Transcript: The Culture of Advisory Boards (EP50)
Brendan: Hello and welcome to The Culture of Things Podcast. I'm your host, Brendan Rogers, and this is episode 50. Today, I'm talking with Jo Hanlon. Through her business, Mind Your Ps, Jo provides coaching, mentoring, and business advisory for individuals, teams, and organizations to boost productivity, open communication channels, cultivate positive workplace cultures, all focused on achieving defined goals and creating lasting change. Many business owners have a real passion for their business but can find it hard to remain in balance, especially when it comes to dealing with issues involving other people.
People-related issues can go rapidly pear-shaped affecting your own, your team, and your business performance, engagement, culture, and behaviors. To add in further complexity, running a business can be lonely and at times scary, causing uncertainty and doubt, especially when you have the added responsibility of providing certainty for staff in a compliance-heavy workplace, rapidly changing client needs, plus a volatile and uncertain business environment.
Because you're the center of your business, whether you're a solopreneur or employer, having a committed person or team of people who provide a sounding board, sound advice, and ideas based on experience, maybe the difference between you remaining sane, and succeeding.
Jo is passionate about helping people who are committed to taking action, who truly care about themselves, their team, and their business, and want to do this using a blend of head, heart, and intuition. The focus of our conversation today is the power and value of a structured advisory board approach to support the achievement of your business goals. Jo, welcome to The Culture of Things podcast.
Jo: Thanks very much, Brendan.
Brendan: Jo, it's a pleasure having you in the studio today. You've been the first guest for a little while in the studio.
Jo: How does it feel?
Brendan: It feels fantastic to talk to people face to face, I have to say. Episode 50 is a milestone for us.
Jo: It's half a century, Brendan. Congratulations. You should be feeling very proud of yourself.
Brendan: Did I get you as the 50th guest because you're 50?
Jo: I wish. Thanks, I'll take that. Yes, I'm 50.
Brendan: Great stuff. Jo, let's get into our topic. As we always like to start, give us a bit of background on yourself. I'm particularly interested in this little journey you've had because you're a registered nurse back in New Zealand. How on earth did you get into this space?
Jo: If I think about the underlying principle of the whole journey and my whole journey, it's about people. It's also about helping people achieve their own goals, whether they're health goals when I was nursing and helping them get better from a physical point of view, to when I was in the corporate world and sales and marketing and business development. It's about making the business better, but it's also about helping my team reach their own goals and seeing them thrive.
That's always been a joy for me. It continues to be the thing that gets me out of bed in the morning when I see people in a different place today than they were yesterday. Hopefully, because there has been some mechanism, channel, advice, or conversation that I've had with them that's been able to make the difference.
Brendan: You spent as well a fair bit of time in a corporate space. You're at Baxter Healthcare for quite some time. I guess your corporate experience and now you've moved into that, and you've been involved in small, medium business for some time now. What is it that you really enjoy about that space compared to the corporate experience?
Jo: My corporate experience was a fantastic training ground. I often describe myself as one of the most highly trained monkeys I know because I attended so many training courses. I've still got a whole lot of those documents on my bookshelf to prove it. I don't know why. It was a fantastic training ground. I've got a lot of best practice thoughts, ideas, and also sharing from my teammates, my peers, my managers, leaders, et cetera.
Moving into my own space, which is what I did 13 ½ years ago now, has enabled me to make my own decisions, to be the master of my own destiny, and working with small, medium organizations, enterprises. I'm right there at the coalface where the decisions are made rather than having to wait for the decision making to go up the tree to the top, usually overseas, and then come all the way back down. Often, when it comes all the way back down, it looks quite different from what it was when I went up. That's like, well, how much difference can I really make?
Being able to work with small, medium organizations in a number of different roles can mean that I can feel that I'm having a major impact. That's very satisfying for me as well as my clients seem to like it as well.
Brendan: Going back to monkeys, I know that if you start picking the fleas off me and stuff like that, you're transgressing into the old thinking.
Jo: It's probably better than going back to reptilian-type behavior where I'm likely to take a jump out of you.
Brendan: I know now what to look for and get really worried if I see that behavior, Jo. I'm sure you control it quite well nowadays after 13 years.
Jo: Yeah, I'm well trained.
Brendan: Let's get into our topic around advisory boards because I know this is a real passion for you. You’ve been involved in it for a long time. You've been involved in some organizations there as well.
Brendan: For those of us who know very little about advisory boards and what they do and stuff, that's what we're going to unpack today. What is an advisory board?
Jo: It can look like all sorts of things. I guess it's a group of people that are selected by the business to help the business achieve their goals, whatever those goals may be. Those people are not there to make the decisions or to tell the business owner what to do. The advisory board there is very much to utilize their experiences and skills to create a problem-solving space or a solution finding space for the business owner or owners and the senior team—depending on who's on the advisory board—to look at different options and then make their own mind up about where they want to go.
