Amy Johnson was one of the most pioneering women of the 20th Century. She was the first woman to fly solo from England to Australia in 1930 and set a string of other records throughout her career. Although her flights were meticulously planned, she literally built her own plane with a couple of people (her husband included) supporting her and set off on her travels.
Fast-forward to 2005 and Ellen MacArthur finished her single-handed circumnavigation of the globe. Twenty eight years old at the time, she completed the 27,000 mile voyage in 71 days, 14 hours and 18 minutes, beating Francis Joyon’s record by well over a day. Whilst she sailed her boat B&Q/Castorama single handedly, there were around 35 people in the background supporting her. I was there when she arrived in Falmouth — a day and celebration I shall never forget. You cannot imagine how big the B&Q/Castorama was.
My point is that, today, the most successful ventures are not done solo nor alone. Life is too complicated, technology too specialist, markets too competitive, change too swift. You cannot manage, grow and sustain on your own, if you do you’re at risk of stifling it. We all need help. All need support. All need a ‘shoulder to cry on,’ a wise head to ask, a place to get ‘things off our chest.’
As a scale up advisor and non-executive director (NED) I see many businesses benefiting from outside help. Bringing a NED into a company can be a very smart move for founders, CEOs, CFOs and for the Board, particularly at times of significant change or upheaval. Experience has taught me that NEDs can be instrumental in providing resilience in the following ways:
A NED can act as mentor providing ‘wise counsel’ to the executives, especially the founder(s.) NEDs understand business and by not being involved in day-to-day operations, they can provide a critical, objective point of view when difficult decisions need to be made.
2. Decision making.
An NED’s independence is important — the majority of respondents in research by the Institute of Directors stated that NEDs had helped them significantly by forcing them to make decisions faster and by challenging the ambiguous points. As the research indicates; ‘pushing them over the final hurdle’.
3. Strategic thinking.
The right NED can bring strategic vision built on his/her past success as a board director. Always strive to attract a seasoned strategist who can make sure those tactics ‘hang off’ a strategic plan that’s co-ordinated and illustrates the bigger picture.
The presence of a NED on a board can help enhance the company’s reputation and credibility, which is especially beneficial when it comes to sourcing investment and external financing.
Similarly, they can also help you access important contacts and sectoral expertise. For example, if you’re looking to build a client base in the health space, bringing on a NED with the gravitas and connections in that vertical market can be extremely helpful and save lots of time.
A good NED will also keep the board right on issues of good governance. This is particularly important as a business grows, seeks investment, works with larger clients and is looking for an exit where due diligence is fundamental.
Being a founder/CEO/MD can be a lonely place. Once you are growing, you need someone who can hold you accountable to yourself and your senior colleagues. NEDs can help create key performance indicators, identify problems before you see them and challenge assumptions. On many occasions, NEDs can stop growing businesses making fatal decisions.
There is no right time to hire a NED, but if your business is out of the blocks and generating revenue, profitable and showing positive growth projections, then obviously that’s a good foundation and the right point at which to look at it. Any earlier and you may struggle to gain a NED’s interest. They will want to add value and significantly. Any sooner and that may be challenging for them.
If you feel you’re ready, look for a NED that brings deep and wide experience at a senior level with strategic aspects, one that has relevant contacts and someone that has a specific area of expertise, whether that’s investment, governance, technology, people, processes.
Expect a NED to commit to a couple of days per month. This gets you a monthly board meeting, plus another day for prep, support and other such commitments. Depending on the stage you are at take them on as an advisor first so you know you can work together for about 6 months.
Then, if you feel you need to solidify that further because they offer so much value, go down the NED route where they have legal/financial responsibility and accountability. Oh and expect to pay them!!