An advisory board or board of directors is crucial for business growth. Behind every successful business, whether a startup or Fortune 500, the advisory board’s decisions are essential for an organization to thrive. Success stories of many organizations prove that one of the best business management practices is having an advisory board.
Want to learn the concept behind advisory boards for business? Want to quickly understand why advisory boards help businesses succeed in the long run and why having an advisor in every organization is vital?
This article talks about various aspects of having an advisory board, for instance, the benefits of advisors and how to create an advisory board for a fruitful decision-making process.
What is an Advisory Board?
Advisors for business growth are informal bodies of external advising experts who play a vital role in decision-making. In simple language, an advisory board’s role is to leverage top-level management of companies with crucial business decisions.
Since these boards consist of external members with expertise, they guide the company’s owners, stakeholders, and directors with business advice. These include business profitability and growth, risk management, financial soundness, and the company’s vision.
Moreover, a typical advisory board helps businesses scale and make strategic company decisions. They are fundamental in providing solutions to any problems and challenges. Some companies even have advisors for business growth based on specific needs.
Hence, multiple advisory bodies can be created for different purposes as such. These boards help companies grow their profitability and sustain in the long run.
Suggested Reading: Starting a business? Read this.
Statistics about advisory boards
According to the BDC report, 86% of business firms with advisory boards saw their sales increase by up to 24%, while business productivity increased by 18%.
Another study by Wall Street Journal found that out of the 500 fortune companies, 50 have set up digital advisory boards comprising six members each. This shows the value advisors add to a business.
Reasons Why Businesses Hire Advisors
With this success rate, it noted that every company or business organization should actively have an advisory board. It is vital to have advisors for business growth for many reasons:
- An advisory board gives the top-level management a clear vision, valuable insight, the course of action, and expertise on the company’s overall structure and growth.
- With advisors’ help, the company learns market trends, gauges economic insights, and takes strategic positions based on the advice received.
- They help businesses develop and improve operations. Moreover, they share business ideas and concepts with executives and company directors giving thoughtful insights.
- Advisory boards also help businesses innovate with the latest technology implementations, discuss market strategy, etc.
- The best part of these advisors is that they visualize the entire business outlook. From top-level management to supply chain management, an advisory board helps enhance every aspect of the business. This is why most companies actively have advisors for business growth purposes.
Overall, advisory boards bring new business perspectives, improve business performance, guide business growth projectors, minimize risks, look at the bigger picture, address problems based on reality, and provide safe and effective decisions to executives and other boards of directors.
Suggested Reading: How to meet customer expectations?
How Advisors Help Business Growth?
From shaping the company culture to helping expand the business offerings, the value advisors bring to the table is immense.
Advisors help shape company culture
Organizational culture is essential to each company, determining its overall successes or failure. Every employee and management must feel committed and belongingness to the organization.
Advisors help coach the top management
Top-level management is responsible for strategic thinking, critical thinking, problem-solving, and effective communication channel. In this case, advisors support and enhance overall management skills with their expertise. And this is why companies hire advisors for business growth purposes.
Advisors help build company networks and growth projections
Businesses cannot survive without having good contracts and networks that drive company goals. Hence, advisors can easily sip into a crucial yet profitable contract for the company in the long run. With advisors’ networking formula, companies can create and tap into new business opportunities.
Advisors help businesses make decisive and risk-laden decisions
Often, companies are reluctant to take a decision citing high risk. With an advisor’s support and advice, companies take the risk. It is not a matter of success or failure but learning about the roadblocks and barriers. This is why advisors for business growth are essential for a healthy company.
Suggested Reading: Architecting Connected Customer Experiences for Business Growth
How to Successfully Create an Advisory Board for Your Business?
Every company should integrate advisors for business growth. Companies considering to form an advisory board must consider the following points to form it:
- Identify the reason behind creating an advisory board. It could be specific to a task or the entire company’s insights. Identify a mission statement citing business goals and values.
- A best practice for hiring advisors is to pick them from different expertise levels. With their diverse domain expertise, advisors can give businesses better insights and understanding of their company operations and financial conditions. A few examples are financial advisors, marketing advisors, legal advisors, etc.
- Keep the advisory board small with relevant expertise for the task assigned. Larger ones can create confusion and misunderstanding among the members.
- Keep your advisory board organized and focused. Promptly implement decisions and advice of the board. Maintain records, decisions, and progress levels advisors take for business growth.
Advisory boards are an integral and essential part of a business model. Studies have shown that companies with advisory boards have better business growth and productivity. Advisors for business growth give brands much insight into the organization’s functioning, operations, and health parameters.
Moreover, advisory boards are external committees and not a part of the organization. They provide crucial inputs about the company to top-level management like company owners, executives, and the board of directors.
Connect with us to know how to grow your business in this digital transformation era. Email us at email@example.com to know more about us.