Unlike a board of directors, you are not legally required to have an advisor or advisory boards. You can, however, leverage these arrangements to fill gaps within your organization. A few good reasons to bring in an advisor or construct an advisory board include:
Entering unchartered waters for the business (helping to scale the business as revenues grow from hundreds to thousands to millions to billions; moving from centralized architectures to distributed architectures; transitioning from in-house to outsource, etc…)
Entering new geographies where the existing team has limited experience (in many cases, geographies have very different cultures and very different ways of conducting business; business in North America is not the same as business in the Middle East which is not the same as business in Asia, etc…)
Entering new markets where the existing team has limited experience (consumer markets are different than enterprise markets which are different than service provider markets; government markets are different than commercial markets, etc…)
Entering new segments of existing markets in highly complex environments (government markets are a classic example; dealing with state agencies is different than dealing with federal agencies; dealing with the department of defense is different than dealing with the department of education, etc…)
Training ground for executives to get used to “boards” (delegate advisory boards for maximum impact; CTO to chair Technical Advisory Board(s); VP of Marketing to chair the Diversity Advisory Board; etc.)
To help you keep your sanity (it’s lonely at the top with few people to turn to; strong advisors can help you overcome obstacles, achieve new heights or provide unique perspective; they can offer insight into current or future challenges and potential solutions based on their experiences; etc…)
Remember, advisors and advisory boards can only offer advice “in good faith”. Ultimately, the executive team will be responsible for the decisions made. You’ll also want to make sure this boundary is preserved to ensure advisors cannot be deemed or viewed as directors.
This piece originally appeared on Visible Arbitrage.