301: Marissa Levin — Build a Great Advisory Board

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Well, I'm sure as you've looked in the mirror, sometimes you wonder, maybe you have a little fear and anxiety about what you don't know that you don't know. There's a whole world of things there. And that's why we look to find our own blind spots. And, and we look to find advisors who can help us get from here to there. Right. What got you here won't get you there is a famous title and an idea and that's what a board of advisors or key advisors can be all about. That's what today's show is all about. Building a great advisory board. Listen in.

Hello and welcome again to the the Scaling Up Business podcast. I'm your host and scaling coach, Bill Gallagher. On the show with me today is Marissa Levin. Marissa, welcome to the show.

Hi, Bill. It's so great to be here. Thank you.

Yeah. So Marissa's in Northern Virginia, Right. And we've just been talking on the show and our kids are almost exactly the same age and we're both dealing with some similar life issues about being empty nesters. Opportunities.

Not issues, just opportunities.

Oh, they want help, they come back, they have crises, there's all manner.

They're all in charge of their own journeys. That's how I'm looking at it.

And is your son the oldest?

We have two boys.

Two boys. Okay, good. Yeah, I have a boy and a girl.

Yeah.

A young man and young woman. Yeah.

And where are they now?

Well, they're home for the summer. Yeah.

Yeah, both of them are home for the summer. So my oldest is doing an internship. Last summer he did a 4300 mile bike ride across the country to raise money for special needs. So I'm very happy to have him actually home instead of on a bike. And my younger son is Home too. Getting ready to launch.

That's badass. That's awesome. I cherish the time when we get. Our son lives nearby, a few miles away and is a CEO of a startup. And our daughter lives down in LA and is a photographer with performing artists.

Excellent.

They're similar age and I just love when she comes home for a few days or when we get to see him for dinner or when we get both of them. It's awesome.

Yeah, it really is because we don't.

Have to deal with them every day.

Understood.

So we're talking about advisory boards and you were a speaker at our summit. So folks should know that Marissa is an accomplished entrepreneur and she writes for Inc. Magazine. She's written a couple books. Her latest book, Built to How Top Companies Create Breakthrough Growth through Exceptional Advisory Boards, is sort of the main subject of our talk. Although I'm sure we've already started talking about family stuff as well. But we're going to talk about the impact of all of this, in particular for scale. And she spoke to the coaches and at our Scaling up summit and I thought it was a really useful topic because a lot of our clients want to develop advisory boards. Some have four formal boards and we'll talk about the differences and all that as we get into it today. So I'm glad to have you on the show.

I'm thrilled to be here, especially talking about this topic because done right, an advisory board is one of the most compelling and effective strategic tools that any leadership team can use to get to the next level of growth.

Yeah, well, when I was doing tech companies back in the 90s, I, I would build an advisory board early on to help with the formation of the team, the funding like all kinds of aspects of our early moves and that was really critical to getting the attention.

Of anyone, I'm sure.

So how did you get interested in this? Give us some of your background so people can get your connection to advisory board.

