Australian businesses with international growth aspirations can be well supported by independent Advisors. That's according…
How Boards Can Navigate the Post-COVID World
Business Continuity Planning and Corporatised Advisory Boards
Advisory Board Centre Founder and CEO, Louise Broekman, was a recent guest on the “Positioning for the Future” series hosted by George Paramananthan.
George is an experienced corporate lawyer, Non-Executive Director and Advisory Board Chair. In this episode, George explores how the post-COVID world brings many challenges, but the opportunity it also brings is the potential for innovation and change. Organisations are able to challenge old thinking, to update preconceived notions and to set up new norms. Louise discusses what the “new” world might look like for the Advisory Board sector, the professionals who fulfil an advisory function and organisations for whom they serve.
“There is a realisation phase of what are the options and what’s next, as well as the critical thinking of an Advisory Board and how it is really paramount in supporting (business) owners to get out of their own mindset and to tap into the best minds to truly navigate what those options are!”
READ THE TRANSCRIPT
George Paramananthan: Hi there. My name is George and in this series of conversations I want to talk about the post COVID world, what it will look like and what opportunities there are for businesses to be positioning for the future. I have with me today, Louise Brookman, she’s the founder and CEO of the Advisory Board Centre. The Advisory Board Centre was founded to support and improve the effectiveness of the global Advisory Board sector, including the professionals involved. As a matter of fact, I’m an Advisory Board Chair, certified by the Advisory Board Centre. So I’m personally aware of the good work of the centre. Welcome Louise. How are you?
Louise Broekman: Good, thank you George.
George Paramananthan: So should we just dive in?
Louise Broekman: Absolutely.
George Paramananthan: All right. From the perspective of Advisory Boards and organizations that use them, how do you think the world has changed? What are the opportunities for either Advisory Boards, Advisors and all of the businesses that use them?
Louise Broekman: It’s a good question. If we look at the history of Advisory Boards to start with George. Advisory Boards up until about three years ago were very ad hoc and we took the place to be the professional body for the Advisory Board sector and to really create good foundations of best practice and to have the best people credentialed so that we could build quality Advisory Boards in the market.
Where the Advisory Board market has been in the last three years is in the growth of formalized Advisory Boards for both business, but also project-based Advisory Boards. So, we’ve created this really highly sophisticated group of Advisors engaging both with the business sector, as well as the corporatized sector where Advisory Boards are supporting, governance boards and directors. So that’s a really interesting support mechanism.
Where the market is today, is we’re seeing the growth in project-based Advisory Boards, specifically around continuity planning and managing crisis, given the way business has been in the last few months. The market is beginning to settle down and its working through and navigating what are the next steps that we need to make when nobody knows. So, the support of Advisors and Chairs in continuity planning and project-based Advisory Boards has been really, really critical and there’s really good work that’s being done.
I think as we continue on in this journey, there’s going to come a point where we ask what are the options for what’s next. Consequently, the critical thinking of an Advisory Board is really paramount in supporting owners to get out of their own mindset and to start tapping into the best minds to really navigate what those options are.
George Paramananthan: Absolutely. And I think the Advisory Board Best Practice Framework™ that you developed that guides, Advisors and Advisory Boards is fantastic. Do you want to talk a little bit about the framework and how you think it would be useful to give guidance to Advisors and businesses who use Advisory Boards in the coming months post COVID?
Louise Broekman: We’ve recently released the world’s first best practice framework for Advisory Boards in February, which is really good timing for just before COVID really hit, specifically Australia and the Australian market. What the framework has been really instrumental in, is creating a foundation of ethical best practice around the engagement between an organization and the advisor community.
I think we need to be really careful about the ethics in the way that Advisors are being engaged during challenging times, that people really understand where the boundaries are, where advice should come from, whether it’s direct experience or not. So, this best practice framework is really about making sure it’s purposeful, you’ve got the right process in place, and that you are engaging the right people. Having that combination around that is, I think, going to be really crucial. The best practice framework is available as a complimentary document and guidelines for everybody so that people can navigate through what they need and how they engage.
George Paramananthan: So in the time of crisis, I guess the non-executive director role, the traditional governance board and an Advisory Board all play different roles. Can you talk a little bit more about what you think the Advisory Board’s role is as opposed to a governance board, particularly in a crisis like this, and how they can help to manage out the crisis and then post-crisis?
Louise Broekman: The key is going to be around making sure things are fit for purpose. Circumstances will always change anyway and part of what we see as really good quality practice is to measure an organization before they engage any external advisory structure to see what are the business priorities and then focus on the things that really matter.
If their key priorities are to maybe go through something or to reach a certain goal that is short term, then 90-day planning and a 90-day approach is great for something where you think, there’s the next horizon, but we just need to get to that and then it’ll be different. Generally, that horizon would be an 18-month horizon.
It could be six months time horizon in this environment. So having an Advisory Board or any advisory engagement that’s being engaged, that is really fit for the particular situation. It’s important to have those gate posts for measuring where the organization is at then really identifying if that conversation is still the same one we need or do we need different conversations or different people around the Advisory Board table? So it’s agile, it’s able to move with the needs of the business at the same time.
George Paramananthan: And you’re right. I mean, that’s one of the big benefits of having an Advisory Board is that what Advisory Boards do is to help the business determine their priorities. They ask the right questions, point them in the right direction, see if that resonates with them and help them determine what the priorities are for themselves. The governance board then does a whole different thing.