I'm an executive director and a governance board as well. The difference between them both is if I read from this, a board of directors or governance board is a group of individuals who are legally responsible for the governance, control, direction, and management of an organization. They're very much governed by the Corporations Act Legislation and Regulations, but they're elected by business shareholders to make decisions on their behalf, and they are accountable for the performance of the organization.
If we look at the role of an advisory board, it's a group of individuals who are appointed by an organization to provide specialist or strategic advice to help solve a range of difficult or complex business problems. It's quite different. They don't have a legal or fiduciary responsibility to the business, but it's more like the business owner, owners, or management team have somebody that's got their back and is there to go on the journey with them to help them achieve their goals.
Essentially, the business owner, managers, or whoever end up making the decisions. They sift through all the options that are offered to them, and then they decide which way they want to go and which path they want to take. The advisory board doesn't direct them or have any expectations. They're there to assist.
Brendan: What business would be ripe for an advisory board situation? Let’s say my business and your business, where can we use that term solopreneurs, I suppose. We have some people that may contract and help us out from time to time. Is my business right for an advisory board, or there's a different level of business needed to even contemplate going into that space?
Jo: There's a bit of a continuum of different business models that people can use. It's everything from going it alone to then using peer groups and people that they know who may be in the same space. They can share information to particular groups like tech groups or CEO groups, people like that who've got other people that are sharing their own problems and you work on it together.
Other people use sole advisors like their accountants, lawyers, engineers, or whatever. But then there's a time if you're a growing business, there are different reasons that people would appoint an advisory board. Based on some research, 74% of people are looking for growth in their business, 17% are looking for succession planning, 5% are looking at increasing the asset value, and 5% are looking at the sustainability of operations or their business model.
There are a number of different reasons, I guess. They can be funded startups generally to even corporations because a number of corporations and even government departments around the world and now in Australia too are actually using advisory boards to achieve certain goals or outcomes. It's a complex answer to a simple question.
Probably not so much solopreneurs, but more if you've got a business that meets one of those criteria. Rather than just having one advisor, you can end up with a group of advisors that work together to support you. It's less than the governance board where you end up having people that actually tell you what to do.
Brendan: Let's maybe unpack that a little bit around the groups of people in an advisory situation. What benefits does that lead to for a business in having an advisory board, a group of people with different experiences, and those things?
Jo: Often, if we have one advisor that we've actually relied on for a number of years, which can be an accountant or a particular consultant—and you and I are both in that consulting business, there's absolutely a place for consultants completely, always will be. When it comes to an advisory board, essentially, the benefit is that you are able to shortcut a lot of those things that might take you a long time to get to.
If you've got one person with one skill set and they're advising you on one area but your key success drivers may be in multiple areas. If you think about what just happened with COVID, it’s bored all sorts of needs out of the ground. The process that we use, and I'll talk about the advisory board center shortly, that we use is actually a formal assessment of the business where it's at the moment, what the gaps are, making sure some foundational processes, procedures, practices are already in place.
The business is not encumbered by any of these legislative or maybe complexities. They could have a court case of some sort hanging over their head. They could have a poorly constructed partnership agreement. Partnerships could be breaking up or heading in different directions, whatever. In a lot of the initial assessment we do, we don't just rush straight into an advisory board. We actually start off with an assessment and see where people are and really do a bit of analysis to look and see if they're ready.
Now with an advisory board, the type that we run, it's more of a formal advisory board because there's a lot of people that have informal advisory boards. You may know some of those where you get a group of people together. It might be family members, it might be a mentor and you discuss your business with them every six months, a year, a couple of years just so that they’re keeping you on track and keeping you accountable. When you put a formal advisory board in place, it's more to do with a structured process. We have a charter. We have an independent chair.
A lot of people with advisory boards at the moment act as their own chairs. The problem with that or the issue with that is that the person is either fixating on the process rather than freeing themselves up to have the discussion, to listen, to ask the questions, and to have the robust discussions that they really need to have.
If you've got a formal structure, a formal advisory board, the group normally looks like an independent chair. That person looks after the process of keeping people on track and making sure that there are some key questions that the business owner or owners want to be answered for each particular meeting or get-together they have. Then the owner or the business managers can be free to actually indulge in the conversation, really get deep into it, and get the knowledge that they need, the answers, the experience, or the input or options that they're looking for.
The rest of the advisory board, from an external point of view, will normally be made up of two or three maybe other expert advisors and they are handpicked. Generally, the chair of the board may help access some certified or quality individuals that may have that experience that's needed, put them in front of the business owner. They choose who they want to actually work with them based on a good fit, from a cultural fit, from a personality fit, whatever. Therefore, you pull on people when you actually need them.
The other good thing about an advisory board benefit is it can be flexible. It can even be a pop-up advisory board if you really need it just for one or two meetings to deal with a hot issue you might have at the time you need a specific piece of advice or look at different options. Once you've gone through that conversation and selected which way you want to go, then you can move on, pick up the next piece, which may mean that you need a different type of advisor or expert to come on board for a certain period of time.