So my first company is 26 years old now and it's called Information Excellence Experts. That's a full service strategic communications, marketing and training firm. I'm no longer involved in the day to day aspects of that. I've been out of that for eight years running Successful Culture International with a partner now. But when I was running Information Experts, as we were talking earlier, Bill, before the show started, building your first company is very much like building a plane while you're flying it. And every day you just hope that you're making the right decisions that are going to help to move you higher and move you forward and are not going to come crashing down on you. And you know, I was no exception to the leaders that faced that every day. And I, I've always been someone who likes to surround myself with help and reaches out for help. I've, I've just have never shied away from doing that. So even when I was building my company, that was one of the most important things for me to do was to find people that could really help me know what I needed to learn. Because so often when we embark on any endeavor, we're in the I don't know what I don't know quadrant. We're not even in the I know what I don't know quadrant. We're in the I don't know what I don't know quadrant. And I knew, especially as being someone who had an undergraduate degree in English with a concentration in Shakespeare, that I, I knew running a business while I had a passion and I had vision, you know, and I had a feeling for the impact that I could make in the world. I knew that I needed help from those who had done it well and potentially even those who had not done it so well. So one of my informal advisors, when we were at a point where, you know, I had, you know, a whole team of project managers, at one point, I think we were running 75 projects through the company, you know, different training and development, human capital and marketing contracts. Even though we had a great team of PMP Project management certified project managers, there still was a lot of chaos and it was like the wild, wild west. And so one of my advisors had said to me, have you ever thought about building an advisory board? And I said, well, what's an advisory board? And when I went out and did some research on it, I realized that there was no model on how to intentionally, consciously select the advisors that, that people need around their boardroom table that are aligned to the holes and goals of the organization to really get them to where they needed to be. And so I spent over a year, I should say I invested my time for a year documenting and creating my own process on how to select the right people, how to compensate them, how to associate them into your organization, how to leverage them, how to evaluate, evolve and exit them when they no longer fit. And, and that's how the scale model came into being. So I did my own research, I talked to over 150 other entrepreneurs and I created my own model so that I can make sure that I was selecting the right people, not just people who seem to have a lot to offer. But how did they actually align with my vision, my values, my mission, my strategic plan, my competitive analysis? You know, what I was trying to build from a cultural standpoint, how did I find those people? And that's really why I took the time to create the scale model and we implemented it. We found some great people. It ended up resulting in several million dollars of growth for our company. And then I was able to take that out to the market. And so that's kind of how the model evolved. You know, I've always defined entrepreneurship in six words. See a need, fill a need. And that's what I did.

So many of our great origin stories come around dealing with something, grappling with something yourself, and then spinning it into a business. So now you've worked with others on their advisory boards. Talk to us about that a little bit.

I threw the book up on Amazon after I wrote it. I self published it and it went to about 14 different countries. And it's kind of taken on its own life. It's patented and trademarked. And as a result, companies called us to say, can you help me with your advisory board? So I figured out how to actually turn this into a consulting opportunity. And so that's part of the offerings that we offer through successful culture international. And leaders have come to me and said, tell, you know, we've read your book, we don't want to do this ourselves. And that's the whole thing about entrepreneurship, which, being as someone who's an entrepreneur, you know, for the last quarter, you know, quarter of a century, I understand that we put the processes out there, but the truth is they don't want to do them themselves. They want to delegate them, these types of things to people who are the experts. And so they will call and say, can you help us? And you know, there are certain things that need to be in place. There are certain, you know, rules of engagement that have to happen with an advisory board initiative. The first thing is I have an online assessment and survey where I, you know, make sure that they're actually ready and that they're right for an advisory board. But the first thing is that to know that an advisory board is not, it's not a solution for a crisis. It's not something that you put in place to triage a problem. It is a strategic initiative. So if you've got something going on in your firm and you think, well, if I have an advisory board, they're going to fix it. This is, this is a long term strategic initiative that should be aligned to A strategic plan. It's not to just come in and fix one specific thing. So when I work with clients, the first thing I do is make sure I understand where they are strategically. The second thing, it's not the advisory board's job to do the values, the mission, the vision, the competitive positioning, the customer analysis, all of this has to be done and really clearly defined before even going down this path, because that information becomes part of your advisory board search document, all of that. You know, the CEO needs to have their story down cold when they're searching for advisors and to know how they want that advisor to engage. So there's so much upfront work that we need to do before we even get to defining what the seat definitions are and who they need around the table and the vetting process. So that's the first thing is really even making sure sure that they're even aware of whether or not they're ready for an advisory board. So when they come to us, you know, we do that vetting first. And if they are ready and we embark on it, we make sure that they're aware of the investment. And that depends on how many seats they're looking to fill, what types of seats they're looking to fill, if they want us to actually do the source selection. So either partner with us with a search firm or engage in the search. Perhaps they only want to get us to get them ready for the advisory board. There's lots of different ways to figure it out. But once we do that and we're engaged, they have to know it could take six months to get the right advisors around the table. And what we've learned with our experience is that one of the things that could drag out or delay the process of completing the whole thing is, is the need for diversity. And we've learned that companies who put in advisory boards, it's very important to their employees that the board accurately represents the diversity of the employee base and the customer base. So if you're going to put in a group of all white males, you are going to alienate your employees, and you won't be representing what they look like, what what your customers look like. And you also won't get a diverse viewpoint on how the world is operating today. So finding diversity within your advisory board, you have to factor in that need for doing that type of search, because it's not always easy. So there's a lot of factors that have to go into the entire advisory board process. But once we do it and we get the advisory board in place, we we don't just take off. We make sure we have a whole boot camp and a process to kick off the advisory board successfully. And then we stick around for as long as they want us to, whether it's six months or nine months or 12 months, to make sure that the advisory board is really functioning in the most optimal way possible.

