There are two vital lessons to take-away from by now conversation with 100 entrepreneurs, Chairman, NEDs and Capital Providers about their experience of Boards. (1) the Board can be an Engine of Growth and (2) you the founder either get what you design or what someone else designs for you – your choice!
Extract from Chapter 1 of Realpolitik “Eight Essential Aspects Of Small Company Boards”
Essence 5 – Your Board Is What You Make It – For Better Or For Worse
Will you consciously create your Board or will it just happen as a result of happenstance and ad hoc pressures from capital providers?
What was/is your guiding concept for your Board? Legal? Administrative? Reluctance? Enthusiasm? How is it working out for you?
I recall one of my better business trips involving a taxi ride through the sugar cane fields of Barbados. I was quizzed over my (at the time single) relationship status. In his deepest Bajan accent my driver said: “You can run but you can’t hide.” Which at the time seemed curious as I was neither running nor hiding. Within two years though I was married so the driver’s psychic powers must have been pretty good.
In the same way the founders I interviewed were neither running nor hiding. However, in the blink of an eye, their lives changed too. The more you succeed, the bigger your SmallCo grows, the more your challenges change and hence what you need from your Board changes.
You start your journey not in sugar cane fields but on the plains – the land of infinite potential but no growth. You decide on your direction and start on the journey of growth and challenge towards your mountain. At the top of the mountain if you so choose you can “level up” and go into a rather different phase of the game.
The most important thing I can emphasise to any founder is that there are many paths towards and up the mountain.
I have spoken to some eighty folks – no two Boards, no two companies ever did everything exactly the same way. That’s part of the fun of it. It, like your life, is your journey. Sure there are commonalities such as “wear good footwear”, “have a plan and adapt”, “beware known pitfalls and traps” and we shall come onto all of those. However there are many routes to success with your Board, many ways of growing your Company. Most importantly if you are the founder then you need to find the intersection of what works for you with what works for SmallCo Boards.
Broadly speaking the attitude amongst NewCo founders to The Board ranges from “ignore this for as long as possible, we have more important things to do” to “let’s get things right from the start”.
Both extremes can be perilous. The latter end of the spectrum can all too easily morph into the generally toxic “let’s be a micro-BigCo” which is a cardinal sin. The “ignore” extreme is always the pragmatic reality the day after the night before in a pub when you thought up Your Idea. And it will be the reality the day after that and the day after that.
After a while, however, generally after raising external capital, whatever your original inclination your SmallCo will have A Board. If I had to put my conversations into three main pigeon-holes I’d label them “ball and chain”, “yawn” and “turbocharger”. A fourth pigeon-hole is “noose”. If the CEO gets changed it is the Board who bring the gallows.
I spoke to some poor folks for whom their poorly/unfortunately constituted Board was a ball and chain around their ankle. Just one more thing that made the journey that much harder, something else to drag along, just one more burden they wished they didn’t have.
The “yawn”, humdrum, routine, somewhat “who cares?” Board is the kind of neutral point along the spectrum. Generally administrative, generally something of a time-waster, somewhat tick-box. We will pick this up in the Fixing Broken Boards chapter under “stale Boards” as, with all relationships, staleness can creep in at any stage if one just drifts along aimlessly.
I should say at this point that we must be careful not to slip into armchair-critic mode. Founders aim to fix everything in the long run. In the short term, however, there are only so many hours in a day and you can’t fix everything. Every founder wishes that all parts of his company were like some gleaming BMW factory – but it took BMW quite some time to get there. Along the way there will be plenty of mistakes, like a toddler falling repeatedly until it learns first to walk, then run.
The third type of Board pigeon-hole is “turbocharger”. This was over-represented in businesses founded by serial-entrepreneurs who understand deeply that the SmallCo Board can be the difference between the success and failure of the whole project. Hence these founders prioritised Getting A Great Board as soon as possible not leaving it for mañana.
In extremis there are cases where for the founder/CEO the Board ends up being a noose which we shall cover later.
The most important takeaway is: Have A Plan for how you wish to handle The Board Thing.
In terms of your priorities never forget that serial-entrepreneurs put A Great Board high on their priority list – a Great Board will be a tremendous help in growing and nurturing your fire.