The value of board members from outside your industry cannot be understated – here’s why.
By Martin Rowinski
October 24, 2022
Opinions expressed by Entrepreneur contributors are their own.
Few individuals are experts in everything. Even the cumulative expertise in most businesses could use input from more experts in diverse areas. This is why we have boards — a panel of experts in areas that fill in the gaps in our existing company knowledge base.
But even once we find the right group of experts from our industry to take a seat on our board, we would still stand to benefit from the wisdom of more diverse perspectives and experiences. Their range of successes and failures becomes additional resources to put together more tried and tested strategies in the face of new challenges.
Outside experts bring more perspectives
Most companies (and boards, for that matter) still lack insight from people outside their industry. In 2014, less than 5 percent of middle-market companies had an established board or advisory board, and most of those who did put family, friends and internal management into those roles. But the perfect marketing expert for a company could be someone from outside that company. Their experience could even be from outside of that company’s industry, but their new point of view might be exactly what the company needs to get its brand to the right audience. Their unbiased eyes can catch more company inefficiencies, see greater opportunities and ideate more innovative strategies.
This is also why diversity in race, gender, age and socioeconomic backgrounds drives innovation. Looking to outside board members to fill talent gaps opens up a larger pool for inclusivity. A 2020 Deloitte study found women held under 23 percent of board seats among Fortune 500 companies, and minority men, only 12 percent. But adding these points of view to a company’s leadership paints a complete picture of that company’s role in commerce and broader society. With this diversity of perspectives on our board, we position our company to be more innovative than most of our competition, still strategizing without them.
Look for strategic, outside-the-box thinkers
Besides looking outside your industry and broadening diversity, two main attributes indicate a high-quality outside board member: a strategic mind and outside-the-box thinking. Elon Musk is an excellent example of someone who demonstrates both qualities. His endeavors range from electric cars to solar energy to a space exploration company that competes with NASA — his outside-the-box mind saw the connections between these diverse fields, and his strategic mind allowed him to apply his successful experiences from one to another.
Of course, someone with both would be ideal, but someone with either quality will drive any company in the right direction. Strategic thinkers analyze several variables when creating plans for achieving goals and generating new ideas. They stay on top of new opportunities while considering vulnerabilities. To do this, they ask many questions, welcome feedback and self-reflect. They gather all the information before making decisions to make them decisively. With a strategic mind, even someone outside a company’s industry could still see how their skill set could be translated into a new field.
Most of us unknowingly follow some form of old ideas born out of antiquated lines of thinking, but outside-the-box thinkers easily step outside of those boundaries. They imagine radical new possibilities, question the status quo and stretch the boundaries of what’s achievable. Rather than fearing change, they embrace it as a new opportunity. An outside-the-box thinker will be able to see how their perspective and experience in other industries is advantageous to strategizing and innovating in a new one.
When it’s worth the risk, despite no industry experience
If you find a strategic or outside-the-box thinker, the next step is determining if they are suitable for your board, especially when they have no experience in your industry. If your company plans to do mergers and acquisitions, bring a person outside your industry with expertise in mergers and acquisitions. If you want to take your company public, find an outside expert in going public. If you can find someone who has already done what your company needs to do in several industries, this is an excellent indicator of their flexibility to step in and excel in yours.
Then, try to draw out those valuable skills that translate across all industries: strategy and innovative thinking. Get to know their strategic mind. Ask about their area of expertise and if they have a strategic plan for growth and improvement. Reveal outside-the-box thinkers by getting them to elaborate on how their skill sets apply to your industry. When you find the right people with the skill sets your company needs and the ability to pull ideas from different industries, this outside board member can be a key player in driving your company’s success.
Source: Entrepreneur