So why don't you share with us some examples, a client story or two about that you were talking about. One, as we were getting ready for the show that I think it would illustrate some of these things for folks so.

And give you some examples of some of some companies that we've transformed through our advisory board work.

What was it like? What happened? How'd they come to you? Sure.

So, you know, a lot of my companies are, you know, they're fine with me sharing their information and others not so much. And I'll share a combination. One of the firms that we've worked for, really amazing company, it's called Ridgel Corporation, R I G I L Corporation. And we have their permission to fully talk about our experience with them. They're a huge advocate of our process. The CEO called me after he ordered my book. You know, he went to Amazon and he was interested in advisory boards. And so we came up or the number one search on that topic and he called me because his company, they they're government contracting. And what's so interesting about this company is they have figured out how to successfully both a product company and a service company. And I'll tell you, when I was running information experts and I got that company to about, you know, $15 million, 75 employees, we were a professional services company. But what we did internally is we dabbled in product development. So we created some internal tools on how to develop elearning and how to track problems in, in in different platforms. And we came up with about five or six different tools that helped us to do efficiently. We then thought about taking them to the market. And what we learned from our own experience and what Rigel also learned was that the business model for a professional services firm and the business model for a product firm, especially a technology product firm, are vastly different. It's different cultures. You need different people, you have different value systems, you have different funding vehicles. It's a whole different ball of wax when you're trying to build a product company versus a service company. And so we discovered that quickly and as the CEO, I decided very quickly to shut that down, that we were not going to pivot that and take our profits from our professional services piece and try and fund product development, because that's a disaster. So when Rigel contacted us and they said to us, look, you know what? We've got great state of the art technology and apps, and, you know, that we're doing for the Federal Aviation Administration and different agencies, and we really are trying to be this hybrid model of a product and a service company. We are not sure how to take what we've built so far and take it to the next level. And we need an advisory board for that. So I was able to, you know, consult as someone who has the experience that they were looking for, but also to help them figure out who they are really needed around the table. And it did start first with really evaluating their values, mission and vision and seeing where those may have been outdated because they do need to evolve with the company. The other thing about Rigel that was interesting was, was that they had very strong employee loyalty, which meant that there wasn't a lot of attrition. However, as they were growing and they were bringing in new people from a cultural perspective and, you know, my company, Successful Culture International, we do all culture work from a cultural perspective. When you're blending the new employees in with those that have been there for a while, it always presents cultural challenges. So Rigel, you know, was on the cusp. They had won some very large contracts, and they were on the cusp of growing not only to one next level up, but actually to two or three. Because when you win these massive government contracts, it can literally propel a company who's doing like, you know, a five to $7 million Runway to overnight. They're a 30, 40, or $50 million company. And while that might sound successful on the outside, the chaos that it causes on the inside can literally bring a company down. So what they needed from their advisors were people who could really peel back the onion inside their company, see what was working, take a critical look at that, look at their leadership, look at how they were pivoting from product to service or service, and how they were going to be a hybrid model and then also in the government space. And this was something that we learned as we were building our government firm. They needed people who were retired executives from the agencies they were working with to be able to give them some insight into what those agencies needed and how they functioned. So we were able to come up with a very specific blueprint for their advisory board. And I'll tell you, it made a huge difference for them to able kind of really reset and reposition themselves successfully to hit that 25, $30 million mark because of all the wins they were having. Really, really great success story. I would, I would encourage people to check them out@rigil.com R I G I L.

