Interview with Amber Sherlock
Recently, Peter Williams was interviewed by renowned television news presenter and reporter Amber Sherlock of TV’s Nine News for the Trusted Authority Alliance Expert Series Show.
Peter is Australia’s #1 authority on leveraging business growth through advisory boards. He is also the founder of the Australian Advisory Boards Institute and author of the book Are You Ready For Your Own Advisory Board?
Sit back and enjoy their discussion on Peter’s background, his work and the form and function of Advisory Boards.
Amber Sherlock: I’m Amber Sherlock and welcome to the Trusted Authority Alliance Expert Series Show. We’re here today with Peter Williams. Peter is one of Australia’s pioneering experts in business advisory boards. With over three decades of experience in engineering, investment banking and corporate strategy, including running and exiting his own multimillion dollar management business, Peter knows what it takes to run a successful business. He sat in the driver’s seat as a CEO and a business owner and we’ll make sure you’re getting the advice you need to do it. In Are You Ready For Your Own Advisory Board? Peter discusses the most common misconceptions about these boards and explains what they actually do and what they can contribute to your business. Welcome to the show, Peter.
Peter Williams: Thank you. Good to be here.
Amber Sherlock: Take me through what exactly is the Australian Advisory Boards Institute?
Peter Williams: I often get asked, Peter, how do I scale my business? How do I grow to the next level? We live in a very fast paced world, ever-changing, technology is changing, the market is changing, the environment is changing. So, how do I actually take it? How do I find sustainable value and future certainly for my business?
So, after chairing 17 boards in different industries, what I found is that the best thing to grow and accelerate the growth of your business is to surround yourself with people who can get you from where you are now, to where you want to be. So I formed the Australian Advisory Boards Institute to professionalize the way advisory boards could be run to ensure that you get the proper structure, the proper focus and the proper clarity around how to actually look at the strategic direction, the strategic vision, challenge the status quo, challenge the business as usual approach and therefore lift the business of the owners and the CEOs to that level that they want to when they get to.
Amber Sherlock: What’s the difference between an advisory board and a governing board?
Peter Williams: The differences, we’ve all heard about the governing boards. It’s certainly at the front page. It has been with the Royal Commission recently and they’re public companies have boards of directors and they are regulated by the corporation’s law, by the regulator. So there are strict limits and limitations and conditions applied to being a company director. The advisory board is flexible, so they’re there at the pleasure of the owner. They are there to help the owner grow the business and take it to that next level. And they can be then chosen for their expertise and skill sets that they can bring to ensuring where the company would like to go. And it’s about choosing the right advisors, bringing them together around the board table and actually helping drive the company to the next levels. Very flexible, very agile and very creative. So it’s actually focused on performance, not on governance and compliance, which is what the governing boards are.
Amber Sherlock: So how do you start an advisory board?
Peter Williams: To start an advisory board, it’s really to understand where you want to be. So where are you aiming to get to? That’s the most important element. So once you’ve established the purpose of the advisory board, you’ve established a vision of where you want to take your company. Then you set about actually looking for advisors who can fill the holes and the goals in your own organisation. So you look at your team skills that you’ve got already in your team. You then look at actually the sort of expertise that you would like around the table that can help you or guide you and take you forward to the next levels. And then once that is done, if they’d have an independent chairman that will run the board to make it focussed, because as an owner or as a CEO, it’s very difficult to do both, to facilitate meetings and also to contribute to meetings.
And then it’s around having a process and a framework that takes you over the next 12 months in terms of tackling all the key issues in your business, the key elements of where you want to go and the strategic direction.
Amber Sherlock: What is the evidence that advisory boards can supercharge your business?
Peter Williams: The evidence, having chaired 17 boards, I’ve seen the results first hand from my clients about what an advisory board can do. There is real evidence that also come out of Canada, from the Business Development Bank of Canada. They have to do a study of 4,000 private and family businesses in Canada. And the results were quite staggering, quite eye-opening. So those companies that actually had an advisory board, their sales growth increased by 66.8% in three years after an advisory board. Productivity rose 5.9% and quite tellingly, those companies with advisory boards had a 25% higher sales revenue than those companies without it.
So the results are quite staggering and that really just comes down to focus, clarity and accountability. And that’s what an advisory board provides. It’s there to support and also to challenge.
Amber Sherlock: Can you share some advisory board case studies?
Peter Williams: Over many years and working with 17 boards, I’ve worked with amazing people in amazing businesses and just being around people who are successful, who have grown their businesses from where they started to where they are now have been very inspiring. The reasons that people or purpose that people set up all their business owners set up advisory boards are many. Sometimes they are wanting or going into a new market, sometimes they want to expand internationally or even nationally. Sometimes they’ve got a new product that they want to bring. Sometimes they just want to break through that ceiling that they get to. They’ve grown their business, they get to a ceiling and they’re not quite sure.
So, there are very many reasons that business owners will set up at an advisory board. Perhaps, I can talk about three of them and that I currently work with. One is an IT company that wanted to get investor-ready. So they had grown their business from, as the managing director said to me, we started the business we were small, we were clever and we were agile. We were nine people. We are now 129 people. So, my whole way of managing the business, running the business has changed dramatically. We will need an outside finance to expand into the eastern states. And I don’t know how to actually get ready, I don’t know what I’m looking for. So what I’d like to do is to understand how a governance structure works, how strategy can work and therefore how can we actually get the right investors and the right directors to take the company to that next level that I want to.
