The Wise CEO has Many Advisors: How to Create a Personal Board of Advisors

One of my CEO clients regularly reminds me that “the wise man has many advisors.” I’ve watched my CEO clients build (sometimes intentionally and sometimes organically) a cadre of advisors who help in all kinds of ways. I’m now a believer in the idea that this is one of the first things you should do as a new CEO.

Why do you need advisors?

As CEO, you face a broad set of issues. I’ve been coaching CEOs for over ten years and every week I’m learning something new about the kinds of challenges and issues my clients have to navigate. Your goal as CEO should be to avoid learning through “trial and error” by instead having a group of trusted advisors who can quickly help you avoid both common and uncommon pitfalls.

Before we go further, I want you to ask yourself: “Is it easy for me to be vulnerable and ask for help?” If not, I suggest that assembling a personal board of advisors is a waste of time. You have to summon the character to solicit input, hear that input, engage with that input, and determine how to incorporate it into your work. Great advisors will provide you with advice, feedback, mentoring, and coaching.

Some people will suggest that your board should provide this kind of input and advice, or that your team should be able to provide the input you need, or, if your company is private equity/venture funded, your investor partners will provide the advice/input you need. This is true—but only in part. Without question, these are good resources for you to leverage and a personal board of advisors is different because they share the following characteristics:

• They have no vested interest in the outcome of your deliberation. They are not impacted positively or negatively by what you choose to do. At their best, they are an objective, disinterested party to your deliberations. This is one important distinction between the advice provided by a personal advisor and advice provided by a board member or an investor.
• They are individuals you trust for a variety of reasons. First, there is personal trust—you know they have your back. Second, you trust their expertise—they’ve had some experience in the issues with which you might be grappling. This involves an important distinction between a mentor and an advisor: While a mentor has been in the CEO role, an advisor has not. Finally, you trust them because they occupy a role in an organization that gives them credibility (e.g. practice leader at a consulting firm, search expert at a search firm, industry association leader, deal partner at a PE firm).
• They work completely outside of your sphere of influence. Put another way, you have no power over them. There is no quid pro quo relationship. That said, you will do what you can to help them in return—this includes engaging them (or their company) in a consulting capacity. As a CEO coach, I’m the perfect example of this kind of advisor: an outsider, with no agenda for my client other than their success (however that is defined). You’ll know when you are in a commercial relationship vs. having a mutual partner in an advisor.

What kinds of advisors do you need?

I recommend that my clients have a few trusted advisors, each capable of making a different contribution to your thinking. They should have more knowledge than you, more experience than you, or have expertise that you don’t have. A word of caution: Filling your personal board with “buddies” or “sister-friends” won’t help you grow and develop.

Here are some of the typical advisors you might include on your personal board:

• Consulting Firm Partner. This is someone you can take to lunch and learn more about potential approaches to gnarly business challenges. Typically they will know more about, and have a good grasp of, industry issues and typical operating challenges.
• Investment Banker. This is someone who can provide you with objective guidance about what is happening in your industry: trends, companies in play, and deals in the works. This is critical if your industry is being disrupted or if there’s a surge of consolidation.
• Search Firm Partner. This is a go-to person who can help you think about assessing and developing your top team and talent. This is a supplement to your in-house HR team, which typically does not have the recruiting or assessment talent that you need for your most senior roles.
• CEO Mentor. It will be pretty challenging to find one—few former CEOs offer mentoring. The ones that do mentor often do so in a consulting capacity or are board members. That doesn’t mean that you shouldn’t be on the watch for a CEO mentor.
• CEO Coach. No matter how good you are at soliciting feedback, an experienced CEO Coach can get you the feedback that you need to make adjustments to your style and approach. As CEO, you will hear feedback about your ideas, but rarely hear feedback about your style or the things you need to change (who wants to speak truth to power?). I advise you to find a coach who has worked with CEOs—these coaches know how to blend coaching and consulting in service to what you need to be successful.
• Your Accomplished Friends! In my experience, CEOs have a small number of friends who have been successful in unrelated industries. Sometimes (and beyond their care for you), they have fresh perspectives and unrelated, but pertinent, experience. Most often, CEOs have successful friends from college (not necessarily business school!). Having access to this kind of “friend advisor” is pure gold—and comes with the caveat that they might have an overly positive or less-critical perspective.

I also recommend that my clients pick an industry group to belong to. It can be G100, a McKinsey Industry CEO group, etc. These groups have their pros and cons and are often subject to some restrictions if executives from your competitors already participate. 

What do you look for in an advisor?

The answer to this question is quite simple. It’s the combination of three things:

First, you have to personally trust your advisor. You should believe in their goodness, their character, and their interest in supporting you (even if that sometimes means they tell you something you disagree with or don’t like to hear). At a minimum, you should understand their values as expressed in their behavior (not what they say, but what they do). Does your advisor put people before profit? Are they concerned about winning more than sustaining success? Do they have a long-term perspective? Do they listen deeply to you or are they just waiting for an opportunity to jump in with their own ideas? Are they thoughtful in their word and language choices? Are they soulful and thoughtful in connecting you to a bigger picture of purpose and mission? You should trust your advisor to bring out the best in you.

Second, they should have real expertise and a track record of success in their area of expertise. This translates to you being able to trust their help. You’ll find lots of people who are self-described “advisors” and you’ll need to be able to identify the wise ones—the ones who have created knowledge and insight from real experience. Real wisdom is always hard-earned. Can the advisor speak to their failures? That is always where we learn the most. In fact, it’s only when we are broken that we get to truly fix things and learn from the process. Also, a word of caution: Some advisors have never been a CEO. That often means they can sometimes “project” and want to live vicariously through you.

Third, great advisors are generative. This wonderful descriptor from adult-development theorist Erik Erikson identifies people who are concerned with supporting the next generation. In a business setting, this is someone who is less concerned with a commercial relationship and more concerned with how you have an opportunity to do some great work in the world. I would argue that great advisors come with more big questions than answers, hopefully bringing more of a coaching mentality than an expert mentality. They often help you believe in yourself, provide you with a good assessment of your potential, and see the enormous good you can do in the world. Similarly, they see and believe in the potential of your company to change the world. They provide you with input about how you can lead to fulfill your company’s potential and they keep you grounded in an honest assessment about what might get in the way.

Final Thoughts

You need more than one advisor—hence the title of this article. CEOs operate in a complex, changing environment and it’s rare that a single mentor, coach, or advisor will be able to support all of your needs for external advice and support.

The best measure of an advisor is whether you trust them personally, trust their help, and trust their agenda in helping you (they want you to accomplish your goals rather than their own).

I invite you to do an audit of your advisors. Where are there some expertise gaps? Can you identify what you really need from any future advisors (e.g. skills, qualities, experience, knowledge)? Ultimately, all advisors need to meet most of your criteria or the relationship will not be a good fit.

Good luck with building your personal board and if you need any advice or input, please contact me at damien@damienfaughnan.com.