The Power of Mentors – A Guide to Creating an Advisory Board

July 26, 2020 Mac Lackey

My friend Tom just shared this quote:

“Smart People Learn From Their Mistakes, Geniuses Learn From Others”

I don’t know if it was his original quote or he was sharing it from another source, but what I do know is that this is a powerful and true statement. 

It also sums up one of the single greatest lessons I learned as an entrepreneur… 

Creating an Advisory Board is a secret weapon!

Why is creating an advisory board for a small business SO important? 

The hard hitting fact is, over 90% of entrepreneurs live in the GRIND. Whether you are just getting started or are hitting the next level chances are you are in, or will be in, The Grind. 

What is the GRIND?

The grind is the day to day struggle of starting and scaling a company. 

  • It is cash flow pressures.
  • In the Grind you land two new customers, but lose one you thought would never leave.
  • The place you know you need a bigger team but can’t afford to hire them. 
  • You can’t take a ten day vacation and completely unplug (as things won’t run the same)
  • You are working hard (40+ hour weeks) and your todo list is only growing. 

These are a just few of the MANY awful realities of life in the GRIND.

Most every founder gets caught in the grind for a period of time (some, sadly, are trapped there forever) but there is good news. There are 3 ways I know of to get out of the grind and move to where your business becomes a machine for your goals and dreams. They are:

  1. Luck
  2. Learning via Trial and Error
  3. Mentors and Advisor

Everyone Should Get Lucky

I know for a fact that over the past 25 years, some of my successes should be attributed to luck. I was in the right place at the right time. I had good karma, divine intervention or just plain luck. 

I believe that you should set yourself and your business up to see the signs and take advantage of them when they appear. Be opportunistic. Be ready and willing to be lucky! 

But, clearly, you can’t bet your future on luck.

I Will Work Hard and Figure it out

I have no doubt that when an entrepreneur commits to defy the odds and break through the most common approach is simply to work very hard. 

You commit to doing the work and you try lots of things. This will lead to a ton of mistakes (hopefully not fatal ones), and then you can just constantly adjust and evolve towards the things that are working. Daily steps, constant adjustments and progress can be made. 

Learning via trial and error absolutely worked and produced results for me as an entrepreneur. As a matter of fact, early in my career this WAS my strategy. The only downside is that it can be a very long and challenging path. But committing to work hard and figure it out, IS a viable option.

Mentors and Advisors

Finally, we have mentors and advisors. 

The concept behind mentors and advisors is SO incredibly simple and yet so valuable that I am embarrassed to say it took me a long time to figure this out. To save you a lot of time, heartache and struggle here is the formula: 

Find someone who has already been where you want to go (ideally, more than once) and ask them to show you the way.

I am not joking. It is that simple. 

Now, sometimes the execution may be tough, or the steps you’ll need to take require new skills or mindsets, but mentors are like having a secret weapon.

I often show entrepreneurs a presentation I call The Founder’s Journey. I use a giant mountain as an analogy for the journey (where our aspirations, goals, dreams are at the peak). Our job as entrepreneurs is simply, climb the mountain.  

The traditional path to climb is to move sequentially. Step by step, stage to stage… You move from starting the company to finding viability, to scaling, to optimizing and then ultimately after the long, tough journey (if successful) we can reach our aspirations. 

Using this analogy, imagine that you are climbing the mountain with all of your peers, step by step, fighting the steep terrain. You are battling horrible weather, starting to get super tired and even questioning should you continue the journey. 

THEN, all of the sudden, someone pops out from behind a rock and says: “Hey, come this way!” 

As you walk around the bend, you see a sunny, smooth path up the back of the mountain. Sure, there is still work ahead and climbing to do, but now you are walking up a gradual incline on a well-lit path straight to the top.

That is the power of advisors, those who have already been where you want to go and are willing to show you the way.

If you take nothing else away, and decide to stop reading right now, do this:

Find someone who has already been where you want to go (ideally, more than once) and ask them to show you the way.

 

Forming Your Advisory Board

Hopefully you understand the power of mentors and advisors. Maybe you are already using them… but if you don’t yet have a formal, engaged ADVISORY BOARD now is the time to form it.

What is an Advisory Board?

According to Wikipedia An advisory board is a body that provides non-binding strategic advice to the management of a corporation, organization, or foundation. The informal nature of an advisory board gives greater flexibility in structure and management compared to the board of directors.”

This is an important distinction as a Board of Directors is a much different structure with vastly different obligations and responsibilities.  

How you form an advisory board 

First and foremost, an advisory board needs to be based on the goals and objectives of your business. 

Chances are you have a team (or at least YOU, as the founder) with a set of skills necessary to build your company. However, you should have objectives MUCH, MUCH bigger than your current capabilities. These objectives might be your mission, your vision, your BHAGs or your version of The Great Outcome. That powerful future you want to achieve.

In addition to these lofty objectives, you should identify areas where you and/or your team are currently lacking certain skills or expertise. 

Armed with these two lists (your loft objectives and the gaps in your current team) you have the foundation of your advisory board NEEDS. 

The first gaps advisors should fill are providing guidance and perspective on areas you are weak. You want to ensure you don’t make fatal mistakes, and a seasoned advisor, who is skilled in the area you have a GAP will help ensure you avoid common mistakes and make the smartest business decisions. Remember, you want those who have already been where you want to go, ideally more than once. So if your weak link is in technology, find a seasoned engineer or CTO who has built more than one software product or entire technology company. 

