Hiring Your First Advisors with Jenn Longnion

In this episode of Never Too Early, host Lauren Ipsen, Talent Partner at Decibel, dives into the vast and increasingly popular world of advisors. Lauren's guest, Jennifer Longnion shares her perspectives on the different roles an advisor can play, and how to choose the right person and structure for your business.

00:00 Introduction to 'Never Too Early' Series

00:20 Meet Jennifer Longnion: Seasoned People Leader

02:30 Question 1: What are the different roles an advisor can play? Lauren and Jenn discuss the different types of modern day advisor engagements and what structures work best for startups.

06:45 Question 2: What are the primary differences between an advisor, a fractional leader, an exec coach, a Board member or an EIR? Lauren and Jenn discuss when it makes sense to bring in an executive coach, versus a mentor versus a fractional leader and what a founder can expect for each of these engagements.

11:02 Question 3: How do I structure advisor compensation dependent on the type of engagement? Lauren and Jenn break down how a founder should be structuring compensation dependent on the role they are playing for the company.

14:06 Question 4: What does the role of an informal advisor look like relative to a formal advisor? Jenn pushes on the importance of flexibility as an advisor and how these roles can often be dynamic. She also talks about how to stay close to your founders to ensure they are still getting the help they need as the engagements change over time.

17:03 Question 5: When is the right time to bring on an advisor versus hiring someone full time? Jenn talks about how an advisor can be a great solution in the interim if you are not entirely sure what you might need in this function down the road.

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Transcript

LAUREN IPSEN: Welcome to Never Too Early, a YouTube series focused on unconventional talent insights for founders. I’m Lauren Ipsen, Talent Partner at Decibel. In each episode, we’ll cover the top five commonly asked questions that we get from founders building their organizations for the very first time. It’s never too early to learn from the best.

I’m super excited to introduce my guest today, Jennifer Longnion started her career as an organizational development leader with Best Buy, Motorola, and the Coca-Cola Company. She later joined Silicon Beach darling Dollar Shave Club at its prime as chief people officer before taking on the COO title; and then, most recently, taking the role of chief impact officer at Flexport. After three decades of leading in the hot seat, Jenn now focuses on scaling multiple ventures as CEO and founder of See & Free Consulting. Her clients have anointed her the “Org Whisperer” for her ability to walk into organizations at any stage, quickly assess the landscape, and implement transformational solutions on a dime.

So, with that being said, Jenn is one of the most qualified to answer the top five commonly asked questions that we get from founders hiring advisors for the very first time.

All right, Jenn, welcome to the show!

JENN LONGNION: Hi! How are you? So good to see you.

LAUREN IPSEN: I’m doing great. So good to see you too, and wonderful to have you here. Thank you for joining.

JENN LONGNION: Of course.

LAUREN IPSEN: All right. So I just walked listeners through your incredibly impressive professional background. But it would be really helpful if you could just give the guests something about you on a personal front.

JENN LONGNION: Yeah. For sure. I guess I bizarrely asked my wife what she thought was interesting about me on the personal front, and she said, “Nothing.” We’ve been together 26 years.

LAUREN IPSEN: Okay.

JENN LONGNION: Maybe that’s the most interesting thing. But I tell people all the time, she and I are still, after all these years, the first and last one on any dance floor at any party or event.

LAUREN IPSEN: Awe.

JENN LONGNION: So if you like to dance, come find us. We’ll always be there.

LAUREN IPSEN: Okay. I love it.

JENN LONGNION: Yeah.

LAUREN IPSEN: That’s awesome. And I’m going to out you, because I know that you mentioned this to me, but you wanted to be a DJ, it sounds like.

JENN LONGNION: I did. Yes. I still do. I dream about being – not just a DJ, but a club DJ.

LAUREN IPSEN: Absolutely.

JENN LONGNION: I want—yes. It’s got to be—I want to make people happy and see them dancing and enjoying themselves. And that is my passion. And so, someday. Just—just wait. Maybe. I’ll make it happen.

LAUREN IPSEN: Yeah. I’m ready. Okay. So we’re going to talk about advisors today. Over the past couple years—and I’m sure you’ve seen this too, Jenn, especially in your own business—but there’s been such a massive uptick in not only the demand for advisors from companies, but also, I think, more full-time operators are wanting to have a portfolio of work outside of their day job. It can really help you kind of keep a pulse on what’s happening in the market, help you feel like you have a good understanding of things that are trending in industry, and just keep you sharp while continuing to be fully occupied in a role. And so, this session is going to be specifically for founders, but really focused on advisors and the different roles in which they can play.