Do you think there are a lot of opportunities arising for advisors at the moment and are there any kind of hurdles or barriers for advisors when they are advising in the new world order post-crisis?
Louise Broekman: Well, not all businesses are going to survive this. I was just talking to our advisory community in Hong Kong a few days ago where we’re talking about, what is going to be important for some businesses to reshape their business or to close and to do it in a way that doesn’t mean losing face as well. There are Advisors that are going to really help businesses make those really difficult decisions that must be made.
You have the dual speed, those are going slow and then those are going fast. The other one is maximizing opportunities that are in the market now. For those businesses that are already in that space of accelerated growth we see that in quite a few sectors that are planning for accelerating at a particular point in time when it’s safe to do so. So I think again, it’s about looking at what the priorities are and do all the scenario planning, best case as well as worst case and pessimistic case.
George Paramananthan: Absolutely. I think lots of different scenario planning is really important and then as an Advisor you feed the right questions into the business’s scenario planning. I mean, one of the things that I’ve been thinking about and something I’ve written about is that there are opportunities for strategic acquisitions.
So if you’re one of those businesses that is accelerating, there are also businesses that are struggling, and you might want to have a look at acquiring one of them. Or alternatively, if you are that business that is struggling, look to see if there is someone wanting to take you over, or buy your client list for example. I think that is also the role of the Advisor to help businesses who are accelerating and to help those who are struggling, to see what the options are for them.
Louise Broekman: Definitely the mergers and acquisitions within a supply chain or within a competitive set, you have then just created a collaborative set. There are so many options and there’s never just one decision. There are so many options, but you have to just really evaluate each one of them really clearly and objectively. And this is where I think, even myself, I have an Advisory Board for my business because I’m so close to it and I love my business and the work that we do, but you need independent thinking sometimes to think it through and determine if it is actually a really good commercial decision to make or not?
George Paramananthan: I think that’s the main benefit of an Advisory Board is that it is a second pair of eyes that help you critically test some of the decisions that you want to make as a business owner. You may be too close to it and it’s ultimately your decision as a business. It’s your baby, so you want the best for it, but you don’t know if that’s going to be realistic enough and so that’s where an Advisory Board can bring expertise and experience that may help.
Louise Broekman: Absolutely. For the corporatized sector where you have a very strong governance board, the conversations about what’s next are really tricky. It’s a very important role to make decisions that are binding and ensuring things are road-tested before they get to the boardroom table so that the rigorous debate around it has already happened helps to take the risk off the table around that debate, and then it can be handed over to the board of directors to make the decision. That is where that real relationship in the corporatized environment is. That’s where it’s going to be really, really helpful to directors.
George Paramananthan: You mentioned before that there are governance boards now using Advisory Boards for particular projects. Do you see that in the post COVID world that that’s going to escalate? Do you think there’s going to be a lot more of that or do you think that that’s not an opportunity at a governance board level?
Louise Broekman: Yes, I feel like Advisory Boards have been born for this moment, George. Governance boards and directors have a huge undertaking and a big responsibility. Whereas Advisory Boards are agile. It’s a problem-solving model. It’s a thinking system in itself. When you can harness minds to support executives or directors to think through road testing ideas and put rigour behind the thinking, that will help a board of directors to make really difficult decisions about reshaping of organizations.
A lot of them are really large and complex organizations. So the question is how are they going to do this? With the existing infrastructure and the existing mindset – sometimes we’ve got to have a circuit breaker and this is where the Advisory Boards can really help, especially when they’re project-based. By just focusing on one particular thing or a segment of a business or an organization, they might be able to act as a circuit breaker around those things.
George Paramananthan: You’re absolutely right, this is the perfect time for the framework to come out for Advisory Boards to have as a centre place in a lot of businesses, because there is a great deal of value in Advisors helping businesses to navigate the post covid world. There will be so many projects that come out of this. People will look at things like, we should be able to let our staff work from home or work from anywhere. So what does that look like?
They will need a committee to deal with that. Or maybe the supply chain of a business has been severely impacted and so our crisis management plan needs to be amended. So looking at what in our supply chain can be onshore rather than offshore. Getting quick access to scalable staff. So there’ll be different committees that will come out of this and the governance board won’t be agile enough. They won’t have that kind of breadth of knowledge to cover all of that stuff and this is where Advisory Boards I think will shine.
Louise Broekman: They’ll shine if they’ve got the right structure and the right voices around the table.
George Paramananthan: Yes, and that’s where your framework comes in. The Advisory Board centre has put so much work into the best practice framework for Advisory Boards and it’s really great, it’s agile and gives a set of principles for people to be guided by without being too rigid.
Louise Broekman: Thank you. It’s great to see your life’s work, coming into being useful!
George Paramananthan: So before we close, any closing comments to add?
Louise Broekman: I think the advisory community really needs to be activated. Go out there and look for people who need help and support, be excited for the opportunity and have compassion for those that have challenges, be real and be there for them.
George Paramananthan: Thanks for your time today, Louise. Great insights. You’ve given us all a lot to think about.
Discover how an independent Advisory Board can support your organisation. Connect with Chairs and Advisors via the complimentary Advisor Concierge service. Get connected.