“An advisory board is an evolving, dynamic entity that will likely change as your business grows,” says Marissa Levin, founder and CEO of Successful Culture.
I’ve previously written about how to build a team when starting a beauty branda—who to hire, in what order and with what compensation options. I’ve also discussed the various types of sales people in the beauty industry and how to build a sales teamb. In this third and final installment of my “people series,” let’s look at the advisers you can turn to for help, and that will hold you accountable to your strategy—your board of advisers and board of directors.
What is a Board of Advisers (BOA)?
A board of advisers is an informal group of trusted peers that is committed to your success and will provide non-binding strategic advice relating to the creation, organization and/or management of your business.
This group has flexibility in terms of structure (how many people are on your BOA, number and frequency of meetings, how and how often you change the membership of your BOA), compensation (you can pay them or not) and guidelines (you can listen to their advice or not).
What is a Board of Directors (BOD)?
A board of directors is a group of individuals elected to represent the interests of a company’s shareholders. This is a formal group governed by rules and regulations as defined in the company’s bylaws. A BOD has significant responsibilities, including setting the company’s overall strategy, hiring and firing key executives, distributing dividends, and issuing more shares.
BOD members are not typically involved in the day-to-day operations of a business but are overall held liable for the consequences of a firm’s policies, strategies and actions. A BOD is mandated for all public companies and most privately-held companies with outside investors.
For this article, I will focus primarily on BOAs, which are relevant to any brand—startup or not, small or large. I have had different advisers at different phases of my business, and a true BOA at the beginning of my brand’s launch.
I chose people with experience in the beauty industry, entrepreneurs who had “been there, done that,” with whom I already had somewhat of a relationship. I cannot recommend this practice enough.
5 Steps for Building Your Board
The best person to offer advice about how to successfully implement an advisory board and reap the benefits of your efforts is my friend Marissa Levin, founder and CEO of Successful Culturec. Here are her five recommendations to attract and recruit the best possible BOA.
1. Complete your values, mission, vision and strategic plan.
“To create a comprehensive board search document, you must have your foundational elements constructed,” says Levin. “What do you stand for, why do you exist and where are you going? You must be able to articulate this to any prospective board member. In addition, you must be able to share your target customer profiles and your competitive landscape.”
2. Select advisers that are ahead of you.
Levin explains, “Choose advisers that have already achieved what you are trying to achieve so that you can learn from both their successes and their mistakes. You don’t want to sit around a table with others that are exactly where you are.”
3. Make sure your advisers fit your needs.
“Are you expecting your advisers to only work with your C-level execs?” Levin asks. “Or do you want them mentoring your other employees? Are you expecting them to be available during meetings? Or only show up quarterly? These are just a few of the many considerations you must think about when selecting advisers.”
4. Start small.
Levin says, “An advisory board takes on a life of its own. In addition to running your company, you will have to manage the individual and collective contributions. Start with no more than four advisers. If you successfully identify your needs, you will be able to prioritize your top four seats.”
5. Institute a one-year agreement with each adviser.
“An advisory board is an evolving, dynamic entity that will likely change as your business grows,” Levin explains. “You want the option of re-evaluating each adviser at the end of each year to determine if they are aligned with your goals for the coming year, and if they have met your expectations.”
Levin concludes, “Selecting the right advisers is just as important as selecting the right employees. The wrong advisers will be a waste of time and money, and can potentially lead you down the wrong path.”
The 3 Cs of Advisers
As you think about creating your BOA, address the compensation question. Board members will not take on this project to get rich, but rather because they believe in your success and want to help.
Nonetheless, you must decide if you wish to compensate your board members monetarily, in shares, in your company’s products or not at all. Related to this, think about your expectations in terms of frequency of meetings.
Not compensating your board is much easier if you are asking them for two four-hour meetings per year rather than two hours per month.
If, per Levin’s recommendation, you are going to start with a four-person board, think about the following:
a. Which areas of expertise are you/is your team lacking? First think of the expertise required before thinking of specific people.
b. Do you only want people from within your industry? Depending on your needs, it may be interesting to enlist advisers from outside (yet related) industries. As a beauty brand, think about the fashion industry, medical devices, pharmaceuticals, pet food or other consumer goods, distribution, etc.
If you feel the need to create a BOA, but it seems like an overwhelming task, think about a micro-board, or flash-board. These are the popup shops of BOAs. You bring together a group of advisers to help with a very specific concern or question—a new product launch, the need for a new distribution partner, a significant shift in your company’s results or operations (good or bad). This temporary board will be project-focused, which may be less of a commitment, versus a true BOA.
a“How to Build Your Beauty Dream Team,” January 2018, www.gcimagazine.com/magazine/pastissues/2018/
b“How Do You Build a Beauty Sales Team?” February 2018; www.gcimagazine.com/magazine/pastissues/2018/
cSuccessful Culture (successfulculture.com) works with CEOs to foster business growth through leadership development, the assessment and improvement of organizational culture, and the formulation and execution of strategy.
Ada Polla (email@example.com) is the co-creator of the Swiss antioxidant skin care line, Alchimie Forever, which launched in the U.S. in 2004. Her strategic focus and implementation have yielded double-digit annual revenue growth for the company. Polla holds an MBA from Georgetown University, majored in art history and political science at Harvard University, and graduated magna cum laude with a Bachelor of Arts degree in 1999. She is also a Global Cosmetic Industry editorial advisor.