What Qualities Do Entrepreneurs Want in Their Best Advisors?

For many organizations, an advisory board can help a private company compete more favorably in their markets. Advisory boards have more flexibility than their publicly traded competitors. However, you should look for similar qualities in the people you have providing you advice.  These people can become your best advisorsLast week, I got several notes asking about what kind of qualities an advisor should have. So today, we discuss these qualities and then next week we talk about recruiting and compensating your advisory team members.

I adapted several of these ideas from Ram Charan. When I first started doing board searches for my clients, several CEOs recommended his books.  All of them made great contributions to my clients’ organizations. You should check out Ram’s newest book called Boards That Lead.  He has co-written it with Dennis Carrey and Michael Useem.  Their thinking on boards is going to change how you see your board of directors.  You can find out more about Ram at www.ram-charan.com

The first quality you want in your best advisors is practical experience working with peers and able to mentor your team.  Having great leadership skills is critical to success in being an advisor. I have found many great advisors for my midmarket clients talking with the future leaders of their firms. These individuals are looking for opportunities to get more involved in strategy as they continue developing their careers.

The second quality you want in your best advisors is a good understanding of the markets you serve and what’s happening across a number of customer industries. They are capable of sharing your ideas with others and know how to facilitate discussion between the different stakeholders in your organization.

The third quality you want in your best advisors is they are able to focus on your challenges when working with you. They are certainly passionate about their own organizations, but they are also capable of helping you develop opportunities for your organization. I have found the best advisors can open doors faster than traditional business development methods. They bring positive energy to your growing organization.

The fourth quality you want in your best advisors is they possess is they can help you connect the dots. They are very good at asking great questions and facilitating discussions with any number of professionals on your team. The know how to nurture others through a process while still providing different points of view during discussions. They are very effective at connecting ideas together and fashioning a solution for your best markets.  Sometimes it’s their ability to constructively bring challenges forward in an impersonal way.

The final quality you want in your best advisors is you must trust this person. When choosing an advisor you must be comfortable with how this person interacts both with you and your key people. This person must embody integrity in their interactions with people both inside and outside the organization.

In many cases, I suggest that we bring in advisors from their best customers. These individuals can not only help you better understand the customer’s point of view but can provide introductions to key executives within other potential customers and partners.  In several cases, my clients have been acquired by strategic buyers because of these introductions.

Finally, when thinking about who should be on your advisory team, you should consider what you can provide back to these great advisors. In most cases, it’s the intangibles that help you attract the right people to your team. In my experience, compensation is a small part of their decision to be involved in your organization. I’ll share this on next Tuesday.

Later this week, I talk about how to create a high performing team.  See you Thursday.