21 čvc 2020
What’s behind the rise of the Technology Advisory Board?
As technology companies strive to keep pace with a tidal wave of innovation and disruption, appointing the right Technology Advisory Board (TAB) has become critical.
An external viewpoint and a diversity of perspectives at the most senior levels has become business-critical for forward-looking tech organisations open to innovation.
Accessing this expertise by forming a Technology Advisory Board (TAB) has become commonplace. From disruptive start-ups and scale-ups to established technology companies, while differing in focus, the need for these external perspectives remains.
What is a Technology Advisory Board?
A Technology Advisory Board is a team of external experts who provide insights for the executive team and corporate board. An Advisor can be called upon for several things. These might include challenging, and validating innovation and product strategies, contributing to an investment committee, bringing external strategic insights into view, and expanding the company’s network.
A TAB should have a clear strategic development focus and typically does not become involved in more formal governance.
Since most early-stage company’s board are comprised primarily of investors, a TAB delivers additional thought capital and resources to cash-strapped companies, providing an immediate impact on strategy, technology, and go-to-market plans. Many venture and private equity firms utilise Technology Advisory Boards to support their portfolio companies.
Forming a TAB in the United States has evolved from early-stage tech start-ups to late-stage growth and public companies spanning all industries.
As legacy companies contend with the impact of global disruption, many establish a TAB with the Chief Information Officer, Chief Digital Officer, Chief Technology Officer, Head of Data Science, or Chief Product Offer serving as a corporate sponsor.
The growing rate of Technology Advisory Boards in the UK and Europe
While we have partnered with our clients on these important board-builds for many years in the UK, there has been a marked increase in the assembly of TABs over the last 12 months.
Mike Butler, Co-Founder of London headquartered cybersecurity start-up, Think Cyber, says of his newly assembled TAB, “As a small business we have limited resources and gaps in our knowledge and experience. Our advisors have already made an impact in a short time, by guiding our business strategy - particularly our go-to-market, enhancing our credibility, mainly by association, and helping us to access their networks of both potential customers, and investors.”
In mainland Europe, our technology clients are increasingly interested in the potential competitive advantages to be gained by appointing a TAB, seeking access to new minds to keep them on the leading edge. Lars Smith, Managing Partner of Odgers Berndtson in Denmark has seen clients appoint a TAB for a short, high impact timeframe. “Most members are appointed for 15 – 18 months, and then the advisory board is refreshed with new people, or supplemented, to avoid groupthink and encourage more current contribution.”
Why form a Technology Advisory Board?
Appointing a TAB is an investment in staying relevant, competitive, and ultimately ensuring success. Factors such as the age, stage, funding, and the go-to-market strategy of a company all impact on the goals, make-up, and time commitment required of a TAB.
Often our clients seek a TAB to advise on business challenges they face at a specific moment in their evolution, during times of change and market shifts or intense competition.
Lisa Hooker, Partner in Odgers Berndtson’s Technology and Board Practice in Austin, Texas, recommends forming a TAB when a company is facing a paradigm shift and needs advice on product road map adaptation which could pose a significant impact on the company’s strategic direction.
Gaining input from a panel of outside experts provides a broader perspective, reduces risk, and allows the company to tailor offerings to meet customer needs. And even pivot to other industry verticals if necessary.
What makes a good Technology Advisory Board member?
While a TAB member should contribute in a broad capacity, they are often appointed for a combination of specific expertise. This might have been gained throughout their career in either an executive or non-executive capacity, and might include:
International Breadth. As a tech company develops and matures, extending its reach and operations, access to expert opinion on new market entry, country-specific business practices, and cultural nuance can help to avoid costly and potentially damaging missteps. A recent client seeking to do just that created a TAB and appointed four members, with individuals based in the UK, Europe, North America, and Asia.
Access and Connectivity. Often, but not always, aligned to geographic expansion, many tech companies appoint a TAB member who will help to provide access to a customer segment and/or the investment community. Well-timed strategic introductions at senior levels can bring obvious benefits when seeking to raise funds or accelerate revenue growth.
Jan Pedersen, Distinguished Scientist at UBER and based in California, has been a TAB member on multiple occasions. “For earlier stage tech vendors, I’ve positioned myself as a catalyst for conversations, brainstorming the tech story and the pitch deck. Helping founders to refine their pitch to investors and understand, ‘What is the special sauce that is going to make this company successful?’ ‘How do we actually make money out of this thing!?’”
A ‘Press Moment’. Attracting TAB members who are considered a ‘name’ in their field can create a leverageable press moment and enhance a company’s profile. Having these experts connected to the company often accelerates attracting talent and securing funding.
After appointing a leading international AI professor to their TAB, a recent client found their ability to attract and appoint highly sought-after engineering talent greatly improved.
Technical and Research Insights. Disruptive technology companies are commercialising the most innovative technology advances, many of which are initially developed in academic institutions. An understanding of the way customers use and consume technology from a behavioural science or psychological perspective can be critical.
Advisors with academic and research backgrounds within these fields bring a much-needed perspective to a traditionally-commercial viewpoint. When a management team is lacking significant technical depth, the voice of a trusted technical advisor provides valuable advice and a better understanding of forthcoming tech trends. Seeking counsel from a TAB on the ‘unknown unknowns’ can have obvious benefits for technology companies in all stages of their evolution and growth trajectory.
How do you form a Technology Advisory Board?
Attracting the right calibre of talent to a TAB is paramount and it is important to consider at the outset how the position will be perceived from the candidate’s perspective.
Often, potential candidates will be motivated by the opportunity to work with a technology company that is disrupting a market or solving complex problems. Others may be motivated by joining a well-funded start-up at a critical moment on its growth journey. Many will find a TAB position more attractive compared to non-executive director roles where the governance requirement is more substantial. Regardless of the driver, the opportunity to work and collaborate with other technology leaders is very compelling.
The search and appointment processes are key.
The Chair of the TAB should have a strong network of contacts to ensure a robust board can be assembled. If not, partnering with an experienced executive search firm provides access to a wide range of experienced leaders.
The most critical consideration is to identify and select individuals with a passion for the business, but with good chemistry with the other members of the Technology Advisory Board.
Getting the most out of your Technology Advisory Board
Leadership from the CEO and the Chair will ensure that your organisation gets the most from every TAB member.
To maximize a return on investment from a TAB, it is important to agree on a clear mission and objectives at the outset.
Virginia Gambale, Investor, Board and Technology Advisory Member, and former Wall Street CIO offered, “In order to be successful, the Technology Advisory Board must have a Chair who can help assemble the right members and work in partnership with a dedicated group of the executive leadership team. It must be treated like a real board with goals, agendas and processes”
“A successful TAB can surface board-level issues which need to be addressed and completely change the product road map or industry focus, avoiding costly mistakes.”
When agreeing on the terms of reference for advisory board members, be clear on the support role of the advisory board, and where ultimate decision-making authority and collective responsibility lie.
The cadence and timing of meetings and expected contribution should be agreed upon. Prioritising regular contact between planned meetings will keep advisors engaged and thinking on behalf of the company.
Gaining executive leadership team buy-in to the value of the TAB’s advice, and a spirit of openness and collaboration is fundamental to achieving success.
There is little doubt that Technology Advisory Boards will be an increasingly prevalent feature in the global business landscape. As companies navigate the rapid change of technology and disruption to their business models, the creation of a TAB could prove a critical factor in creating a competitive advantage, achieving success and avoiding disintermediation.