One of the worst pieces of advice I received in the early days of Three Pillar was to refrain from building a board of directors. If you need the advice, I was told, build a board of advisors. Conventional wisdom said that I shouldn’t relinquish control. Luckily, I ignored conventional wisdom and did the opposite of what was recommended. I added my first outside director when I had less than $1M in annual revenue. For a bootstrapped company with no outside investment, this was highly unusual.
I credit much of Three Pillar’s success to that decision. It did three things that an advisory board could never have done:
- It clearly communicated to those I added to the board that I was serious about building a professional company and that it’s success was more important than my opinion or personal tendencies. This likely enabled me to attract seasoned professionals that I otherwise would not have been able to attract.
- It made me accountable and the board responsible. Accountability channeled my drive in a specific direction. It ensuring that I didn’t drive off the road. Responsibility kept my budding board engaged, ensuring that they took seriously the task at hand and had a stake in the game.
- It gave me the luxury of proactively building my board of directors. We built the board before we had to. Because there was no time pressure or outside constraint, our board was built deliberately and with purpose. It was built to be high performing and add value (not as so many others, primarily to act as a babysitter for outside investment).
At the end of the day, I am fortunate that the result is a high performing board. Not a lot of CEOs have this luxury. Many are stuck with a board that falls into one of two extremes – overbearing and meddling, or uninvolved and a distraction. At the end of the day, the best board is one that challenges assumptions, asks tough questions, and offers perspective based upon a diverse set of backgrounds. High performing boards work well as a team and don’t require “management” from the CEO. Yes, the board has a fiduciary responsibility and holds the CEO accountable, but even more importantly, they are a resource for the company and a key tool in the successful CEO’s tool belt.
My relationship with my board has changed as we have grown, taken on investment, and become more formal, but I am glad that I gave up the illusion of control early on. It allowed me to build a high performing board and taught me how to interact and use e a board before I had to.
Have you been successful building a board? Have you had to rebuild a board? What techniques have you used to not only build but get the most out of your board?