On today’s episode of Author Hour, I sit down with Barbara Clarke to discuss her new book and here’s a brief description. As a CEO charged with elevating your business and ensuring its growth, the path can feel long and lonely without the right support. But behind every successful CEO is a board of directors, a diverse group of mentors rich in knowledge and experience capable of guiding you in your company’s development and laying a foundation for you to flourish. Are you ready to start building?
In Build Your Board, Build Your Business, economist, investor, and entrepreneur, Barbara Clarke shows how to take your company to the next level and fulfill your potential by developing the board of directors that your company needs for success. Whether you’re a CEO now or aspiring to be one, this book is the business companion that will help you organize your intentions and goals, streamline your effort, and utilize the diversity your organization has to offer.
Your personal success means more overall success for your company. With worksheets, questionnaires, and exercises to demystify the process of building a board, Build Your Board, Build Your Business is a thought-provoking companion for any business owner’s journey to success. Here’s my conversation with Barbara Clarke.
Welcome to The Author Hour Podcast. I’m your host Benji Block and today, we’re honored to be joined by Barbara Clarke who has come out with a book recently here titled, Build Your Board, Build Your Business: The Path to Million Dollar Success Explained. Barbara, welcome to the show.
Barbara Clarke: Thanks for having me.
Benji Block: So, you are an investor, an economist, an entrepreneur, co-founder, and president of The Impact Seat. You’ve been a part of, I was reading, three successful IPOs. I know you serve on several different boards so the resume is long and excellent, we could talk a lot about your history but maybe fill in some of the gaps, anything I missed there you think is important for listeners who might be new to you and the work that you do.
Barbara Clarke: Well, I think for the past decade particularly, I’ve been really focused on answering the question about what makes a company succeed, and the first part of my career, I worked with pretty big companies or they were venture-backed, they were still pretty far along and you could sort of see some of the things in the rearview mirror that made companies successful and just really interested, turning about 10 years ago, focusing on startups and thinking, well, everything for a startup is in through the front windshield, not in the rearview mirror. So what are some of the things that make companies like that successful?
Benji Block: So, you’re asking this question, is that what then sparks the book some 10 years later, or what’s the genesis of that?
Barbara Clarke: Yeah, definitely, the book was, you know, I found myself in the past couple of years, been on several boards, I know people who were on boards but also just having worked with literally, hundreds of companies, seeing hundreds of companies, made investments and have been part of over a hundred investments.
So you start to see some patterns and that’s where the idea of some folks – well, I think everyone but particularly, certain people really need a good board of directors. It is that sort of secret sauce to success. I’ve also seen where a board of directors can really go bad but in general, I think having a good size, the talented board is really the difference for so many companies.
Benji Block: Okay, well, we’re going to get there in one second, let me ask one more question on the book. So when you’re working on this, is there a specific type of person you’re writing this for that you hope picks it up, do you think it would be a great resource for them? Who is the ideal reader?
Barbara Clarke: I think the ideal reader is any business owner, any executive, or even maybe somebody who is just in the executive suite and they could be a company that only has like half a million in revenue or they could have five, 10, 25 million in revenue but they basically have a business and they have something to work with. They already think, “This is where I want to go. I have this existing business and I know I can take it to the next level.”
I use an analogy like a visual in the book where you’re standing at sort of the top of the hill, and you see a city or something in the distance. Maybe a little bit like Dorothy looking for the Emerald City but you know that it’s there and you‘re just not sure like what’s the right path because there’s tons of paths and so I think it’s the board that can really help you crystalize how you get from point A to point B.
Imagining the Ideal Board
Benji Block: Well, you do a really good job of articulating early on what I think many may have as like a preconceived notion about a board and you say that many entrepreneurs outright reject the idea of a board of directors because they fear they will have to give up control of their company and they imagine a room full of stuffy old men, judging them for their mistakes, and telling them how to run their company.
I think I speak for many when they say that’s kind of what they imagined. I appreciate a book like this where you’re actually saying, “No, we need to reimagine that” that’s not what you’re advocating for at all. What should we imagine instead?
Barbara Clarke: Yeah, I mean, what you really want to think about is just having this powerful group of people who are vested in you and your company’s success. Those people totally exist and the horror stories, it is true. Many executives do lose their jobs because the board fires them but the entrepreneur that I’m talking to here, they’re still somebody who probably owns a majority of their company or a pretty substantial portion and so, that’s a lot of power that you still have over your company.
