How NOT to build an advisory board. . .
February 23, 2009
Thinking about building an advisory board for your startup? I think there are a couple of important lessons on ‘what NOT to do‘ to be learned from Obama’s Presidential Task Force on the Auto Industry.
Rule No. 1: Ensure that your advisory board has experience in the area where you need advice. Obama named 18 members to his Auto Task Force - the sole purpose of the group is to save the domestic auto industry. The problems with the team?
- Not a single member of the advisory board has ever been in the auto business. Even the transportation secretary, Ray LaHood, has no automobile, transportation or business experience (he was a school teacher before entering politics). The closest any member of advisory board has come to the auto industry is Ron Bloom, the Senior advisor on the Auto Industry for Treasury, who started out as an investment banker at Lazard Freres and ended up as a labor negotiator focused on corporate bankruptcies in an array of industries from steel to airlines. When you are looking for members of your advisory board, my advice is to pick a few with some real world experience in your space.
- Out of 18 members of the advisory board, only two drive American cars. Ron Bloom drives an aging Taurus, but I suspect that is because his largest client the UAW. (Geithner - Acura TSX, Summers - Mazda Protege, Orszag - Honda Odyssey, Jackson - Toyota Prius, Goolsbee - Toyota Highlander, DeBoer - Lexus RX350, Zichal - Volvo, Heinzerling - Subaru Legacy Outback, Utech - Mini Cooper S, and Bernstein - Honda Odyseey.) You might be surprised to learn that a few members like Carol Browner, Diana Farrell and Steven Chu don’t even own cars (Browner is the climate czar so we will give her a pass). So I am not sure whether or not owning an American car is an important factor, but to be sure you need to question the judgment of Rick Wade, senior advisor at Commerce, who drives a 1998 Chevrolet Cavalier - I thought rental car companies were the only owners of Cavaliers - a Cavalier? Can we trust someone who actually picked a Cavalier?
Rule No. 2: Ensure that your advisory board has experience in the area where you need advice. Really, I am not kidding. It is a VERY good idea to ask people with experience before tapping people who work for you. You want outside opinions and advice. Obama would have been better off picking 18 people from the Reagan International Airport lobby than he did. Don’t make the same mistake.
