ADVISING THE WISE
Updated: Mar 30
COLIN MASON B.SC., CMO, PRACTICE PARTNER
In the midst of economic turmoil and rising challenges, what is the best source of sound and practical advice available to a CEO and immediately applicable? It’s a simple question, but one with great significance for the development of small and midsize businesses (SMEs). At different times a leader may want to access specialized expertise, to generate a strategic decision, or to invigorate a discussion around business growth. There are many potential sources of business advice: your executive team, shareholders, peers, professional advisors, family, etc. Each has its pros and cons, but a CEO could definitely use more assurance of the outcomes they can expect from the wisdom of their chosen soothsayer.
In working with many CEOs over the years on many specific management projects, many clients have queried C-Level about high-level and strategic guidance of a more general nature. There appears to be a growing demand for this kind of broad high-level advice, unavailable from any single individual. This conclusion was reinforced by our discovery of a recently completed and quite unique Canadian study of over 25,000 SMEs. This contemporary body of research was sponsored and shared by the Business Development Bank of Canada. It gives a startling revelation of the kind of impact that a source of seasoned advice can have on business productivity and profitability.
Although larger organizations frequently have a board of directors, many SMEs are not in a position, for a variety of reasons, to access the benefits of such a formal group. However, it is well within the capacity of a small to mid-size organization to employ the services of an Advisory Board. This is a relatively simple way of accessing expertise, know-how and depth of experience, and also it is a far more flexible approach, especially if a leader of an organization is focussed on getting forward-looking perspectives and guidance, as opposed to the rear-view oversight practiced by most corporate boards.
The outstanding feature of the BDC methodology is their use of metrics to quantify the value of Advisory Board usage. Two key highlights of the research found that organizations with an Advisory Board reported that they enjoyed 24% higher sales and 18% higher productivity than the ‘board-less’ control group. 86% of these SMEs were also “respondents who benefited from the advice of their Advisory Board and believe it had a significant impact on their company”. Those results speak volumes; yet BDC reports that only 6% of Canadian SMEs have formed Advisory Boards to assist them. The study concludes that “the role, operation and benefits of this governance tool should be highly promoted to Canadian business leaders in order to help them better manage their company’s success.”
Based on this trailblazing study, and by tapping into the depth and breadth of the talent pool at C-Level, we have developed a tailored approach to helping clients actively establish their own Advisory Board. This approach reduces time, effort and risk; and provides immediate direction by focussing on upcoming key issues; be they vision, profitability, sales growth, strategic initiatives or enhanced transactions.
Have you considered the benefits of an Advisory Board? Care to see the findings of the entire BDC research? The potential benefits are undeniable. Just contact us.
For more insights, read this Harvard Business article on "Giving and Receiving Advice"