Subscribe
Share
Share
Embed
It's business owners talking shop! Hosted by and featuring growth-minded small business entrepreneurs, The Parker Web Partner Show is a podcast for creative agencies, digital marketing firms, and website hosting companies looking for creative solutions. Join us for insights, ideas, and a problem-solving roundtable - with a few laughs along the way.
Caleb Parsons 00:02
Welcome to the Parker Web Partner Show, where we find creative solutions for creative agencies.
Darryl Parker 00:10
Hi, and thank you for joining the Parker Web Partner Show. Today we are meeting with Nancy Mayer, who is the author of a book that we love here at Parker Web called "The Advisory Board Playbook." What a wonderful book and what a wonderful set of information that she has provided in this book. Nancy, tell us about yourself, introduce yourself, tell us about your book and why you wrote something like this.
Nancy Mayer 00:35
Oh, thank you so much, Darryl; I'm so pleased to be here. So it's a funny story. I have, what I like to say, an unconventional experience, meaning my experience from being in the music business and motorcycle industry, manufacturing, and then into software development. And I was at an Adobe event for innovation games on sales enablement, and everyone kept talking about their customer advisory board. At that moment, I decided: "I'm going to make a pivot, and I'm going to become the customer advisory board specialist for midsize tech companies." Because they had said: "Well, it's really important to have someone who has a background in event management--which I did, someone who's like an innovation games facilitator. So the moment I said, "customer advisory board" just with the words "advisory board," all sorts of wonderful things started happening. There's a company in Canada--I'm originally from Toronto--called the Business Development Bank of Canada; it's an investment bank for entrepreneurs, for small- to medium-sized businesses, pretty much exactly like your audience. And they put out this report: "Five Things To Do; Five Things Not To Do." Number one was "Innovate." I'm already in the innovation space. And the second thing they said was: "Get a formalized advisory board." And I thought, "Oh my goodness, this is very different. This isn't a customer advisory board. This is more of a strategic advisory board." The last piece of the puzzle, I was at an all-weekend event where the speaker was saying advisory boards are awesome offline marketing opportunities. So they were now talking more about not-for-profit advisory boards, to get around the table with other potential clients, and that as an offline marketing strategy. So I drank my own Kool Aid. I asked the people at this workshop: "Would you be interested in knowing...I could teach you two or three, two canvases." I'm known for visual thinking--so the Business Model Canvas, Value Proposition Canvas. I said, "I can teach you these two canvases that are fundamentally changing the way that people build businesses, or I could put together three focus groups or customer exercises that will give you so much information it will fundamentally change the way you build your products, or I could talk to you about advisory boards." Everybody's hand went up. I preach a little book on advisory boards.
Darryl Parker 03:24
So how did you begin to even research this and learn more about it? Because your book is super detailed; that's one of the things I really like about it, and why I like referring it to my clients and putting it on the reading list. There is a lot of really good information there. So how did you go about developing all that?
Nancy Mayer 03:43
It was interesting. Because I committed to writing that book and the Business Development Bank--they call it the BDC--had done this article, I decided I wanted to get into the BDC for their Small Business Week so that I could teach a little bit more about advisory boards. And the funniest thing that happened was that I ended up becoming one of their top--because of the Business Model Canvas--I became one of their top strategic consultants. I was able to connect with a guy at the bank who did the research and we just started working together. But I found that there was just so much confusion about what it is and what it isn't. But even moreso, for me it is one of the most misunderstood, underutilized, and powerful business tools out there. The interesting thing that came up in that very first article from the BDC was that less than 6% of small- to medium-sized businesses have formalized advisory boards and the ones that do are actually seeing triple the amount of sales, double the amount of productivity, huge impact on profitability. And if you're a startup and you're using an advisory board to buy association, you can actually almost four times boost your valuation through association. And what was really funny was when I moved to Utah, I was in the tech field, and that's when I really saw every single pitch deck had these advisory board slides. And I'm just going, "Yeah, but they're not doing it properly." So I did a couple of pivots. And my publisher asked me to go out and get some endorsements. And I wanted someone from Silicon Valley, so I approached a gentleman by the name of Sam Long, who's had like five exits. He's got a phenomenal program, if anybody's fundraising especially, called Fundable Startups. And I said, "What do you think? Would you write an endorsement?" And he said, "Well, here's all the problems: They always invite the wrong people, they never have any tools or processes, and they never walk away with a plan." And you read my book, he goes, "Oh, my God, can I write the foreword?" Of course, I said, "Absolutely." It's just been a really fun journey, you know, little pivots along the way.
