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In the face of global challenges such as new technologies, the COVID-19 pandemic, geopolitical tensions, and market volatility, organizations are increasingly turning to expert advisors to guide special project initiatives.
The traditional concept of an advisory board may seem outdated in today's digital age, but the demand for this form of governance is rapidly evolving.
According to the Advisory Board Centre's "State of the Market" study in 2021, the number of organizations globally using advisory boards as part of their governance structure has increased by 52% since 2019. This trend is expected to continue as organizations prioritize growth and require new strategies for sustainable growth.
While the classic advisory board is appointed for an indefinite period of time in many countries and has a broader range of tasks, the project advisory board has a limited duration of action from the start that is focused on a specific task.
One form of advisory board that is gaining popularity is the project advisory board. Unlike a classic advisory board, which has a broader range of tasks and may be appointed for an indefinite period, the project advisory board has a temporary duration focused on a specific task. These boards are typically engaged for 3 to 18 months to accompany market entry, supply chain management, crisis management, business model evaluation, or investment decisions.
Fit for purpose project advisory boards
The significant added value in the project advisory board for organizations can be seen primarily in the following two aspects:
Flexibility to fill internal gaps, master difficult tasks, and manage effectively from a risk & reward point of view
Far-sightedness can be temporarily integrated into the organization through external support with a wide range of skills, up-to-date knowledge, and relevant network contacts
The figures also show that these aspects are of interest to organizations from a wide variety of industries: 34% of the newly created advisory bodies are project-related — a strong indicator of the adaptability and effectiveness of this form of implementation.
Market or location-related advisory bodies are the most frequently chosen form of the advisory board in this context. The organizations primarily meet their needs for market experience, operational support, connections, and local good governance.
The value of project advisory boards lies in their ability to provide flexibility in filling internal gaps, effectively managing risk and reward, and temporarily integrating external expertise into the organization. Market or location-related advisory boards are the most commonly chosen form, providing organizations with market experience, operational support, connections, and good governance.
Determining which form of advisory board is best for a particular organization requires a clear understanding of its objectives and the influencing factors, such as the life cycle of the business model, market phase, growth strategy, and shareholder structure. Honesty about the current situation is key to making an informed decision and maximizing the added value that a project advisory board can provide.
As organizations face the challenges of an uncertain global landscape, the rise of project advisory boards offers a transformative approach to governance, providing expert guidance to overcome obstacles and achieve sustainable growth.
Mike Flache is an advisor and mentor, former entrepreneur and angel investor. Together with talented teams, he builds digital businesses worldwide. Onalytica’s analysts named him one of the top-10 global thought leaders in digital transformation. Mike helps high-tech innovators in Silicon Valley, Europe, and Asia grow and scale. Together with the Fundment team, he is currently building one of the next billion-dollar companies in financial technology. Mike is also a partner of Fortune 500 companies and technology vendors. He has worked with executives from companies such as the Silicon Valley Innovation Center, Google, Amazon, Huawei, and Mercedes-Benz.
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