A fairly interesting and painful lesson to learn was having my father as Chairman of one of my IT businesses.
I hadn’t ever had a formal board before, and my father was experienced as a chairman of public companies. So as CEO I decided the other founders and I, who were the Directors, should meet quarterly with my father chairing the lot of us. Unsurprisingly, this was spectacular unsuccessful. We didn’t know what we wanted to achieve and my fathers experience was with mature large businesses only, very much focussed on a risk mitigation.
Its disappointing for me to realise that since I was around 25, I have continuously been a Director of a variety of small businesses, but up until recently didn’t have a clearer idea of what board should do for small business other than the general statement, help it grow. Therefore, it was relief and excitement at last Thursday’s Churchill Club meeting, a comment was made by David Burden (recently CEO of the Webfirm Group Ltd and co-founder of Legion Interactive) that really resonated for me.
Forget Accountants, Marketers and Lawyers, you can buy their services as you need. Forget Industry Doyens and Professional Directors, they are unlikely to be anything more than a distraction to a small growing business. What you want as a small business is additional Directors can help you with one or more of the following four tasks.
- Grow revenues.
- Raise capital.
- Get the right people involved.
- Exit the business.
If they can’t help you with one of the above tasks through their existing networks and assets, they’re just wasting your time.
Looking then at what you want from these potential Director’s, its pretty easy to then decide what their KPI’s should be (the outcome), how you want to remunerate them (appropriate fee for time, equity for success), and how long their tenure should be (till the job is done). It also makes it a lot easier to find them, because you now know exactly what you are looking for (people with large, useful networks and/or assets the business needs).
So despite the fact my father was a great Chairman, he was completely misplaced in a small business that didn’t know what it wanted. A waste of both his time and mine. And I didn’t even write that because he is likely to read this post :)