So, with that being said, first question for you. What are the different roles an advisor can play? What is the right time to engage one? And then how do I know who the right person is?

JENN LONGNION: Yeah. Yeah. So, I mean, I think different types of advisors. There really are. And it depends on your “why” for engaging an advisor. Sometimes it’s because there’s an expertise that somebody has that you don’t have. You need to round out your understanding, especially for founders. Many of them have never been employed, much less led massive organizations or grown companies.

And so, in some cases, it’s just what’s that know-how that I don’t have and that expertise that I need to supplement my brain, build my brain a little bit about what’s out there and what’s happening. Sometimes it’s specific industry kind of network opportunities. Connecting people to financial sources of income or investments. Sometimes it’s just listening to a pitch. You want people to give you feedback, but there’s people that have been there, done that, other founders who’ve lived the cycle, and they’ve had successful transactions.

Others, it’s about kind of how do I become a leader. It’s engaging an advisor on that front, which is how do I grow my own leadership skills, my own capabilities, and kind of up my game on that front. So there’s so many different ways that people engage advisors. And I tell people, maybe to overuse your—the title of your podcast. But it is never too early to do that, right?

LAUREN IPSEN: Ah.

JENN LONGNION: I think you—yeah, as long as you’ve got that “why” for yourself about what’s important to you, what do you want to achieve, what do you want to get from that advisor, that’s the most important thing.

And then you want to build your network. I mean, a lot of these entrepreneurial ventures rely on peoples’ networks and the ability to kind of lean on other people to help join you in your conviction to start a company and make something work. And so, the more people, the better, to kind of bring on and bring into the fold to help you do that, that are truly invested in your success.

You said, “How do I choose the right one?”

LAUREN IPSEN: Yeah.

JENN LONGNION: Oftentimes, people you know, know people. So there’s that. So if you don’t have the resources, but you have people you do trust in your—what I call kitchen cabinet, your confidantes, they will likely have networks. Don’t take that for granted. You’d be surprised just how many people are connected in the networks that you have. That’s one way. So really strong referrals.

If you’re working with venture capital, or private equity, or any sort of investment firms, they typically have a very good set of resources for you to access. Professional organizations. I hear a lot of people at YPO, for instance, as an example. If you come out of Y Combinator, an accelerator like that, you may also be able to leverage those networks. But they know who’s out there, right? And that’s a good source for you to access to find out, who can help me right now? And who’s the best? And who knows their stuff? And that’s really what you want.

LAUREN IPSEN: Super helpful. Talk to me a little bit about the difference between advisors, board members, exec coaches, execs-in-residence. There’s all these different titles, and obviously, slightly different roles that each of these individuals play. So help me break that down for our founders.

JENN LONGNION: Yeah, yeah. So advisors are exactly that—people that provide advice, right? And so, that can be an informal engagement, somebody that you just say, “I need your advice, mentorship, guidance.” And it can be formal. And often, they’ll agree to some sort of number of hours or some sort of engagement where it’s like, “Call me. Phone a friend.” I’m a phone a friend advisor for a few ventures. And I try to be clear, that’s how to engage me best, is when you need something, call me. So advisors can be a wide range and can be engaged in many different ways.

The board of directors is typically a group of people who bring certain skill sets to the table. Many times with founders, I find that they have their original investors on that board of directors because they have a very vested interest on getting a return in their investment, and they’ve done it before. A lot of them have gotten companies to scale and be successful. And so, they tend to be some of the early board of directors. But they’re there to help you make sure you’ve got a good, sound strategy, business proposition, help you fill out your team. Sometimes your leadership teams help you go get that network of other folks that can help you get the venture off the ground.

And so, I tell people, “Choose wisely, because those folks will probably be with you for a little while.” But you really want those people to help you provide the governance that you need to get your venture off the ground and your business moving forward. They really are key to making that happen.

Yeah. There’s other engagements called fractional leaders. That’s something I do a lot of. Typically, these are folks that come in on a part-time basis for an unspecified amount of time. Sometimes it’s just like, “We need you.” And oftentimes can be used to plug in—I tell people all the time, “I’m plug-in executive. That’s me.”

LAUREN IPSEN: I love it.

JENN LONGNION: Where you need—yeah, where you need leadership and don’t have it. Even if I don’t have the subject matter expertise, sometimes just having somebody that can be the grownup in the room or has kind of that leadership gravitas, credibility, and experience is necessary. Sometimes you want specific subject matter expertise, right?

