What does an entrepreneur do when she runs out of ideas? Or when he realizes he needs to be more systematic about gaining new business contacts, more professional about setting strategy or more proactive about seeking out management mentors?

One solution is to form a board of advisors—a group of experienced businesspeople with complementary strengths and skills who meet occasionally to discuss the progress of your business and suggest ways you can pull up your socks. As seen in the “Success Insurance” series of articles I wrote with College Pro Painters founder Greig Clark, advisory boards are probably the single most powerful management tool for those seeking advice, personal growth and increased accountability.

But working on that project with Greig only heightened my interest in the potential of advisory boards. If they’re such powerful and positive tools, why don’t more entrepreneurs use them? A look back at our 2007 research indicated that a number of entrepreneurs without advisory boards didn’t have a clue how to start one. They didn’t know what sort of help they needed, or how to find advisors in the first place.

More research was needed. So, when Vancouver Island University in Nanaimo, B.C., asked if I could use an intern from their MBA program, I readily agreed. In the long-standing tradition of academia, why do the research when an indentured student will do it for you?

Although we met only through phone and e-mail, Ajmer Mehmi of Victoria proved to be a smart and effective collaborator. Together (by which I mean he did most of the work), we created an online survey to probe best practices in recruiting potential advisors. Our goal: to eliminate the most common excuses for not assembling an advisory board.

We sent our survey to a list of recent PROFIT 100, W100, and HOT 50 business leaders, supplied by this magazine. We were pleased to receive responses from 30-odd companies that have advisory boards (as well as many more from companies that don’t). Here’s the empowering news from some of Canada’s best entrepreneurs:

  • Two-thirds of the CEOs recommended mining personal networks for quality advisors. “Friends, colleagues, clients and business partners can all be possible advisors,” said one respondent. No one reported using search firms or cold calls to find advisors.
  • Close to 60% told us that business groups (e.g., professional groups, local business organizations, industry associations) are excellent places to find potential advisors.
  • Another 40% of CEOs say former colleagues often make strong advisors. “Go with people you know in your industry,” suggested one. “My best results came from former peers or colleagues.” That marketing guru or finance whiz you used to know? Worth a call.
  • One-third of business leaders identified referrals as a good source of advisors. As one leader said: “I lean heavily towards personal networks and referrals, because they [referrers] have a better understanding of who I am as a person, and the ethics/overall atmosphere I want to create and promote.”

Experience on other advisory boards may also be useful. As one repentant respondent recommended, “Look for advisors who already have board experience. We had one member who did not, and we spent way too much time educating him and received very little advice. We had to remove him after one year.”

We also asked business leaders what they look for in members of an advisory board. Some 88% of respondents ranked industry experience, reputation and “successful track record in entrepreneuring” as important attributes of potential advisors. And, as one respondent said, “Don’t shy away from seeking persons who are extremely credible in their field and wiser than you are.”

In addition to the experience and accomplishments they expect of potential advisors, the entrepreneurs haven’t forgotten the soft stuff. A full 83% said they believe that “personality” and their “personal relationship” with a candidate are important factors in selecting advisors. They’re also mindful of the big picture, with 83% saying “board chemistry” is a significant issue.

Finally, we asked whether Canada offers “numerous resources to help growing businesses find qualified advisory board members.” Just 21% agreed with this statement, 29% disagreed and 38% expressed no opinion—suggesting that if such help is available, it hasn’t been much help.

If advisory boards are to emerge as a widespread solution to helping Canadian businesses grow, the next step might be for government or educational institutions to create more resources for entrepreneurs seeking advisors. There’s only so much one intern can do.

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