Advisors

Throughout my career, I have advised, mentored, facilitated, coached and worked as a non-executive board director. They’re not all the same activity – quality training is essential for facilitation and coaching, and financial literacy and an understanding of corporate governance is important in order to become a board director. But there are overlaps, and these activities do borrow skills from each other. At some point I will write in more depth about these different roles. But today, a few words about #advisors

Aside from the various types of consigliere* that show up in corporate settings (often lawyers, investment bankers or former officers and directors of the firm), we tend to think of advisors in the setting of #startups and #scaleups

So, you may be a founder and you think you need an advisor, as you may not be getting ‘what you need’ from your team or your investors. What should you be thinking about?

• Is ‘what you need’ something that should be within your team or is it OK for it to be outside your team and organisation? Is it something to consult occasionally?
• Are you ‘in the right place’ emotionally and mentally, to request and receive advice? Do you know how to ask for advice? Can you listen? And can you listen without feeling hurt or offended?
• Advisors are like shoes. You may have to try several before you find one you can work with. ‘Fit’ and ‘chemistry’ are important. So, you and your advisor should have an initial chemistry session to see if it could work.
• The advisor advises, and you decide. The advisor shouldn’t expect you to agree with or do what they advise. And you should not abdicate your decision-making responsibility to them.
• What’s their value-add? Is it knowledge of your customers? Is it experience of developing something of similar complexity? Is it business development? Or is it more general support for an entrepreneur’s often lonely journey?
• What is their actual relevant experience? Don’t be dazzled by job titles and overall presentation. Are they recommended by someone whose opinion you trust? Or are they someone you have worked with, albeit in a different setting…and potentially a different power dynamic?
• Are they appropriately battle scarred and able to advise on what NOT to do?
• What are their soft skills like? It helps in an advisory relationship, but it is not the sine qua non we sometimes think it is. A leading subject matter expert may be a great advisor, but you may have to work to extract the advice from them.
• How do you wish to work with them? Are they a sounding board, your ‘conscience’, a challenger, a safe container, a connector to networks or a subject matter expert / teacher?
• How often do you think you need access to them? You could start with regular sessions which then evolve into ad hoc contact. But do be respectful of their time.
• What’s their motivation to be an advisor?
• Do they have any conflicts of interest? Do you think they would declare any potential conflicts? How would you mitigate conflicts of interest?
• Being an advisor comes with a duty to keep confidences, whether related to trade secrets, relationships with colleagues and other stakeholders or personal matters. NDAs may be used but have little enforcement value if you have no time and money and are in any case no substitute for having an advisor of sound character.
• Your advisor should not go around trading off their access to you.
• An advisor should be willing and able to speak truth to power, even if it hurts; leave the ‘uncritical encouragement’ to friends and family.
• A good advisor will tell you when they don’t know the answer and should be willing to work with you to determine a path to it.
• You and the advisor will understand that the engagement will one day end as the ‘fit’ diverges from the current business context. That’s absolutely fine, and either of you can end the engagement on a ‘no fault’ basis.
• An advisor may later transition to being an employee. How would you both handle that change in relationship?
• It is not a given that you will have just one advisor. You may find yourself using different advisors for different areas and for different growth stages of your venture.
• It is quite OK to retain multiple advisors, almost like a board of advisors (BoA), although you don’t have to meet them as a group.
• Compensation. Many of the ventures requiring advice (pre-seed or seed stage) have little or no money and advisors should be attuned to that (some advisors commit to a degree of pro bono advisory work every month). But if you can and want to pay (and it also depends on how much you are asking of your advisor) then you have a choice between equity, cash or a blend of both. Equity is precious and arguably that should be prioritised for employees. As for cash, if you have it, what are you paying for? The contact…or for outcomes? And are they tangible or intangible outcomes? It is not always clear what you are paying for, and compensation is not necessarily enough to align interests (shared values or aims help – which is why the initial chemistry meeting is important). Some advisors may initially trade favours with you, but if they begin to make a positive impact – especially in helping you save money and make money – then you need to think harder about compensation.
• An advisor can become a friend, but do keep the two strands separate.

I’m increasingly asked by people in my network how they can secure an advisory gig as part of their transition away from full-time employment. The short answer is “from within your networks.”

Being active in your network allows you to demonstrate your value as a potential advisor and build rapport with those who may need advice. I am continually amazed by professionals who do not actively network (and I do not mean exchanging biz cards or adding LinkedIn contacts).

In my area of #deeptech we tend to build partner ecosystems, and the majority of the partners are small to medium businesses, working out how to use their scarce resources to grow, deciding which partner to back, etc and they require advice.

Who in your network may be in need of your advice?

* Yes, yes, I am aware that the term ‘consigliere’ is often used in reference to the Cosa Nostra, the Camorra, the ‘Ndrangheta and the Stidda, etc.