Sunday, July 26, 2009

Those Pesky Independent Directors

A young CEO recently asked for some advice. She had just signed off on a third party investment which came with the requirement to add an Independent Board member to the team. The CEO commented that "The dynamics and complexity of the Boardroom has changed in a number of significant ways. I need some help in understanding what is unfolding." The key changes as she described them included:

1) "The new Independent member has asked for a lot of background material about the company, our shareholders, suppliers, accounts receivable, contracts, payables, risks, issues and opportunities, personnel files, incentive plans - the list was long and the more I provided the more information I was requested to deliver." I respond -it is very important that a new member of the board come up to speed as quickly as possible. Much of the material that you have used in your recent due diligence will provide the Director with the necessary background for an effective Board Orientation.

2) Prior to the meeting, a Detailed Agenda was requested that included a start, stop and time allocation for each agenda item. In addition, we were asked to categorize the agenda into a) Standing Matters (CEO Report, Financial Update, Pipeline Review), b) Committee Reports: (Finance, Human Resources, Governance & Risk) c) New Items: (For Information Only or Decision Required), d) In Camera session (excludes CEO). I respond - this is just common sense. Directors are busy and organized professionals. An appropriate well constituted meeting agenda is critical to ensure meeting efficiency. The Chair of course will need to be strong to ensure that the meeting plan stays on track. An In Camera session without management is a must.

3) A couple days prior to the meeting a detailed Board Package of supporting materials was sent out to all members. Our new board member was looking for at least 5 days with the supporting materials. Twenty four hours in advance of the meeting, the final materials were emailed or faxed - Our new member was happy that the changes to the final package were small. I respond - Directors are appointed to help enhance management's decision making. They will need to see a sufficient level of detail to understand the options and recommendations made by management. Given schedules and commitments 5 days is the minimum period of time to allow the member to read and absorb the materials. Often after the Board Package goes out there are critical updates that need to get sent - these updates should be sent no later then 24 hours in advance of the meeting and should not form the core of the agenda materials.

4) The meeting itself also changed quite dramatically. With all the materials sent out in advance everyone on the Board had a chance to understand where we were at. The board meeting dynamics now changed to a barrage of questions about the assumptions, the trends and associated conclusions related to the materials. I respond - Asking questions helps with the clarity and provides a real time mechanism to test the quality and validity of management recommendations. It is often stated that there are no "wrong questions" in the board meeting. Directors who don't understand a particular point will most certainly speak up.

The Board of Directors are appointed by the Shareholders and their purpose is to "Enhance Executive Decision Making". They are bound by a Duty of Loyalty that demands that they act in the best interests of the Stakeholders. Stakeholders include not only shareholders but customers, suppliers, NGO's, employees, government agencies and others with a "stake" in the companies business. Their Duty of Care is to act in a matter that is consistent with what a reasonable person would do when presented with a similar set of facts.

Directors perform their duties by a) demanding a high calibre Board Package that contains the right amount of detail and is delivered in well in advance of the meeting, b) asking lots of questions to improve clarity and test what if scenarios and c) digging into their wide and deep leadership expertise to help guide management.
The CEO who asked for the assistance left our session with a significantly enlightened view of that Pesky Independent Board member. Does it now make sense to you?

Monday, July 20, 2009

Bright & Not Blurry Eyed Business Plans

I finally broke down over the weekend and attacked the stack of 5 Business Plans that I promised to read and comment on. They ranged in length from 15 to 80 pages and covered multiple industries and segments. My mind was whirling as I completed the last " conclusion" section. As I compared and contrasted the individual documents I was inspired to write a couple tips to help those Entrepreneurs with their next versions.

a) Capture My Attention Quickly - Perhaps its starts with your overarching vision, but find a clever way establishing and leading our interest in your product or service quickly.

b) Make it Easy to Read and Compelling to Turn the Pages - Think about that spy novel that drives you aborb the content and turn the pages as the plot unfolds.

c) Follow Business Plan Protocol - There are many protocols & templates out there and they all lead the reader through a time tested process. All of the heading and topics will need to be addressed so there are no short-cuts to be taken. One client suggested that since their product was so unique they had no competitors and "never would' - therefore they left the section completely out!

d) Cadence your Content with Appropriate Emphasis - A colleague of mine at MaRS - Andy Haigh ( has developed a 25 page format for the business plan. His rationale is simple - create something that the reader can digest in a single sitting - lean towards 25 pages rather then 60. The flow goes something like:
  • Executive Summary (2-3 pages) - Company description, Value Proposition, Key Highlights
  • Introduction (2-3 pages) - What is the problem that the company is trying to solve?
  • Product & Technology (2-4 pages) - How does your technology solve the problem?
  • Market Size (2-4 pages) - Start with the big numbers and narrow it down to your market.
  • Go to Market Strategy (2-3 pages) - How do you plan on attacking the marketplace?
  • Competition (2-3 pages) - How are you "better, faster, cheaper" ?
  • Management (2 pages) - Do you have the team to make it all come together?
  • Financial Summary (2-3 pages) - Financial Model, Investment Opportunity, Cash Flows.
  • Strong Summary (1 page) - Re-iterate Key Points

e) Visualize at Every Opportunity - 25 pages of solid text will not work for your reader. Since a picture tells a 100o words - the photogragher or graphics designer are the world's most effective writers. Use charts, graphs, pictures, white space and section headings to help illustrate the points and focus the reader.

f) Proof Points - Do you have the customers, beta trials, strategic partnerships and trending financials to clearly demonstrate that you have it right?

g) Strong Finish - Having lead the reader through a compelling 25 page journey, re-iterate the key points to leave them with a lasting impresssion.