If it's a project-based advisory board, research is showing that the advisory board is normally in place for about 18 months. But if it's a longer-term goal, an exit strategy, or a long-term growth plan, then three years is probably a more normal timeframe. Research is showing that that's what happens.
Rather than relying on one person who is your trusted advisor, they're only human too, they can't be experts in absolutely everything. To have them as part of your advisory board is fantastic, but to bring in other experts when you need them is really useful. You get flexibility, you get advice that turns up when you need it. That helps you look at options and shortcuts your journey, which is really important in this world where you have to be nimble, you have to have strategic plans 3, 5, 10 years in any detail. In this day and age, as we know, it can be useful. But when it comes to the detail, sometimes that needs to change quite rapidly.
Brendan: It potentially offers a huge amount of flexibility and really maybe niching into certain situations needing certain people for times. Can you just maybe give us some example or an example around a topic, a situation, a challenge that a business has had that you've worked through with them in an advisory board situation where they've bought in a panel of experts, an advisory panel to help them through? Just so we can get a concept of maybe some of the challenges that people should consider taking up that flexibility of an advisory board?
Jo: Sure. There are so many different types of issues at the moment. But if we're thinking about future growth, there's an organization that I've worked with for a period of time who on and off, they're an NDIS provider. The owners were working in the business for a very long time. They felt that the business was growing. They're also a bit burnt out. Succession planning was a really key aspect for them and the staff. I actually initially went into what we call our growth assessment under the initial questionnaire.
Based on the outcomes from that, we decided that they probably weren't ready for an advisory board at that time because there were a few issues that needed to be dealt with immediately. We basically got those sorted and dealt with. A couple of other people came in. The key issue that I found very quickly was succession planning was a key strategy for them to succeed in the future. Then that's where we bring in an advisory board. I've been the chair.
This has been a little bit unusual, in which no one advisory board looks like any other. They're all quite different, but that's the beauty of it. It can be really horses for courses. I've been probably more the informal chair working with the business owners to source and access a general manager.
Once now, we've had the general manager in place. It's given us the opportunity to then work with the financial advisor and somebody else with an NDIS background and that expertise, and then myself as that informal chair to really position them well for growth into the future and really strategize and give them some options about where they might go and what they might do. That's been a really powerful and useful model.
Brendan: You referred to it a couple of times and say every situation is different and the skill sets that may be needed can be different, depending on the situation, obviously. Have you found, though, that through your experience chairing advisory boards and being involved in advisory boards that there's a level of experience that seems to be a common need to be on an advisory board that can really add some huge value to businesses?
Jo: Yeah. This is probably where you mentioned at the beginning my involvement with the Advisory Board Centre. I was a founding member of that based on a relationship that I'd had with the founder previously. She knew me. She needed a couple of guinea pigs, I suppose, to come on and put through the process.
Brendan: I'm starting to worry, though. One minute you're a monkey, now you're a guinea pig.
Jo: Yeah. Well, that's the flexibility of it, right?
Jo: Anything, and a crocodile apparently. Anyway, she pulled together a group of people who came from quite different backgrounds whose point of view she trusted. She put us through the process as the guinea pigs. Based on the feedback she got from us and herself going through the process, she has standardized that. Then, at the beginning of 2017, she launched—this is Louise Broekman—the Advisory Board Centre, which was a first.
There's been a couple of others like this, a number of other models around, but if I talk, it’s specifically about this one. Her goal was to use research that she'd used over 15 years where she had seen the needs of business change. She had seen the need going forward for that flexibility and experience. What she's done is put together this amazing network of people. She's got a whole lot of chairs, as well as a whole lot of advisors, as well as expert firms. A chair is a person who sits up and runs the advisory board, whatever that looks like. I'm one of those certified chairs.
She's put us all through a course. She has certified us basically and given our structure, given us a set of tools. That's what we used to create a more formalized structure for an advisory board rather than just a group of people, like I said before, that has got your best interest at heart sitting around and having a chat about it. What she's done in attracting the experts that she's now got on her network, or the chairs, there's a certain set of criteria that she has developed over years to make sure that the people who are coming on board have either got a certain skill set, or they've got a certain degree of experience and knowledge.
The experts are the really key people because they're the ones who are coming on board with years and years of experience in marketing, of setting up. There are a lot of global people. The network is now, I think it's about 700 or 800 strong now. That's the people who have come back from Australia. They've spent a lot of years consolidating, growing, selling, putting in place a lot of the practices that they're now being asked to share their knowledge about to people who are coming up through the ranks and looking for an advisory board.
The difference with the Advisory Board Centre is it is a structured organization with some clear charters. It's very arm's length. They don't get a cut of any. These are paid roles, I must add. They're not just pro bono, they're actually paid roles, and they don't get a cut. They actually basically have a membership type, I guess, model. They give access to firms who are looking for advisory boards to their network to be able to draw on people.
Let me just go back a step. When you've done the growth assessment, the chair works with the organization and says, okay, these are your goals. Do you agree? Yes. These are the types of experts that you're looking for. Yes. Then we put an EOI out into the network of the Advisory Board Centre. People with their required skills will apply to be the expert or even the chair for the next stage if necessary.