That'S so great. Now, have you had any that didn't go so well?

So, okay, so that's interesting. We, like I said, if you look in my book, I have a quote from Plato in there in the beginning, and it says the beginning is the most important part of the work. And I think probably a lot of people might skip over that quote, but that's really significant for any strategic initiative. And so, look, I'm committed to making sure that my clients are successful for whatever they're going to hire us for. And there has to be some preliminary due diligence done on our part as the consultant to see if they're actually ready for what they think. And, you know, I mentor a lot of up and coming entrepreneurs and people who often start as solopreneurs and they're, you know, independent contractors. And one of the things that I try to really implore with them is that there's a big difference between a contractor and a consultant. A contractor does what the customer asks them to do. A consultant challenges them on what they think they need. Because, you know, as someone who's run a professional services firm for 25 years, I can say with 100% conviction and certainty and clarity that nine times out of 10, what your customer is asking you for is not what they need. And so consultants use that information when they come to you with a challenge or an issue and they say, I need X, Y and Z, that is the opening of a conversation. That's all it is. It is not a request for services. It's incumbent. And it's on the consultant to say, well, why do you think that you need that? Tell me a little bit more about where that need is coming from and start to do some exploratory dialogue to really understand what they need. And chances are they're going to need something much more different than they think for many reasons. First of all, it's very hard to see the picture when you're in the frame. And, and a consultant's job is always to stay outside the frame so that they can provide an objective viewpoint and bring best practices to the table when they're trying to improve. So for the advisory board work, we have not gone down any roads that have led to failure to thrive, I'll put it that way, because we're so careful about making sure that they understand what's required of them, what this engagement really looks like, what the readiness factor is for them. We won't engage unless we feel that they're really ready to embark on this initiative and they're going to be ready to implement and they're going to be ready to go through the transformation that the advisory board is going to initiate. So we have not had any failed engagements because we are very focused on making sure that we do it right.

Yeah. But I could see a lot of opportunity for it not to go. And I think like, hiring people, selecting people in general, picking clients, picking employees, picking service providers, seems like there are a lot of ways that it can go wrong. And when I think about in every category, I feel like I've made mistakes at one time or another by having somebody who maybe looked great on paper but wasn't a fit for our values or worked really well with small companies, but not with a big company or vice versa.

Yeah. And so that's why the deal diligence up front, the vetting process is really important. It isn't just about what's on paper. Anybody can write a good resume. Right. Anyone can hire someone to write a really good resume. I mean, I'll tell you right now, I look on LinkedIn and I have, I have, you know, former employees that worked at my old company. They, what they've written about, what they did from. For our company is so far off base from what they actually did. And it's not like I, as a former or owner can do anything about it. Because really, when you. And this is a great lesson for anyone who's hiring, when you are hiring, or whether you're trying to put an advisory board together, whatever it is, when you're engaging anybody to do any sort of work for you, it really is what I would call buyer beware. Right. You need to do your own due diligence. And so if you're looking to build an advisory board and go great resumes come across your desk, they should be, you know, treated with a grain of salt. Right. I mean, you need to tread carefully and kind of just, you know, take it at face value and then make sure that you're doing your due diligence because it is. There's so many things that you need to look at when you're building an advisory board for cultural compatibility. And I go over all of that with, you know, in my presentation and the work that I do with my clients to make sure that they know that it isn't just about the skill set that they have or the experience or the technology expertise or their network or, you know, even a customer, you know, experience. There's so much more beneath the surface, and that's why you have to do such strong due diligence and have multiple interviews when you're vetting these people.

What's the getting started piece? I think I need an advisory board.

Right, okay. So your thought is I think I need an advisory board. Right.

Yeah.

