4 Remembering to trust yourself

We love to hear stories from entrepreneurs who went against the grain. It’s great to learn about the hero’s journey, replete with overcoming all the odds. Rather than listening to conventional wisdom, these entrepreneurs trusted their instincts and believed their vision of what was possible. They found an innovative niche, explored fresh ways of connecting with their customers, and figured out how to stay ahead of the curve. During those early times of idealism and excitement, most entrepreneurs did everything themselves. They made the sales calls, developed the products, provided the services, wrote the checks, answered the phone, and swept the floor. This is an important part of the life cycle of a business. But if we remain in this mode, our companies will be only as strong as a single leader.

If we want our businesses to become sustainable enough to grow and create livable work for all stakeholders, then at some point the way we operate needs to shift. As this shift happens, we become more knowledgeable about our industries and begin to make use of conventional wisdom. At this point, we need to ask for help, know when to delegate, and know when to hire people who know more than we do. As we grow bigger, it can be difficult to keep track of our intuitive values and that gut feeling that started us off on the entrepreneurial road to begin with. We may start not to trust ourselves as much anymore.

In this chapter Lisa and Margot share stories about hiring “experts”—hires that led them to question their own knowledge of their companies. Joe tells us about a time he gave himself (and his work) away, a little at a time, and ended up not sticking with one of his own core values. Tom shares a story of questioning his own integrity in favor of looking good for his board. He illustrates how one small choice of straying from your standards can start a ripple effect. Marie talks about how sometimes there may be no way to stick to your mission, and the best choice left is compromise. When that happens you can reinvent yourself, start another project, and try to keep your original values intact.

These stories are about how we can stop trusting ourselves, a little at a time, until we don’t know how we got to where we are and we have to find our way back. Sometimes we need to trust experts and sometimes we need to trust our own instincts. The trick is finding a balance.

Asking for Help Without Giving Yourself Away

LISA

After many years at Vermont Bread Company, I finally delegated the role of sales manager to someone highly recommended by my former business partner. This person was bright, articulate, and confident. He had previous marketing experience, which I hoped would make up for my complete lack of knowledge in this area. At the end of the first year his results were disappointing. He kept telling us he couldn’t close sales because we needed to offer better promotional programs with deeper discounts, create new products and product line extensions, and restructure our pricing to give higher margins to our customers.

During the second year he told me repeatedly that the marketplace was completely different than when I was overseeing sales. “It’s just not as easy as it was back then,” he would tell me when a new customer didn’t sign up. I believed him because I figured he knew more than I did. I started to worry about the future of our company because growth seemed to have slowed so much. Within the next few months, as sales continued to stagnate, he decided our company was not able to give him the opportunities he was looking for, and he resigned. Until I could find a replacement, I had to step back into the sales role, and I was dreading it.

After a few weeks on the road, I found that what he had told me was not actually true. It was then that I realized how easily I had let his knowledge and experience trump mine. When I called on new potential customers, told my story, served them Vermont Bread toast, and presented our programs, I was able to close sales as I always had. And I realized I had given my knowledge away for what I thought was an expert’s experience.

When you stop trusting yourself, it is often connected to self-doubt. We think we are not capable, so we trust an “expert” more than we trust ourselves and decide someone else knows better than we do how to make decisions about our companies. We need to find a balance between asking for help and understanding that what we know is enough. While we are learning the ropes, we will inevitably make a mess. We have to know when it is past time for us to stop making a mess and be able to say, “This is not working.” One way to know when something is not working is to take a hard look at the results. The sales manager I hired had a long resume and a reputation of being very good. He told me a lot of stories about what he was doing, and I saw him move around a lot, but the results were poorer than what I had seen when I was doing his job.

