Over the past few weeks, I have talked about the demonstrable, high ROI of strategic planning for companies of all types and sizes, along with suggested processes and tactics to complete that plan on time and under budget.
As important as the creation of the plan is its ongoing review and updating. Both in comparison to actual results and then the corresponding “Gap Analysis” to evaluate what went right and should be done more, and what went wrong and needs adjustment, discontinuation, etc.
One of the best ways to recalibrate like this is through the establishment and regular meeting of a Board of Strategic Advisors.
For smaller, entrepreneurial companies, a strategic advisory board can perform many of the functions that a fiduciary board does, but for far less cost, headache, and without the emotionally and financially complex decision around loss of owner control.
For companies like this, here are a few ideas on how to set up and earn ROI right away on a strategic advisory board:
Accept the Truism that Often It is Better to Receive than to Give: While advisory board members, unlike with formal boards, do not have liability nor fiduciary responsibility, their time and energy requirements to participate are significant.
And for most smaller companies, the financial incentives it can offer advisory board members are relatively little compared to the value of board members’ time.
A good if imperfect analogy is that for many senior executives their involvement with a smaller company advisory board is almost a philanthropic endeavor, where they give of themselves without expectation of direct reward, financial or otherwise.
Correspondingly, the owners and managers of the small company must approach the sage advice and good energy offered by their advisory board fully in “receiving” mode.
For businesspeople of the mindset of always trading value for value and reciprocal obligation, this is hard. But only by clearing this space can an advisory board’s counsel be best received.
And somewhat counter-intuitively, often only by management fully accepting the “gifts” of its advisors will the board member’s experience be richest.
Begin with the End in Mind: For companies beyond the startup phase, its operating executives are naturally pulled to the shorter-term challenges and realities: this quarter’s revenue and profits, this month’s sales, the challenges and angst of a difficult employee decision, etc.
An advisory board discussion, however, by both its nature and by the kinds of folks attracted to serve on them, naturally pulls to the longer view - to the big "why" and "which" questions that all businesses should be regularly asking themselves always but rarely do.
The why questions are hopefully embodied in the Company’s mission and its values, and need the regular attention of strategic planning sessions like advisory board meetings to keep them from existing only in “hot air.”
The “which” questions are in many ways the harder ones that an advisory board dynamic can specifically help address.
This is because ambitious entrepreneurs and executives, especially after they have a little success, are naturally drawn to expanding their sense of their market opportunity, and correspondingly their list of product and service offerings.
This naturally leads to a diffusion of focus, of trying to be all things to all people. A thoughtful advisory board will challenge management to clearly define where they are aiming to be 1 year, 3 years hence and beyond, and from this vision where resources and attention should be focused today.
Speak Little, Listen Much: Managers and owners of emerging companies are often also the lead salespeople, the lead “evangelists” for their companies.
As a result, their default mode is to always be selling, always be pied-pipering their incredibly bright futures.
This is natural and good, but when strategic planning in board settings it is of equal importance that the challenges, the obstacles, the concerning risk factors be discussed and grappled with long and hard.
Even if, especially if, so doing is buzz-killing and / or depressing.
Why? Because it is often only in the “low negative” energy state that a certain kind of reflective creativity can flourish, and completely new approaches to solving vexing problems can be discovered.
Brevity is Next to Godliness: Strategic planning sessions in a modern business context should be tightly scheduled to last not more than 3 hours. After this length of time, diminishing returns starts setting in fast.
A tight frame also requires all participants to come to the meeting prepared. And, in turn, that the meeting organizers select the right meeting homework and then plan and moderate the agenda with the proper balance of structure and free-flowing dialogue.
Doing all of the above requires work – a good guide is that for every hour of strategic meeting time there should be 5 hours of planning time by the meeting organizer and at least 2 hours of preparation time by each participant.
Given that the only way to increase the value of a business is to either a) increase its bottom line financials and/or b) to improve its strategic positioning and growth probability, a structured approach involving first the development of a formal plan and then...
...staying committed to its ongoing “review and resetting” as is done in a well-moderated advisory board setting should be a FIRST priority of any responsible manager of a company with ambition.
These are classic “non-urgent, extremely important” business building activities to be ignored at one's peril, and benefited from in ways well beyond reasonable expectation.