So I'm. You're gonna call us and we're gonna have an initial meeting. Well, first I'm gonna do a survey because that's gonna let me. That's. That gives you a platform to really articulate for both of us on why you're going down this path. So what is it that is compelling you to think you need an advisory board? Where are your holes and your goals in your organization at first glance? And once you provide that, then I'm going to ask you, well, let me see your values, your mission, your vision, your strategic plan. Have you done that work? And if you've done that work, then that's great and we'll validate it to make sure that it still is relevant to today. Because if you did it two, three, four years ago, it may not be relevant. So we need to make sure that it's relevant. If you haven't done it, that's the first place that we start, as well as doing a SWOT analysis relative to the advisors you need around you, not just what's going on in your business. So, you know, those are really what the first steps are. And then I will really even step zero is have you read my book? Right. I mean, the first thing that I want to make sure is that everybody, we're on the same page for what the model is. And so if they haven't read the book, then I send them the book and that at least gets them onto the same page for the model. But if we do that work and we find that they really are ready for an advisory board, then that's great. And then we start down the path of looking at the selection phase. And there's lots of things that go into that for selecting phase and that will get us to who are the designated seats? And one of the questions I always get is, well, how many advisors should I have around my table? And the thing about an advisory board, this is not a board of directors. They don't have fiduciary responsibility. It doesn't matter if you have an odd number or an even number for advisory boards. Whereas, like with a board of directors, you really want to have an odd number so that there isn't a tie in voting. But advisory boards, you know, are much more looser because they're, like I said, there's no fiduciary responsibility. And basically the CEO, at the end of the day, can do whatever he wants. He can listen to the advice and, you know, not listen to the advice. It doesn't really matter. So the number that I always say is start with four. Don't go any more than four. Because managing an advisory board, you're managing a whole new entity now, right? And managing an advisory board is another job on top of running the company. So you want to make this where it's very manageable. And anything more than four when you're first starting is kind of unwieldy. So we want to make sure that we have really strong clarity on what the greatest priorities are for the expertise that you need. Because every time we've gone through this exercise, you end up with a list of eight or ten things that you need help on. Well, we can't build an advisory board with eight or 10 advisors. It will just be a disaster starting out. So let's prioritize those and we'll start with the first four to get the board going. And you know, that in itself is going to be a huge initiative to just find four advisors.

Now, some advisory boards meet formally and others will meet sporadically or individually. Do you have thoughts about that? Is there one or the other?

Is it situational?

So it's totally situational and discretionary according to what the company needs. And this is where. This is the work that's done up front, right? Because you might want to have everybody in person or once every three months, once every four months. And let's say you get a resume from someone who's retired and they live across the country and they don't feel like traveling. It doesn't matter how good their resume is. If they don't meet your criteria for having everyone in person, if you're not willing to make that exception, then they're out. They're not a candidate. So this is why doing that type of selection upfront and what the criteria is is so important. There's not a right or wrong way. Like, do you meet in person? Do you allow them to use Zoom or WebEx or GoToMeeting? Do you allow them to conference in. I mean, there's no right or wrong. It depends on what is best for your company. And another selection criteria that kind of piggybacks on this is how do you want the advisory board engaged? You only want them working with the C suite so that they're just advising the C levels? Or do you want to use them and leverage them as mentors to other people in your organization? And if you do, what does that look like? Do you want them doing business development out in different networking organizations for you in different networking communities? What does that look like? This is why doing that upfront work of creating a really, really comprehensive, robust search document so that you have answered every possible ambiguity is really, really important.

We haven't talked about the reason the advisors engage you.

I love that question and I get that a lot. And I serve on different advisory boards. I mean, I am an advisor. So I look at it, you know, from the perspective of an advisor and I also look at, from the perspective of a CEO. So if this is what we found from our research, you know, of talking with over 100 different advisors that, that like to serve, they do it for a variety of reasons. They want to stay relevant, you know, they want to stay connected to community. They do it because they believe in the leadership and in the mission of what the company is trying to accomplish. You know, they do it just because they want to give back. I mean, they've been through a lot. Several of them have, you know, retired or they've sold their companies or they're, you know, they're on their own growth trajectory. So there's lots of reasons why people do it. Typically, advisory board work doesn't pay nearly as what, you know, director work pays. So money typically isn't the motivating factor. But that's not to say that you shouldn't pay them because, look, you can't expect someone else to put skin in the game if you're not going to do it. But typically they do it because they want to stay engaged and stay connected and they believe in the leadership.

