I’m often asked if there is a single decision that has led to 3Pillar’s success more than any other. It’s hard to pinpoint one specific decision from the last fifteen years as a launching point, but choosing to proactively build a strong, fiduciary board while 3Pillar was still in its infancy would be near the top of the list, if not #1.
Building Our First Board
Today, 3Pillar is a global organization with roughly 2000 employees. We’ve far surpassed $100MM in annual revenue. We have the privilege of working with a number of companies that are household names – Carfax, PBS, Fortune, and ParkMobile, just to name a few.
When I first built our board, in 2006, we had 6 employees and were doing under $1MM in annual revenue. I was still writing code 80 hours a week as a billable asset. I still owned 100% of the company. Many people told me I was crazy when I decided to build out a board at that point. I’m sure many others thought I was naive at best, foolish at worst. Why would I give up control?
I saw the decision to build a board as something of a challenge and a test, however. My theory at the time was that if I couldn’t convince four people who I’d hand-picked for being good fits and long on experience that the business decisions I wanted to make for 3Pillar were solid, I’d be better off forging a different path. At the same time, I knew if I could convince those four people to serve on the board, I’d gain the advantage of learning from others who’d been there before and I’d have a sounding board that could help accelerate our growth.
5 Considerations When Building Out Your Board
No matter where you are in your journey, whether you’re looking to start a board from scratch or optimize your existing board, these are 5 keys that I’ve found have helped me configure 3Pillar’s board since those early days:
- Understand the purpose of your board. The most valuable boards will provide much more than governance. In fact, the best boards are so well run that governance is not the focal point of discussions. These boards will spend much more time serving as a sounding board for the CEO, asking provocative questions, and providing strategic advice than they will spend focusing on corporate governance.
- Deliberately design your board. Too often, boards are composed of accountants and lawyers. Nothing against accountants and lawyers, but you can hire them for their advice when you need it. When designing your board, ask yourself, “What expertise do we really need for the next phase of our company’s growth?” A CEO mentor, a marketing guru, or a seasoned technologist all may add unique perspectives and provide strategic advice. Purposefully seek board members that can fill these gaps.
- Validate fit amongst board members. Big names, celebrities, and world-renowned experts don’t always make good board members. Just as important as the knowledge that the board member brings to the table is the alignment the individual has with your company, your values, your culture, and your expectations of board members. Good board members engage in respectful discussion and debate. Great board members ask exceptional questions that lead management to discover the right answers. They lead through influence and collaboration and they roll up their sleeves and open their networks to help. Be sure to find the right fit, not just the right expertise or name recognition.
- Boldly recruit your board members. Just like you hire your team for tomorrow, build your board for tomorrow. Shoot for the stars. Purposefully build relationships with mentors and other leaders you look up to. Recruit the best candidates you possibly can. 3Pillar’s first full board consisted of two serial entrepreneurs, a CEO with both public and private experience, and a former public company CFO. If I’d followed “conventional wisdom” at the time, not a single one of them would have been likely to accept the invitation. 3Pillar would’ve been a miniscule fish in a miniature pond compared to the companies they’d been involved with. Because I was purposeful in my approach, however, all four took me up on it when I asked them to serve on 3Pillar’s board.
- Purposefully build board cohesion. A dysfunctional board can destroy a company. A healthy board can be a huge accelerator. Purposefully find folks that respect each other, will complement each other, and who will work well together. Set clear expectations and best practices. Take time to build rapport and relationships between members — board dinners, a board retreat, or even hiring a consultant to help create a high-performing board. Your work isn’t over when someone accepts the invitation to join your board. It’s just beginning.
Looking back on it, I can honestly say that choosing to build a board when 3Pillar was in its infancy and I owned 100% of the business was one of the best decisions I’ve made as CEO. Purposefully building the right board is a strategic imperative for any business. The right board will be a strategic asset that helps you see around corners, sets the stage for future growth, and validates that you’re on the right track or helps you shift tracks accordingly.