All businesses are operated by people. You can run the models, secure more data, interrogate a search engine, create more slides, read more research. But the model is still the model, the data doesn't reason, and the machine is still the machine. None of these are as effective as your CEO, management team, and fellow board members’ minds and experience. Most of the answers you need to improve your business are there. Just ask. The first obligation of a director is care and duty to the company shareholders. The first desire, however, for being a board director is to help build a great company. Our team and our Edison Director Network members love the game of supporting a company by transferring operating experiences, contacts, ideas, and contributions to the CEO and team to grow and scale a successful business. As well, Edison accepts the reality of a limited attention span from a board member. We know that board directors secure most of their information and knowledge from monthly board calls, the quarterly board presentation, the quarterly board meeting, and the periodic conversations with the CEO and fellow board members. The Strategic Value of Questions So how do you maintain intensity and progressive intelligence, while meeting only four to six times a year? It’s not uncommon for the lion-share of board attention from a pattern recognition and newfound insights perspective to be on the P&L and balance sheet. While vital to absorb and understand, these are lagging indicators and do not foretell, frankly, much of anything other than more financial information extrapolated into the future. Progressive board director intelligence is developed through a building-block process of adding information and details into an existing frame of reference of the business. In addition to the financials, the core portions of the board deck invariably are Go to Market and Product related. These are highly important, but often do not build a connected, progressive intelligence quarter upon quarter. Often, once the annual plan is presented in Dec/Jan, that is shelved and onward we all go. There is an opportunity for the board of directors to add tremendous value and discipline to CEOs and management teams without spending an inordinate amount of time and effort with the company. How? The answers are in the questions. The process to speedy and scalable board director progressive intelligence is a disciplined cadence of relevant, recurring questions. It is a forcing function for speed, continuity, effectiveness, and, ultimately, more interdependent insight and decision-making among the board of directors. The difference often between success and failure is one more question, particularly if you ask the right question at the right time. What follows here are important questions that run the gamut on company operations and execution across all facets of business. The board of directors should meet and determine the process to build the right progressive intelligence cadence. Board members can assign themselves specific questions per domain, partner on questions, rotate, etc. Your executive sessions might begin with a 15-minute synchronization on the current answers to the recurring questions. Operational Questions During Executive Session Is the CEO performing as expected and according to the success criteria we established? Is the CEO’s focus between internal and external correct? Do we accept the reasons why the management team is missing budget? OR, do we understand the reasons why the management team exceeded budget? Does the CEO have a firm grasp of all the toggles on the balance sheet, particularly payables, receivables, and CF? You have heard the company pitch on vision, strategy, and opportunities. What do you think? Are we concerned about certain members of the management team, why and what are we doing about it? What do we think are the top risks (both corporate and operational) over the next 12 months? How can we help the company outside the boardroom? What are the top three opportunities to expand into adjacent markets and grow faster? What skill do we need in 18 months that we do not have now? Business Model Every business needs a plan. It needs a model. It needs a roadmap to get from the product to the customer, to get revenue in the bank and to do it all over again. The board of directors should challenge the CEO and management team to keep the following questions in mind: Can you explain this business in three sentences? What do you do (quickly)? Besides high-level sales metrics, how do you know your pricing structure and price point is working in the marketplace? Is there an opportunity to convert more to repeatable subscription revenue or will there always be “X” number of one-off services in your revenue? Are the incentives and goals to achieve your plan driving the right behavior? What can be improved? What are the most important and predictive metrics used to manage the business and measure its health and momentum? Have you tested the assumptions in the business model against historical trends? What are the macro trends that can disrupt or upend your business model? Who is currently winning in the market? What can you learn from the competition? What are the challenges and areas of need currently in the business? What are the 2-3 most significant internal and external risks for the business? How can you mitigate them? When times are good and you’re hitting/beating your plan, how do we keep the team accountable and not miss major flaws in the product and market? How do we make the business run leaner even if executing well? Can we do more with less? Core Financial Metrics Boards should be able to help guide company financials, and that process often starts with these questions: Are regular and systematic cost reviews in place to identify potential cost saving opportunities? Do you use internal ROIs on new initiatives – requiring functional leaders to be accountable to top-line or bottom-line improvements per initiative? Is there an ongoing process to monitor cost savings with regular reviews to assess impact and areas of improvement? Is a profitability analysis performed regularly across products, services, and customer segments? Are AR and AP reconciliations performed in a timely manner? What percent of AR is over 90 days old? How many months of cash do you have? Are you regularly conducting a cash flow analysis? Does the financial data support informed decision-making and strategic planning? Is the financial data lacking in quality or in need of a validation process? How can you reduce customer concentration? What story is your customer revenue trend telling about your product mix and concentration risks? What are the primary uses of existing debt? Is debt being used to fuel growth? If I was an outside financial sponsor looking at your numbers, what story would your data alone tell me (without your voiceover)? Product Value and Customer Voice Business execution can’t be any more of a “firing from the hip” process than anything else the board does to avoid costly errors and misfires. Board directors should use their operating experience to help the company connect the dots between the product they are selling and the end customer they are selling it to, asking questions like: What is justifiably unique or special about the product itself? How are you fortifying that moat deeper/broader? What is your reputation and place in your market? What do G2 and other marketplaces say about your business and/or product? Why do customers buy the product? What’s the #1 reason? Has that changed in the last year? (This answer should ideally correlate to solving PAIN for the buyer persona.) What is the product’s Net Promoter Score (NPS)? How is the product being used? Who is using it? What is your win/loss record? More importantly, what have the last 5 win/loss reports shown you? If sales are slow, how is the product contributing to that reality? When deals stall, what’s the most common reason? What is the pricing plan for future enhancements? Can the price be increased? Why are some customers choosing competitors? Why do others not renew? How are product enhancements and changes being addressed? When was the last time you shared the product roadmap with the whole organization? What is the split on the roadmap between building for competitive leadership versus building for customers? Sales and Marketing Even with perfect product-market fit, it’s rare that products sell themselves. The right customers need to know about the company and be able to buy when the time is right. For many growth-stage companies, this is where the directors can be most helpful, connecting their offering to those people who might want to pay for it. The following questions can help go to market teams stay on track: What were the top five deals sold last quarter and what was the deal size and term length? What is the total pipeline in volume and value entering this quarter? What was the mix of direct versus channel sales? What was the mix of new logo deals versus up/cross-selling to customers? How did channel sales track in terms of channel partner participation versus last quarter? In other words, how diversified is our indirect revenue source? What is the price (ARPA or ACV) trend for this quarter? What was the funnel conversion rate and funnel economics last quarter? What was CAC & CLTV (if SaaS)? How many salespeople reached quota this quarter? Did last quarter meet the quota assumptions? How many sellers are >100% this quarter? As growth-stage companies scale their operations, the role of the board becomes increasingly critical. By actively engaging in the refinement of business models, financial metrics, product strategies, and sales execution, the board is providing the strategic guidance needed to navigate complex market dynamics. Through thoughtful annual planning and ongoing collaboration with the executive team, the board will help drive sustainable growth and lasting success. However, if you aren’t being intentional and consistent with smart, relevant, challenging questions, then you are short-changing the value creation opportunity for your growth-stage company.