Yeah, well, I've had people ask me and ask others to be on an advisory board and then not want to give them anything. And there's many times where you get engaged with the idea of a company. You're passionate, you love the leader, you love what they're up to. It's interesting you can help them in some way, but I never had respect for, for whether they're engaging me or someone else. For someone who, who wants somebody to help them build something and, you know, add millions of dollars in value and they're like, oh, they want to be cheap with them. I guess that's would be a value disconnect, right? When Somebody's like that.

Yeah.

What are you thinking? You take care of your people. So those are the cases where I'm either not the advisor or not not the coach. I suppose in our world we mostly see folks who really want to build something and they're willing to invest in their people, their team, that kind of thing. But some folks are, you know, like, if you really want people's time and attention, take care of them.

Right, exactly. I mean, and, and you know, if you are paying for them, then that gives you an opportunity and a right to be able to reach out to them. If you're not paying for them, I mean, it's really hard to go back and ask them for, you know, substantial help.

Yeah, yeah. Or it's for a limited, you know, we, we all do things for friends from time to time here.

Oh, of course. I mean, that's totally different.

Yeah, that's different than being here formally, but having, taking lunch with you is different than being your advice.

Right, Right, Absolutely.

So talk about the length of the engagement. How long are you thinking these are and does it matter? Should it be open ended?

So are you talking about once you get the advisor? Are you talking about the advisor actually on the board? Like, what is the land?

Yeah.

So I want you to be my advisor. How long would it be? Should I say it? Should we just leave it as is?

No. So you want to start with a one year agreement and that's it. And that way at the end of that first year, you can determine, both of you can determine if you want to continue because one of you might want, you know, to end it. The advisor might want to roll off. You might decide that they're not what you needed or they're not delivering. It's, you know, it's, it's like when you hire someone, there has to be a review at, there has to be checkpoints. And so we recommend one year with a restricted stock agreement in the event that you're giving any equity, which will allow you to buy back that equity. Because the last thing that you want to do is give someone a, you know, even if it's a small piece to your, of your company, you definitely want to make sure that you have an opportunity to get that back if you decide to roll them off. And what we have in the book in the last section, which is the E for evaluate, evolve and exit, know that an advisory board is a very fluid and dynamic process. And so, you know, ideally you're going to outgrow some of your advisors if they're if you're doing all the things right, your advisors will get you to a certain level and then it would probably be best if you brought in other advisors at another level. So it's the understanding that this is a fluid and dynamic entity that is ever changing. And when you do roll them off, we actually include an exit interview process. We include the questions in the book so that the CEO can roll them off in a way that never burns bridges. Because, look, we never know when we're going to be working with other people again. And it's always important to take the high road. So, you know, roll them off in a way that creates closure and that allows them to leave with their respect intact. And knowing that this is business, you know, it's not nothing's personal that this is business and making sure that that relationship stays stable.

Helpful well, there's a lot to chew on here. And there's even more in the book. The book is built to scale. You can find it on Amazon and it's about how top companies create breakthrough growth through exceptional advisory boards. If you want to find out more about Marissa's company, go to Successful Culture. Of course we'll put links to both of these in the show notes. So if you're driving along, just keep your hands, go look at the show notes later and go to Successful, go to Amazon. Get the book. Marissa, thanks so much for talking with us today.

Such a pleasure. And if you happen to be on LinkedIn, connect with me. I love connecting and we do and try, we try to put very valuable content. And Successful Culture also has easing, you know, a blog that comes out every other week and all of the content is specifically geared for the business owner. The small business owners, they can build their greatest companies possible.

Well, as always, special thanks to the.

Original growth guru Vern Harnish for creating the whole scaling up framework that we know and love.

This show is produced by Lucy Summers.

Audio production by Podfly Productions with audio editing done by Albert Burge in the show notes compiled by I'm Codena and proofread by Tim McGowan. If you got some value out of the show today, please share it, pass it along like and subscribe. Subscribe it to get it every week and you can let us know the parts that you love or what you'd like to hear more of with an email to info scalingcoach.com thanks again for listening.

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