The business owner is the one who chooses who they work with. They set their own independent organization or arrangement with each of those people, and then it's up to the chair to have monthly catch-ups with the business owners. Generally, if it's an ongoing relationship, probably a quarterly half-day meeting with the advisors and the chair to address whatever key issues are at that time that the business owners need help and support with. As I said, a lot of them are very flexible.
Some people, the name board or advisory board really freaks them out. They'd rather just have an advisory group. We're very much guided by the language of what the business owner is looking for and what's important for them. One of the other things that we're really clear on is, we try and keep at arm's length from the fact that we don't advise people who are consultants to also be experts in the advisory board because there could be a potential conflict of interest.
You can absolutely have consultants working in the business. If there are going to be advisors that come in, when the advisors come in, we like them to have quite an independent relationship. If they then are engaged by the business because of their expertise to do a consultant type role, ideally, it's best that they step down from the advisory board because again, just to have that clear cut definition between ideas, so they're not overly impacting, informing, or advising the business owner based on their prior relationship or existing relationship.
Brendan: Is there a level of importance needed around teamwork for advisory boards? Why I ask that is because when I think about what I'm learning from you around advisory boards and the structure of those, and then I've had some board experience as opposed to advisory board experience. My experience on a board level is that it's really important to interact well as a team and really challenge each other as well as the CEO. Is that as important in an advisory board situation of having that teamwork amongst the advisory group?
Jo: It's a great question because when you think about it, the key role of a governance board is to come to a consensus and then move forward. The board, when we're on a governance board, is about making sure that the majority are in agreement to then give the directions to the business managers, management, or leadership and then off they go and do whatever. Then the advisory board, the chair is there to make sure that people are addressing the issue, but there's not the same need for consensus for what the best way forward is.
In actual fact, you often want a bit of productive conflict versus destructive, but productive conflict because that's where often the real juice comes from and the ideas come from. It also gives the business owners the opportunity to look at quite a wide variety of different options and make their own minds up depending on what suits them best.
We're not looking for a consensus with an advisory board, but we are looking for a team in relation to the common goal of the advisory board should be to be supporting that business to achieve their own goals and what they've been advised or what they've been contracted to do.
Brendan: Just sticking on that theme too, is there a natural progression? Again, you hear about a lot of people that want to move into governance board positions. Ideally, they want to move into paid governance board positions. There's always a talk around, hey, I probably get some runs on the board in a not-for-profit-type situation and a voluntary-type scenario. You mentioned earlier how advisory boards can be an unpaid role in some organizations.
Is that a good step to take? I know it's different, but is that a good step to take as far as getting involved in some board process or be an advisory board versus governance board to look at other steps into a governance type board? Do you see it work like that?
Jo: If we look at the continuum that we've actually got and that we use governance, what I guess, is the ultimate. That's not to say that all organizations want to go to that. That's more publicly listed organizations or not-for-profits that are relying on input from all sorts of people. If you're a business owner, put yourself in the shoes of a business owner with a whole set of employees, it's not that many people who really want to be told what to do. Some do, some say, look, I need a board to keep me accountable. Therefore, they have some type of governance board. That can be seen as the ultimate.
Partaking in an advisory board can be a step towards that, but it doesn't necessarily have to lead to that. I think the difference with a governance board is there's a high degree of risk for directors now, because of the Corporations Act and you've seen a whole lot of board members that have been outed because of poor decisions they've made that have led to bad performance of the business, bankruptcy even, bad culture, or whatever that is.
An advisory board doesn't have that same level of risk because they don't have that legislated. They're not meant to advise, they're not meant to tell people what to do. That's one of the traps of being on an advisory board—especially if you've got people that are also on a governance board—is they can sometimes fall into the trap of trying to treat the advisory board like a governance board and make the business owner accountable to them. The business owner is not accountable to them. The business owner remains, retains, and should remain with their own independence and their own decision-making. If there's a conscious goal to move towards a governance board, then that's fine.
I think the risk is that people that have got governance board experience or have done even an AICD course can end up treating an advisory board like a governance board when it's not necessarily. I think we need to remember the difference if you’re sitting on both like I do. We've just got to remain independent in our thinking and remember the differences in respect to those.
Brendan: It's really a fascinating topic, I think because the thing that's playing in my mind is that I'm not sure that there's enough information out there in the business space around advisory boards. Maybe this is the option, putting legislative requirements aside where some businesses have to have a governance board. What's your take on that? Is there enough knowledge out there about advisory boards, the benefit of that?
If I'm a company owner, my own private company, I might have 20, 30, 40 employees. I'll start to think, you know what, I didn't know much about advisory boards. That seems like a pretty good option for me. It's my business. I want to maintain control, and having a governance board I'd lose that. Is there really enough knowledge around this in understanding the benefits of advisory boards for business owners, particularly private business owners?
