I recently read an article by Mike Myatt refuting the myth of the self made man: Self-Made Man – No Such Thing. There are probably a lot of reasons a successful business person bills himself a “self-made man”. For example, it might be part of an argument to keep taxes low (at least during primary season), for high impact in a presentation or just arrogance. Mr. Myatt dispatches any such thoughts as he makes it abundantly clear that the myth of the self-made man (aside: no mention of self-made women…) is basically a ridiculous refusal or inability to recognize the contributions of others.
Coincidentally, on the same day, I came across an article by Richard Branson, undeniably a successful entrepreneur and businessman. Richard Branson On How To Avoid Start-up Mistakes has as two of four key steps to follow: “Hire the people you need, not the people you like” and “Know when to say good-bye”. Both steps emphasizing the importance of building a business with the right people for the business…based on intelligence, skills, experience…for the business.
The high concentration of life sciences and other high tech start-ups in Massachusetts is quite well-known. Thankfully, albeit somewhat less well-known, there is now a growing educational infrastructure for entrepreneurs to help guide first timers (as well as veterans) through the complexities of starting and nurturing NewCo du jour. And Boards, as in Board of Directors (BOD) and Advisory Board, have been examined in a few interesting contexts over the last few months.
The 128 Innovation Capital Group presented a session on 11 August by Jenny E. Freeman, M.D., a member of Boston Harbor Angels and co-founder & CEO of Respiratory Motion, Inc., entitled: Management Team, Board of Directors, Advisory Board – How to Best Utilize Your Company’s Talent. This was an outstanding overview of the importance of surrounding the entrepreneur with capable, talented people, and how to deploy them for greatest benefit to the nascent company. On 4 November, MassBio’s Entrepreneur U presented: Building the BOD for Tough Love. Featuring panelists Charles R. Lax, Robert E. Anderson and Richard G. Ganz in an interactive discussion led by Co-Chairs John Hession and John Hallinan, the audience was treated to the gory details of building and working with a BOD in an entertaining and highly informative session.
Just yesterday, 16 November, the North Shore InnoVentures educational arm – InnoVentures U – featured David H. Gibbs, PC, Partner at Bowdy & Dewitch, presenting: Using Advisory Boards to Enhance Company Performance. While acknowledging that a Board of Directors (BOD), with fiduciary duties and management oversight responsibility, is an important organizational tool, this session assumed the presence of a BOD and focused on the importance of Advisory Boards. Advisory boards may be organized around specific topics, such as the company technology, or more general in nature. In either case, the role of the Board is to provide advice, not to make decisions.
Companies of all sizes and shapes use Advisory Boards, but this is a particularly important tool for small companies and start-ups – where expert insights can be crucial to the company’s success. Independent advice from experienced individuals, who have dealt with the opportunities and challenges facing the young company, are an invaluable resource. Further, well-established experts can add credibility (by association) to a young company, as well as a nicely-populated Rolodex (we all have one of those, right?) when a warm introduction is needed – for example: investors, lawyers, management candidates, new expertise, etc.
Of course, assembling the right people, with the right resumes, and the best networks is not beneficial if not used properly, or at all. In addition to providing an outstanding overview of strategies for picking Board members, Mr. Gibbs provided valuable insights for different ways to take advantage of the intellect and resources that an Advisory Board has to offer.
As a nice closing touch, the session was not merely a theoretical exercise. Two of the entrepreneurs in the audience “volunteered” to summarize their business models for further examination. The assembled group, led by Mr. Gibbs, then helped to pick out the expertise needed for an effective Advisory Board. The decisions were not legally binding, but it was clear that the advice was well taken.
Bottom line: it’s lonely at the top, particularly for an entrepreneur slogging through the complexities of starting a company and finding investors and/or customer revenue. An Advisory Board can break up the loneliness and, when managed well, bring unparalleled opportunities to benefit the growth of a start-up.