LAUREN IPSEN: Yeah.

JENN LONGNION: So sometimes, you want to go after that. Either way, you will scope that role appropriately and say, “This is what we need.”

You mentioned execs-in-residence. There’s also a term called entrepreneurs in residence. But either way—sometimes, strangely, I have also been an exec-in-residence, but it was in an academic setting, because a lot of times, academia bring in execs-in-residence. And it’s somebody that’s got that kind of pragmatic business experience to bring to bear in academia. But in the business world, it’s oftentimes somebody that is either an operating partner or somebody that works closely with your investment firms or your investors. And oftentimes, it’s somebody that’s got professional experience. They have scaled companies. They’ve scaled ventures. They’re known and have credibility around that, and they have influence with those investments firms.

So they’ll either be used to do due diligence, to say, “Yeah, this person’s got it. They’ve got that thing that you want to invest in or you want to coach and nurture.” Sometimes they’ll come in and mentor the senior leadership teams and help them kind of navigate the trials of early startups. But either way, you can leverage them. And oftentimes, they’re there and they’re available, and that’s exactly what they’re expected to do. They just may be serving multiple portfolio companies for that firm. And so, that’s important to know as well.

LAUREN IPSEN: You did a really good job of articulating all of those different archetypes. Talk to me—

JENN LONGNION: Thanks. Yeah.

LAUREN IPSEN: It was a loaded question. Talk to me a little bit about the differences in which all of those individuals are compensated, and what the right structure is for each of those people.

JENN LONGNION: It’s different based on the engagement and maybe even the conditions of those engagements, right? Advisors often will expect—if they’re expecting payment, they’re saying it’s formal, they’ll want that in the form of cash compensation or equity of some sort. So it might be a certain number of retained hours, for instance. I do that a lot, where I say, “I’ll be available eight hours a month, and for this amount of money.” Or sometimes I say, “Yeah, I’ll just take equity,” right? Some people don’t want the money. And the reason they don’t want the money is they want to have flexibility with their time and their commitment, right? So just be—just know that. If you go after an informal advisor, know that that’s really under their conditions, right, because they want that flexibility.

Fractional leaders typically are going to come in on a retainer basis or a contract basis. They may say, “I’ll start with the first three months, six months.” It’s going to be a hefty price because you’re paying for somebody that’s got a lot of professional experience and probably has a good income of their own they’ve already earned. And they’ve done this for other companies or are doing this for other companies. And so, you’re going to pay more than you would pay for a full-time hire in those roles, but that’s okay if you know you need that expertise immediately to help you figure out what you’re going to need in the long-term.

One thing we didn’t talk about last time was exec coaches. So that’s another area too that a lot of people will engage. And people ask me a lot about coaching. There’s different models of coaching and different methodologies of coaching. And so, some people will engage on kind of an hourly basis for a certain number of sessions. I think, oftentimes, they’ll—let’s say I’ll be here for six months or 12 months. It also depends if they’re coaching multiple people within your organization or on your exec team, and if they’re doing group coaching. Because I do, for instance, co-founder coaching, where it’s multiple folks, especially if there’s more than one founder, and they need to get alignment, and they want coaching together, because they just want to learn to work together as a team, that’s going to be more from an hourly basis. But it’s still in an hourly engagement. And I say, “You get eight sessions or 10 sessions.” But that’s how you pay your coaches.

And an exec-in-residence, it depends. They might be compensated by the investment firm sometimes, because they’re wanting to really shape where they’re focused and make sure that they’re doing what they need. It’s more of a reciprocal relationship. Sometimes they’ll want a share of your company, right, as a part of being part of your growth trajectory. And so, just figuring out, kind of, again, why they’re involved and under what circumstances, that’ll help guide you towards how to engage them and compensate them.

LAUREN IPSEN: Awesome. Okay. So we talked a little bit about this. And you mentioned that you’re an informal advisor to a couple of companies right now.

JENN LONGNION: Yeah.

LAUREN IPSEN: What are the primary differences between engaging an informal advisor and a formal advisor?

JENN LONGNION: On the informal side, oftentimes, those come to me in the form of a referral. Somebody has referred somebody to me. And it’s because I have a certain expertise area or an industry expertise that they’re wanting to tap into, because the founder is starting a company in that arena, and they just want to know, what’s—how do I navigate this? If I want to go into COG, or if I want to go into direct-to-consumer, how do I get in there? Who are those people? How do I connect with them? Because those inevitably will be their clients or their customers.

