Gary Collins
Whether you are a "lone wolf" entrepreneur or part of a family dynasty, every business person can benefit from the impartial advice of a peer.
Personal advisory boards are one of the hottest trends in small business today. Setting up a group of friends or colleagues who meet periodically to offer wisdom and support can expand the size of your management team without increasing your payroll costs. It can also bolster your legitimacy and increase the value of your company.
A personal advisory board can range from an informal group of trusted friends to a more formal peer-to-peer mentoring group.
Gary Collins knows advisory boards. Mr. Collins, who has 20 years of experience in executive management, is a managing partner at Toronto-based 4Growth Inc., which provides management services to businesses. Mr. Collins launched the Canadian operation of Internet pioneer McAfee Associates in 1994, and by 1997 it was designated the highest performing worldwide region with $60-million in revenue.
Later, as co-CEO of Pomegranate Media Inc., Mr. Collins built and sold a successful marketing services business. He was also vice-president and general manager at NexInnovations Inc., a technology services provider, where he managed a $300-million region.
A native of Sarnia, Ont., Mr. Collins has a bachelor's degree from York University.
Earlier, Mr. Collins took your questions about advisory boards and small businesses.
Dave Michaels, globeandmail.com: Hello Mr. Collins, and thanks for joining us today. To get things off the ground, I have a few basic questions. How does an entrepreneur approach other business people and ask them to give their valuable time and expertise to someone they don't know? What's in it for them? What kind of pitch should you give?
Gary Collins: To begin, create a list of 20 influential people you know. Ask these people to provide an introduction to key people whom you think should be on your advisory board. Once you have connected with potential board members, invite them to discuss opportunities over lunch or dinner.
Your advisory board members can benefit through stock and/or stock options, or through an hourly rate (offer in the $100- to $300-per-hour range). This is in addition to the opportunities for sharing their experiences, giving back, and career networking.
Before you meet, be sure to prepare a strong pitch, including a professional presentation of your current business and your vision for the future. Outline the gap between your current business and where you want to be, and highlight the ways that your advisory board members can contribute to closing this gap. Preparing this pitch will also help you to define the needs, skills and experience necessary in your advisory board.
Dave Michaels, globeandmail.com: What should be your ratio of people you know to people you don't? I'm guessing you might get more honest feedback from people who aren't your friends.
Gary Collins: There is no specific formula for the mix of friends and independent board members. Regardless of the mix, the objectives are the same - leverage the experience of your board members, gain independent advice, and leverage the board's ability to reach your target markets and help grow your business. Ask yourself the question "will this board have the ability to close the gap between my current business and achieving my vision?"
Theo Zivo from Canada writes: While the idea of advisory boards is to have access to many minds with different resumes, there exists a very real danger that a leader may only choose those who mirror their own experiences. The result is a boardroom of useless sycophants. (For the record, I've seen this in action more than once and the result was disastrous.) The alternative error (which I believe President Obama may be making) is to fill your advisory board with so many contrary minds that consensus is as elusive as the holy grail. How does one go about creating a balance?
Gary Collins: You make two excellent points and, like yourself, we've seen both of these situations. The KEY to creating a balance is understanding your business and your needs (in skills and competencies). By understanding these, look at the GAP in requirements to grow your business and find the "right" individual, regardless of whether that is someone you know or someone who you don't.
Dave Michaels, globeandmail.com: What kind of mix should you aim for, professionally?
Gary Collins: The key professional skills can include market expertise, sales, product/ technology expertise, finance and access to funding. The best mix will depend on the needs of your business.
If these needs are evolving, you may want to build your board over a period of time, starting with the near term needs and adding skills as they become necessary. If you are a first time CEO, consider the importance of an adviser who has been there before you and achieved success.
Regardless of their professional background, all board members must be willing and able to help attract new customers and grow the business.
Lary Waldman from B.C. writes: I can see the value of this exercise in the urban setting, but what to do in the rural setting, which I find myself in? In a small town, Internet savvy or not, if you say one word that doesn't meet with the approval of someone, you are going to hear it again, a week later only embellished and totally out of context. Rural communities are really just small little fiefdoms, run by the biggest player in town. Say something truly bad about them and they crush you like a bug.
