By: Joshua Finley
Strategic clarity often comes from outside perspectives, particularly when businesses face complex growth decisions. While many companies rely solely on their internal teams and paid executives, the value of a well-structured advisory board can be transformative. By carefully selecting board members and clear goal-setting, these external advisors can help identify blind spots and guide companies toward sustainable growth. Drawing from her extensive experience working with early-stage companies and established businesses, board advisor Archita Fritz shares key insights on building and maximizing the impact of advisory boards.
Understanding the Value of Advisory Boards
Companies, big or small, have growth problems that are hard to see from the inside. “A lot of times, the people in charge need clear ideas, and they need someone from the outside to help them see things clearly,” Archita says. Advisory boards are like outside guides, asking essential questions and helping the leaders find good chances to grow. According to Archita, by 2030, many family businesses might close if they don’t plan well for the next generation of leaders. She says, “Having an advisory board with many experienced advisors who have different points of view can help the company know how to get to the next level.”
Forming the Board at the Right Time
Many companies wait too long before making an advisory board. Archita says it might be too late if you see the same results year after year. “The correct time to make a board is when you can’t hire many new managers to think for you, but you want to use the knowledge of a varied group to help you get answers,” she explains because getting these answers is crucial for growth and strategy. For new companies, Archita warns against forming new boards that don’t envision change. Even though investors often become board members, she says that each member must work hard to help the company grow.
Building an Effective Advisory Board
Usually, people make advisory boards by asking their investor friends, but Archita says this is not the best way. “I tell everyone to look outside their circle because you want different opinions that challenge how you work,” she says. Companies should fill in missing knowledge rather than just finding people with experience in their industry.
Archita says to think about three key elements when choosing board members:
- Diverse Industry Experience: “Consider the strategic knowledge gaps you have in your decision making,” Archita suggests, as sometimes, good ideas come from people who have faced similar problems in other fields.
- Complementary Skill Sets: Look for board members who can add skills that your managers don’t have. Archita says that someone from a big company might help a new company because “they have already done what you are doing 40 years later.”
- Network Activation: “They might know many people, but if they do not know how to use their network to help you, they may not help much on your advisory board,” Archita explains.
Archita tells a story about two women from the Netherlands who were starting a medical device company. She helped them as a board advisor, finding the critical knowledge they were missing, mainly in the medical field. “We saw that their medical officer was a report writer with a doctor’s title, but he could not be a qualified manager,” she recalls, which shows the importance of proper qualifications. Nonetheless, her guidance made the founders gain investors’ trust and obtain valuable funds from angel investors.
Enhancing Advisory Board Effectiveness
Archita offers practical advice to get the most out of an advisory board. First, ensure that the people you want have been on a board before or have received training. Also, she says to have a three-month trial period in the agreements: “If we don’t see that there is a good connection, we are not meeting the values of what you contribute to the advisory board, we will end our relationship.”
Precise tasks for each board member are also important. “The best boards have clear tasks for each member,” Archita says. “I focus on innovation and investment strategy, so I have clear goals, and my goal is to help the founder and the team reach those goals.” If you choose the members carefully and plan how they will work with you, advisory boards can offer new ideas and different perspectives you need to grow your business.
To learn more about Archita Fritz and her approach, check out her LinkedIn profile.
Published by Drake M.