A lot of movement and talking does not always mean results. Sometimes you might see someone make weird, circuitous movements and hear very little from her, yet the results tell the true story of her success. For instance, a full-loaf packaging machine in the bakery slices the bread, bags it, and puts a closure on it. The guy who runs it is nicknamed Earl. He has been running it for years, and when brand-new employees come in and see him, they think he’s not doing much of anything. Earl is a big guy, and he stands in one place appearing relaxed and unproductive. The truth is, he is very skilled at his job—he has the working of that machine down to a science. If he is there, that machine runs perfectly. If you put someone else on that machine, that person runs around like crazy and appears to be working really hard, but when you look at the machine, you see it is not running smoothly.

Results should speak the loudest. A well-respected expert in your company might tell you, “Your product is flawed, your company is flawed, and I am going to do such and such to help you make it right.” But when you actually look at the results, you might see that production or sales numbers have actually gone down. Of course, in order to grow your company, you have to ask for help, but asking for help does not have to mean giving yourself away or not trusting yourself.

For over thirteen years I ran Vermont Bread Company with a business partner. We never saw each other outside of work, but every day we came into our company and worked together to run it. When we became a grown-up company with a factory and systems and policies, my partner did not want anything to do with it. He liked the entrepreneurial, seat-of-the-pants, creative decision making of a start-up. So he left the company and built a beautiful house outside Portland, Maine. But he forgot two very important facts: he is a pilot and I am a very convincing salesperson. I kept talking him into flying back to Vermont to help me. He decided he had picked the wrong Portland and moved to Portland, Oregon—you cannot easily fly a Cessna from Oregon to Vermont.

When I finally accepted that he was really gone, I floundered for a while and then made two key decisions: first, to hire people who knew way more that I did and, second, to create an active advisory board (see the “Practical Wisdom” section at the end of this chapter). I do a lot of one-on-one consulting at events like Social Venture Institute, and my key advice is always this: Put together an advisory board. Look around at your networks and try to pick people who really know their stuff. For my advisory board, I needed people who were strong enough to stand up to me because I can be a steamroller. I got a banker, a baker, some owners of bigger businesses, an attorney, and a marketing person. Over the years, whenever I had outgrown a particular board, I would take the members out to a nice dinner and politely fire them. Then I would find people with experience running larger companies who could help us get to the next level.

Having an advisory board gives you a place where you can lift up your head and look to the future. I am a real fan of advisory boards—for businesses and for life in general. (We are actually playing with a model in Vermont called the Chess Club to provide an advisory board for your life and career.) Creating a board gives you a group of people who have made a commitment to understanding your issues and your history. I always retain complete veto power over all my board’s decisions; that way, I always have at least one place in my professional life where I can ask for help and yet never have to give myself away.

The Professionals Versus the Spirit in the Box

MARGOT

The bigger a company becomes, the harder it is for an entrepreneur to stick to her vision and remember to trust herself. When a company reaches a certain size, you have to delegate tasks, and you can’t control everything. You often lose track of what is going on in different areas of your company. When I started Birkenstock, I vowed to run it like a company I would want to work in myself. I had worked as a dress designer in Canada, and that was the only time in my life I was an employee and had my place in the hierarchy. I worked on the designs, made the patterns, oversaw the sample makers, and fitted the dresses on the models. Because the company was big, I never found out how the whole business fit together, where the profits came from, or how the salesmen sold the goods. I loved the dressmaking work, but because I was not connected to the enterprise, I felt isolated and dissatisfied. I decided if I ever ran a company, my employees would never feel that way.

This was a very good intention, but this sort of ideal is hard to stick with as the company gets bigger. When Birkenstock was small, it was easy. I didn’t have to face the challenge of losing track of the vision or forgetting to trust myself. I had close relationships with my staff, my supplier, and my retailers in the field. My staff consisted of two people: a bookkeeper/secretary and a stockboy. They knew everything that was going on, and I consulted them whenever I had a question. I told them about the goals we wanted to achieve, and then I would ask, “How do you think we should do that? Do you have any ideas?” In this way, they became part of the business. We all worked together, and it was fun.

