Generally speaking, small companies have fewer resources than larger ones. Perhaps nowhere is this more evident than in the sparse ranks of the upper management of many small companies, where key decision making is often left to the CEO. These CEO’s regularly operate in environments with frequent interruptions and demands on their time from employees and customers to suppliers and regulators, and of course, family and friends. Not helping this situation are gadgets such as smartphones, with their emailing, texting, and video watching capabilities that can further compress available time and leave CEO’s with short attention spans and difficulty concentrating on specific tasks.
Proliferation of Products, Services, Challenges, and Opportunities.
While CEO’s may struggle with compressed time frames, the world around them hasn’t slowed down. There is an almost constant stream of new products, services, challenges and opportunities to be addressed. Important issues like new competition, worker shortages, rising wages, changing regulation, software implementation and new product windows, to name a few, won’t always keep until the CEO can get to them.
Partial Solution: Informal Advisory Boards (IAB’s)
One way to help small companies address limited people and time resources available to their decision making CEO’s is to consider forming informal advisory boards of 4-6 members. Unlike a board of directors, whose members vote on the direction of the company and who have a fiduciary responsibility to the company, advisory boards do not vote and have no fiduciary responsibility. Instead, it is their purpose to help the CEO, who is tasked with running the company.
IAB’s are Comprised of Experienced Business People
Informal Advisory Boards or Teams are typically comprised of experienced business people who bring to a small company and its CEO many benefits including:
- years of multi-industry business and job experience (i.e., not all construction or HR people;
- “fresh eyes,” that are particularly useful in entrenched companies;
- impartial points of view, especially when evaluating company performance;
- connections, referral sources;
- knowledge and brain power; and
- additional energy.
IAB’s Help Improve Business Decision Making
With their diverse backgrounds and business experience, IAB’s help improve CEO decision making by increasing the resources – people and time – focused on particular business issues. In this way, they help relieve “CEO overload,” by bringing additional people to bear who can help the company cover more topics, and in more depth. IAB’s also combat shorter attention spans and “seat of the pants” thinking by adding additional time for thought and consideration before key decisions are made. One important, but not always obvious benefit, is that IAB’s bring together people who are used to making business decisions. Because of this, they can often anticipate the information a CEO will need to help reach a decision, and when applicable, they can be of enormous value when helping a CEO think through a problem that they have already addressed.
James F. Hart, MBA, CPA, CIRA, founder of Lightfoot Group, LLC, assists business owners and their key advisers with advisory board and business troubleshooting services involving critical business challenges, dispute resolution, and management and ownership transitions. Jim has decades of experience as a business adviser, court-appointed receiver, turnaround consultant, and interim manager including operating and selling companies and assets, resolving disputes, and assisting family-owned businesses.
© 2018 James F. Hart, Lightfoot Group, LLC