MARISSA Levin more than doubled her revenues at Information Experts during the past three years, and she’s the first to tell you she couldn’t have done it alone.
Her secret sauce - a great advisory board. About three years ago, the founder and CEO of the 18-year-old strategic communications consultancy turned to a mentor for help in growing Information Experts.
“My company was stuck at $5 million,” Ms Levin says. “I couldn’t get past certain roadblocks.”
Her mentor advised her to put the board of advisers in place.
“He said it’s a group of people you hand select that can get over your problem,” she says. “That conversation sparked a light bulb for me.” Last year, the firm brought in $11 million in sales. Ms Levin has been so happy with her experience that she’s even written a book to help other CEOs, called SCALE: How Top Companies Create Breakthrough Growth Through Exceptional Advisory Boards.
If you don’t have a board of advisers in place, now is a good time to start putting one together. As Ms Levin has found, good advisers can become a vital sounding board and source of strategic insights for a CEO, helping you to grow your company while others in your niche falter.
Tap the right talent
Ms Levin invested nine months in recruiting the right board members - experts who can help her strengthen the company in key areas. Her six-member board now includes an entrepreneur who sold a $55 million company and has helped with project management, and the former head of one of the government agencies her firm works with, who has sparked business development.
Make it formal
One of the big mistakes that growth companies make in choosing an advisory board is that they’re too relaxed about it.
That won’t get you very far. Ask John DeHart, CEO of Nurse Next Door, a 60-unit franchise chain based in Vancouver. About five years ago, the home health care company, which he co-founded, brought on three advisers. Meetings were held every two months, and though the company would send the advisers a report two weeks before the meetings, everything was pretty informal.
“We ran it like two entrepreneurs running it,” Mr DeHart says. While the advisers were paid, “it wasn’t the right amount,” he says.
“It just ended up stopping. Advisers wouldn’t show up to meetings.” But Mr DeHart didn’t give up on the idea.
About a year ago, the company formed a new board and brought in three new advisers to help with matters such as the transition from two CEOs to one. Two advisers are past CEOs of large companies, and the third is a successful entrepreneur with strong corporate governance experience. They meet every month for four to eight hours and hold a two-day annual retreat. The company makes it worth their while financially.
Accountability matters
The new board has required Nurse Next Door’s team to stay on top of key information -from financial metrics to risk factors - on a constant basis.
“Every single month, I and my entire team have to do formal reporting to the board,” Mr De Hart says. “It’s made us so much more disciplined in our actions and thought.”
The board has the power to hire and fire the CEO (Mr De Hart), and that accountability has made him a better CEO, he says.
Look beyond company logos
When Mke Ferranti started his New York City company, Endai Worldwide, in 1999, during the dot.com era, he set up a six-person board of advisers from well-known firms. But it was hard to get the advice he needed from them. “They were big company guys,” he says. “They could not relate to an entrepreneur.”
The web analytics company, which now manufactures its own email marketing software, tried again and set up what Mr Ferranti calls ‘Advisory Board 2.0’ in 2008. The three-person board, made up of marketing professionals with experience in important niches, is much more hands on. Mr Ferranti pays them to attend meetings and sometimes to tackle consulting projects. “Experience taught me that I needed to surround myself with people who had specific capabilities, skills, knowledge and values,” he says.
The ‘intellectually challenging debates’ he has had about strategy with his board have led to decisions that have helped the company grow. Endai, which has about 23 employees, is very profitable and had triple digit sales growth last year.
Verne Harnish is CEO of Gazelles Inc, an executive education and coaching solutions provider, and author of Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Fast-Growth Firm.