We called the company Birkenstock Footprint Sandals, Inc., but we didn’t own the brand; it was the Birkenstock family name, and I worked closely with Mr. Birkenstock. Only five years before I discovered his shoes, he’d been baking the first footbed in his mother’s oven. We grew our companies together. When I first went to Germany to visit him, he had a staff of about sixty employees, including manufacturing and selling. Again, because his business was small, I became familiar with its whole process and with the German staff. Mr. Birkenstock frequently came to the United States as well. When we traveled together, so he could understand the American market, he sometimes brought his family along. So I knew his three sons from the time they were babies. On our travels we formed very close relationships with all of our retailers. It was important to have those connections because the retailers were carrying our mission into their communities and needed all the information about the product they could get. We held annual conventions for them, and Mr. Birkenstock often attended those. The middle years were the best for me: I retained the vision of running an “ideal” company, and everyone was connected to all aspects of the process. It was a very personal business, and I enjoyed it very much.

But as we grew, I started to doubt myself more. I began to ask, “Am I really cut out to run this place?” Though this question weighed on my mind, I never mentioned it to anybody because grow bigger we must. That is always the mantra of business. Frequently, that is also why trouble starts: during growth a lot of entrepreneurs start losing track of their visions. They begin to give themselves away rather than trusting in their missions. For instance, I had always tried to promote our own people from within so that I knew what I was getting. But as the company grew, we needed advanced skills in different areas, and I decided to hire “professionals.” The first one was a sales manager who was well known in the industry. When he joined us, he hired his sales team. They didn’t understand that Birkenstock was more than meeting quotas, earning commissions, and manipulating retailers into buying more than they needed. Before I knew it, I had a department of people more focused on making money than on building relationships with our customers. I had, in a sense, given my vision away.

To me it was clear: in order for a business to be sustainable in the long term, the relationships have to matter more than the high sales numbers. When I did the selling myself, I never tried to oversell. I never pushed people into buying more. I took into consideration that they would have to pay for the merchandise. I wanted to be sure we could count on the money coming in. My way of thinking was odd to most salesmen, and this sales team was no different. Because I knew about the tendency for salesmen to focus on high numbers, for years our sales folks were on straight salary. That didn’t fly with this “professional sales force,” so, I caved in, and we worked out a quarterly bonus system based on volume. The bonuses would be paid out, but four months later a retailer might still return the shoes. What then? At that point I felt I was standing still and trains were rushing by in both directions. I was getting dizzy. I had given my vision away. Finally, I woke up and said, “This is not working.” I had to fire a number of the salespeople, but luckily, I didn’t have to fire all of them—some had begun to understand.

As a company grows bigger, it can be important for the growing staff to understand the spirit in which you started the business. But sometimes it can be difficult to translate this spirit into words. That’s where our Birki Boy came in. Years ago, at an international distributor meeting that Birkenstock held in Germany, the Dutch distributor spoke about the almost mysterious way Birkenstock sandals had spread out into the world. He attributed the footwear’s success to an invisible spirit inside each box. Its magic unfolded once the box was opened. As with all fairy tales, you had to believe in it before it could manifest itself. I wanted to make the intangible tangible—I wanted to express to my staff the spirit in which I started Birkenstock. So I had a very talented employee create a hand puppet: the Birki Boy. He was the “spirit made visible.” We used this character at retailer meetings with great success. He helped us tell the story. After the fallout from hiring and then firing the sales force had died down, I realized it was time to get the Birki Boy out of his hiding place again. At the next sales meeting, he told our crew that they’d better start believing in him because without him, Birkenstock would not be where it is today.

Sometimes you think you can hold on to your mission by hiring people who hold the same values as you do. But just because someone talks about values doesn’t mean that person will necessarily be able to act with integrity. For example, when I hired the consultant for our succession plan, I believed I was hiring someone sensitive, capable, and socially responsible. This man worked with us for a while and got to know Birkenstock, and then he suggested we do some team building and bonding via a weekend of togetherness at a nearby Zen center. The program entailed a variety of exercises, including falling trustingly into the arms of others. One young salesman was very afraid of the trust exercises, but we finally got him to fall backward into our outstretched arms. It was a tremendous achievement for him.

