Dr. Earl R. Smith II
Managing Partner, The Federal Circle
DrSmith@Dr-Smith.com
Dr-Smith.com
A well constructed and professionally managed advisory board can bring amazing benefits to a company. A poorly designed and managed one is usually a colossal waste of resources. The difference often lies not so much in the idea of an advisory board, but in the execution of that idea by the senior management team, and particularly the CEO, of a company. In many cases, the productivity of a company’s advisory board is an indication of the effectiveness and sharpness of focus of the senior management team.
In my very first column I described how an advisory board can turbo-charge the business development process. A lot of you found that idea intriguing and have asked for more details. I thought I’d take this column to describe the very first advisory board that I built specifically as a business development engine.
In my last column I described how I leveraged the needs of a client base and funded the launch of a company using the customer’s money. This was the company that also taught me how an advisory board, if appropriately structured, populated and managed, can radically improve a company’s performance.
As it turned out, there was a second major benefit that came out of that experience. Beyond a validation of my suspicions 1) that a promising solution to a major problem will draw investment from those who will most benefit (the customers) and 2) that involving potential clients intimately in the process of developing solutions to their problems will ensure their support of the company which then offered those solutions, another important lesson was learned … this time quite by accident.
Once our business model was in place, we set about managing three flows. The first was the flow of product … film projects that we could participate in financing. The second was the flow of investment dollars which would ensure that we could meet our obligations under the financing agreements. The third was the flow of bank funds.
Informally at first, but then more formally later, we formed two working groups that eventually merged into one Advisory Board. The first group was representatives from the film industry and their bankers. Their task was to organize the flow of investment ready opportunities. The second group was senior representatives of the street houses and accounting firms. Their task was to organize the flow of investment dollars. Initially we spent time working to balance the flows but soon realized that, if we brought both groups together, we could more closely coordinate the process. Thus the advisory board as business development engine was born.
What was neat about this approach was that entire, multi-million dollar transactions were often proposed, negotiated and funded during single Advisory Board meetings. The process wasn’t entirely on automatic pilot but it sure was a lot easier to manage than shuttling back and forth between camps. My team provided the meeting coordination, processing and the post-closing management … we also acted as the coordinator of the overall process and made sure that each interest within the group was fairly served. In the end everybody had a big win and everybody had a respected role in the process.
On reflection, there were at least three major characteristics of this Advisory Board that were important to its success. The first was that the Board had a very well defined and obviously important function to serve. (And I am not referring to driving the run rate of a startup company.) When the members came to the meetings there was an anticipation of ‘doing business’ and ‘getting things done’. As a result meeting preparation was very through, materials were provided well in advance and meeting participation was very active. A second characteristic was that all Board members had specific economic interests that the Board would help advance. All of the players came to do business and trusted the others (including members of my team) to come to the table in the same spirit … a culture of cooperation towards a common set of goals that served the individual goals of each member dominated the proceedings. Finally, all discussions were conducted in a spirit of camaraderie and common purpose. Complex settlements would be explored and reached at the table and not left to extended phone discussions that typically involved lawyers and accountants. In other words, the decision makers made the decisions (and compromises) together.
From my team’s perspective, the Advisory Board made life much easier. The flow of product, investment funds and bank loans was all organized within one venue. The regular meetings of the Board provided a continuity of process that helped to organize a complex situation. Because the ‘market’ had become so well organized and the ‘players’ were all recognized ‘friends’, the process of arranging and closing financing became ‘rationalized’ … much of the uncertainty had been removed. My team got the credit for doing that and the company was seen as a necessary part of the process.
In the middle of the Big Apple we had organized a lower stress oasis.
© Dr. Earl R. Smith II
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Related Articles:
- Amazing Pace: Turbo-Charged Business Development
- Advisory Boards – Ancillary Benefits
- Turbo-Charging Business Development
- Advisory Boards – Turbocharged Business Development
- Seven Reasons Why Advisory Boards Don’t Produce
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1. Networking
2. Open Source
3. Innovation
4. Content
5. Design
6. Interactivity
7. Cross Platform Support
8. Cross Device Support
9. Data Footprint (ability to work across all data networks with fast speed)
Posted by Wallace Jackson
Hello
Successful small business owners will be quick to tell you that it wasn’t dumb luck that allowed them to have a thriving business.
In most cases, careful planning and the implementation of a business development strategy was involved.
Quite simply, strategic management is the act of developing and implementing a plan designed to achieve the objectives of your business.
Typically, this involves listing the objectives, doing an analysis of current practices and developing programs and policies to correct any weaknesses and thrust the business forward in terms of meeting objectives.
