When Beth Savage became the owner of PQ Systems, the first thing she did was put together an outside board, she says in this video. “Why not have a board that is there for the sole reason of helping you and your team succeed?” says Beth.
Many business owners are reluctant to create an outside board. Some believe that their company is unique, and a board of outsiders wouldn’t work for their company.
Others rationalize that they already get enough advice from employees, family members, and paid advisors—such as their attorney, accountant or bankers. Still others can’t see the purpose, and they want to hold on to what they see as their autonomy.
“That autonomy is exactly the reason why you need a board,” says Aileron Founder and Chairman Clay Mathile. “A lack of analysis is a weakness in a privately held business. One of your board’s most important functions is to strengthen your decision making by confronting you with opposing viewpoints to weigh,” he says in his book, Run Your Business, Don’t Let It Run You.
How can an outside board advance your business? Here are 5 ways an outside board acts as a resource for you, the business owner.
1. An effective board helps you shift from a short-term to a long-term mindset.
To build a stronger, more sustainable business, you need to be able to get out of the trenches and think and plan for the future. One of your board’s most important functions is to offer strategies and long-term perspective to help you improve and execute your strategic plan.
Making this shift to working on your business instead of in the business gives you a way to attain a different perspective, a broader and longer view, and perhaps most important—forces you to dedicate time to strategic thinking and planning. By improving your ability to make decisions, a board is an investment in your leadership, mission, and business culture.
2. An effective board is uniquely qualified to help you deal with complex issues.
As a business owner, you have one of the loneliest jobs in the world. An outside board will understand the pressures you face because they’ve been in your shoes.
When dealing with ownership and management issues, an outside resource can help you confront the tough issues.
Whether it is family-related conflict, a rapidly changing marketplace, or tough personnel issues, effective board members are equipped to help you navigate such situations. They’ll also make sure the needs of all constituents are heard.
3. An effective board offers invaluable advice on succession planning.
Have you thought of your exit plan? Do you know how that aligns with the legacy you want to leave behind? What prospects do you see for management and ownership when you can’t run the business anymore? Many business owners don’t know the answers to questions like these.
Your board will support you in your succession planning to help you achieve the vision you have for yourself, your family, your organization, and your people.
Board members can help you address this crucial responsibility, with questions including:
- Do you want to pass your business on?
- Do you want this business to survive you?
- If so, to whom should leadership and ownership be passed? How? When?
They aren’t there to pressure or confront you about your succession plan. Instead, with your best interest in mind, they’ll ask the questions that no one else may have the courage to ask.
You might get technical advice or help setting up wills, trusts, or stock transfers from a paid advisor or consultant, but only an outside board can spark the kind of toughminded debate that forces you to consider alternatives in the context of your personal abilities, values, beliefs, and vision for the organization.
4. An effective board helps you overcome blind spots.
As your business grows, any blind spots you have may become a deeper source of vulnerability for the business. Effective board members have nothing to gain or lose by being honest with you, and so you can count on them to tell you unpleasant truths or tough advice you need to hear.
Board members are a source of accountability and they are truth tellers, says Beth: “If they see that you’re doing something that potentially could damage your organization, they’re going to tell you. As the leader of a team of individuals counting on me, I want somebody there who’s going to tell me that,” she says. Because they are a group of peers you can trust, a high-functioning board will help you turn the corner, while preparing you for what’s around that corner.
5. An effective board provides perspective backed by broad and diverse experience.
Part of the value of an outside board is having access to talent, experience, expertise, and lessons learned that you wouldn’t otherwise have access to. With their extensive business experience, your board can help you challenge assumptions, better analyze information, and make better business decisions.
Because of their expertise, your board will help you objectively focus on the future, the direction, and the positioning of your company.
Next Steps: Choosing Your Board
An outside board isn’t a group of people who will tell you how to run your business. On the contrary, an outside board offers wisdom and perspective to help guide you towards better decision-making and problem-solving.
Don’t forget that a dynamic, high performing board is made up of leaders who are in the “giving stage.” These are leaders at a point in their career in which they experience joy in giving back, and they feel honored to help and contribute ideas and solutions to another business.
“A board is a group of people who really just want to give back and help,” adds Beth. “They’ve been successful in their careers and now they want to help others be successful.” Continue your success and find a low-cost, alternative to being alone at the top: attend the High Performing Boards program to create an outside board or to get more out of your current board.