So, that was one example. Another example is four generations of family business. The husband and wife are the third generation and they’re bringing their fourth generation through. So they’ve realised that they also have got to that ceiling and that they need to have outside expertise and outside support and encouragement and challenge to take the business to the next level. But also to be able to hand it over to the next generation. So the next generation are coming through and they’re being mentored and coached on all aspects of the business. One of the good things about an advisory board is that everyone gets a 360 degree view of the business.
And the last one was several shareholders, founding shareholders after about five years, had a big falling out. Very different view on where the company should go. So they both saw that they had aspirations for the growth of the company, but they’d both different in the ways of that should be achieved. The advisory board helped bring all that together, crystallized the vision, getting alignment on it, and then was able to take the business forward to being a very successful enterprise that it is today and continuing on. So they are just three examples of the types of advisory boards and how they work. And it’s really about focus, clarity and structure and that can achieve some great things.
Amber Sherlock: If a business is already successful, why do we need an advisory board?
Peter Williams: It’s very lonely at the top. So most business owners find that it’s lonely there. They’re in their own business, they don’t really have anyone who’s a true peer because they’re usually always employees, in some form, even though they might be senior in experience, they don’t really have anyone that they can go and talk to. They don’t have anyone they can really trust. So if they’ve got fears about their business or the market or where they’re positioned or how they’re going to grow, there’s no one within their own organisation that they can really talk to. So the advisory board brings in the expertise and skills to sit around the table and provides an objective and a sounding board for the owner or the CEOs as to what they would like to do, where they want to go and how they should actually get there. So that really helps the gang lift the business owner because he’s already been successful. He’s got his business to this level, but he actually now wants to take it to that level. So having the advisory board around him means that he can road test all the ideas without fear or favour. Because the advisory board has no other objective other than to help the business owner succeed.
Amber Sherlock: What are some of the key issues that keep business owners awake at night?
Peter Williams: Yes, the key issues, it’s a challenge running a business. There’s no doubt about it. Everything’s coming at you from all different directions. So some of the key issues that when I’ve talked to business owners have been around, unpredictable revenue strains, squeezed margins, profit, those type of things, loss of fat clients, competitor activity coming into the market which has been a sort of things from national, global cause we live in a very globalised world. So they sit there and they think, well, how do I take my business to the next level? How do I survive even, but let alone grow? So they are some of the issues that I’ve found that keep business owners awake at night. And this is where the advisory board provides a proven framework and proven skills to help overcome those so that they’re not alone. So they don’t feel alone. They’ve got a trusted a group that they can talk to about their issue.
Amber Sherlock: What are the five critical changes every business owner should make to have a more strategic board?
Peter Williams: Often, across boards, they got to have some foundation, foundational building blocks. So they need to have a purpose on a charter that’s a very important aspect. They need to have an independent chairman in my view, because the business owner or the CEO can’t both chair and contribute to the meetings and then they need to have a proven framework that takes the business forward. So it’s got about regular and consistent meetings. It’s having a proper agenda or a full agenda that’s actually focused on the strategic issues. But some of the other practical things that dealing with boards over many years and the number of boards that I have is that there are a number of things that need to be done. For instance, one I recommend is that you don’t educate the board members, spend the time, the valuable time that board members have.
Sitting around the table, you don’t spend your time educating them. So that’s about getting the information to them beforehand. It’s about eliminating PowerPoint from board meetings, which tend to be the bane of everyone’s life. But again, all that’s doing is justifying management’s view on where they’ve been, not about where, where they’re going. It’s about posing the questions and the help that they would like from the board members. So too often, of course, it’s just presenting reports and asking for ad hoc comments. But really effect of high impact boards will actually post those questions beforehand. So they’re just some of the ways to really turn your board into a high impact board.
Amber Sherlock: How can an advisory board be a business owner’s competitive advantage? Take us through it.
Peter Williams: Yeah, it’s very difficult in today’s world to compete, stay ahead of the game. And the competition is always there. So the competition is always looking for different ways. Technology is helping new start-ups coming into a road, your market share. So again, it’s very difficult and it’s very lonely at the top. So by having an advisory board of experts and skills around the table, you can now be on top of everything. You’ve now got to focus. You’ve now got a clarity, you’re now got accountability as to where the business wants to go. So you’ve now established that and the skill sets that you bring into the table and an advisory board are there. They fill the holes in the goals in your own organisation. So you hire for talent and you rent for experience is the way I look at it. Internally, you’ve got people that are working for you to help actually implement the growth. But around the table you’ve actually got the skills and expertise. People who have been there, who have done that, they know the pain points that you’re going through trying to grow your business. And so that becomes your competitive advantage. So you can make sure that you’ve got skills and expertise where you’ve got those gaps in your own organisation. And that’s what you build your board around.
Amber Sherlock: What are the challenges to build a sustainable value in a company?
Peter Williams: Sustainable value has to be the end goal. As a business owner, you’ve worked very hard to get where you go. Sometimes it’s around I’m just surviving, sometimes that I’m actually trapped in my business because I haven’t created enough value. So sustainable value to me is what you deserve as a business owner. You deserve to be able to create valuable, sustainable value in your business and future certainty. So having the advisory board helps you overcome those issues and doubts about where the business is. As I mentioned before, it’s just survival, it’s the lowest value that you would, then it’s around being in the value creation traps. So you’ve got a business that’s successful that you’re running very hard at it and you don’t seem to be getting ahead of the game. So it’s then about bringing alignment about all the members in the team to really have the same direction. And then at the highest value end, it’s really about having the experts and expertise around the board that can help you drive to where you want to be.
Amber Sherlock: Thank you very much.
Peter Williams: Thank you.