1. The Power of an Informal Board of Advisors
by
Kirk Coburn
Co-founder & Managing Director, SURGE
(For Copy with Audio, Please Email Me)
2. About Kirk Coburn
★ Co-founder & Managing Director, SURGE Accelerator
★ Created the PGA TOUR Network on Sirius XM
★ Founded Sports and Event marketing agency that works
with leading brands including the PGA TOUR, the NFL,
Nascar, American Express, Sirius XM, Major League
Baseball and the NHL
★ StartedBrandBark marketing and management
consulting to help start-ups and companies accelerate
growth
kirk@surgeaccelerator.com
★ Served on the Board of EO
★ Continues to hold onto a 2 Handicap
★ Loves endurance running and open-water swimming
★ Bornin the wild and raised by a pack of coyotes under
the name Kuykendall (Kirk) Brand Coburn
Read my BLOG @ surgeaccelerator.com/blog
3. Agenda
* The Business Case for a Board of Advisors
* Case Study: HappyLawn of America
* What Kind of Board Is For You
* Strategic Board Best Practices
* Peer Board Best Practices
4. DO YOU NEED A BOARD OF ADVISORS?
Four Questions:
* What are the three or four biggest challenges in your
business right now? (What keeps you up at night?)
* How do you handle stress?
* How has your business changed over the last three to
five years?
* Where do you get your best counsel and advice, in
terms of driving your business forward?
5. WHY YOU NEED A BOARD OF ADVISORS?
Comments from fellow Entrepreneurs & CEO’s:
“I felt I had reached my current natural limits on learning how to be a
CEO, was not getting enough”
“My advisory board is responsible for driving 85% growth in revenue
the first year and 35% the year following.”
“Running a business is simply easier if you have some help and
advice from a group of trusted individuals dedicated to seeing you
succeed.”
“I determined that I wouldn’t have made my 3 biggest mistakes in
my company if I had myself accountable to a group of experienced
businessmen who I respected.”
6. WHY YOU NEED A BOARD OF ADVISORS?
YOU are in good hands…others that have proven
the model
7. Case Study: Happy Lawn of America
Situation: Barrett Ersek had a US$2.2million dollar lawn care company that
seemed to be stuck – he could not grow his company at a rate more than
5-10% per year.
Problem: Barrett could not see past the industry’s key bottleneck, the cost of
the long & complicated sales process
Solution: Barrett created an informal board of advisors. Out this came an
assignment, “Think about your biggest bottleneck, solve it, and if possible
think of a way to improve the process or product in a way that would give us
10 times the advantage over our competitors. Solve that and you will win in
your business.” His advisors helped him find an “X” factor.
Result: Barrett had developed a proprietary patented selling process that
allowed the company to grow rapidly from no sales in 2004 to US$10million
by year-end 2007. Today, operations cover Northern Virginia all the way up
to Northern New Jersey, USA.
8. FORMAL OR INFORMAL?
The recent Sarbanes-Oxley Act imposed on public
companies has soured private firms on
having a formal Board of Directors.
“ The biggest loser in Sox: the small and medium
businesses that create over 90% of jobs in the U.S.” –
Tom Meredith, key Dell Architect, former Motorola CFO
Don’t give your advisors the fiduciary responsibility of a
formal board. It does not align with your main
objective: helping you grow!
9. 2 TYPES OF INFORMAL BOARDS
Strategic Boards Peer Based Boards
Strategic Boards are what most would This is a board made up of peers. At
consider to be a “Board of Advisors”. This SURGE, this consists of fellow founders of
Definition board should consist of strategic influencers other Energy IT companies that meet
that can individually help your business together to resolve and learn from one
succeed where you are weak. another.
This Board exists to advise your company on Peer Boards are put together to help the
strategic matters similar to a President’s entrepreneur succeed and grow
Cabinet. This board should be made up of professionally and personally. This is the
Purpose key business leaders that can serve as a place that an entrepreneur can go to
source of credibility and value to help the discuss the deepest issues that
company grow and navigate business employees, strategic boards, investors and
issues. stakeholders cannot.
PROS CONS PROS CONS
Helps companies get Not a great place for Helps entrepreneur The entrepreneur is
new customers, an entrepreneur to manage the “X” not truly
Pros and serve as credibility, let his or her guard factor: finding accountable to the
Cons raise capital, consult down on personal ground breaking peer based board
on operations and failures/concerns. strategies. Place of and cannot rely on
finance, form better Must be on “A” game safety for board to help
partnerships with when managing entrepreneur to execute
stakeholders learn without fear
10. COMPENSATION
STRATEGIC BOARD:
* 0.25% to 1% of your equity per person
* Pay a Daily Fee plus Expenses
* In some cases, pay an extra Retainer for extra work
added during board meetings
* As your business becomes more successful, time to
renegotiate compensation with each advisor
independently
PEER BOARD: Join SURGE and gain access to many
other founders as part of the SURGE alumni network.
