Use The Entrepreneurial Way To Get A Company Board Of Directors
Key to success
Many years ago, business expert Michael E. Gerber wrote that for any small business owner or successful entrepreneur, “Working on the business and not in the business is the key to success.”
More recently, ‘Rich Dad, Poor Dad’ author Robert Kiyosaki, said something similar: “Most entrepreneurs don’t build the business; they build themselves a job. They’re self-employed, but your business must be able to operate without you.”
Both experts offer sound advice, but how can you make that happen? One way is to appoint professional managers to run your business. Another is to create a company board of directors.
Let’s face it. In the early growth stages, you rarely can afford either unless, that is, you try the creative, entrepreneurial way to get you the equivalent of a board of directors.
In reality, in any successful or rapidly-expanding small to medium business, you, as the entrepreneur, founder, or chief executive, possess the key skills, and the broadest overview of your business. So, how can it operate without you?
You also know when you are stuck at the coal face putting in the hours and effort to guide your thriving business to greater success, you are vulnerable to a number of threats. You also miss many opportunities.
This dangerous paradox arises because when you are trapped working in your business, three key business elements get missed:
- Breadth of focus
- Independence and Detachment
To board or not to board?
This is where the entrepreneurial way to get you a board of directors kicks in!
In Australia, by law, smaller private companies can have just one director. Meanwhile, public companies are required to have larger boards and to ensure that the members of those boards and the board itself possess at least the three qualities of independence, breadth of focus, and objectivity.
Yet, where your business lacks a professional board, your need for objectivity, breadth of focus and independent leadership still remains. However, until recently, there were few cost-effective, high-quality options for your small to medium business to obtain these three keys to success.
Times have changed
Now, times have changed. A new entrepreneurial way has emerged to get you the equivalent of a company board of directors. Many fast-track, small to medium businesses are scrambling to establish hand-selected expert Management Advisory Boards (MABs).
MABs sit between you as the owner-founder and the normal corporate board. Where you don’t have a formal company board of directors, they can take on the normal range of director roles, plus other roles – hence, their effectiveness.
They do so at lower cost and without the legal responsibility assumed by formally-appointed company directors. Also, they more than pay their way by adding far more direct value than they cost in fees – even in some cases, contributing equity or loan funds, or other vital resources to your business.
Equally, they cannot fire you as chief executive. This, as we saw with Steve Jobs, can be both the duty and responsibility of a formal board.
What can MAB members do?
In addition to taking on the corporate governance, innovation and strategic roles of a formal board of directors, MAB members mentor you and your core team, so your personal and team skills and know-how rapidly develop. They open up to your new networks and strategic alliances that steadily assist the growth of your business. Until you grow your full executive team, they act as part-time executives undertaking either a wide or a narrow range of roles.
You select the part-time members of your MAB for their strengths in areas where you and your team may be weak. For example, the three initial members of your unique MAB may be your external management accountant, your business mentor, and your professional sales-marketing consultant or coach.
One of these members should be the chair of your MAB, not you.
When you establish an MAB for your successful and growing business, the benefits of a MAB with a breadth of focus are enormous. When you choose the right talent and expertise for your Management Advisory Board, you get the chance to carefully plan and action your purpose, the development of your people, and the potential that lies within you, your team, your products and services, your innovation, and your growing customer base.
As a result, you increase your sales, profits, productivity, performance, and success. You may also choose to pay attention to protecting the planet and playing some community, charitable or philanthropic role. In short, as a team, you create a business with a soul, rather than a soul-less corporation.
In addition, your Management Advisory Board can take on the range of roles normally played by a company board of directors. They also work with you to grow and diversify your business services and products, so you generate multiple streams of income.
You also gain from enhanced objectivity and professional independence. In any business where you, as the leader, are heavily engaged in the growth and success of your rapidly-expanding business, you and your team may be less objective, and somewhat 'blind' to the strengths and weaknesses, opportunities and threats of your business.
Objectivity, along with detachment, brings the capacity for a much broader overview to be taken of your business and industry, and of their ever-changing potential. These qualities and the vulnerable gaps in your business systems and processes are addressed by a good MAB. So, you benefit from a group of experts who are alert and focused on threats and opportunities that are missed where objectivity is missing.
Hand in hand with objectivity goes detachment and the ability of the MAB to guide you to decisions that are best for the growth of the business, rather than narrowly what is in your short-term interest or focus. An MAB brings detachment from the coal face of productivity and sales, and that detachment comes from not owning the business.
It is this quality that enables you to receive the best advice and support, because an MAB is not as vulnerable to emotional or ownership influences that can distort your decision making. This quality alone is invaluable and keeps you as an entrepreneur or business owner safe from manipulation.
Additionally, you benefit from the independence of your “as-if” company board of directors.
Often along your growth journey, as a business owner, you need to seek and gain independent high-quality counsel from experienced professionals you respect and trust. What better way is there to access such advice than from a group of independent specialist experts, who know you and your business intimately, who have a personal relationship with you, and who have the best interests both you and your business at heart?
An MAB supplies such trusted advice and counsel on an ongoing basis, providing you with the best advice and sounding board for your business. Such a resource is both invaluable and irreplaceable.
Finally, you having an MAB also gives your clients and the broader market place more confidence in the sustainability of you and your business. You are seen to be punching well above your weight.
These are the reasons that so many good businesses in the Asia-Pacific region are now retaining Management Advisory Boards as the entrepreneurial way to get a company board of directors, plus a lot more. So, why don't you?
For advice on setting up your own tailor-made MAB, you can contact Neville Christie of CEO Mentor Pty Ltd. and click here for ideas on how your MAB can work with you to create and grow multiple income streams.