Jo: Look, it's a very new model. Louise, the founder of the Advisory Board Centre, and I'm talking about her mainly because that's who I know. I'm not talking about the other people around who have a similar type of business model. When she went looking in the world, Canada was probably the only other country at that stage that had some research-based or structure-based practices that she could actually talk to.
Now, that's changing. Now, Louise and the Advisory Board Centre are working with a number of universities, even in Oxford now and in Canada to actually get some more robust data to even make this more widely known.
The data and the research shows that probably 6% of the business across the OECD part of the world could probably benefit from having an advisory board. It's not for everybody. Some people think that it's a great idea, but when they actually get into it, they're either not ready or it's not really going to benefit them too much. Some people are looking for a governance board.
It's like anything now, Brendan. If you're looking for information, if you go looking on the net, do some research, but do the research with people who are actually practicing it and who have got some good structure, knowledge, and framework. It is a very newly discussed business model. But there's certainly a big need for it in a lot of businesses based on those areas that I talked about that would benefit from it. It's a very viable option. Do the research.
Brendan: Yeah, very much so, a very viable option. You also referred to maybe the business is not ready or it's not right for them. Give us an example of when that would be the case. What business wouldn't it be right for or timing in the business that is not right for it?
Jo: That's when we normally do that analysis, as I mentioned at the beginning, because based on those questions and how they are answered. As I also mentioned, there could be some other more fundamental problems that need to be dealt with first, whether it is structural.
There's one business I know that set up and took on an advisory board only to find that the business partners ended up going in different directions because when they did the growth analysis survey, what happened was that both partners recognized that their dreams and goals for the future of that business were quite different. They talked about it more and ended up saying, you know what? I'm wedded to this way, the other person will say, well, I'm wedded to that way. They basically went off, split the business, and did different things.
That's okay. I mean, there was an initial piece of shock and horror that that's what happened, but after that shock and horror passed, they recognized that that was the best thing possible. One of the business partners continued and actually did set up an advisory board in the end, a proper one, and they’re just going great guns. Often, even just starting that process can identify where some gaps are that need to be addressed first before you just launch straight into an advisory board.
You can imagine, if you've got two partners who really have different dreams, you engage an advisory board, and then you're sitting there trying to just decide which direction to go in. There's going to be so much internal conflict that they're really not going to get the best value for money out of the process and potentially get distracted by the conflict or the different goals and dreams that each person has. That's just one example of maybe an organization not being ready at that time.
Brendan: It's a great example too because I know through my own experiences, sometimes it can be a challenge to get business owners, business partnerships onto that same page. It really has an impact on the rest of the business if you can't get some alignment. Sometimes that alignment is not possible and they need to move in different directions.
Jo: Yeah. Often, people avoid having those discussions. Even just the process of engaging in that initial survey and opening yourself up to that because it takes a lot of courage. It can take a lot of courage for an organization to do that. Once they've done that, then it's about being willing to make the changes needed or it's just going to stagnate. I think it takes courage to do any of those types or take any of those types of steps when you're sharing and letting people into your organization. It's probably highlighted more when you're looking at working with a team of people.
I met a lot with the other advisory board, chairs, experts, and things. All of us have got stories about organizations that started going down the path thinking that we're ready. Three years later, they're still not ready because there's still a lot of other foundational issues that need to be sorted before they're ready to get going on an advisory board. Just starting the process has got them unstuck, and they've made some decisions from that.
Brendan: You've mentioned networking and I have to say, I call Mark Charrette a bit of a networking tart, the male version. I mean it very affectionately. I think you're the female networking tart. You're very, very connected to some fantastic organizations and people around you. It's a little bit off-topic. Why is that so important to you to have those connections and relationships?
Jo: Wow. That's a deep question, which probably deserves its own podcast session. You know me, that might happen. I think the thing that is important for me is I know myself pretty well. I'm part of being the most highly trained monkey. I know I've probably gone through about 50 different personality style analysis questionnaires. What I know is what I'm good at, what I'm not good at, what I like, what I don't like. It also helps me in my selection of my clients. Who I work with, who I don't, or who I refer to other people.
For me, I want to make sure that when I'm referring to other people, I know them, I like them, I trust them, and there's some history of some good work experience. Connecting and networking with people and doing that over time shows me that. You would have known this too.
The number of people who you see and they come out with a hiss and a roar, then they attend a couple of sessions, and then you'd never see them again. That could be for all sorts of different reasons. If I'm going to be referring some of my clients to other people, I want to make sure that they've got a very good solid pedigree because otherwise, it can reflect badly on me, and I could look like a bit of a goose.
The other side of it is I just really enjoy people. The other thing I've learned is that consistency is key, and relationships aren't going to be built in five minutes. You need to come back time and time and time again. When you're in a networking situation, I don't know about you, but when I go to a party, the more people there are, I find that I've talked to a whole lot of people about just surface stuff. Sometimes, it's really important just to connect and spend their time.
My word for this year, as I mentioned before, is deepen. It's really about spending some quality time with people, getting to know them. Going to some of those networking events gives you that opportunity more often.