Darryl Parker 06:31
Well, I think you've made such a strong case for it, the impact of the boards. But I'm a small business owner, and maybe I've never even considered an advisory board, maybe today's the first time I'm hearing about one. What does that look like? If I'm a small business owner, and I own--let's just use something small-business-ownery like a restaurant or mechanic shop--how does an advisory board help me? What does that board look like?
Nancy Mayer 06:56
To begin with, anybody who's built a business, a small business up to a certain level, I am absolutely sure that you have six to eight incredibly successful people that want to see you succeed. And maybe you've had a one-on-one mentorship relationship with some of these people, but you've never actually given them a vehicle to contribute in a more formalized way. Advisors want to give back, so I call an advisory board a win-win-win. The founder--or the founder and the business owner--small business owner wins, because they get feedback, they get to compress growth timelines, they get to eliminate costly mistakes, and they get to expand their circle of influence by putting a more formalized board together. The advisors win because they get to give back, but they get to do it in a way where they've set the expectations; they know it's not going to be an energy vampire. And they WANT to give back. Every successful person I've ever met loves to give back but they only have so much time. But the advisors also win because they get to sit around the table with their peers and see how others think. I've seen so many wonderful relationships build because they're working together, but again it's really about being properly prepared to help you, the business owner, solve very specific challenges. One of the things that I've seen and that I talk about in the book how to get around it is: PowerPoint, PowerPoint, PowerPoint--what do you guys think? Well, you realistically have hundreds of thousands of dollars of advice, if these people were acting as consultants around the table, committed to help you with a very specific challenge. So one of the things that I do talk about in the book, and we'll just jump into, the first part of the book is what an advisory board is and isn't, because there's a lot of confusion. Advisory boards cannot kick the CEO or the business owner out of their own business. So that's a very important thing to realize.
Darryl Parker 09:21
They're not they're not a board of directors, right?
Nancy Mayer 09:24
Correct, and you don't have to take their advice. But if you do take their advice, and they can actually see you implementing their advice into your strategy, they become even more vested. The second part of the book is really what I call my Five-Step Process. Number one: What's the purpose? Do you need funding, do you need advice, or do you need access? It's usually all three but let's prioritize which one it is for your small business. The second step is getting the right players. A lot of times people go: "Oh, that person's really good at what they do" or whatever. But unfortunately, someone who's the VP of Marketing for a Fortune 500 company is not really going to understand what it's like to build a small business because they have these huge budgets. So how do you get the right players? What I like to recommend and what I talk about in the book is building categories, doing a bit of a SWOT--Strength, Weakness, Opportunity Threat--a SWOT Analysis, and find out where your gaps are. Where do you need the most help? Come up with categories or roles that you want to fill. Then start brainstorming with your team. If you have a board of directors or other friends that are in the business--maybe you have a peer advisory board or the EO that have other contacts--and just start brainstorming, who might best fill that role. The other caveat that I like to talk about is, you're better served to have those people within your six degrees of separation because they care about you and they want you to succeed. I personally don't think this advisory cloud and some of these other things where they say they're going to pay you money for your advice and your subject matter expertise--and there's nothing wrong with that but I just think you get more value from people who really want to help you.
Darryl Parker 11:40
Can I interject there? This is a good segue. The number one question that I run into when I'm working with the students that I work with and the business owners when we get on this topic is: How much do I pay them? There's the question of: Do I pay them or do I not pay them? If I do pay them, how much do I pay them? If I'm not paying them, what's their benefit? Business owners...we're problem solvers. We deal with checkbooks and making sure we have enough money for stuff. How do we get through that?
Nancy Mayer 12:11
Again, that's one reason why it's better to go within your warm circle of influence because they want to give back and they're not doing it for the money; they're doing it to help you. A lot of times it might be a small, very small piece of equity, I'd say one to two points over eight people. So it's not a lot of equity but the main thing is to make sure that it's actually vested over time and based on certain milestones, so that the advisors need to stay engaged and be part of the solutions and the growth, and making introductions and doing some of those things that you want them to do for them to actually get their stock or their stock options. A lot of times you might want to go for a stock option, because it has less in taxable implications. But it could also be a stipend. And the other fun part of it is, if you are budgeting, you want to do a nice dinner or something the night before, maybe have a three-hour meeting, obviously in a classy location. If you have a great board room in your office, that's fine, too. And then maybe a lunch afterwards or a game of golf. It depends on the advisors where you're at. The other thing that I help people with, and saying more so now than ever, look at a three-year timeframe for your advisory board appointment. Because where your business is going to be in three years is going to be so different than where it is right now. And if some of the advisors continue to contribute, you can bring them into the second round of advisors. But you might want to change some things up.
