Advisory Board Injects New Ideas, Raise Expectations
Originally published: 05.01.10 by Ron Smith
Seek the advice of outsiders to outperform the insiders.
As the owner or general manager of a company, you lead a team of division or department managers. Hopefully, you are holding structured team meetings with regular frequency. It is important that you fill this team with competent coworkers. It is equally important that you surround yourself and your company with the best possible outside professionals, including your CPA, attorney, insurance agent, banker or bankers, advertising agent, primary supplier, Web site development/Internet/socialnetworking specialist, and consultantcoach, if you use one. Consider these outside professionals to be another team, separate from your internal division- and-departmentheads team, but these outside professionals do not meet as a group. Meet with them one-on-one. I always met with my banker monthly, my CPA quarterly, my advertising agent weekly, and the others on an asneeded basis. I like to call them team members because if they are chosen carefully and correctly, you can rely on them to help your company be successful and achieve your goals.
Additionally, many hvac contractors belong to an information-sharing group of normally six to 12 contractors, representing contracting companies from different parts of the country. These groups generally meet two to four times a year at one of the member’s facilities. I’m a proponent of these groups and believe they are a good source of information.
There is another great outside team resource that I recommend you strongly consider, and it probably is right there in your community — an Advisory Board. Believe me, if anyone knows how entrepreneurs think, I do. Often, we believe we have all of the answers and can do everything. But, that’s not true. And, when we get around to looking for advice and information, we tend to look for it from other contractor companies, alliances, associations, and information- sharing groups within our industry. That’s all great, and I certainly support such behavior. But, there are two things missing: advice from professionals with a perspective outside of our industry; and an opportunity for ruthless assessment of our skills (or lack thereof ).
In my first hvac company, which grew from a one-man operation to a retail and contracting organization with $40 million in revenue (in today’s hvac dollars), we studied and learned from other retailers, not hvac companies. That’s exactly how we got far out in front of most other companies in our industry. Marketing is a good example. Adopting the marketing and advertising techniques and principles used by companies selling appliances, televisions, sound systems, clothing, vacations, homes, etc., propelled our company to new heights. Incidentally, we handled staffing the same way. We did not confine ourselves only to people within our industry. In fact, we deliberately recruited, hired, and trained people outside of our industry. Many of those are now recognizable leaders in the hvac community.
The lesson is that if you learn only from your own industry, how will you ever get any better than the best contractor? Assuming you select the correct members, an Advisory Board is the answer. Do not place your other outside team members on this Board. You are already getting their advice and paying for it. Select members who are or have been successful in other professions and industries. They will often bring advice and information that you have never considered and will ask questions that will cause you to think, “Why do we do it that way?”
Look for members who can contribute in areas such as human resources, marketing, new creative ideas, strategic planning, dispute resolution, finance, business evaluations, and management techniques. Six members plus yourself is the right size for a Board. Pay them an honorarium of $500 to $1,000 per meeting, and meet quarterly. Be structured, work from meeting agendas, and provide them with plenty of information on your company. Why would successful people such as I’m suggesting spend the time to be on your Board? It’s because you are able to make a convincing presentation that you are sincere in looking to them for advice, that they can get a sense of satisfaction in seeing your company improve and prosper, and that they can meet and learn from the other Board members.
You’ll know when you have the right Board — they’ll be candid, will hold you accountable, and will challenge you.
Ron Smith is a well-known authority in the hvacr business. He has more than 45 years of experience as a contractor, franchisor, consolidator, and consultant. Ron has just released a nine-disc audio CD set of the book HVAC Spells Wealth. The CD set and his two books, HVAC Spells Wealth and HVAC Light Commercial Service Agreements can be ordered at www.ronsmithhvac.com or by phoning 615-791-8474.