Some will develop their plans using a “bottom up” method, while others will use a “top down” approach. In bottom up management, employees will make suggestions and the best of the ideas will be passed up through management until, finally, some of the ideas are adopted.
In a top down management style, the business owner or top managers will create the business development strategy and then implement the changes down through the chain of command.
Another option is the collaborative process in which managers and employees work together to develop the best business strategy.
You’ll want to evaluate each idea based on its weaknesses, strengths, growth potential and risk potential. The initial development or review process may involve top managers or employees from every department may be involved. When possible, a business strategy consultant may be included.
Depending on the complexities of the strategies you plan to implement, there are several factors you’ll need to take into consideration. These include ensuring there are sufficient resources, assigning responsibilities and establishing a chain of command.
You will also want to develop a timeline and points at which you will evaluate the strategies to see if they are achieving the desired goals.
Here are two common types of business strategies and the areas they encompass.
Functional Strategies
These strategies focus on broad ideas and tasks for different departments within a business.
Functional strategies may include marketing, human resources, new product lines as well as legal and financial strategies.
Operational Strategies
While functional strategies incorporate broad ideas, operational strategies are much narrower.
They typically deal with the day to day operations of the business and may focus on details such as how many cashiers are needed during a certain shift or how much stock to keep on hand.
Obviously, there is not one type of business strategy that is going to work for every business. The old saying goes “there is more than one way to crack a nut”, and this is true in business, even within the same industries.
If you’re in the insurance field, that doesn’t mean that to find success you must copy the business model of the successful agent down the street. In fact, the contrary is often true.
For some businesses, trial and error is part of the process of finding business development strategies that work. You don’t want to pull the plug too quickly, however. Some ideas may require time to reach their fullest potential.
Find what works for you and if you realize that what you are doing is not working, switch things up until you find a new business strategy that is right for your organization.
Hope the above information will help you out
thanks
Posted by vitun sharma
Developing business works through continuous customer contact, feedback from existing clients and of coarse referrals which fill your pipeline. When I talk about continuous customer contact I am referring to calling or visiting clients on a weekly, monthly and semi-annual basis. With new customers you want to see them more frequently at the beginning then once you have a solid foundation or relationship you can switch to a less frequent basis but you must expect referrals and be persistent in asking for them otherwise your clients will figure your too busy. When asking for referrals you need to use specific contacts like do you know the business owner to your left? and your right? Who is your real estate agent? insurance agent? etc. These are great contacts to network with and trade business back and forth. While your getting feedback from your customers, ask for a recommendation letter once you have a solid relationship. The worst thing that can happen is that they will say no or that they don’t have the time. If your relationship is solid and you provided an excellent quality of products or services then they will be more than happy to help.
Private Note:
Well I hope my answer has been helpful. Have a great day!
Steve DiMichele
Posted by Steve DiMichele
simplicitymastered.comamichelleblakeley.com1. I strongly believe in the 6 degrees of separation. Your sphere of influence can generally get you connect to those you need to be connected with, including ideal clients. Plus they make for great resources.
2. You need to systems in place that maximize efficiency and effectiveness (CRM platforms, auto-responders, newsletters, etc.). When these are combined with a “personal touch” (i.e. phone call, handwritten note card, etc.) Not only do you stay top of mind, but you convey a consistent, polished and professional image.
3. Give, give and give some more. Providing relevant and useful information works wonders for generating interest, establishing expertise and increasing your brand awareness.
Hope this helps. All the best,
A.Michelle
http://www.simplicitymastered.com
http://www.amichelleblakeley.com
Posted by A Michelle Blakeley
activestor.caDr. Smith
Certainly, networking is one key. That is something you employed when you built the advisory board success described in your article.
The problem we saw: it seems most people do not know how to network.
The solution we came up with: start a LinkedIn process to help other folks do better at networking. [ie, 'to help' rather than 'to tell']
The note at the following link explains what has happened so far… http://www.activestor.ca/post/2010/06/19 /People-Networkinge280a6Succeeding-in-the-21st-Century-5.aspx
I hope this helps.
Rick
Posted by EFC (Rick) Baker
Within social media, putting in the time and energy into it, through participation in group discussions as well as keeping in contact with those in your network and groups…
There’s no free lunch… It’s free to join most of these sites… The only thing needed is time spent working to get yourself seen by others, hopefully creating a situation where one acquires new clients as a result…
Posted by Dave Maskin
good night sleep – breakfast- non stop reading- sharing -save some money for your dream
Posted by Chia Yun Tsai
Back away sometimes and THINK. It’s about being strategic, not just busy.
Posted by Ken Cooper
I invest my time where my best clients do.