Darryl Parker 14:10
As a small business owner, if I have a company that's doing maybe half a million a year, a million dollars a year, giving out a few points of equity sounds a little intimidating, right? I mean, it's like: "Hmmm...am I bringing on these partners or...? Is there a threshold where that starts to make sense to do equity, or is it just what your comfort level is? How have you seen that play out?
Nancy Mayer 14:37
To be honest, if you're asking the right people, a lot of people will just do it for nothing. Let's do it for the satisfaction.
Darryl Parker 14:43
That's been my experience, too. Yeah.
Nancy Mayer 14:45
That's where you set up your expectations. So, when you've built your war room with your different roles or categories of where you need the advice-- which you prioritize based on access, funding, advice--at that point, you need to invite them in. Again, just set their expectations. If it's one in-person meeting a year, one virtual meeting, and two one-on-ones with your subject matter expertise, that's a very easy "yes." And sometimes people aren't even going to want anything outside of an honorarium and looking after their food and things like that. If you have one linchpin that you think people really want to sit around the table with, then you invite them first, and then you use that as part of your invitation process moving forward. Say, "Steve Jobs is on my advisory board" and people go, "Wow!"
Darryl Parker 16:02
So when we were talking prior to recording here, we were talking about: Bring them all together as a group, or talk to them one-on-one, or both, or...? I've talked to some business owners who have advisory boards who've never all gotten together at the same time. And then I've also talked to business owners who have advisory boards where the only way they interact is everybody together at one time. How do you feel about that?
Nancy Mayer 16:25
I feel very, very strongly that your very first meeting, everybody should be in person because you build those relationships, you can maybe do some icebreakers, but it's really about... The other caveat I would say is have a professional facilitator, because as a business owner you don't want to be running that meeting. You need to be sitting at the table with these super rock stars who are there donating or giving you advice in a way. That might be another small item that you put on your budget and work with someone to reverse engineer. The second--we talked about purpose, we talked about the players--the next thing is the preparation. One of my secret sauces is not just give them your strategic plan and your financials, but actually come up with one to three challenge statements. Where are we struggling? Where do we need help? What problems do we need to solve right now? Then those advisors come to the table much better prepared to help you. Now, if you're working with a professional facilitator, they can reverse engineer very specific exercises that are going to get you those actionable items and outcomes that you can then put in your plan. That's one of my secret sauces; this is about really going out there and saying, "Here's where we need help. These are the challenges we want to work on now." And that's why I think it's really important. Because what's going to happen is you're going to get this popcorn, like if you've ever been in a brainstorming situation where it's like: "Oh, I did this" ...and you were asking..."Oh, I did that and we lost this money, so we went here"...and "let me introduce you to this eq debt person as opposed to giving away equity"...or "let's do this." It's just that camaraderie and the collaborative nature of coming up with an innovative solution that never would have happened one-on-one because they're all--as you and I were talking--sometimes, like you say, someone has five or six advisors. You see them on their pitch deck, whatever. But they talk--I speak with you for three hours, I speak with someone else for three hours, then I talk to the next advisor and they're telling me something different. And now I'm really getting frustrated and upset, because I'm getting conflicting advice. But if everybody's together in a room, it's that conversation that leads to: "Oh, let me introduce you to this person"...or..."Oh, you know what, I did this..."and that's where also the friendship is between the advisors because you can see how other people think.
Darryl Parker 19:36
One of the things I really like about your book is there's a lot of practical things in the book, like there's a sample agreement, advisory board agreement in the book. And there are other tools that are there to to help someone put together an advisory board.
Nancy Mayer 19:53
The third part of the book, which goes back to just what we were talking about, is actually this whole idea of: Now that you're having this meeting, don't eff it up. There's a lot of value sitting at that table. So the third part of the book is all about preparation, facilitation, and visual thinking using mapping stickings, getting it out of your head onto the wall, design thinking. How do you help the whole group think differently? Prototype, don't fall in love with your first idea, validate, iterate, that type of thing, so that when you do spend money, that kind of lean approach you're spending it on, you're solving the right problem before you start solving the problem. And then the little extra thing is that gamification piece, or the innovation games, or these different fun facilitations that actually drop people's biases and just get them so engaged. That's, again, you come up with these innovative solutions that never would have happened one-on-one.