I have tried to capture in a few words what is clearly a significant art form. Have Andy and I missed anything? We look forward to your feedback.

Friday, July 10, 2009

Advisory Boards - An Entrepreneur's Secret Weapon

We met with a young Entrepreneur a couple days ago who was making great progress in commercializing his technology. He had locked down his IP, sized his large addressable market, secured some strategic relationships and was well down the path of turning a discussion into a revenue generating pilot. As we turned to analyse his Go to Market strategy something jumped off the page - the calibre of his Advisory Board. To date he had surrounded himself with family, friends and service providers. These linkages were critical to the early days of his incubation but clearly progression to the next level would be impaired without the right support. Our advice was simple - take a critical look at what your company will be facing in the next 12 months and map that to the talent of your Advisory Board - do you have what it will take to accelerate your growth path? Some of the more popular roles include:

  • Do you have a "CAPY"- someone who can help you raise your next round(s) of Capital?

  • Do you have an "Indy" - someone with deep industry Domain knowledge?

  • Do you have a "Connector" - someone with Contacts and connections?

  • Do you have the "Devil" - someone who will always play the alternative advocate?

  • Do you have the "Seasoner "- someone who has been there and done it before?

All of these roles will be critical to any early stage company looking to get to the next level.

Does your company have what it will take?

Friday, July 3, 2009

Have you seen "In Business" on Rogers 10

In late June I had the pleasure to do some Live TV. David Wojcik the host and producer of In Business ( had been at our Innovator Idol and was inspired to do the final show of the 2008/09 series on Business Incubators. I was joined on the program by Av Utukuri - the CTO of Nytric ( - a company focused on "bringing exciting new ideas to life." David W facilitated a lively discussion in which AV described a number of the cool companies he was incubating in his Mississauga based office and I got to outline what we do at the RIC-Centre ( as part of the Ontario Commercialization Network. The In Business program was wrapping up for the season - but it will be back in September. If you live in Mississauga and have access to Rogers 10 I suggest you check out the summer re-run schedule. David has done a terrific job packaging a show that concentrates On Business, For Business and of course In Business. I look forward to David's new season and the opportunity to get some of my clients profiled on his program.

Innovator Idol - A new pilot for a TV show?

The concept came to us as we thought about all the neat companies that we were seeing through our Entrepreneur In Residence (EIR) work at OCETA and the RIC-Centre. James Sbrolla ( another of those EIR's in the Ontario Commercialization Network and I were keen to showcase some of the companies that we were working with. With significant support from the RIC-Centre team (Sharon, Radi and Pam) were created Innovator Idol. The concept mirrored that popular TV show that concluded in early June.
We created a panel consisting of an Angel investor (Henry Vehovec, a Venture Capitalist (Michael Curry and a representative from the Innovation Accelerator Fund (IAF) (Shriley Speakman Over a beer or two James and I sifted through a signficant number of applications and chose 4 companies that were clearly up to the challenge. These included Thoughtspeed ( - a ecommerce health application, IDAlerts ( - an identity theft protection company, Refined Data ( - a risk management software system and Real Tech ( - water quality test instrumentation. Each company was given 6 minutes to present their unique story and another 6 minutes to answer questions from the panel and audience. The panelists were then asked to provide their constructive feedback to each of the presentors. In a stroke of innovative genius, Radi and Sharon found some SMS voting software and with a little help we were able to have the sold out audience vote the company that they were most likely to invest their own money into.
The winning company was Real Tech represented by their CEO Jodi Glover. Congradulations to all of the presenting companies and to the audience for their support and appreciation. The event was such a success that James and I are already scheduling the next visit to the Pub to plot the next version - I am thinking something like: "...Ontario's Got Innovation Talent..."

What do you think?

"Is there anyone out there....?"

Having recently done some maintenance on my Ipod, I was reminded about one of my favourite Pink Floyd songs that contained the phrase: "..... Is there anyone out there...". For those that know me well I have spent the past 2.5 years trying to increase my Significant Impact. I have done this by focusing more on Not-For-Profit work, increasing my level of Coaching and Mentoring and spreading the word about Good Governance, Climate Change and Sustainability. Encouraged by colleagues such as Gordo, Pinky and the 'Dag, I have been long overdue in establishing a Blog to support these efforts.

Late last year I signed up to be an Entrepreneur in Residence (EIR) within the Ontario Commercialization Network. This network includes many well known brands including MaRS (, Communitech, Tech Alliance, ISCM, OCRI, OCETA and BioEnterprise. Most of my EIR is centred in Peel, Halton, Hamilton and occasionally in Toronto. I initiate my work from the RIC-Centre ( in Missisauga. This brand is emerging as one of the key resources in the commercialization network. Supported by the Ministry of Reaserch and Innovation (MRI), the Brampton / Caledon / Mississauga Board of Trades and the University of Toronto Mississauga, we are helping young organizations "...Accelerate Their Time to Commercilization." The work is challenging, fulfilling and a ton of fun - especially if you can see the progress these companies are starting to make.

Consequently, I now have a steady and reliable feed of interesting and exciting stories about our Innovation Economy in southern Ontario. The time is ripe for me to get onto the computer and create a regular feed of information for my newly minted Blog. As a result of my 'slow off the mark' approach, I have some key catch up to do this month.

Once again, I ask the Question: ".... Is there anyone out there........?"