And so, you’re going after an informal advisor usually just for an initial kind of “tell me a little bit about,” right? Those are how those conversations usually start. And I will sit down with anyone, which is a problem, because I don’t always think about, “Oh, I don’t have time for this.” But I get so excited about these new ventures.

So that’s the informal side of it. Formal advising sometimes can come—like you said, that can emerge from starting as an informal advisor, where you go from “I got a question to you,” to “Would you be on our board of directors?” or “Would you be a formal advisor for me, right, on a retained basis?” But a lot of times, you want to male sure before you engage that person in a formal way, that they will give you the time and the energy that you need from them. And then be really clear what you need from them, right, in that situation.

LAUREN IPSEN: Yeah. Well, and something that I talk to a lot of folks about that are hoping to do more advisory work is that a lot of those informal conversations are ultimately what get you to be brought into the fold as a more formal advisor, right? Which is a lot of what you were just alluding to. People want to build rapport and credibility before allowing you to just have skin in the game. And, assuming that your resume is worth it, right? So I think it takes some time to build that trust.

JENN LONGNION: It does.

LAUREN IPSEN: And then those formal advisor-type engagements come to be. But I think it’s really smart for operators to just be open-minded to taking the calls. It’s going to make you sharper. It’s going to make you have a better pulse on what’s happening in market. And then it might lead to more of a formal advisory engagement or a potential board seat down the road, right? And that’s how these things happen. It’s more organic relationship-building at the start.

JENN LONGNION: It really is. It really is. And those relationships are critical, right? For everyone, both the advisor and the founder. Yeah.

LAUREN IPSEN: My final question for you is around when to bring in an advisor or someone in a fractional capacity, versus when to know to just hire someone full-time. And then if you could walk us through kind of pros and cons to both, and would it make sense to do this, that would be helpful.

JENN LONGNION: Yeah, for sure. I mean, I kind of break it down to, like, if you know—if you don’t know what you need—you know that kind of approximately, I’ve got a challenge, I’ve got an issue, I’ve got a need. But I don’t know exactly what I need. And maybe I need somebody to help inform that, right? What’s the right resource to go after? That’s an advisor. Just call and get some advice, because somebody’s probably had that need before as well, or they are the person that can solve for that. If you know what you need, but you don’t know for how long—you don’t know if you can afford it, right?

You know, it’s like, I need this expertise. I need these kind of financial, this financial analysis, or whatever the case may be. I know I need a strong CFO partner, but I’m not ready to commit to that. I don’t know exactly what the scope of that role will be over time—then that’s when you go after fractional leadership. That’s the perfect opportunity to bring in somebody for a period of time that’s just done it before. And they can tell you what you need, but they can also probably help you find who you need for the role.

If you know what you need, and you know you’re ready for that partner, that person that’s going to jump into this crazy, chaotic joyride that you’re on, and somebody that you want to build a trusted partnership with that you’re willing to share in the company’s growth with, right, because you’re about to probably give equity to that person to join you, that’s full-time hire. That’s when you bring more people onto your leadership team, and you say, “We’re in this together.”

LAUREN IPSEN: Yeah.

JENN LONGNION: But that’s when you know. And I tell people, on average—just because I don’t like to make investments in people unless I’m willing to make a commitment to them. So I say, usually, if you can see yourself 18 to 24 months from now, working with that person, right, that’s how you know it’s time to hire.

LAUREN IPSEN: Yeah.

JENN LONGNION: You need the role. You need the person. You want that talent in place. That’s how you know. And that’s how you want to bring them in.

LAUREN IPSEN: Yeah. Well, and sometimes these advisory engagements start as, really, trying to build rapport and creating a beneficial dynamic on both sides. And then over time, if you’re working with them 18 months from now, then maybe the company’s at a different stage, where they could benefit from this person in a full-time capacity. And now that individual already knows the inner workings of the business. They already have rapport and credibility. And so, they can kind of just hit the ground running in a totally different way, right?

So it can be mutually beneficial, I think, to start in that type of role if you’re not sure what you need in a full-time hire, right?

JENN LONGNION: Yes, absolutely.

LAUREN IPSEN: Well, I can’t thank you enough for coming on the show, sharing your wisdom and insights. I think this one is so incredibly topical and comes up all the time. And you are the perfect person to walk us through it. So thank you so much. And thank you all for tuning into Never Too Early. More to come soon.