Darryl Parker 21:09
And if you bring in a facilitator, have them read the book, right? So they can...you're coming from a common language at that point. Do you have any examples of--I know you gave us some statistics when we opened up--but have you got a specific example that comes to mind of a business where having that advisory board had a significant impact on their business?
Nancy Mayer 21:33
Some of the biggest impact is that one introduction, is that access, is that idea. The other one is just that strategy: The what-ifs, how-might, and circling around. So really, it's all about strategy. And part of that strategy is also talking to your customers. The actual fourth part of the book gets into what I identify as five different types of advisory boards. There is a strategic advisory board, which is really about business advice and getting highly successful people helping you solve very specific problems. Then there's your customer advisory board, where you can actually bring in your customers, your super users, and think of it almost as an early-stage gamified focus group. Because a lot of times, we become overly sophisticated consumers of our own product, we think we know what our customer wants, and they say, "Oh, I have a page" or "People can do this," but they're not actually getting real feedback from their customer. Sometimes it's a squeaky wheel. It can go all the way to the focus...the full, very expensive focus groups. People know that there's someone sitting behind that mirror window and they're still, even with the best facilitator, going to be somewhat biased. So I love innovation games; it's one of the ones that I use a lot. And there's discovery games, where literally within an hour you can uncover the number one problem, if you fix it, it'll give you the biggest bang for your buck. Then there are shaping games, where the customer tells you--the one I like is called "Prune the Product Tree" so: What are the must-haves? What are the roots? What are the low-hanging fruits? But with that one, what I really love about a shaping game is it gives a customer an opportunity to come up with ideas that you would never have even thought about. It's funny because I train the business owner and their team as observers and they can't say anything. It's hysterical, especially with tech companies with engineers telling people: "So crazy!" So shaping games are really, really fun because they allow the customer to give you ideas that you might not otherwise ever have come up with, like: "It'd be so simple if did..." And then the last one are prioritization games. It comes from the tech industry but I've used it for concert promoters, for associations, for small businesses to talk to their customers and that's a prioritization game where: What are the next four or five features or products or product features or...with this concert promoter, it was like, "What other add-on values could we test?" and literally, let's say you have five things you t-shirt-size them on how expensive it would be to build or to develop, give it an arbitrary number like a small might be $5, an extra large might be $25. Add it all up. Give them a budget, but not enough money to buy everything; about 45% of the full budget. And they will tell you so quickly what drives the highest value for them by what they purchase. Now, here's where the little gamification thing comes in, as well--oh, they get a dopamine release when they buy something virtually. When you release that, they want to replicate that feeling so actually it increases their propensity to buy. And as I said, I've done this with associations, with concert promoters, not just in the tech industry.
Darryl Parker 25:37
I think that just what's so rich about your book is there are just so many details and so much information that you're just not going to pick up in a seminar or a webinar about advisory boards. There's just a real deep texture and a lot of good stuff there. Nancy, I want to thank you for taking the time today to talk to us and talk to our listeners. Any closing words, anything you'd like to say here, before we wrap up?
Nancy Mayer 26:00
Well, like I said, this last part of the book, I also talk about not-for-profit advisory boards, because a lot of small business is not-for-profit, and I think they can just be much more intentional and strategic about who they bring to the table, even if it's a volunteer board. You'll set those expectations right up front and that's how you're going to maximize that value. And the last one I say is like a peer advisory board where that old-style, Napoleon Hill, six to eight peers committing to help each other grow, like the EO or the YPO Model. Not those masterminds where they put hundreds of people in a room: "Oh, we're masterminding," but really that old-style, one-year commitment to meet every month and help each other out. So yeah, just go out there. People want to give back, you just have to ask and the more you can ask in a structure and set their expectations, the better experience it's going to be for everybody. And the other thing is don't facilitate your own meeting because you need to be 100% engaged at that table and act as a peer with these highly successful people.
Darryl Parker 27:19
Thank you very much. And we'll put a link to the book in the show notes below this video. Or you can look at "The Advisory Board Playbook" on Amazon by Nancy Mayer, M-A-Y-E-R. Nancy, thank you very much for coming on the show today.
Nancy Mayer 27:35
Thank you so much. It's been such a pleasure.
Caleb Parsons 27:41
You've been listening to the Parker Web Partner Show. If you need help in this ever-changing digital world, reach out to us at 877-321-2251 or visit our website at parkerweb.com.