How To Drive Your Board To Be As Effective As Possible
Even during the best of times, the future is always uncertain. That’s even more apparent right after several recent periods of disruption: pandemics, recessions and supply chain issues. In the past, boards and board formation may not have meant much to company leadership, but today, a well-designed board with the right collection of skills and experience can get a company through a crisis and significantly impact its success.
Additionally, engagement in the workplace has never been more urgent, and this is just as true for boards. More-engaged teams are more resilient and able to withstand bigger challenges. A Gallup meta-analysis found the most-engaged teams were 21% more productive than the least-engaged ones. Diversity—in race, gender, age and socioeconomic background—benefits any team, including a board, but engagement is what makes those diverse board members the most effective.
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How to Best Recruit Board Members Outside of Your Industry
The value of board members from outside your industry cannot be understated – here’s why.
ew individuals are experts in everything. Even the cumulative expertise in most businesses could use input from more experts in diverse areas. This is why we have boards — a panel of experts in areas that fill in the gaps in our existing company knowledge base.
But even once we find the right group of experts from our industry to take a seat on our board, we would still stand to benefit from the wisdom of more diverse perspectives and experiences. Their range of successes and failures becomes additional resources to put together more tried and tested strategies in the face of new challenges.
Outside board members can bring a lot to a company, but to find the right ones for the job, we need to know what to look for:
Related: How Board Members Can Help You Through a Recession
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How A Diverse Board Can Help Your Company
Diversity is more than a buzzword. Back in 2015, McKinsey & Company called it “a competitive differentiator that shifts market share toward more diverse companies over time.” McKinsey’s research also found that companies scoring the highest for racial, ethnic and gender diversity are more likely to have financial returns above national industry medians.
There are benefits to age diversity as well, including increased productivity and reduced employee turnover, both of which can affect a company’s bottom line. Even socioeconomic status, sexual orientation, mindset and cultural background are ranges of diversity that can arm any team, including a company board, with a competitive advantage.
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How Board Members Can Help You Through a Recession
With recession looming, having a strong board is now more important than ever.
First, COVID-19. Then, health mandates. Add in choked-up supply chains, the Russia-Ukraine war, rising prices, interest rates, and inflation. Economists are starting to unite around the prediction — a recession is inevitable.
No one has a crystal ball, and the future seems more uncertain than ever, but if we break these problems down (e.g., pandemics, war, and rising food and fuel prices leading to a recession), we realize that many of us have lived through similar challenges before. Either we made it out on the other side alive and thriving, or we made mistakes and learned what not to do. These insights are valuable for getting through this next round of uncertainty.
Alone, a business owner can see issues from a limited amount of angles. Especially as first-time leaders, it can be hard to think outside the box with little experience to reference. But, with a board, its members’ expertise can help in more informed decision-making. Leaders can lean into the diverse range of expertise their board members have — their “been there, done that’s” — to tackle challenges and opportunities better and get their company through even the toughest of times, including the oncoming recession.
Related: Building a Better Board: 5 Things Every New Board Member Should Know
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My mentor’s mentor: How to ensure you are choosing board advisors you can trust
The goal of a board is to mentor a company, guide its decisions, and provide advice on best practices. However, most companies don’t consider the benefits that come from mentorship: Greater awareness of new ways of thinking, a challenge to our limiting assumptions, and the sharing of valuable life lessons we have yet to gain. What better way to tap into the skills and expertise board members bring than to connect them with people in the same company looking for mentorship?
THE BEST MENTORS
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Startups And Boards: How To Accelerate Your Growth
Going into a startup, founders have a lot to worry about. Startups have an incredibly high failure rate—a whopping 90%—because of the unique and vast range of challenges their founders face. Founders may not have many solutions to get through those obstacles and often end up learning the harder (and more painful) way to do things, especially when they are going at it for the first time.
It can be challenging for startups to prioritize which fire to address first, the next best steps to take or how to make decisions based on experience without that experience to work with. This challenge is the reason establishing a board should be at the top of that priority list. When startups prioritize founding a board with both inside and outside members, they increase their chances of success.
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Finding the Right Board Members for Your Company is Crucial to Success. Here’s How to Do it.
Finding the right board members for your company is an important task. Here’s what to consider.
Once upon a time, a new startup rushed through the process of bringing board members into their company. Its leaders were young and inexperienced. They went through the process without third-party guidance or a deep dive interview with candidates. They met smooth-talking members looking to be partners and were sold on something grand, but what the candidates delivered was the total opposite.
The partners’ experience was less than they let on. Their mission, vision and values were out of alignment with those of the existing members. Things quickly started to fall apart and the startup founders suffered through years of pain before the company eventually dissolved.
I’ve heard this story many times in my job guiding board formation. So many leaders lament that fewer mistakes would have been made if they had just had connections to more of the right people who matched up with their company’s core values, ambitions and guidance to vet those candidates.
“But none of that happened,” they tell me. “We signed papers and got screwed.”
Not many founders consider their board’s composition, but taking the time and care to cultivate a board of inside and outside perspectives across diverse experiences can be a company’s number one predictor of success. Building a board is a big deal for your company’s success and must be done correctly. Here’s how to do it right.
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Cultivating executive talent in yourself and your team
I believe executive talent is the most important aspect to look for when hiring or promoting leaders. A company’s leadership affects an entire organization and can either motivate teammates and provide them with purpose and direction or cause them to leave. Having a leadership team full of people with executive talent can help bring your company to new heights, but only if you nurture that talent in both yourself and in others.
Not everyone may know executive talent when they see it, but there are some common traits that anyone can easily identify. I believe good executives have no ego. They understand the value of constant learning and always seek out new ways for continuous improvement. Someone with too big of an ego may be unable to realize what it takes to be a great mentor or be mentored. If they think they know everything, they leave no room for others to teach them. And if they view teaching as a waste of time, they’re unlikely to offer their guidance to others. A culture of teaching and mentoring within a company can create an environment that nourishes executive skills and leadership, which is the key to exploiting that talent on a team.
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How Outside Board Members Can Shift Your Company
CEOs and founders need to be very good at what they do to succeed, but no one alone can be an expert in every subject, nor in every area of a company. With the combined insights of a carefully curated board, however, maybe we can. A board offers additional perspectives and the wisdom of having gone through diverse experiences of success and failure. When done right, a board drives a company’s growth and innovation with tried and tested strategies, and it guides better, more holistic decision making.
While some of a company’s leadership might be well-suited to sit on its board, looking within to fill all board positions will severely limit its potential. Outside board members can help the company’s leadership see objectives and obstacles from different angles and paint a more complete picture.
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The Time for Outside Board Members is Now
Outside board members are the x-factor that will propel your company out of times of crisis.
Outside board members have always been a necessity, but today they are more important than ever. When a company can turn to a board with a broad diversity of insights and with members from outside the company, they receive guidance that can be the advantage they need to survive tough times. Nowadays, it seems like times are only getting tougher.
As problems increasingly have global repercussions, every decision we make could make or break a business. Outside board insights have always been a necessary consideration for staying agile and strengthening decision-making power, but now, those insights are becoming indispensable. To be more in an uncertain future, bring on outside board members for a broader selection of expertise to fill a company’s gaps and the best chance of coming through anything on top.
Related: Why E-Commerce Businesses Need to Rethink Their Channel Strategy
Look outside your company for the best fit
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