The Benefits Of Peer Pressure
Mark Jordan
In my personal experience working with business owners around the
country, less than 10 percent of privately owned companies operate
with a true board of advisors. The most common reason is that small
business owners enjoy total control of their companies and have little
interest in relinquishing authority. In addition, business owners
tend to be very private and are not comfortable with outsiders having
an intimate knowledge of their sensitive information.
Two questions need to be addressed
by every business owner: 1) Is there value in securing outside advice
regarding the core functions of your business, and (2) Can this advice
be had without giving up control, authority or privacy? There are
numerous benefits to forming a team of outside advisors including:
enhanced business growth, accountability, encouragement, critical
thinking, unfiltered feedback, vision planning and prioritization.
Enhanced business growth is a natural
outcome of soliciting and implementing
ideas from outside advisors. Many
business owners have reaped tremendous rewards by forming an
outside board of advisors. According
to TEC, a well know advisory board
organization, TEC member companies are growing faster than
the S&P 500, the Dow Industrials, and the Fortune 500 combined.
Clearly, these companies are receiving
input from their peers that is positively
affecting their company.
We all need greater accountability.
Webster’s defines accountability as an obligation or willingness
to accept responsibility for one's
actions. It is further defined as
a statement explaining one's conduct or exposition of reasons,
causes or motives. It is dangerous
to operate unchecked in any part
of your life and your business is no exception. We all know how
tempting
it can be compromise integrity or
put off responsibility when no one is watching.
The world of a business owner can be
very lonely. An encouraging word goes a long way toward propelling
us past the proverbial bump in the road.
Critical thinking skills allow us to
see the forest and the trees! Outside advisors can hone and challenge
our pre-conceived ideas and improve our ability to assess situations
and react appropriately.
Employees and company insiders tend
to filter the responses and information
they give their superiors. Outside
advisors can be tasked with providing unfiltered feedback with no concern for the owner’s response. This relationship
also provides a safe outlet for sharing
problems.
Vision planning is at the core of
every owner’s responsibility. Advisors can provide a fresh
perspective and feedback to improve the viability
of your plan and suggest strategies
to reduce potential obstacles.
It is difficult at best to maintain
priorities during the heat of your daily business battles. A team
of advisors can act as a guide insuring you stay on the course you
have plotted.
The primary type of outside advisor who can be utilized without giving up control
or authority is an advisory board. It has no ability to mandate decisions or
obligate you to action and they operate at your sole discretion.
An advisory board can take many shapes, including an informal gathering of
colleagues and establishment of formal groups with specific objectives. The
greatest benefit is received from establishing a formal board that meets with
you on a systematic basis.
Advisory boards can range in size from a few people to as many as 15. TEC,
which can be found at www.teconline.com, is an example of an organization that
facilitates and creates a board of advisors for your company. TEC (which has
been around since 1957), has over 7,000 members, combined revenue of member
companies of $133 billion, and combined employees of member companies of 2.1
million. TEC has established facilitators around the world who act as moderators
of each board of advisors. Business owners, who meet certain criteria, pay
an annual fee to join an existing board of advisors. The board is comprised
of peers who are in different industries but facing similar challenges. The
TEC facilitator organizes monthly meetings of the board with a formal agenda
and stated objectives.
In addition, the TEC facilitator participates in individual meetings with
each of the members in his group to provide targeted advice. The net result
is a
group of like-minded business owners who act as a board of advisors for each
other’s company.
Another approach is to establish your own board of advisors. This group would
be committed to providing you with feedback but without your corresponding
responsibility to their company. The obvious challenge is finding people who
would be enthusiastic about becoming involved in your company on a monthly
basis. One way to overcome this is to offer a small stipend. You can provide
additional motivation by allowing them to publicize the fact they serve on
your board of advisors thereby enhancing their credibility. Consider going
to some of your existing individual advisors to solicit their participation.
You need to take a methodical and detailed approach in selecting your team
of advisors. Larry Bossidy, chairman & CEO of Allied Signal, Inc., summed
it up best when he said, “There was a time when I thought that brains
were everything. That view has dimmed recently. I think brains are important
but now I also look for good team-builders, good communicators and courageous
people who do not get stuck with an idea. You need people who are more nimble,
who have the ability to lead organizations in changing and tumultuous times
comfortably, without panicking.” Look for individuals who add value
to the company by among other things:
• Providing
wisdom from years of experience.
•
Offering a successful record of accomplishment
leading growing and healthy companies.– You cannot take
someone where you have never been.
• Offer access to new relationships in
areas you want exposure.
• Enhancing the credibility to the company.
• Demonstrating strategic, objective
thinking and good communication.
Confidentiality is of paramount importance. Can you trust the advisors
you have assembled? Most of the due diligence is done by the facilitator
in an organization such as TEC. If you assemble your own group, get
confidentiality agreements signed by each member. This creates a
professional framework and highlights the importance of the trust
you have placed in each person.
Increase your board’s effectiveness by holding regular planned
meetings with clear agendas. Provide
an outline of your agenda at least
one week in advance. Facilitate frequent interaction and communication
of important issues and ideas among
the board members.
“There are high spots in all of our lives and most of them
have come about through encouragement from someone else. I don’t
care how great, how famous, or successful
a man or woman may be, each hungers for applause.”
- George Matthew Adams
Mark Jordan is Managing Partner of Vercor and President of Capital Strategies, Inc. Mark brings a unique, multi-disciplined approach to the mergers and acquisitions arena by drawing on his advanced tax strategies, estate, and financial markets knowledge. He also holds an MBA, BS in Business Administration, and numerous designations.