ll in the Fam

t A
o
M
any family-owned restaurant operators talk

ily
N
about establishing a formal advisory board,
but few actually invest the time, energy and
money to do so. Why should you bother to
establish a board of advisors? The short answer is that having
outside advisors will enhance your business’s performance.
The source of this benefit is the access your leadership
team has to the insight, wisdom and experience of your out-
side advisors. Over time, the board will potentially help you
perform four key functions:
• develop and implement a strategic plan
• steer clear of potential, “avoidable” problems
• create optimal solutions to issues and challenges as they
do arise
• hold yourself accountable over time
An advisory board does not replace the owner’s primary
role of leadership, decision making and strategic vision.
Rather, it is a mechanism to enhance both the individual and
collective performances of the leadership team.

An outside board can

strengthen a family-run
restaurant company.
PHOTOGRAPHY: IMAGE SOURCE

By Bradley S. Schneider

62 R E S TA U R A NT H O S P I TA L I T Y F E B R UA RY 2 0 0 7
 Not All in the Family
Advisory boards are often discussed interchangeably with portant to recognize that this is a position of serious re-
boards of directors. There are, however, some critical differences sponsibility and high expectations. You should
between the two. Corporations are required to have a board of not populate your board with “prima
directors by statute, while no law controls a board of advisors. donnas” or “yes-men.”
Directors are “elected” by the owners of the company. Advisors The first step in recruiting is
are appointed by the leadership. Because directors are in a le- formally stating what you want/
gally mandated position, they have very specific obligations with expect from your board and its
fiduciary responsibilities—and liabilities. The responsibilities of members. You then must develop
the advisors are whatever you make them. Lastly, directors actu- a formal position profile for each
ally make decisions that are effectively binding on the company. seat on the board, fol-
Advisors are only in a position to offer ideas and make recom- lowed by assembling
mendations, which carry no legal weight. a list of people who
would possibly fit
the specific needs.
What Makes for an Effective You must contact
Advisory Board? each candidate to
There is no magic formula for creating an effective advisory explore their in-
body, but there are some fundamentals that will at least set you terest and then
down the right path. First and foremost, it is critical to carefully conduct a
assemble the right mix of people. Quality of character is key—the formal in-
advisors should reflect the values of the restaurant and of the ter view
owners. You also want to ensure diversity of experience and per- to ex-
spective—each person should bring something distinctive to the
board. Chemistry of the group must also be taken into account.
While a mix of thought and style is important, it is equally impor-
tant that everyone interact well together.
In a restaurant setting, a board of directors might typically
consist of investors, operating people and one or two indepen-
dent directors. An advisory board, on the other hand, would not
necessarily include the investors, unless they brought specific
insight to the running of the business. Rather, we would try to amine their fit. If
surround the operator or leadership team with a group of people your goal is to start with
with backgrounds and expertise that specifically support the three advisors, your objec-
needs of the business. tive should not be to find
A second key to a value-added board is the creation of a written the “three best,” but rather
the “best three.”
In a restaurant, a board might consist It is likely that the people for whom a board position
of investors, operating people and one holds an interest and to whom you will be attracted will
or two independent directors. not be motivated by the money you will offer. On the other
hand, it is, at the same time, important that both you and
charter. Such a document provides the board with a clear mis- the advisors clearly understand that a board seat is a
sion and very specifically sets out the expectations of the board, position of real value. Therefore you should compensate
both individually and collectively. your advisors with either a cash stipend, or if deemed ap-
It is also essential that you maintain discipline regarding meet- propriate, an opportunity for acquiring company stock.
ing routinely and strictly adhering to agendas and schedules. Set You should expect to pay between $5,000 and $20,000 per
the date for all meetings a year in advance and distribute back- year, per advisor.
ground information and a summary of topics to be addressed one
week in advance.
You must also commit to complete openness in your communica-
Getting Started and Staying on Course
tions with the advisors and promote the same openness in the com- Creating an advisory board is not rocket science. The
munications among them as well. hardest aspect is getting started. The basic consider-
Lastly, you must be patient and willing to allow time for the ations and steps in launching your effort include:
board to take root and ultimately mature to its full potential value. 1. Design and agree upon the board development and
selection process.
2. Who will be involved?
Recruiting and Compensation 3. Who will make the decisions?
Don’t undersell yourself or your company’s ability to attract 4. Who will have input?
exceptionally high-caliber advisors to your board. It is also im- 5. Decide what you want to get from a board.

64 R E S TA U R A NT H O S P I TA L I T Y F E B R UA RY 2 0 0 7
Not All in the Family
While the start is relatively straightforward, the greatest
incidence of board collapse is in the first year.
6. Create a board charter.
7. Identify the attributes/competencies of ideal board candi-
dates and draft a “job description.”
8. Develop a preliminary prospect list.
9. Contact and interview prospective candidates.
10. Put together the slate of the best three to five individuals.
11. Extend offers to those selected.
12. Hold an initial board orientation meeting with introductions
to each other and the company.
13. Establish a schedule for the next four quarterly meetings.
While the start is relatively straightforward, the greatest in-
cidence of board collapse is in the first year. Often the second
meeting lacks the excitement of the first, the third meeting be-
comes perfunctory and the fourth simply never gets scheduled
or is postponed into oblivion. It is, therefore, of paramount im-
portance that you stick to the schedule, adhere to the agenda and
invest the time and energy into the quarterly meetings to make
them worthwhile for you and your advisors.
The Consultant’s Role
Essentially, an experienced consultant will act as your guide
through the process, ensuring structure and focus through to
completion. He or she will help you define your goals and should
work with you to draft the charter. The consultant must be able
to help you put together a list of potential board members. If
66 R E S TA U R A NT H O S P I TA L I T Y F E B R UA RY 2 0 0 7
you want, he or she can also make the initial contacts,
conduct preliminary telephone interviews and screen
the candidates to develop a short list. Additionally, your
consultant will be able to serve as a sounding board to
help you put together the best group of advisors from
the list.
After you have the advisors in place, it is often ben-
eficial to have the consultant lead the initial orienta-
tion meeting to ensure that the group is structured to
achieve the board dynamic you desire. Again, this first
meeting is generally a longer session as you will take
the opportunity to more fully explain the business,
share your vision and strategy and reiterate your ex-
pectations.
Usually, advisory boards meet on a quarterly basis.
Following the orientation meeting, your consultant
should probably attend the next four quarterly meet-
ings, assuming the responsibilities of facilitator, time
keeper and scribe. Your goal should be to diminish the
consultant’s involvement over time, to the point that
you are fully weaned from his or her role by the end of
the fourth meeting. < RH
Bradley S. Schneider is the director of Blackman Kallick
Strategic Services Group (www.bkadvice.com). The Blackman Kallick
Family Business Center offers broad consultancy expertise to family
businesses.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.