Gary Collins: This session totally speaks to those who run small businesses, and many of those are in small towns, rural or otherwise. In selecting an advisory board, you're looking for people who want to help your business succeed, above and beyond gossip and innuendo. I think you're addressing the marketing challenges within a small community. That challenge is to keep a good image of the business most of the time.
Remember, you're not alone in this. Your advisers should be participants in keeping and maintaining a positive impression of your business. If they're active, a poor impression reflects upon them as well.
Toivo Pajo from Toronto writes: Hi Gary. What kind of suggestions would you have for individuals seeking to find a seat on an SME (small and medium enterprise) advisory board? I work with the Institute of Corporate Directors, which represents the director community in Canada, and many of our members are interested in joining SME advisory committees. We offer a program on SME Board Effectiveness to help our members understand and learn about the unique challenges facing SME directors and advisory board members. What else can the director community do to learn about joining SME boards?
Gary Collins: There are several organizations that support small business owners. In Ontario, there are approximately 18 Innovation Centres that support the small business community. These government funded organizations were created to provide advice and counsel to the business owner. There might exist an opportunity to become a business mentor.
In addition, several regions in Canada support Angel Investment Groups. There is a National Angel (Maple Leaf Angels) investment group and we're associated with the York Region Angel Investment Group. Once again, these groups look for individuals who can provide guidance to entrepreneurs.
Entrepreneurs get support from their accountants, bank managers and lawyers. These collateral professionals may be helpful in connecting you to their clients.
Dave Michaels, globeandmail.com: What are some of the common problems inherent in advisory boards, and what can you do about them?
Gary Collins: The most common problem is that people join advisory boards for the wrong reason. They join because they want to promote themselves. It is important to ensure that all advisers have a keen interest in your business success, have enough time to work with you in growing the business, and have the ability to make a difference.
Since this is your advisory board, you have the luxury to remove those who cannot or are unwilling to give you the assistance you need to improve your business.
Another problem we find with advisory board members is that they don't have the relevant experience running a small or medium business. Often, entrepreneurs try to find someone who has a great deal of success in running large companies and they think, because of this, that person would make an ideal board member. In many cases, they do not. There is a significant difference in building a small business compared with managing a large enterprise. Again, find the best adviser for your business who has relevant experience.
Dave Michaels, globeandmail.com: How often should a group meet, and what's the best way to keep in touch?
Gary Collins: We think its important to meet once a month if a new advisory board is being formed. Once a review of the business has been concluded and the gap in performance requirements has been articulated, the board can move to a quarterly meeting process.
However, in times of crisis or major changes (market or otherwise), the board should be asked to participate again on a monthly basis. In a small business, it's important that business issues are handled immediately as they generally don't have the capitalization to withstand a significant problem.
There should also be an annual meeting to do a review of the performance of the company and the planned goals and objectives for the forthcoming fiscal year.
In our world of converged communication, it is now possible to conduct effective online meetings, including live chat and video. Therefore, it isn't necessary to have all meetings face to face. This allows companies to include board members who might not be located in their community.
Dave Michaels, globeandmail.com: How important is confidentiality? To what lengths should you go in this regard?
Gary Collins: Confidentiality is very important even in a small enterprise to ensure the privacy of customers, partners and suppliers. We recommend that the advisory board members sign a non-disclosure agreement (NDA). This is standard procedure in most organizations.
A breach in confidentiality should be treated as a serious offence to the business.
Dave Michaels, globeandmail.com: Gary, that's all we have time for today. Thanks for sharing your expertise with us. Any final thoughts?
Gary Collins: A good advisory board can be a very valuable tool in growing your business. The board allows you to see your business through a different lens, it allows you to vet your ideas and thoughts, it allows you to leverage the experience and expertise of other people at a relatively low cost.
If you do a good job in the selection of your board, it's safe to assume that you can accelerate your business beyond your expectations. And that is a good thing!