Brendan: Yeah. Hear, hear. Thanks for deepening our relationship today and coming on the podcast, Jo.
Jo: You’re more than welcome, Brendan. I've been looking forward to having that opportunity for quite a while, I must say.
Brendan: As so I have. I've had a bit of a backlog of guests, but we've finally got to you in Episode 50.
Jo: Well, you’ve given me that age today, so I'm happy. I would have appreciated 49 though.
Brendan: Look, let’s get back on topic. I'm really interested to understand your own experience again from the governance board versus the advisory board. Is there ever a situation where you could have both, business uses both?
Jo: Yeah, absolutely. Generally, though, it'll be a bigger organization where they’ve got some departments or divisions. It could be a government department, and that's what research is showing or experience is showing through the Advisory Board Centre. That's not my area of focus, but a number of my colleagues. Some of them even work in some organizations and share their expertise still, and share their expertise because one of the really important things about being an expert—just as an aside, and I didn't add this before—is the currency of their knowledge.
People will go, I've been doing this consulting stuff for years. I'll go and sit on a board, either an advisory board, a governance board, or whatever. The important thing is to remain current. Even more important in this day and age because things are changing so quickly. Having some people advise us or even chairs who are still working, whether it's in their own business or as an employee in another business, gives them currency.
But a number of big organizations are seeing the value of having advisory boards as part of their divisions or their departments to get a certain job done, and to buy in I guess expertise that they don't normally need as part of their business model, but they could benefit from it for a short period of time. It's an alternative.
A lot of people like that because they still like to have somebody that's really independent, is highly skilled, or has done an enormous piece of work like one of the advisors on the advisory board seem to set up the whole Virgin Rewards Program a number of years ago. Having somebody that's got a breadth of experience with a program like that that's been such a global success over the years is a fantastic person to have on your advisory board rather than as an advisor. If that’s what you're looking for, a way to reward clients, customers, et cetera.
Another advisor I can think of has grown multiple businesses and sold multiple businesses for millions of dollars. Again, if you're looking to grow and scale your business, if you are going to employ that person or even have them as a consultant, it's probably going to be a really expensive exercise for you. But to have an advisory board means that you can access their ideas and their input for a set period of time, for a set amount of money, and you can be really specific about the goals and the objective. The more specific or clear the business owner can be about the objectives and the problem that they are wanting to address, the more effective the advisory board can be in helping them address that situation or that problem.
Brendan: The other burning question for me and probably because of the work that I'm doing predominately is the consulting, the coaching, the facilitation of team type stuff. But this seems to me that there could be an angle there where that business reaches a point where the work that I do and expertise that I may bring, it’s not the right time and the right place. We've sort of outgrown each other or whatever, where an advisory board approach would be another great next step.
What would that look like for a business? If I'm working with a client today and there may be a certain size or some challenge, when would that advisory board approach maybe be a better take than the individual consultant approach?
Jo: So one of the pieces of information that we have is a model that shows that at certain stages, and it's pretty predictable based on a whole lot of people's input. That there are various steps, dollar sizes, and stages that a business will get to. It’s at that stage you have the challenge of whether to grow, consolidate, or step back. Step back, step out, or step up basically.
Often what you’ll find is a consultant might help them get to that stage, but it's about that consultant or the coach being secure enough in themselves I suppose, and making it more about the customer rather or the client and not about them to actually recognize that this is bigger than me. I've given them everything I know and so we really need to bring in another set of expertise or skills to let that business go to its next level.
I think so much of it is about consultants and coaches being generous and focusing on our client’s needs rather than our own financial needs, our own egos, or whatever that is to actually recognize when it might be a good time for that business to look broad or wider, and to say to them, look, I've really enjoyed doing this with you. I may still continue working with you, but in this area as your executive coach like you and I do a lot as well.
But for this next growth situation or this next growth goal that you have—to go from $5 million to $10 million—we need to put in some extra technology, some extra machinery. We need to export overseas. We need to really amp up our marketing. We need to form some really key relationships. We might need to acquire another business. Whatever that decision is, if we're not the right person to help them with that, I think it's really important to then say, who else can we reach out to? Maybe it's time to look at either a pop-up or a longer-term structured or informal advisory board.
The reason that having a structured or formal advisor board helps is that a lot of people like to have a framework that they can hang their hats on and they can feel secure in, and it helps everybody manage the process.
Again, if you’ve got an independent chair that helps manage that process, then it can allow the conversation to be focused on what it should be rather than trying to solve the conflict problems or the people who think that their opinion is better than somebody else's, and you should be listening to that person, not that person. Whereas a chair or an advisory board is about, okay guys, we’re here for the client, we’re here to help them achieve their own goals, therefore, we need to focus on them.
Brendan: We’ve talked a lot about the pros of advisory boards. For me, I see a lot and I've heard a lot today. Thank you for sharing that. There are always some cons around everything we do. For you, what are some of those cons in advisory board situations?