11. STRATEGIC BOARD: HOW DO I CREATE ONE
How do you attract an Advisor?
* JUST ASK and KEEP ASKING
* Make sure you test drive them for 90 days and ensure
alignment in strategy, style, and most importantly, core
values.
How many should be on the Strategic Board?
* Find where you are weak, and get someone to be on the
board than can offer strength
* The actual size is important. Read Venture Hacks article
entitled “Create a board that reflects the ownership of the
company”
12. STRATEGIC BOARD: WHO SHOULD I ASK?
WHERE ARE YOU WEAK?
* Energy and Utility Deep Domain Expertise
* Finance
* Strategy
* Leadership
* Marketing
* Client Services & Business Development
“I felt I had reached my current natural limits on learning how to be a CEO,
was not getting enough consistent and targeted professional development
from groups like my CEO roundtables, and felt I didn’t have time for full-time
school. How can I keep on learning in real time on real issues that I’m
facing? She went for two members first one to bolster her skills in finance,
strategic relationships and senior teams and one to support her continuing
efforts in service quality. Besides crediting them with her growth in revenues,
they’ve helped her transition the entire leadership team into new roles,
managed a major trade market infringement scenario, and helped her work
out their business plan for the next 4 years.”
13. STRATEGIC BOARD: ONE FAVOR AT A TIME
Maximize everyone’s time, pick one specific action
item for each board member to pursue on their own
(Examples from Verne Harnish, the Growth Guy)
* John Cone helped Verne nail down the GE, Dell, and Southwest Airlines
benchmarking events.
* Boyd Clarke, CEO of the Tom Peters Mgt Consulting Co, advises him on
marketing.
* Bill Gladstone, one of the top author agents in the country, is working with
Verne on a potential second book deal
* Ted Leonsis, Vice Chairman of AOL and investor in Gazelles, was key to
securing a relationship with Fortune Small Business magazine
* Arthur Lipper, former owner of Venture Magazine, is helping Verne get some
business in Singapore
14. PEER BOARD: HOW DO I CREATE ONE
How do you attract a PEER Advisor?
* Join SURGE
* Find the best organization that fits your personality and
business need and JOIN. Leading Peer Based Board
organizations include:
- EO: Entrepreneur Organization (www.eonetwork.org)
- YPO: Young President’s Organization
- Vistage
- CEO Roundtable
How many should be on the Peer Board?
* Between 6 & 10
* Less than 6 members there isn’t sufficient
experience in the room to ensure each member benefits
from the Forum. Over 10 becomes too crowded
15. PEER BOARD: SIZE CONSIDERATIONS
Advisory Size Pros Cons
· The intimacy level can grow · When one person is absent,
stronger more quickly because the value of the Forum
there are less personalities meeting is more significantly
When there is a
involved. impaired.
small number of
members · It takes less time to go around · There are less experiences
the table during exercises. and knowledge to be shared
· It can be easier to achieve around the table.
consensus with a smaller group.
· When one person is absent, the · It takes more time to go
When there is a large value of the Forum meeting is around the table during
number of members not significantly impaired. exercises.
· There are more experiences · It can be more difficult to
and knowledge to be shared achieve consensus with a
around the table. larger group.
16. PEER BOARD: KEY TENANTS
Best Practices from over 7,000+ entrepreneurs
generating over $101 billion in revenue, employing
over 924,000 people
* Safe Environment of Confidentiality
* Non-Solicitation
* Protocol of Gestalt, Experience Sharing
17. PEER BOARD: THE LIFE CYCLE
Level: Casual Connection Commitment
“The 5%”
Safe subjects they Real life dilemmas they Things they may not
would discuss with would only discuss with have ever discussed or
Content
casual acquaintances a few trusted confidants thought about
Low trust; few risks, Acceptance, openness, Members share their
low commitment, no trust and respect vulnerabilities openly
Environment
emotional investment
Mild anxiety, Caring, comfort, Highly emotional,
optimism, excitement, confidence with group strong acceptance &
Feelings
and potential distrust commitment
New product line, Partner problems, Overwhelming
office relocation, H/R strategic planning, business loss or
Sample
benefits, new workout family issues, health challenge, fear of
Presentation
regimen, hiring new problems, life balance failure, impending
Topics
sales people divorce, depression,
etc.
Notes de l'éditeur
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Assure group that this will be quick, will hear from various members\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
Good opportunity to compare EO to competitor organizations.\n
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Good opportunity to compare EO to competitor organizations.\n