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Do you need an agency board?
Yes.
Okay, next question!
But seriously, let me explain why we feel so strongly that an advisory board is vital for running a healthy agency — with a bit of help from a virus, founders and investors from the world's fastest growing tech companies, and some respected agency leaders...
Unforeseen events
We set Convivio on a mission of helping agency founders run their businesses more proactively after the initial waves of the Covid-19 pandemic.
It became clear that most agencies didn't have any concept that a pandemic was a likely threat to their business, let alone having a business continuity plan for how to survive it. To 99% of founders it came completely out of the blue. And the same with the economic disruption that followed.
This left agency founders in the position of constantly reacting to events, rather than getting ahead of them.
One of the main reasons we found for that, when we investigated, was that agency founders hardly ever wore the 'top three hats' in their business — the owner, director and CEO hats. They were too busy down in the details.
We believe that having an advisory board, taking time to wear the 'director' hat — even if it is still just the same founders or management on the board — creates a vital time and space for higher-altitude thinking about the agency.
And here, we believe, agencies can learn a lot from the world of venture-backed tech businesses that are on a fast-growth trajectory.
Learning from fast-growth tech companies
Agencies are usually owner-managed, with no external investment. That’s a fantastic thing in terms of freedom and long-term sustainability of the business.
But it does mean there is no pressure for good practices in the high-level running of the business. Everything naturally falls into being very operational.
Healthy agencies actively design the way the founders perform the owner and director roles in their business.
A good source of inspiration for us to look to are fast-growth tech startups. They are small, nimble and creative too. They are founder-driven and on a mission.
But they have external shareholders who also hold them to a high standard in the way the business is run — and bring expertise to help with that.
So, by looking to what these founders and their investors do, we can bring some great ideas back to agency-land, without having to have the pain of answering to big venture capital companies!
One of the most respected tech investors, Fred Wilson of Union Square Ventures, is adamant all small businesses need advisory boards:
A company should have a board the day it is formed. Every company should have a board of directors. At the start it can simply be a one person board consisting of the founder. But it should not stay that way for long.
Clint Korver teaches a course on startup boards at Stanford University called “Startup Boards: Advanced Entrepreneurship.” Clint says:
The most common mistake startups make is not having a board at all.
He says research shows a majority of startups fail due to self-inflicted wounds — internal decisions about founding team, roles, equity, and other important issues, which some deeper thought in a board context could have helped them avoid.
So having a board can help you have a space for thinking, where you step away from the day to day and focus on the important issues of the business, ahead of time, to prevent them becoming crises later.
The board works at a high level, on the long term.
And, if there are some other voices on the board too, it can provide extra experience and support for the founder(s).
When we conducted research with agency founders, a common theme we found was people feeling lonely and isolated in the top job in their business.
Mark Suster, a founder turned VC at Upfront Ventures, sees this a lot:
Being a founder of startup is a lonely experience because you’re constantly faced with hard decisions that need to be made with incomplete information and many of the decisions can be very consequential and you have limited people from whom you can get input.
The board can then become a forum for getting advice and support with these weighty issues that you can't easily talk about in the day to day of the business.
The Agency Senate on boards
We asked the members of the Agency Senate (the invite-only group of respected agency leaders who we survey regularly as part of designing the Convivio Way and writing up this Agency Leaders Playbook) about their thoughts on advisory boards. 55% had an advisory board that meets regularly.
“We have a very active board that adds value to the business every time it meets.”
“We have recently constituted a new board structure when we became an employee-owned agency.”
“We've just appointed two advisers, less a formal Board (though they do perform some of the functions of a Board), more a mix of leadership coach and practical advice on growing an agency. Early days, but so far they've made a massive difference.”
Of the Senators whose agency didn't have a board, a third were planning to start one in the next 12 months:
“We do not have one currently, but are exploring what it would mean to formalise one. In lieu of a board, our exec team essentially serves as a board, but we agree that's ultimately less than ideal.”
And among those who didn't have a board, and weren't planning to start one, some common themes came through:
They thought their agency was too small or too young to have a board (see above, we're not alone in advising agencies to have an advisory board at any size)
They didn't know what an advisory board could do, or what value it would provide to their agency
“We don't have a board. I don't really understand their role to be totally honest with you.”
So in this section of the Agency Playbook we're going to show you how to set up and run an advisory board for your agency, and show you how to get the maximum value from this time for your business.
Because we strongly believe every single agency needs an advisory board.