Some good unemotional sober second thought ...
What I Learned About Advisory Boards in Conversation with Jake Leguee
In business, where all opportunity can turn out to be a challenge, and all challenges turn out to be a fantastic opportunity, it can require a crisis moment to reach out for some help.
Jake Leguee, CEO of Leguee Farms, a large broad acre dryland farming operation in south eastern Saskatchewan, describes how they came to form their advisory board.
"The timing was pretty good when we decided to do it after a tough year, but we'd actually put the process in place quite a while before that. We've had an advisory board since then."
Jake describes the value of the board in perspective ...
"We've gotten really good advice out of it. Some good unemotional sober second thought that I think family businesses often need."
One of the most daunting aspects to getting started can be choosing the advisory board members. In this too, Jake deployed some assistance (note the pattern of asking for help here).
"Terry Betker from Backswath Management helped me out quite a bit with finding people for the board. You need the right people. You need people with experience, but I didn't necessarily want a bunch of ex farmers on it."
From the vantage point of a fly on the wall, what does an advisory board look like?
"We talked about some of our plans around working capital, building a budget, and having them look through it and point out some things that are out of line. Looking through our financial statements they would say, "Look, these line items are pretty high. What do you think about that? What are you doing about that? And what are you telling your banker about it?" It wasn't as though they came in and said, "Oh, you need to do this and that and the other thing", it was more about questioning us. "Are you thinking about this? If you're not, you should, and if you want some help with it, we can take that offline.""
It seems there are always the folks on your board that have a specialty skill or wisdom they are passionate about.
"One of the advisors is really big on strategic planning. She helped me out quite a bit on developing our strategic plan for our farm and getting all that organized. It's been really, really good."
Another hurdle to setting up your advisory board may be perceptions about the cost. Jake relates that the cost may be a lot less than you would think.
"It's not costly. One of the advisors put it really well. He said, "As long as I'm getting as much out of this as I'm putting in, I don't really care. I'm having fun. I've got pages full of notes. This is just awesome. Those are the kinds of people that you want to find." Some of them, the problem is trying to get them to take money. They're getting a lot from each other. No question about that. All four of them are accomplished individuals, right? They get a lot out of that. I think there is a giving back part of this too. I think that they do feel that there's value in trying to give back to another business the way that they might have gotten something like that in their own past lives, I think that's part of it too. I think it's just enjoyable. I don't think I'm alone here, but it's kind of fun talking about business and family governance and those sorts of things, because there's so much that goes into all that. They get some value out of it that way too."
A good advisory board can gently urge you into areas of risk reduction you may not be anticipating currently in your operation.
"I would say that one of the highlights that they really brought to us was the estate planning. They said "You know, you guys have done some work in your strategic plan, but really need to focus in more on getting those estate plans drawn up and getting that good set of legal documents that protects each one of you and protects the farm in case of something bad happening." Those are things that we hadn't really done as much work on as we should have at that point. That's something that we're really focusing in on."
An advisory board will bring with them countless events that have shaped their thinking. Wisdom from experience is something that can't be purchased. It's priceless ...
"There's just certain things that you have to experience in your life before you really know that you need them. These people have experienced so much that we can gain a lot from it."
Kudos to Jake for having the courage to take some outside advice on improving his business and the lives of his family and team. I am sure we will see much more advancement in this incredibly undiscovered natural resource for businesses, the advisory board!
You can hear all of the interesting ground Jake and I cover in the S3E9 episode of the Growing the Future podcast anywhere you listen to podcasts !