So I don’t think it’s something to be afraid of, I think you need to be smart, and then at the other extreme, which I talk about is there had been all kinds of machinations and maneuvers by folks like the CEOs of Facebook and We Work where they’ve been able to preserve their own power. I think actually, they’ve gone to the extreme, but it does exist. There are ways you that you can shore up your power and your ownership in your company so that you can lessen that risk that all of a sudden, you’re just going to get the boot and kicked to the curb in a company that you built.
Benji Block: I think outside maybe just that needing it for a shift in perception there, you would also see many that would go, “Man, I’m just so overwhelmed and there’s so much already on my plate that taking on, trying to figure out, a board just seems like another thing I’d have to do” and they’re unsure of where to start. Do you come across that quite a bit?
Barbara Clarke: Of course, because it is time-consuming and I think there’s some parts in the book where I might scare people a little bit, especially when we talk about sort of the best-in-class CEOs how often they communicate with their board members and that I think could be really daunting. If you are a leader right now and you’re thinking, “Yeah, I got a million things to do” but the little mantra that I think everyone should always have in their head is that if you’re working in your business, you’re not working on your business.
It’s so easy and so tempting to get pulled into the stuff, the day-to-day stuff. Like for example, if you’re a technical person, it might be so easy to get pulled into the latest bug fix or if you’re a marketing person, you might be so easy to get pulled into like, dealing with a problem with the top customer but sometimes you have to really think, “This is a development opportunity for my team, to really push them” they need to take this on so that you can really – so to step, not step away but step above the day-to-day.
Your Business is Not Your Baby…It’s Your House
Benji Block: Yeah, you think of business like a baby, right? Have these entrepreneurs who they have this baby and it’s theirs and they’re afraid to let it out into the world, right? But you got to let the baby grow up and learn to walk on its own.
Barbara Clarke: I’m so glad you used that analogy because I think that that is an analogy we hear all the time and it’s absolutely the wrong analogy.
Benji Block: Okay, let’s hear it, let’s hear why I’m wrong. I love this.
Barbara Clarke: No-no, because I’m a parent, right? So my children are in my life forever and so yes, I see them grow up and I enjoy all the things that they’ve done. You should really think about this as this is real estate. You bought a house, maybe bought it in a terrible neighborhood and now you’ve completely renovated, it looks fantastic and you’re going to sell it and you’re going to move on to the next houses, that’s how you should think about it because you could, I mean, you could also think about it most business owners are going to be looking for some sort of exit.
Maybe it’s five years, 10 years, it could be something that you want to establish a family legacy. So just like the house, maybe you structure it so that it has in-law quarters or something like that but at the end of the day, you want to have the opportunity to move on from it. Whereas, you’re not going to move on from your children and your family. I think also, thinking about people do use that phrase like, “Oh, it’s my baby” I think it just applies too much emotional weight to the company that I think that it’s harder to then separate from it and make really difficult decisions.
Benji Block: Yup. I think that’s such a good point, right? Because there are so many that are afraid to sort of open their hands up and let other people get in but then ultimately, if you have the goal of selling the business one day of moving on, you’re going to have to learn to open up your hands and let other people in and do this work and so I love that.
Well, let’s talk about this acronym here, ANCHOR, it’s what you based the whole book around and I’ll read quickly what anchor stands for. It’s assess, network, communicate, honor legal duty, organize, refresh and return and you go into detail obviously on each of these but talk a bit about what to expect here and then we’re going to dive into assess a network but what’s the genesis and the thought behind ANCHOR?
Barbara Clarke: My objective with the whole book was, let me create something that people can read and they can actually take action on. It may be daunting because it is a lot of work but at least they know the different pieces that they can start on and throughout the book, there’s, depending on the stage your company’s at, you can do different things. So that’s why I broke it into those different focus areas so you know like, what’s coming.
Benji Block: Okay, well, talk to me about assess because there’s kind of step one in the process. I think maybe people are asking, when should an entrepreneur think of having a board, do you think it’s around a certain size or a revenue number, and when is that starting to take place?
Barbara Clarke: I think assess—and I’m so glad that this acronym worked—assess is the first thing because it is really the first letter and it’s really the first thing that you should do. I think entrepreneurs and business owners, when they have an actual established business and they sort of know where they’re going, at least, in the short-term so like, I wouldn’t put a revenue number per se on it.
I’ll just give some examples, like if you’re a service company, maybe a tech-enabled service company or something like that. You’d want to have a few customers and some revenue. Have a couple of employees so maybe you’re at the low end, $750,000 in revenue. Maybe at the upper end, you can be in the millions but then, you could be a company that is doing, it’s gotten a lot of research grant.
