomplishes 4 things: 1) credibility by association, 2) a source of advice, 3) a network of connections, and 4) accountability for your actions. Leverage them all.