February 1, 2016
Engaging Talent and Resources beyond your Company’s Four Walls
April 20, 2011
Last week, I met with a CEO who is looking to create an advisory board for his company. After the CEO had gotten comfortable with me and what I could offer, his questions switched to "selling me" on why I should want to join his board. As we were wrapping up our meeting, he asked how I choose my clients.
I look for three things when evaluating whether to do business with a new client.
1. Is the work interesting?
Is the company in an industry or area of application that interests me? Can I get passionate about what they are doing or the contribution they are trying to make? Are the challenges that they are facing ones which I have interest in solving?
2. Is the client coachable?
Is there chemistry between me and the CEO and senior team? Do I respect them? How big are their egos? Do they listen? Do I believe that they are truly looking for advice that they will act upon?
3. Can I add value?
Is their industry, area of application and the challenges they are facing within my realm of expertise and experience? Can I make a difference in their success?
If I answer no to any of the above, then the role is not a good fit for me.
I think this evaluation process also applies to investors. One of my client's is working with a VC on a round of financing. This VC states that they invest in management teams, not companies. Similar to my second point, most of their early due diligence was with respect to the senior management team's capabilities and chemistry. Once they concluded that they liked and could work with the senior team, their due diligence shifted to points 1 and 3.
Instead of "is the work interesting?", their analogy is: does the company's product fit the industries and application areas that the VC feels are lucrative opportunity areas. With respect to point 3, they are also looking at what added value do they offer beyond capital to increase the value of their investment. This could mean expertise, advice, or networks and connections. In the VC world, this is often referred to as "smart money".
So whether you are looking for advisors or investors, slip yourself into their shoes if you want to attract the right talent to your team.