Two days later, the consultant and our sales manager fired the young man. Even before the team-building weekend began, they had known they were going to let him go. Together, they had decided they should run the show, they knew what was best, and I should take a step back and let them handle matters. I did not feel good about that at all: this young salesman had trusted in a way that was very scary to him, and now he was being fired. You can’t play with people’s emotions like that.

In turn, I wound up firing both the consultant and the sales manager.

In the end, I followed my own conviction, but often you can’t know what will happen from the beginning. It is difficult to identify which people will take the power you offer and abuse it. You just have to deal with the results as best you can. I did not give up on consultants: I continued to hire them. Their outsider perspective was very important to me, and they remained a valuable resource for our success. I just had to know how to use their advice—what to embrace and what to disregard. A few years later I met the succession consultant again. We were on a program together, he as a speaker and I as a panel member. We talked, and he acknowledged his mistake. He said he totally understood my reaction.

What I learned from these adventures is that you can’t always be right. Sometimes your trust in others is misplaced, and situations don’t turn out so well. I have been called too trusting at times, but I would rather be disappointed once in a while than to live as a suspicious and paranoid character every day. After all, when I did trust myself again, I was always able to remedy the situation.

Giving Yourself Away One Step at a Time

JOE, CREATIVE MACHINES

Sometimes I don’t even realize I’m not trusting myself and following my value system, but I wind up accepting a job because I think it is going to be good for the community. Later I realize I’ve made a number of concessions, I haven’t kept my values or my boundaries, and I’m in over my head. The result is like throwing one stone into a pond and watching a bad ripple effect.

It is against my principles to work for less money than something is worth, yet last year I gave myself away by not following that value closely enough. I didn’t follow it closely enough because it conflicted with another value: I like to do work that is going to make the world a better place. At Creative Machines, we sometimes do public art projects for the community, and I won a public art commission for Ochoa Park in Tucson, just north of the South Tucson border. The park is by a ravine, and a school nearby is being closed because it’s in bad shape. A lot of “bad” people apparently get together in the park and shoot out the three street lights so they can deal drugs. Kids are afraid to play in the park, and drug dealers are always popping up out of the ravine, and there’s a lot of shooting everything up. They shoot holes in the boxes that run the sprinklers and other objects at the park. So, the Arts Council had a contest for a public art project to try to keep kids in the park and make it a more interesting place to play and hang out. Only $10,000 was available for it, and since that really isn’t enough to create public art, I didn’t even enter—yet I still won.

This is what happened. I have a friend at the Arts Council, and she called me one day and said, “I sort of added your name to the list because you do a lot of things that might help them. You are an inventor and a creator, you come up with economical and unusual solutions, and maybe you could figure out how to give them good lighting. The city really didn’t give them enough good street lamps.” And I said, “Oh, geez, thanks!” but I didn’t take my name off the list. That was my first concession. For the Arts Council presentation, I brought a video of something we created in our shop that I call public drums, which is a rugged structure secured on a metal base. You can tap anywhere on them to make music. At the presentation, I said, “If people have a really good time and are drawn to be there, maybe they’ll come to respect it.” But I also said, “You guys don’t need public art. You need police protection.” All too often, public art is asked to do the job that city planners and architects bungled while the real problem falls through the cracks. Public art is expected to revitalize an area or, as in this case, to stop crime. I said, “The only way we can make something like this is to get more money for it. The city would have to agree to run power to the location and give me a concrete pad to set the structure on. There would need to be another source of money, so I don’t expect that you would want me to do this.” And then I left.

Well, I got a call the following week that the committee really liked what I had said, and they selected me. After a month, the city couldn’t commit to any more funds because of the bad economy. I told the Arts Council people, “I didn’t promise anything unless I can have a concrete block and electricity going into it.” The Arts Council people said, “Tucson Electric Power has a few leftover solar panels and batteries from another public art project. They’ll give you those for your power source.” When I told them I would have to put the solar panel up on a ten-foot pole so nobody would shoot it, they replied, “We’ll see if we can get it donated.” I said, “Maybe there’ll be some more money.” And they said, “No, there won’t be.”