Posted by Christine Hueber
Business Development, in my opinion, is about building relationships, know how to really listen, asking questions, being interested in what the other person has to say, not getting defensive when they tell you what went wrong with a referral, personal, personal, personal, not just talking about business but really getting to know people and being available.
Help your clients/customers/referrals/physicians through the system and always, always do it with a smile. You will be surprised how many people you meet that will become your friends and how nice that is for you.
Posted by Nancy Love
Never confuse BD with sales.
Posted by Keith Hinkle
Actionable vision – Disney stayed focused on a single vision as the Magic Kingdom was being built, the castle, it was actionable. Vivid communication – Each evening he gathered all of the workers around and described what the completed park would look like from the top of a ladder in the spot where the castle now stands. Proactive flexibility – He ran across many obstacles along the way and in every case he was willing to adjust and consider alternative solutions – but he never waited for the minor snag to become a major obstacle.
Posted by Monica M. Paul
Eric Klein wrote:
Setting proper expectations. All to often Business Development is used instead of “noncommissioned Sales Person” and this is not correct.
Business development is supposed to find new markets and help develop them, not become another sales channel. Only by properly setting the expectations as to what the job is trying to accomplish and what the goals are can you succeed in Business Development.
Sami ATIG wrote:
only honesty
Peter, Thanks for a great comment. I agree that there is no substitute for experience doused with a liberal portion of almost suicidal determination. Truth be known, salesmen are some of my very favorite people on the globe. The good ones are forces of nature. Business development is indeed an art. The best at it have a touch that never seems to fail them. I have moved more than one from a space they had grown comfortable in only to see them take off in an unfamiliar space with the same energy and gusto. They always surprise me. I like your descriptions very much. Thanks for sharing them. Dr. Smith
Peter Ortmann wrote:
By reinventing yourself, failing and remaining determined to win.
As a serial entrepreneur for over 38 years, having started over 50 business models, some of which were a small scale success, although most of which failed, you learn many things and define patterns you try hard not to follow the next time around.
My conclusion, is business development is an art form, often a suicide mission for the very business being developed, yet if we are willing to change our ways, our vision, adapt and reinvent ourselves, our goals and our models, and of course stay the course, we will win sooner or later.
The key to developing any business is to network with others who have had some experience in what you are doing or building. Being flexible in changing your business plan (so many entrepreneurs refuse to change their rigid BP’s and that leads to failure most of the time).
My TahitiPetey eco-brand model in the making, has taken on a life of its own, is now eight years old, walks, talks, and has endured two failed launches, and countless other nightmares over that time. But it lives on!
Business Development is life itself!
It is a state of mind, a marriage of wits, an attitude, unique perspective, vision and the abyss all wrapped into one project. True entrepreneurs must learn that failure and change is part of that life, and developing a single business model or one with 30 like mine, It’s hard work, it must change to live on and despite the long days and little or no pay – it’s worth it in the end.
Rule number one: Follow you gut, listen and learn from others, but never let other people’s perception of you or your business, become your realty.
Michael, You last point is incredibly important and one that many CEOs overlook. Every win needs to be celebrated. sure, the mountain ahead might be much higher than the one just conquered, but the conquering should always be celebrated. A culture of winning begins with celebrating wins. Dr. Smith
Michael Waitzer wrote:
In a turnaround situation, changing the organizational culture is often a required challenge. Dan’s idea of cross-pollinating disciplines is a great one. When time is a luxury that is absent, I have had the pleasure of creating team sessions where everyone must focus individual expertise to achieving the “Dot on the Wall”. By regularily meeting as a team, the ability to hide in the forest is eliminated and you have the added incentive of peer judgement of regularily reviewed results. The challenge is for the leader to manage behaviour and to keep everyone focused.
In conjuction to these regular meetings, I would more than occassionally invite line management to participate and push up and back. I have seen remarkable success in reducing expense and driving revenue as a result of these sessions through the contribution of the front line managers.
Don’t forget to celebrate each win, no matter how small!
That’s a great idea Dan. I have used it very successfully in the past. Sending marketing types out on sales calls, sometimes on a fairly regular basis, can have a very good effect. I also think that it is a good idea to have the heir apparent in marketing spend a year in sales prior to their promotion. What do you think? Dr. Smith
Dan Elder wrote:
One way you can cross-pollinate sales and marketing and develop good communications between them is to have a formal rotation program where small numbers of each department spend a year in the others’ shoes.