I mean, a lot of the companies that I’ve invested in are companies that have no revenue for many years because they are maybe a medical device company that’s going through FDA approval and so forth but once you start, “Oh we have our solution, this is what we are doing” and you start to need expertise in a variety of areas.
So I think that the answer may be different for lots of folks and it is okay to think about this going forward but if you’re still ideating and really thinking about what your next business could be, you don’t need a board. I think it is good to just get lots of contact with potential customers and other advisors and when everything starts to crystalize, then you can form the board.
Benji Block: It almost felt as I was reading this assess phase that it’s like you are advocating not just for an assessment of the business but like a life audit of the business owner and I really appreciate that because there is so much that goes into this that’s beyond just maybe what we think of as the scope of the business.
Barbara Clarke: Exactly, because too often when people think about a board of directors, they think about what’s the sort of occupation that somebody needs to have. So I may want a banker or maybe I am in a particular industry, maybe I’m in real estate so I want to have a commercial property developer or something like that and they’re very focused on the job and that’s obviously important because the skills they bring are really important.
But they also have to think about all the other things about a person and you have to think about yourself, so it is really good to start with your own self-assessment. Simple things like if you are born and bred in the town that you’re working in, the city that you are working in, you have deep roots maybe you need to think about having some board members who have a broader geographic reach and experience.
That might allow you to expand your customer base or at least think about other markets differently. You may be a kind of person who is a nomad, so you are the other extreme and maybe you need to actually have a board member that is deeply rooted in a couple of the markets that you are very interested in. This is probably the biggest one, you may be an introvert or an extrovert, somewhere in between.
Just understanding that about yourself to know that you do need to have, so say you’re an introvert. I’m not, I am actually quite extroverted but I know that, so in my example, I know that about myself that I am extroverted and a couple of my closest friends are introverts and we see how we approach problems differently and how we want to work in the business differently because for example, I don’t mind going to a conference with lots of people.
I don’t mind talking and doing all that other stuff and other introverts might be thinking, “Oh my gosh, I am going to have to save up all my energy in order to go to that conference and happy hour” or whatever and so there’s lots of things like that and there is also a huge thing that we have discovered because we have created this assessment through the impact seat in some of our consulting work.
We discovered that there are a lot more people who like to ponder, become ponderers. People like to really think about things, have information, they are still able to make decisions quickly but they aren’t the shoot from the hip style, which can really dominate a meeting or can dominate a company and often times we do a terrible job where we run a meeting where we just show up and we say, “Hey, we got these problems. Here are all the issues.”
“Okay, we need to make a decision, let’s go” and that doesn’t work for a lot of people and you don’t have to slow down progress because people keep thinking like, “Oh we need to go fast and break things” like what if you went fast and didn’t break some things? So those are some of the things like really understanding who you are and knowing that you will bring on people who are different and that will help create the creative friction, which is so important.
To have a diverse team who provide much better answers, it will brainstorm better, and it might seem a little crazy and chaotic, but if you manage it the right way, you’ll get the benefits of all of that diversity. So being aware is the first step.
How to Recruit Board Members
Benji Block: So for some, they’re going to say, “Yeah, I feel in my business an awareness of where I’m lacking.” The next phase is what’s seemingly daunting, whether it’s because they’re overwhelmed and lack of time or they are just unsure of like, “What’s the best way to go about asking someone to be on my board?” So what are you doing as that step in the process to get out in front of the types of people you would want on your board?
Barbara Clarke: One of the things folks need to really understand is that there are so many people who want to be on a board. So just know that, have a little bit of confidence, this is something that lots of people want to do. They want to be on a board, maybe they want to be on your board and then the other thing to think about is, it’s usually these loose connections. The second, they’re not your first-degree connections.
They’re going to be seconds and thirds that will be the most useful and the most interesting. So just getting comfortable with maybe there’s going to be a soft intro that you can get to someone and also cold calls, you’d be surprised like so, I have been missing for a long time, you’d be surprised how very few good cold emails I get because people think, “Well, I’ve got to send out all these emails, I’ll just send out a generic thing and see if anybody bites.”
Well, I could tell it’s a generic email and I just don’t bother but if that somebody has spent the time, you want to create like a profile in your head of like, “Who are the kinds of people I want on this board?” and then you start to reach out to them. You say, I am looking to create a board and I’d be interested to talk to you about your experience. The first kind of person you should be looking for is someone who has board experience, whether it’s for profit or not for profit, because that person can help you on your journey of building a board because they have done it before. They have been on a board, so they know what to expect.