Jo: When it does go off track. When the chair potentially tries to treat it like a governance board rather than an advisory board. When the advisors become particularly attached to their own point of view. It becomes more about them, and the pride or whatever that is that the business owner should have followed their advice rather than the other advisor's advice. Essentially, in general, it’s when our egos get in the way or where we forget that we’re there for the good of the client and for facilitating what they want and what they need, rather than what we feel is important to us.
The other piece too, it's when the advisors don't feel comfortable, maybe it's not a good fit, and when they may need to step down, back, or out and say look, what you're looking for, I'm not the right person. Somebody else might be a better fit for you. Then it just comes back to ego. But it also can come back to financial security for that person too, which can be a battle. It's always I think about staying focused on the client, what's best for the client, then that's when it's going to work far better.
We’re human beings, we've got our own frailties and our own challenges. That's where having a really rock-solid chair is, and that's a different skill set in many ways from an expert advisor or an advisor because the chair is more about the people dynamics, and keeping people on track and on the process. Whereas the advisor should be really creative and big thinkers because that's what they've been paid the big bucks for, and that’s where they've got some really great gains for their clients in the past.
Brendan: I'm going to get you to give two bits of advice today about a couple of different angles. Let me go into the advice part for you. I want you to give two bits of advice. Firstly, a bit of advice for a business owner leader who is in a situation, in a rut, or whatever in their business. What advice would you give them about looking into or taking into account an advisory board situation? What do you think their first step should be to start to consider an approach like this to help them?
Jo: There are so many, but one of the pieces would have you get some clear goals and objectives in mind? Because that's where you're going to get the biggest bang for your buck because we can really zero in on who and what is going to be the best area and person to help get you there.
Rather than going, I want to grow, but you don't have a strategic plan or you don't have any clear goals like, I want to expand overseas, I want to take over another company, I want to go to an IPO, or whatever that is. The clearer you are about that, the easier it is going to be to at least start off in the right direction and see whether an advisory board is the best way to go or an initial way to go.
As I mentioned before, even if you have a pop-up and try it for one or two sessions, then you can go, wow. Yeah, this is really adding value or not. That's one piece.
What would be the other piece of really good advice? I think it's about honesty and transparency. If you're not comfortable sharing details of your organization with other people, then it's going to be very hard for anybody else to be able to help you. Being willing to share, to be open to ideas, and to take on board some of those ideas to move and be committed to taking some action, I think that's the other piece.
Again, a lot of people think they are ready, but they're not really ready. But then, that’s where the beauty of an advisory board is because the power and the choice still remain with the business owner. That’s what a lot of people worry about. That’s really getting more knowledge about it. But get it from people who know what they're talking about rather than just any old person.
I see a lot of people go, I want to have my trusted advisor that I've had beside me. I want them on the advisory board still. I often challenge them and say, if that person was the best person for you and you still want them on the advisory board or you really strongly want them on there, why is that? If you value their advice so much and they're adding so much value, potentially you would already be there or you would be well on the track.
I think it's really important for people to take a good hard look at who they're working with and still keep working with them if they're adding value in whatever, but look at the advisory board for additional expertise and additional knowledge, and be open to that rather than just taking your informal advisory board, making them formal, and then expecting it to be very different, because it may be.
Brendan: Great advice, Jo. You're such an overachiever. You’ve given three bits of advice there, haven’t you?
Jo: Gee, thanks. I like being an overachiever.
Brendan: Absolutely. There's nothing wrong with it at all. I want you to give a bit of advice on the other side of the coin. If there are people out there that have learned a bit today around advisory boards that never really considered it, they're very experienced in their own space, and think, what I think I could add some value or really want to give back to help the organization. What advice would you give them about taking a step to determining whether taking on an advisory board position would be good for them?
Jo: I guess it depends on whether you want to do that formally or informally, and there are a number of people that have set up their own informal advisory board groups as part of their consultancy, and that's working very well for them. I know a handful of those people and they're very good at it. It depends on if you like structure or not and if you feel that you need some guidance or not because some people like to have a framework and fast track. Whereas others are happy to see and learn from the mistakes along the way.
But if you are interested in doing it from a formalized point of view, read about it because there is more knowledge out there—quite a bit of knowledge—and it's getting more and more. Use your common sense, obviously, to sort out the people who are just saying what they want rather than people who are actually doing it. Reach out to somebody like the Advisory Board Centre and say look, I'm really interested in being an advisor or a chair, and going through the process because they have a very robust recruitment process. We’ll help you recognize whether that's going to be a good fit for you or not in that particular model.
I know there are other people who have set that up as a part of their own business model, and it works really well. I think the only challenge with that sometimes is that we tend to bring people in we know rather than leaving the decision to the business owner as to who they want to work with and who they feel is the best person or the best expert to come and work with them.
Brendan: The other bit of advice I’d add to that is you're such a humble person. They could easily contact you as well. How about you tell people how people can get a hold of you?
Jo: Yeah, I forgot about that. Thanks, Brendan. My business is Mind Your Peace and my name is Jo Hanlon. You can find me on LinkedIn. My number, I don’t want to give everyone my number, but anyway, it's online and I'm easily found. Feel free to reach out and just have an exploratory conversation with me. If you want more information, I'm happy to do that as long as you buy me a coffee.
