This week I ran the 10th peer lead class, our class on Managing Boards. We focussed on how boards can support an early stage startup. There were two parts of the class: (1) a Q&A panel with entrepreneurs and a board member; (2) a board simulation where my class became board members, so they could see what it was like from the other side.
Part 1: Q&A Panel insights
The first part of the class was a Q&A panel where Dave Thompson, Kumar Jacob and Steven Hess generously shared their experiences of managing boards in a panel discussion. Here’s a few nuggets of their practical and sensible advice:
- Your board can’t make you succeed. Equally, your board can’t cause you to fail. But, they can help you along your way.
- When looking for board members, look for: i) shared values ii) diversity in skillset to complement your own and iii) mixed sentiment (not all introverts or extroverts). Have an open honest conversation about expectations and motivations from both sides.
- Also, look outside your own address book – and look for people who you actually listen to and feel comfortable being challenged by. It’s too easy to say “things came up” as to why you’ve not delivered. You’re all there to build a business.
- There’s no single formula for managing a board that works for everyone. Each combination of Founder, Board and business is different. Do what works for you (and meets your legal and investor requirements).
- When it comes to communicating difficult news, do it early. Don’t avoid tricky decisions because they’re difficult. They will only get worse. And – do it in private first, individually. Don’t ever give surprises at a board meeting. People can’t think creatively and productively if they’re in shock. Always review the agenda and content with your board prior to the meeting.
- Remember, your business is your priority. That’s why you’re all there. Be careful how much time you put into thinking about your board. It’s important and you’ll want to be prepared. Above all, keep the focus on the business.
Part 2: Board simulation
The second part of the class was a board simulation. I prepared board papers for two Fellows’ startups, based on this helpful startup investor report template. Fellows were given randomly drawn board roles, for example, “you are a board member with 10% equity; you are a board member with no equity”.
Unfortunately due to illness, there was only one board simulation with 20 attendees in person and online. Much bigger than a startup board would be! As an experienced board member and Chair, Kumar, stepped up to chair the simulation board, which was an amazing learning opportunity for us all. He shared his tips for running a board:
- Be clear on the strategy and ask of what to get out of the meetings. Use the advice and expertise in the room.
- The board paper presented three options for a decision on strategic direction. Rather than presenting the three options for board members to discuss – Kumar asked the startup CEO to state their preferred option, and then asked the board if they supported this – and if not, to explain why. This enabled a focussed and productive discussion.
- Kumar’s rule: “we don’t vote in my board meetings; we reach consensus by discussion”.
- We explored how actively considering language and gestures help you manage your board meeting – where do you sit? Do you invite comparison or contributions?
My takeaways on preparing a board report
I prepared the board paper for discussion and it’s one of the most impactful things I’ve done for my startup in the past six months. It forced me to take a step back – get real with my numbers and think about how I could best use people’s time, energy and advice in a board meeting.
Even though I don’t have a formal board yet, I will continue producing these board reports for myself every month to gain clarity on progress and direction.
I’ve also been experimenting with a ‘virtual board’ – images of Leonardo da Vinci, Brene Brown, Barack Obama and others that sit on the cork board above my desk. Understanding their biographies helps me think about how they make decisions – and I block time out to have a “virtual” board meeting with them. I guess it’s a bit like bringing Edward de Bono’s six thinking hats to life! The whole idea of entrepreneurial learning worked really well here and I’ve taken a lot from the session.