If there had been more money in the budget, I could have simply run electricity to the location and would have been able to do a better design. I spent an inordinate amount of time trying to figure out how to protect a solar panel and battery. They’re pretty vulnerable objects. I thought about bailing out, but I was in far enough that it would have looked bad. That’s how a lot of difficult situations happen: you keep taking baby steps. One thought that kept me going was that I shouldn’t run from tough challenges if I want to make money. If Tucson has a dangerous park situation that I can solve, chances are a hundred cities across the country have similar problems. If I could make something that worked in this park and didn’t cost a fortune, perhaps I could turn it into a product and sell it nationally.

Finally things started looking up. A retiring Parks and Recreation employee was very interested in the project and was able to get the city to donate the labor to dig a trench from a nearby junction box. The poor economy let me hire an electrical contractor to run power in the trench for a very good price. I came up with a design that I liked. The drums are about the size of conga drums. Their surface is touch sensitive and glows at night. They are made of bulletproof polycarbonate (similar to drive-through windows at fast-food restaurants in really bad neighborhoods where you have to put your money into the slot). My employee Eric was my destructive tester because he was a juvenile delinquent when he was little. He banged on the drums with a pickax and used his lighter to try to burn through them. The project has proven successful with the public. Local residents love it, no one has hurt it, and I enjoy visiting so that I can watch people play with it. I’m working with playground equipment reps to try to market something like it nationally.

This story will probably have a successful ending, but I still wonder if I did the right thing because I came close to violating a basic principle. Essentially, I was doing $50,000 worth of work for a $10,000 grant. The problem with this form of charity is that other artists who are given $10,000 grants will be expected to do $50,000 worth of work. When asked to do charity, we sometimes forget that work (or the sale of products) is never performed in a vacuum; it is always done within an existing economic system upon which some people depend. I think the lesson I’ve taken away from this is to keep looking toward my basic principles and continue to ask myself at every turn, “Am I following my values?” We tend to think that because we are doing charity and working for a good cause, we should do it for less money than it’s worth. But there is a narrow segment within which charity prevents good economic exchange. It can make it hard to sell something for a fair price. Part of the work we do as values-driven businesspeople is to make a sustainable living so that we can keep on giving.

The Moment of Truth

TOM, NORTHEAST DELTA DENTAL

It can be difficult to continue to trust in your values while you are trying to succeed, particularly on a personal level. For instance, at Northeast Delta Dental we have a very sophisticated CEO review process evaluation and succession plan called a 360. Everybody participates in it. A few years ago the board members said they would like to see the 360 reviews that the people who work with me had written. I really want the reviews because they have been very meaningful to me in terms of growth, but sometimes they are hard hitting, and it can be nerve-wracking to think of your boss reading people’s comments out of context. I’ve had moments when I’ve sat in my office and seriously thought about how I can make the reviews look better than they are. I have asked myself questions like, “Do I really want to show them this?” “Can I sanitize this?”

That’s the truth—I really have asked those questions. Those aren’t my best moments and ultimately I know that I have to show everything to the board. I have to adhere to my value of honesty and transparency first, and then I need to handle the fallout, whatever that might be. It’s the right answer. But I’m sure everybody goes through that kind of struggle.

At these times, it is usually good to remember that all the different problems in corporate America probably start with something that seems easy, like fooling with a review report, something relatively gray and small. And then that dishonesty grows to the point where you are doing something illicit, something that takes you down the path of duplicity and corruption. I can see how that could happen. But if you keep trusting in your core values to see you through, you almost always make the right choice.