Best,
Dan
Bud, Thanks for the comment. You are right on point. I too have had to deal with marketing that was out of alignment. Getting them on the same page takes great skill and effort. Have you had any experience with aligning performance metrics? I suspect that to be one of great challenges of CEOs. I like the breakdown into sales and marketing. How do you coordinate the two? They are truly oil and water. Dr. Smith
Bud Boughton wrote:
I have done numerous product launches and revitalizations of sales organizations and in my opinion, real business development occurs when a company’s marketing and sales organizations truly align themselves with one another. Too often, marketing lives in its own silo and doesn’t get the necessary interaction from sales to understand what the salespeople are hearing from decision-makers out in the marketplace. As a result, there is a major disconnect and as a result, sales and marketing never achieve the kind of synergy they need to in order to be successful. True business development gets its legs when marketing and sales align their marketing and sales activities together with the overall business and revenue objectives of the company.
Francois Roos wrote:
There are as many methods and there are situations, my view is that one need some basics, then you manage the situation.
Basics being you need to be able to measure and manage the right things. What ever you mesure needs to follow the principles of the TOC, increase revenue, decrease capital employed or reduce operating expenses.
All business does not need more market or financing, some need better production capabillity or competitive advantages. Managing the need of the particular company is dependant on the constraints that needs to be eleviated to improve the items measured.
The situation mentioned seems to be one where the company lacked networks and contacts to increase market share. By getting the right people together you succeeded, well done.
I believe no method is the ultimate, but believe what ever you do you need to have the abillity to look into the future and address the risks and opportunities the company present. Decisive action towards this is important.
Inka Traktman wrote:
I would agree that top producers are very good at relationship management, but in my experience they are not the implementers of change and are typically not the visionaries as they need to be focused on winning business within the boundaries of their sales cycles. I have seen very effective advisory boards as long as they are facilitated with dynamic leadership and have top management buy in – too often they become weight down, political and unaccountable. Mostly I would agree with Jerry that an individual must champion change leadership and innovation to achieve outstanding business development results. Success is however not an individual achievement, but particularly powerful if the innovation can be gleamed of the top producers sales obstacles. Key is the organizational fluidity and the ability to implement new processes and business models with the support and alignment of all entities in the organization, even if they are not practiced traditionally and burden-some to members of the organization to accommodate initially.
dr-smith.infodr-smith.infodr-smith.infoJerry, Thanks for your comment. I agree that advisory boards can be a waste of resources. In an article titled Dysfunctional Advisory Boards – A Family of Problems: http://www.dr-smith.info/dysfunctional-advisory-boards-%e2%80%93-a-family-of-problems/ – I describe how I often have to dismantle unproductive boards before building new ones. I expanded on this these in Seven Reasons Why Advisory Boards Don’t Produce: http://www.dr-smith.info/seven-reasons-why-advisory-boards-don%e2%80%99t-produce/ . A productive board has a very narrow focus – in this case it is driving the revenue line. Their structure and management takes focus and attention to serving their principal purpose. In Advisory Boards – Turbocharged Business Development: http://www.dr-smith.info/advisory-boards-%e2%80%93-turbocharged-business-development/ – I give an overview of their structure, resourcing and management. My experience with successful business development types is that innovation has little to do with their success. Top producers are usually very good at interpersonal relationships, exceptional communicators and very focused on winning business. What has most impressed me about them is that they seem to have the same characteristics whether they work for a large or small company or whether they work alone or with a team. Advisory boards as I build them are adjuncts to these top guns; magnifying their ability to win very large chunks of business. Thanks again for the comment, Dr. Smith
Jerry Durant wrote:
My first reaction was whether the majority advisory boards are ‘turbo-charged’ or the ‘colossal’ waste of time you mention? I tha s my experience the majority of them are in the latter context and is due largely to the lack of fuel (in the form of the current day popular category ‘innovation’).
First of all a committee or groups are seldom an effective means of delivering innovation or direction mostly due to the team dynamics and the lack of control over personal agendas. Second, in order to have innovation to drive business development one must allow for it to occur freely and without contraints. There will always be time to critque and subject it to critical examination. Third, business development means having multiple visions and not a one track mind. Many businesses have prided themselves on the vision that they have but then impose a burden of beauracy that restricts responsiveness. An ironic point is while routine tasks are rushed (causing negative results) the organization itself lacks a lean mentality in terms of pursuing business opportunities. This is so unfortunate given the massive resources that could be brought to bare and yet they are absorbed by wasted and often fruitless debate. Those that have been successful have done so based on decisive leadership.
While many point to small business as the hope for recovery, it’s not because of their masses that will cause change, it will be because of their ability to innovate and develop business opportunities. Unfortunately, the ability to penetrate will be limited by capitalization.
Scott, Thanks for your comment. My question is ‘how have you made business development live up to its name?’ I am looking for stories similar to my experience. Dr. Smith
Scott Soutter wrote:
I agree with the article entirely, I however am unsure as to what your question is? Are you inquiring as to how to garner financial commitment or how to streamline and make your business value proposition more saleable and client centric?