28 Dec ADVISORY BOARD CONSULTING DEFINED AND EXPLAINED: HOW MANAGEMENT STRATEGY CONSULTANTS WORK
Advisory board consulting collectively speaks to the engagement of independent external advisors by companies to provide strategic counsel to the board of directors and executive leadership team. Unlike traditional boards which have formal governance oversight, advisory boards provide consulting that strives to augment a company’s internal capabilities during crucial moments of transition, growth and scaling.
The core premise behind advisory board consulting is that no single leadership team – no matter how talented and experienced – has all the answers. As such, companies can benefit tremendously by having an elite team of outsiders who offer invaluable perspective, connections and guidance. Top consultants are often CEOs, investors and domain experts who have been in similar high-stakes situations. Experts provide wisdom by asking the right questions and foreseeing pitfalls.
Typically, advisory boards at startups or small-to-medium enterprises range from three to nine members based on company needs. Members commit to advisory board consulting on an annual renewable basis. Thought leaders convene as a group with company leadership in structured meetings a few times per year. Engaged advisors also make themselves available for one-off individual consultation. Advisory board consulting engagements often last between one to three years as companies raise capital and hit key milestones.
Don’t forget either. During advisory board meetings, company executives will present progress reports, strategy updates and critical decisions under consideration. External partners will provide targeted real-time feedback, drawing from their collective expertise in areas like technology, operations, finance, leadership and governance. Consultants might also leverage their networks to make connections that support financing, talent recruitment, product development and market expansion.
Overall, external advisory board consulting brings a layer of oversight and accountability through highly-qualified thought partners. Unlike the board of directors which oversees management, the advisory board collaborates with management as a sounding board. Outside wisdom steers companies toward smarter decisions and less risk by broadening perspectives amid uncertainty. For many enterprises, assembling an advisory board can be a strategic advantage for scaling intelligently.