When Societal Pressures Impinge on the Mission

MARIE, MS. FOUNDATION AND THE WHITE HOUSE PROJECT

Sometimes you have a great mission—it is timely and innovative and you know the world needs it—yet societal pressures are too much for your funding sources, and you find yourself having to move away from your vision. This happened with our Ms. Foundation for Women program. Our mission was to raise the expectations of girls in the United States. One way we did this was to create Take Our Daughters to Work Day. But the minute the last girl walked out of the workplace on the first Take Our Daughters to Work Day, the cry went up: “What about the boys?” While many fathers were thrilled about the program, some men were outraged, and others were sincerely concerned.

One congresswoman said we needed a Take Our Sons to Work Day like we needed a White History Month. Nonetheless, throughout the life of the program, we bent over backward to see how we could help resolve the conflict. We convened male leaders who contacted us, and we explained the event’s mission. We offered to take their sons to work in places where men were in the minority, like childcare centers. They flatly refused this suggestion, saying it would punish their sons. Nothing would do but that we take their boys to work just like we were doing with the girls. We were a small women’s organization. It wasn’t that we didn’t want to help boys—we had sons and knew that not all boys were doing well—but the girls were all we could manage. We did use Take Our Daughters to Work to talk about problems boys were having, too, including issues of class and race and how difficult it is to awaken to the issues of the minority when you are in the majority. Still, the men didn’t support the program. They pressed lawsuits, picketed our building, and threatened us with violence.

We remained committed to our mission until the culture finally got the upper hand. Women had begun to feel disloyal to their sons and joined participating workplaces in insisting that they add boys. Some companies called it Take Our Children to Work Day but kept focusing the day on girls. Others just started adding boys. The broth of the day got thinner and thinner. The day had never received much financial support, regardless of its enormous adoption across the country and even beyond. It was designed as a stand-alone program. Companies could implement it without acknowledging the Ms. Foundation or supporting it financially. That made us very dependent on certain funding sources. Finally, the company that had given us the most money and hung in with us the longest called to say the internal criticism was too difficult to withstand. We had to include boys and rename the program in order for them to give us any more support.

I looked for other money for girls only, but there was none to be had. We took the issue to the board members, who wisely told us to resist doing the Take Our Children day, but consider Take Our Daughters and Sons to Work. Then we called in folks to help us design activities for girls and boys. We built on research by work-life organizations showing that our daughters and sons want a family-friendly work world that allows them to be involved in all areas of their lives—family, work, and community—without penalty. We partnered with these organizations and let the companies know about the new name and activities. By then, almost all of them were including boys in some way and were relieved when the program was renamed Take Our Daughters and Sons to Work Day.

When we added the boys, many women knew that this would once again dilute the attention to girls’ aspirations, and they were rightfully angry. They couldn’t get us money to run the original program, but that didn’t stop them from letting us know what we already felt: we had failed our nation’s daughters. We gave ourselves away and strayed from our original mission.

The original conflict had propelled the overwhelming press and success that Take Our Daughters to Work Day garnered every year. Once it became Take Our Daughters and Sons to Work, the controversy was over, and the press wasn’t interested. The controversy had actually helped generate conversations about women and men, work and family, and the changing roles of our sons and daughters. After the name change, the issue lacked spark. Girls fell off the front pages, literally.

The day for daughters and sons still exists, under the stewardship of a terrific couple who worked with our foundation for years. Wherever I go to speak about the importance of women’s leadership, grown women come up to me and say they learned about their careers by going to work with their parents or a friend’s parent. At the White House Project, we now sponsor Take Our Daughters to the Polls to stress the importance of putting women in leadership roles. We still have to deal with the societal pressure to support boys and not make waves. When this sort of pressure starts to impinge on funding sources, it can be almost impossible for the original mission to survive, and you might find yourself giving yourself away, but hopefully you can regenerate your ideas in another arena that will make a difference in the world.

What We Learned

It helps to know whether to continue to trust the experts or trust your own gut. Here is some advice that might be helpful:

Set a reasonable time limit to evaluate. When we are used to doing everything ourselves, we can find it difficult to delegate and step aside so the work can be done differently. Don’t expect results too quickly, but do find a reasonable time line to begin to see the outcomes that your business needs.

