Staying on Track with Advisory Boards

Unlike Lauren’s program, however, Greg’s specialized in students who are planning to take over a family business. For one week every two months, the students gathered onsite at one of their family’s businesses, while the rest of the course is taken online. I am very pleased with this program, because Greg gained valuable insight about the operation of family businesses, and received a great education in specialized strategic planning, along with the more traditional MBA curriculum.

Staying on Track with Advisory Boards

All public companies have Boards of Directors that are responsible for looking after the interests of the shareholders, challenging management choices, and inputting ideas about the strategic issues that determine the direction of the company. Without the board, individual egos could prevent owners from making proper and informed decisions for their company. It was for this reason that I formed an external advisory board at Naylor as soon as I joined the company. They are essentially a board of directors for a private company, aside from the fact that there are no shareholders to whom they are responsible.

Our advisory board provided us with a huge advantage, and we kept the same members for about 10 years. They offered discipline, reality checks, and were constantly re-examining the company’s goals. If our focus became too broad, the board would refocus our attention on the key directional paths where we had real chances to develop competitive market advantages. During the recession of the early ‘90s, the board wisely prompted us to start cutting back early, and advised us to keep our focus only on the profitable areas of the business.

Eventually, the company came to a point in its development where the issues we faced were of a much different nature than before. As a result, I dissolved the advisory board for a few years. When the board was reinstituted around 2004, it was with a new group of advisors who could assist with the transition to a new generation of owners and managers. For example, Tim Hogarth has been helpful in our transition to the next generation of ownership. Tim is president and CEO of Pioneer Energy, which is a 50% family owned business by the Hogarth family, and in Tim’s career he joined the business and over time has risen to be its senior operating leader, taking over from his father.

Our board is comprised of several other successful business owners and