Adapt or Die
Kodak, Blockbuster, Tivo, Palm Pilot. Examples of companies and brands that failed to innovate, or failed to maintain their innovative edge, are not difficult to find.
Today, disruption is constant, hitting companies from multiple directions, at a seemingly ever-increasing pace. Research from Yale University found that the lifespan of publicly listed companies has declined from more than 65 years early last century, to just 15 years.
In response, traditional management methods have been replaced with agile approaches to planning, change, and project management. When you can’t control the ever-changing external market, management needs to build internal confidence in decision making to continue to press forward in the right direction. As stated by the Advisory Board Centre CEO, Louise Broekman, “as businesses are challenging their own boundaries and spending less time planning and more time testing, critical thinking and problem solving are needed”.
How can today’s progressive organisations balance the agility, innovation and dynamism demanded of this environment while ensuring confidentiality, accountability and respect?
Engaging Advisors in Your Business
In 1998, Peter Drucker advised that “innovation of this sort usually demands not one kind of knowledge but many”. Even in a time of relative stability, Drucker recognised the value of multiple “knowledges”. As their business begins to grow, it’s not uncommon for owners to begin to reach out and engage advisors in their business.
This generally starts with an informal approach—primarily involving friends and family or business peers. Andrew Murray, an experienced director and seasoned investor, knows the informal approach all too well. Reflecting on his past experiences, Andrew said, “I have previously served as an advisor in an informal fashion on a couple of advisory boards. These were ill-defined and ad-hoc arrangements that came about either through an emotional or financial interest in the businesses. While we didn’t inflict any real damage on the businesses, I quickly recognised this is not a good model for advisory boards.”
Formalised Advisory Boards Help to Bridge the Knowledge Gap
Although many leaders may know the risks of concepts such as groupthink or confirmation bias, as individuals we find it difficult to break away from our existing networks and reference groups.
This is where formalised advisory boards can play a vital role. Advisory Boards are an effective way of working with trusted advisors long term, providing support and insight along the way. According to Louise, “Advisory Boards deliver bigger networks and access to expertise that is not core to any one business. Your Advisory Board can help you bridge the knowledge gap between your business today and future opportunities in a tangible, value-driven way”. And there is evidence to support these claims.
Research by the Development Bank of Canada highlights that on average, annual sales for businesses with an Advisory Board were 24% higher than those without one; productivity was 18% higher. And most importantly, 80% of business owners that set up an Advisory Board said that they would do it again.
Advisory Boards deliver bigger networks and access to expertise that is not core to any one business. Your Advisory Board can help you bridge the knowledge gap between your business today and future opportunities in a tangible, value driven way.
Closer to home, Australian businesses are seeing first-hand how advisory boards can accelerate entrepreneurial drive. Matthew Horton, Co-Founder and Managing Director of HR and payroll platform, foundU, found the exposure to different opinions and advice from Advisory Board members invaluable. “We can have honest discussions about the business and we are free to accept or reject the advice of the board. The benefit is I get to hear a different opinion from people I respect,” Matthew explained.
Advisory Board’s more fluid nature also means they are more responsive to today’s dynamic environment. “Currently I have an HR expert, a senior executive in labour-hire and an IT guru. Next year I might need marketing or financing expertise,” Matthew confirmed.
We wouldn’t be where we are if we hadn’t made the decision to engage an advisory board.
Matthew Horton, Co-Founder and Managing Director – foundU. Read the full story.
While it may initially seem counter-intuitive to adopt a structured approach to business leadership amid dynamic and disruptive environments, the Centre provides a support network to ensure that your advisory board continues to evolve with the market. Businesses can access the Advisor Concierge service, allowing you to create a tailored board that expands your businesses networks, providers critical thinking and independent advice based on mutual respect and committed two-way support over the long term.
If you’d like to discuss if this is the right approach or timing for your organisation, please reach out to us.