Great advisors can make your business
Scott Belsky talked with a handful of thought leaders about how to find, and manage, great business advisors. He came to these conclusions …
No matter how ambitious or talented we may be, we all have our blind spots – certain obstacles or hard realities that we fail to anticipate. Which is why we all need some sound advice from time to time. To get it, we must engage the right advisors along the way.
Perhaps because of their necessity, we’re prone to throwing around the term “Advisor” much too loosely. Many entrepreneurs assemble a board of advisors and then have no idea what to do with them. Similarly, industry veterans agree to advise businesses without any clear sense of responsibility.
An “advisorship” is much more than a mentorship. It is a relationship between a business and a third party who has a specific value to add. There is an implied sense of expectation and reward. Just as an advisor must invest his or her time to serve the business, the business must invest time into the relationship. But what makes for a really great advisorship?
How to engage great business advisors
- Select advisors based on areas of expertise. Every business needs a dream team, but you can’t hire for every expertise you’ll need. Sure, you may need developers and designers, but how about experts on your industry or people with relationships with certain prospects that you can’t afford to hire? As you identify areas of expertise that you lack, consider who might be able to help you.
- State expectations up front. It is best to have a contract that covers details such as the form of equity grant or compensation, as well as whether or not expenses are reimbursed. Some entrepreneurs explicitly state the frequency of meetings, phone calls, and possibly the number of hours expected from a committed advisor.
- Keep a candid exchange. Your relationship with your advisors should be constantly optimised through forthright exchange of feedback. Entrepreneurs should ask their advisors the question: “How can I use you better to help my business?” Likewise, great advisors always ask the question, “How can I be more helpful to you?”
- Have an exit strategy. Many entrepreneurs say that their “advisors” have less than a 50% success rate. Granted, great advisorships are a two-way street. That being said, it is fair to expect that some of your advisors will drop out, change industries, retire, or simply be too busy to help. As a result, it is best to define up front what happens if either party decides that it’s not working out.
- Ensure a productive relationship. Advisors can become a burden – in terms of both expense and time wasted – unless they are managed wisely. Obviously, a great advisorship is a shared responsibility between the business leader and the advisor. You must select advisors for the right reasons, engage them properly, and then manage and use them – purposefully and consistently – over time.