Benji Block: Is there anyone, I know you actually mentioned like avoiding personal friends and it seems obviously you are advocating, you think those second and third connections can be wonderful maybe a little upfront but then they can end up being really most beneficial. Why avoid the personal friend?
Barbara Clarke: I joke a little bit like who you going to complain to when things are tough if that person is on your board and so I mean, that’s part of it and I would say, the other thing it sort of related is if you are in a business with family members, you also want to understand that there is a special dynamic with family members and to really address that upfront because say, you’re the president and you are sister is like the CFO, just understand that you need to have people that compliment both of you.
Benji Block: Let’s zoom out and just talk real quick. I’d love to hear some examples of how you see boards really helping drive tremendous success because I want to paint that picture as we start to wrap up here around just, okay, you’re going to do the hard work, you’re going to read the rest of Barbara’s book, you’re going to start to apply this and this is what you can expect as a result. Give me a couple business examples that you’ve seen and what you would want our listeners to know about.
Barbara Clarke: Yeah, there is so many and so funny too because sometimes, I also think about the negative whereby not having a board, then I’ll also want to start a little bit with the negative where companies that are trying to exist when you are growing your company, there are always so many forks in the road and sometimes maybe it’s – I don’t even know if it is on fork because there is maybe like four different options, five options.
Having a robust board will help you evaluate the different pathways. I’m part of a – there is a company that I am an investor in that’s having a really difficult sale to a very large company and I felt like they brought the board in and they brought advisors in very late and so we didn’t have the opportunity to really push and try to see what were some of the options for sale and I think it was just the CEO felt really overwhelmed.
To me, that was a CEO who didn’t have a board where they could really lay off some of this burden because you really want to lean heavily on your board when times are difficult, which is obviously when COVID first hit, I was super active on a lot of my companies, whether I was a board member or not. So that’s sort of like avoiding some downside but one of the – an entrepreneur I know has she always fills the seats of her boards with people who have been ten steps ahead of her.
So if she wants to grow her company in a particular industry, she has a CEO from that industry. It is not a competitor, it’s a complimentary kind of company because she always has because all their conversations are all about, “Oh when I was at five million in revenue, this is what I did” and that’s what you want. You want the people at the table to be basically like they’ve been on that journey before and I find that particularly effective.
I also think that it’s important if you are from an underrepresented group, whether it’s women, women of color, or men of color, I think it’s important to make sure that your board has some representation from your own demographic because it’s challenging. I invest in a lot of women of color and I know that it is really difficult for them in fundraising. So it’s just really important to make sure that people understand that.
So having a couple of people on your board who have walked that path before, again, just like in every other area, I think that that’s really important.
Benji Block: This is fantastic. I wonder Barbara, the main because it is such an action-oriented book like what’s the hope, the desired outcome for when someone finishes reading this is it, what’s the main takeaway you hope someone is going to walk away with?
Barbara Clarke: Well of course that they would have opened their eyes and seen that there are so many people out there who want them to succeed and they want to share in that journey with them and because folks always say it’s lonely at the top. It’s so true, many CEOs if they are listening to this, they’ll be nodding their head because who can they talk to, and usually it’s their board because the board is hopefully going to be both their biggest cheerleader but also a reality check on things.
So I think that that’s at the end of the book, I also, last chapter is about refresh, do it all over again because you could be on a board yourself and then also maybe you need to refresh your board. So it is a sort of a never-ending iterative process.
Benji Block: An allowance for continued evolution, which I really appreciate and that’s one of the best parts of businesses that continued growth and so thank you for taking time talking a bit about the book. I’ll say the title here one more time so people can go pick it up on Amazon, Build Your Board, Build Your Business: The Path to Million Dollar Success Explained. Barbara for those that want to stay connected to you and the work you’re doing, what’s the best way for people to do that?
Barbara Clarke: So we do have a website, buildyourboardthebook.com. I can also be found in all the places, the LinkedIn, impactseat.com, and also our new foundation, impactseat.org. And then I’m on Twitter @beclarke, with an E on the end of Clarke. So yeah, I am all over the place.
Benji Block: Fantastic. Barbara Clarke, thank you so much for being on Author Hour today. We appreciate it.
Barbara Clarke: Thank you so much for inviting me. This was fun.