Measure the results. Even if the work is not being done in the way you would do it, you can ask yourself some questions in order to find out if the new way is effective. Are sales better? Is the gross margin expanding? Has the environmental impact been reduced? Is morale high on the team? Has quality been enhanced? Are customers happy? Has profit increased? Whatever your expectation was for the new way of doing things, find a way to measure it and use the result to inform your decisions.

Understand that sometimes it isn’t your fault. Marie and the Ms. Foundation couldn’t have done anything differently in terms of Take Our Daughters to Work. If they had insisted on excluding boys, they would have lost all their funding and the project would have been disbanded. Sometimes the best you can do is to compromise (at least girls are still going to work, even though boys are also going), and that is okay. If it’s not your fault, don’t beat yourself up. Marie’s organization is now sponsoring Take Our Daughters to the Polls, which fits her original mission of supporting and empowering girls.

Ask your advisory board. When you feel unsure, this is a good time to get the support and clarity that your advisory board can provide. If you have chosen well, the members can collectively help you find the perspective you need.

These steps can provide the balance between trusting ourselves and getting the help our company needs to succeed.

PRACTICAL TIP

Spend Time Offering Appreciation

Positive energy can be infectious. Here are some ways to spread it:

Handwrite thank-you notes to employees, vendors, or customers.

Verbally offer praise.

Use the Recognition Circle: tell employees something wonderful that other employees or managers have told you about them.

PRACTICAL TIP

Tackle Another Business Owner Who Has “Been There” and Confess

This tip was offered by Tami Simon of Sounds True Recording as one of the ten best ways to get the most out of a Social Venture Network gathering. The person you confess to does not need to be in a similar industry, the same geographic region, or an equal-size organization, as long as he is self-reflective, tells the truth about his own experiences, and is willing to engage about the important issues you are struggling with.

PRACTICAL WISDOM
Create an Advisory Board

What has helped during the tough times? Honestly, getting help! An advisory board can be a lifeline. This is a place to talk about your business, share your challenges, discuss your numbers, seek out new revenue streams, talk through problems with key employees, and figure out the next steps. It’s a place to lift your head up, away from those feet that are stomping out the daily fires.

Definition and Role of an Advisory Board

There are no hard-and-fast rules about advisory boards, but some of the basics are

Advisory board members are consultants to the CEO and are selected by the CEO.

Board members represent a variety of functional expertise and experiences.

An advisory board provides someone to talk to—leading a values-based business is lonely.

The board has no fiduciary responsibility.

The board can be as large or small a group as you want it to be.

The board can be formal or informal.

The goal of an advisory board is to help the CEO do a better job and be a better leader in creating a sustainable, healthy company.

Ten Tips for Creating Your Advisory Board

Following are some tips that will help you create an advisory board.

1. Search out people who know more than you do. Most entrepreneurs are either experts in a functional area or generalists (which is a fancy way of saying they aren’t experts at anything). It is important to know what you don’t know and then surround yourself with people who know more than you do in areas critical for achieving success in all your bottom lines.

2. Find people who can stand up to you. People who work for you are inclined to agree with you. Even members of your board of directors are often likely to be friends who know you well. For an advisory board to be effective, you need honest feedback, so it is important to get people who are willing to say, “That’s an interesting idea, but have you thought of this?”

3. Don’t be afraid to ask! The inclination is to ask only people you know well to be on your advisory board. But the key is to identify the areas where you need the most support and find people who are best able to give that support to you. You will probably be surprised by how many people are willing to help. (They can learn a ton, too, from the other smart people around the table.)

4. Be prepared to have regular meetings, with one or two e-mail updates between meetings. It helps to have a more formal meeting structure that reinforces the seriousness of the board. Prepare as you would for a regular board of directors meeting. At least a week in advance of the advisory board meeting, send the board members an agenda, a president’s report identifying current issues, and recent financial statements. If you do this, the board will take the work more seriously, and you will get better and more meaningful feedback.