Brendan: Well, I did offer you a coffee this morning but you kindly rejected it. You took water instead.
Jo: Well, one coffee a day is enough.
Brendan: I think you just don’t like my instant.
Brendan: I'm sorry for not being more prepared. Jo, look, that wraps up the conversation today. I think we've covered some fantastic areas of the advisory board. Something from my own view, giving me much more perspective on what this is about, where it may be very useful in certain circumstances, and certainly in comparison to a governance board. Thanks very much for sharing your experience there.
Jo: I might just add, there's one last thing I want to offer if I can.
Brendan: Absolutely. Of course.
Jo: I mentioned before the cost of an advisory board. Generally, we find organizations less than $1.5 million probably might find it a bit pricey. The sweet spot is often $1.5 million to $100 million. Businesses that are between that space as an entity will probably find it useful. That's not saying, as I mentioned before, division or department of a bigger company might find that useful because they will or they might.
The general cost if we look at it, a guideline is probably around $40,000–$50,000 a year as a cost to have a chair and two advisors. But that just gives you a ballpark. It’s about judging that affordability and whether that’s something that you can afford or not because people are wanting to obviously get paid for their expertise. That’s not the whole reason because a lot of the advisors and chairs are very happy to provide guidance, help, and share their knowledge. But at the same time, it’s about recognizing that, and that's where the formal structure comes in. As a parting comment.
Brendan: Thank you for sharing that. In my humble opinion, that's a really sound investment to get the outcomes that we spoke about is indeed possible through the advisory process, particularly of a business of that size that’s turning over that sort of money. A very, very small investment for massive potential payback.
Jo: The Entrepreneurs' Programme is absolutely aware of the Advisory Board Centre and the work that’s being done. There's a number of them that advisory boards are actually part of their recommendations now and so they can provide match funding. That $40,000 is probably the low range depending on the scale of the objectives and the goals, it probably goes up from there.
Brendan: There's no doubt about it. You keep overachieving. Do you want to end this interview soon?
Jo: That’s it. I'm done.
Brendan: I'm happy to keep going. Jo, look, once again, it’s been a pleasure. Thank you for coming to my home studio as well. Again, I've enjoyed this conversation. I've been looking forward to it for some time now. I spoke to you many, many months ago and said, I'd love you to be the 50th guest on The Culture of Things podcast. I've got a lot of time, a lot of respect, a lot of appreciation for the work you do. Thank you for being part of my network. Thank you for being a fantastic guest on The Culture of Things podcast today.
Jo: Thank you, Brendan, and I think you’ve overachieved with your 50th podcast. That’s a pot calling the kettle black. Thank you and bye-bye.
Brendan: Fist bump, great overachievers.
Jo: Thank you.
Brendan: It was a number of months ago when I asked Jo if she’d be interested in being the guest for episode 50. Thankfully, she said yes. Jo's been involved in our LinkedIn local central coast community since it started. She’s a prolific networker, or as Jo likes to say, a connect worker.
Testament to her, she lives quite a distance from where we hold our events and she consistently turns up and builds trusted professional relationships. It was a pleasure talking with her, learning about advisory boards, and the benefits they can bring to many businesses. These are my three key takeaways from my conversation with Jo.
My first key takeaway, leaders must ensure their knowledge is current. In order to do this, leaders must be lifelong learners. It should always be a case of many years of experience, never have one year of experience repeated many times. For leaders involved in advisory boards, maintaining current knowledge is absolutely critical to the success of the board and the business it's supporting.
My second key takeaway, lack of humility is the root of all evil. This is especially so when it comes to advisory boards. Advisors must never get attached to their own point of view. They must ensure their focus is all about the business, not themselves. Having an experienced chair who focuses on people dynamics is critical to ensure a lack of humility factor doesn't derail the advisory board objectives.
My third key takeaway, the best business leaders are honest and transparent. As leaders, being comfortable with being vulnerable is critical to building trust. In order to be vulnerable, you have to be honest and transparent. When this level of honesty and transparency is present, information sharing happens and people are open to new ideas. This honesty and transparency are key traits of successful leaders.
In summary, my three key takeaways were, leaders must in short their knowledge is current, lack of humility is the root of all evil, the best business leaders are honest and transparent.
A shout out to an old friend of mine Paul Mieli who I worked with many, many years ago. Paul’s an avid listener of the podcast. Thanks for the five-star review and comment, Paul. Great to know you're taking some gold nuggets from every single interview. If you have any questions or feedback, please feel free to leave a comment on the socials or send me a message at brendanrogers.com.au. Thank you for listening. Stay safe, until next time.
Outtro (music): Thank you for listening to The Culture of Things podcast with Brendan Rogers. Please visit brendanrogers.com.au to access the show notes. If you love The Culture of Things podcast, please subscribe, rate and give a review on Apple podcasts and remember a healthy culture is your competitive advantage.