Directors and Advisors

Many university researchers have extensive experience managing relatively complex research projects or running research laboratories. While this may provide some individuals with enough experience to successfully manage a start-up company, most often an inventor's business skills are insufficient for the world of commerce.

In an academic setting, the researcher essentially occupies the position of 'research director,' while the university provides infrastructure support such as bookkeeping, purchasing, payroll, facilities management, library services and more.

In the commercial world, the business manager (entrepreneur, Chief Executive Officer (CEO), Chief Operating Officer (COO):) must create the infrastructure and face many issues specific to the establishment and development of a new company. Assembling a team of qualified professionals with the necessary busin ess skills at the appropriate time will allow the researcher to continue, in the vast majority of cases, in a capacity that capitalizes on their greatest strengths - research. Blending research and commercial business requires integration of a diverse professional skill set.

An 'A-team' with a 'B-technology' is much more likely to succeed, than a 'B-team' with an 'A-technology.'

Technical Skills
As the inventor of the technology you will likely provide the technical skills for the new organization. While you understand the current technology and its potential, you may need to hire other people (scientists, engineers, technicians:) to handle incremental or new technical developments important to the future growth of the company. You may find your skills are best applied elsewhere in the company, possibly in management, research and design (R&D), or marketing. If this is the case, you may need to train a replacement lead technical advisor.

Management Skills
Each person has his or her own set of proficiencies. A variety of skills are necessary to ensure any enterprise succeeds. If you hire the right people, your personal limitations won't be limitations for the organization.

Researcher: It is not necessary, and sometimes, not desirable for the researcher to take on management functions. With the right team of managers and technicians, you can remain a researcher if you choose.

Entrepreneur: The entrepreneur plays a vital role in the start-up. The entrepreneur's enthusiasm and commitment encourage others to get involved with the enterprise. Investors and hired management want to see a high level of financial and/or time commitment from the entrepreneur before they sign on.

Hired Management: Managers must be hired, if not initially, then later as the company grows. Finding the right management with the right mix of skills will be critical to a company's success.

Pay Administration
Once you have identified the types of skills you will need to hire for it is important to set up a Pay Administration to enable you to control your personnel costs, while increasing moral of your staff, which will ultimately reduce employee turnover. In summary Pay Administration includes defining the jobs, evaluating the jobs, pricing the jobs, installing the plan, communicating the plan with your employees, and appraising employee performance.

See the document Setting Up a Pay System (.doc) for more details on how you can plan and implement this a Pay Administration.

Board of Directors
Management answers to the Board of Directors. Shareholders elect the Board of Directors. As a result, the board's primary job is to ensure shareholders' interests are duly considered in business operations. The Board of Directors is responsible for ensuring that the managers stay on track, pursue the goals and vision outlined in the business plan, and assist management in developing business strategies that respond to the changing business environment.

FINDING GOOD ADVISORS Interview as many people as possible. Take your time. Get advice from friends and others in the industry. A good advisor will have a good reputation. Ideally, your professional advisor will not only understand your business, but specialize in it (then you won't be paying for their time as they research relevant issues). With the right advisors, you can tap into their networks for future contacts. It may end up costing more per hour, but good advice is worth much more than it costs.

As with management, achieving the optimal mix of proficiencies among directors is key. Ideally, the board will consist of people with expertise in the areas of marketing, product development, finance and human resources management. Investors will likely want a seat on the Board.

By law, being a director of a corporation carries certain liabilities, generally referred to as the ABC's of a business (Workers Compensation Board (WCB), Employment Insurance (EI), pension, etc). If the company doesn't pay these expenses, directors can be held personally liable. Some people may be hesitant to accept the role of a director unless the corporation carries indemnity insurance.

Advisory Board
An Advisory Board is a group of people who volunteer their time to provide advice to a company. Advisory boards are informal and members carry no statutory liability for participating in the company. While the creation of an advisory board isn't a legal requirement for a start-up company, it is a good way to gain valuable advice from knowledgeable people. Depending on the needs of the company, various scientific, business or other advisory boards can be created.

Professional Assistance
Nobody can do it all, so it's important to have access to professional advisors such as lawyers, accountants, consultants, an insurance agent, bankers, a patent agent and a business plan writer. Securing good advisors can be the key to success.

For more information on management skills see Management Fundamentals (within Module on Managing a Growing Business)

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