5. Feed them (and water them and caffeinate them). These people are spending their precious free time with you focusing on your business, so treat them well—it shows respect for their role and their advice.

6. Pay them. Paying your advisory board members reinforces the value of the advice you are asking for and shows that their effort and input are important. The payment also helps you to take the meeting preparation more seriously. It doesn’t have to be a lot of money, but your focus and the board’s focus is improved if you show you are serious by paying for the members’ time. Some people pay $100 or $250 or $500 per meeting. Do what fits with the size of your business and the status of your cash flow.

7. Have part of the meeting at your company, but then leave. The board needs to stay connected to your business— your physical plant, your employees, your signage, and so on. But only part of your meeting time should be spent at the company because (you know it’s true) you will be interrupted. Get an off-site meeting room where you can shut the door. Often you can get one inexpensively at a restaurant, your bank, or your lawyer’s office.

8. Set aside your ego and tell the truth. Meetings are a good time to really listen to the smart people you have assembled. Don’t be defensive; these folks are here to help you. They are people with shoulders to cry on, people to complain to, and people from whom you can get help to become a better CEO and get the best advice to grow your company to the next level. Don’t be afraid to try out new ideas with them. It’s better to practice with them than to stumble in front of your banker or a major customer.

9. Spend time assessing what is working with the board and what is not. After each meeting, conduct a critical review: Did you get good feedback on the issues raised? Did everyone participate? Did the format work? What could you have done better to make the time more productive? How could you make the next meeting more effective?

10. Don’t be afraid to change your board as your needs change. Times change, your business changes, and you change. What was once an appropriate composition of the board may not be appropriate now. Assess whether you need to replace various members or the board as a whole. Present a nice speech, give a long toast, acknowledge all that you have accomplished together—and then bring in the next board.

Sample Agenda

What has worked in other companies is to keep meetings loose but structured; bring in key staff members to do presentations—it gives them practice and lets the board assess the team; leave enough time to have significant discussions; and stick to the timelines. Here’s a sample agenda:

Advisory Board Meeting, September xx, 20xx

3:00 - 3:30	Tour plant to see new production line (plant manager)
3:30 - 4:00	Review new marketing materials (vice president of marketing)
4:00 - 4:30	Go over the numbers (controller)
4:30 - 5:00	Check in on issues raised at last meeting, and frame the “big questions” from today’s meeting (CEO)
5:00 - 5:30	Move to private dining room at local inn
5:30 - 8:00	Dinner and discussion

Attached to this agenda are the following:

Quarterly financials

Key production numbers and other “pulse points” measured by the company

Memo (brain dump) from CEO, including updates on five issues, problems, projects, or opportunities with questions and concerns flagged

Build Your Advisory Board

Take five minutes to think about who might be a good fit for your new advisory board. What skills could complement yours to take your organization to the next level? Whom do you admire who can push you to think more deeply about

Growing your revenue?

Marketing differently, a new perspective?

Finding new opportunities, another revenue stream?

Developing a more sustainable organization?

Owning your numbers and understanding them (all of them)?

Creating a new rhythm within your organization to facilitate better communication?

Reducing your carbon or water use footprint even more?

Managing people better?

Taking better care of yourself?

Creating more value in your company?

Think of people who

Run a company that is bigger than yours

Run a similar or smaller organization that does some things better than you do

Have a specific area of expertise (for example, accounting, legal, social responsibility, marketing, human resources)

Have recently retired within your industry

Mix it up! Get a diverse group around your table. Think about various age groups, lengths of time in business, types of organizations, genders, races, political points of view, and so on.

Now list the names of five people and make a commitment to invite each one to become a member of your advisory board.

1. ____________________________________

2. ____________________________________

3. ____________________________________

4. ____________________________________

5. ____________________________________

I will contact all five by ____________________, 20________.

Signature ____________________________________________

Good luck with your new board!