Having a strong board is essential for a successful startup. Make sure you are select board members that reflect the right experience from industry, regional and operational perspectives for the business. For example, if you’re in health tech, having board members familiar with the health industry, insurers, providers and health systems will be helpful. You also may want someone who’s had experience in a technology company.
Once you have this great board, though, how do you ensure you are leveraging what they can offer your business? Here are three steps to get more value from your board members:
1. Manage your board
Once you have a board that reflects what you need for your business, you want to make sure the board works well together. They’re not going to have immense experience working as a team. They’ll come together at various points throughout the year, but it’s not like a working team, where you get numerous opportunities, day in and day out, to build relationships. So making sure the board works well together and, taking that a step further, works constructively through disagreements and conflict, is really important. (For more on this, read “Four Essential Tips for Managing Your Board.”)
2. Set your board up for success from day 1
Ensuring your board’s success starts with what you provide members when they first join to get them embedded in the company. Have an adequate onboarding process, and provide complete resources for them to fully understand your business in these four key areas:
- Company structure: Provide a diagram that breaks down how the company is structured.
- Capital: Include your cap table and background on your investors.
- Finances: Give them your financial reporting and forecasts.
- Business model: Provide details on your target customer, marketing strategy, and the actual project and pricing you use, as well as company culture, key team members and how you’re operating.
3. Build trust and maximize time
Build trust with the board by providing transparency and information that is easy to understand. For example, you don’t want to sugarcoat any challenges or not report any difficulties you’re having. Being transparent and providing accurate information is the best thing you can do to help the board and maximize the value they can bring. That’s why it’s good to get into the cadence of having standard KPIs that you update in regular intervals. This makes it easy to digest for a board member who’s dipping in and out of the business. (For more on this, read “More Structure, Less Stress: Five Things to Include in Your Board Reports.”)
The time the board has with you and your company is extremely limited. So being really efficient about transparency and providing digestible information means you’re getting them straight to understanding the company, what’s happening today and what your challenges are. They can immediately go into helping to strategize, give advice, offer suggestions and think about those in their network who might be able to help. If you’re not optimizing their time, a lot of their expertise will just go down the drain.
I see a lot of CEOs struggle with maximizing the value of their board simply because of the structuring of their meetings. Let’s say you’re meeting quarterly; it’s really important to front-run the meeting by providing an agenda, structuring the meeting time appropriately, thinking about having a blend of virtual and in-person meetings, and having committees that branch off for specialist decision-making. (For more on this, see “Four Essential Tips for Managing Your Board.”)
If you want to get more from your board, please reach out to me. I’m happy to help.