Once those gaps are filled and you have a well-rounded team (between your internal team and your new advisors) it is time to consider your lofty goals. 

Do you want to expand to international markets? 

Do you want to create a software product for your current service offering?

Are you considering adding a retail component to your existing ecommerce business (or vice versa)?

Whatever your goals are, find advisor candidates who have successfully (remember, ideally more than once) done those things. Those are the game-changers you want and need.

CRITICAL: 

At some point now or soon you are going to start feeling like you are about to ask these successful and highly valuable people to HELP you and you might start wondering why they would do that? Exactly what you should be thinking… and asking yourself again and again. 

What would make this a win/win? What can I offer them that is valuable? Why would they be interested in actively participating and helping us?

We’ll touch on a few ideas but that MINDSET is key. This needs to be a mutual win. 

Ultimately, when you do reach out to them you will be reaching out with an OPPORTUNITY, not a favor. That is critical. (We’ll come back to that)

Adding Rock Stars and Superstars

Once you have your lists (gaps and goals) you can make a list of potential candidates. Start with the most important and audacious targets. That can be your dream list, and then expand the list to include great but perhaps less audacious targets – maybe the top candidate in your area, or the one that is only one or two degrees from you. These are now your prospective advisors. 

Remember you don’t want celebrities (ie. just big names) as those people may look and sound impressive but they won’t get you to your goals. They are generally too focused on themselves and their own lives to really roll up their sleeves and help you. You want “doers” and “been there, done that” people. 

Reaching the List

Sometimes the hardest part is simply the reach out. You have a great list developed so your first approach should be to try and get warm introductions. Who do you know that knows them? 

What groups do you share? What shared interests do you have? 

Typically I have found a quick search across social media and general google searches will uncover that you are one or two degrees of separation from almost anyone. Make that actionable and start actively working on getting a warm introduction. 

Remember, you will be reaching out with an OPPORTUNITY so keep thinking about that as you search and get close to your warm introductions. 

Example, as you searched, did you find you and your prospective advisor/mentor have a shared interest in childhood obesity? If so, not only do you have something to talk about to break the ice, maybe you have your alignment. Maybe your company donates a percentage of profits to the childhood obesity sector of non-profit organizations. Maybe part of the opportunity is by helping your company grow, this advisor is actively driving more resources into a cause they care about. *So be sure to make notes as you do your research… You’ll likely find the opportunity, or several.

What to ask prospective advisory candidates

Ok, you’ve found a short list of prospective advisors. You have your warm introductions ready to set up meetings but now (before the email or call, and certainly before the meeting) you need to have the ask ready. 

You may have seen my popular ”Why Should I Meet You, or Care?” blog post (if not, it is a valuable resource in this context), but the simple idea is you need to tell your prospects WHY they should meet you. The answer is not: 

  • “I would like to pick your brain”.
  • “I am lost and need some guidance”
  • “I have heard you are the guru, so could use your help”

Those are all about YOU. This has to be about THEM. 

What are you offering them? Why should they even have a coffee to discuss your business or vision?

Sometimes I think this can come across as harsh because yes, sure, there are plenty of great people out there who have the time (ie. they are retired) or heart (ie. they have decided to pursue philanthropy or causes including just helping entrepreneurs) but you do not want to assume that. 

  • Assume your ideal targets are incredibly busy.
  • Assume they get more emails a day than they can read.
  • Assume they prioritize for their own business, family, causes and health.
  • Assume they can’t guess at what you might need or want them to do.
  • Assume they have no idea that you could offer them something very valuable.

Once you have a really good idea of what you can offer and you believe it is something they will be interested in, you can craft your message (again, the template in Why Should I Meet You, or Care? Is a good place to start).

I won’t waste time here telling you how to manage a meeting or zoom call with the prospect other than to state the obvious. Be early. Be courteous and professional. Be respectful and thankful. Then be clear with what you are offering, what you really want/need and what that will look like. 

Let me get to a last but not least point (as I could go on for days here – this is just valuable stuff). The last point is, make it formal. 

A Formal Agreement

After you’ve met your prospective advisor and have come to the conclusion that both parties are interested in working together as well as have clarity on the offer and expectations, make it formal. Create a document which both parties can sign that outlines your expectations (how often you will meet, what you need them to do, what you are NOT asking them to do, etc.), as well as your offer (cash compensation, equity in your business, the option to invest, the allocation of profits or resources to an agreed upon non-profit… or whatever the offer includes). 

Want an advisor template? I will share an actual emailed letter and advisory agreement with you if you are interested. Just drop your name and email below and we’ll follow up by sending you two templates you can modify for your own use.

The Advisory Board is a powerful weapon for Founders and Entrepreneurs. It has been one of the critical success factors in my businesses and life so I strongly recommend you create one right now. 

Other posts on Mentorship and Advisors.  

https://maclackey.com/establishing-a-board/

https://maclackey.com/forming-a-personal-board/

“If you cannot see where you are going, ask someone who has been there before.” – J Loren Norris

 “Our chief want in life is somebody who will make us do what we can.” — Ralph Waldo Emerson

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