For companies looking to scale, creating a board could be a helpful resource. Not only can boards assist in guiding businesses toward their goals, they can also help minimize potential issues that might come up. But when should a startup start building one? And what are some tips startups should know regarding the process?

Whether it’s deciding to implement a board of directors or an advisory board, most founders of growing businesses will need to consider setting up a resource to help guide them at some point in their journey.

According to Jim Hagemann Snabe, a board is especially useful when “organizational inhibitors and new complexities” arise for a startup.

Having worked with some of the world’s most well-known companies, Jim has a wealth of experience under his belt. Originally from Denmark, he was the co-CEO and board member of software group SAP. Today, Jim is the chairman of both Siemens and Maersk.

When a company grows beyond fifty employees, for instance, or goes from offering one product to multiple products, this can introduce “a new set of constraints or challenges that the founders haven't dealt with before,” Jim told Startup Guide.

[ Read also: Why we need startups, corporates and tech to shape a better future ]

Boards can, however, anticipate potential issues and even help to minimize them. Thus, creating one for your company can ensure you’re focused on what’s important: growing and making an impact faster than you otherwise would.

Jim’s role as Chairman involves helping management challenge assumptions, creating spaces that allow for experimentation and constant reinvention, and prioritizing the next wave of long-term success over short-term financial goals. In his view, the role of boards in corporations is slowly evolving.

“Traditionally, boards at established companies made sure that they were acting in a compliant way, reporting their earnings consistently and not taking too much risk. But I think that’s changing,” Jim says. He adds that there is an “increased focus” to help companies “reinvent themselves and develop new business models.”

At Siemens, for instance, there have been talks about selling kilowatt hours, even though the company has sold products like wind turbines in the past.

In an increasingly digital world, products are becoming the enabler of business, according to Jim. If startups find themselves in a situation where their business model is changing, this is when the support of a board would be valuable.

Jim emphasizes that if your board is to be beneficial to your startup, it needs to be composed in the right way. Rather than set up a board of people you know, such as your friends, it’s a good idea to find people who you believe your company can learn a thing or two from.

He suggests to “define a set of valuable capabilities and then look for people who have them – not the other way around.”

However, you should also consider the personalities of your board members. “Always make sure that personalities fit,” Jim says, “because at the end of the day, particularly in a startup, you have to work with people you like working with.”

Another of Jim’s tips is to avoid bureaucratic board meetings that dwell on the company’s successes, as this defeats the purpose of having a board in the first place. He recommends spending less time reviewing the past and more time on the challenges of the future.

In board meetings, Jim suggests being brutally honest with each other. Discussing exactly what needs to be improved in the company is, in his view, an absolute priority.

Moreover, while not all startups need guidance from advisors – for example, when you have cofounders or teammates with lots of experience or who have succeeded with global companies before – Jim still thinks they’re worthwhile.

“Having different opinions will make you better,” he says. To Jim, boards are like an accelerator, as one of their key objectives is to help startups accelerate scale.

[ See also: The keys to Nordic startup success ]

For those thinking of founding a startup in the Nordics, Jim points out a few advantages which make it stand out from anywhere else in the world. Here, educational institutions are showing initiative and creativity and ensuring students are able to challenge assumptions and test new ideas.

The Nordic region is also home to a culture of early adopters, meaning it’s an ideal market to test things out. And from a market point of view, you can experiment within the region, unlike in countries like the US or China, where you might not survive even if you have the best ideas and chances to scale.

This article was originally published in Startup Guide Nordics in December 2018.

Main photo of startup accelerator Fast Track Malmo by Startup Guide

Taking risks and focusing on the details

But Jim’s approach to leadership doesn’t exactly align with what board members did in the past. “Traditionally, boards at established companies made sure that they were acting in a compliant way, reporting their earnings consistently and not taking too much risk,” Jim says. “New boards, however, ask themselves how they can ensure large companies are constantly reinventing themselves and are open to experimentation.”

A key aspect to Jim’s role as Chairman involves aiming for the next wave of success and prioritizing this over short term financial goals. He supports management when it comes to challenging assumptions and creating spaces in their companies that allow for innovation.

In Dreams and Details, a book Jim co-authored last year about how leaders need to think differently about leadership in light of a disruptive, digital future, he argues large companies should take risks from a position of financial strength. “They need to take these risks when things are going really well rather than when they’re in trouble – by then it might be too late,” Jim says.

In the context of startups, he explains, the fundamental principle of the book still fits: “big things happen when you have a big dream and purpose that can inspire people to unleash their full potential.” In other words, thinking about what your startup can become and what kind of impact you’ll have will go much farther than thinking about how you can sell a product out of your great idea.

The biggest advice Jim says he has for entrepreneurs is to “dream big dreams and care about the details that matter the most.” He adds that the startups which managed to scale globally were founded by entrepreneurs who were obsessed with the few details that really mattered.

Take Steve Jobs, for instance. User experience was one thing he’d spend obscene amounts of time on because he knew it was a key differentiator for Apple, Jim says. So spend a third of your time on each of the two or three things you insist on, because if you don’t “your dream will remain a dream.”

Luck, opportunities and creativity

With regards to his rich career, Jim insists it was “a journey of luck” to have been part of a successful company like SAP which gives its employees plenty of opportunities. “Don’t underestimate the importance of luck,” he says. After starting as a trainee at SAP in 1990, he took on more and more responsibilities and was still quite young when he began in a leadership role.

“My philosophy has always been to make sure someone else can do what you do,” he says. “Train them really well so that you are no longer needed and you can move on and learn new things. Because if you're the only one who knows how to do your current task, the likelihood you’ll be asked to do something else is slim.”

Another aspect to the changing world of work is that it’s brought with it new challenges particularly for young people. “Opportunities don’t come if we assume that you need to be employed by a big company,” he says. Although there’s nothing wrong with this, “it’s equally important that young people create their own opportunities.”

At Maersk headquarters, efforts are being made to attract younger people, including the recent opening up of a new digital innovation department leveraging AI and design thinking. The colleagues who work there actually sit in the offices where the oil business used to be, Jim explains. He believes in the future, the most valuable ‘oil’ will be human creativity.

Meanwhile, there have been talks at Siemens about selling kilowatt hours, even though the company has long since sold products like wind turbines. In a digital world, products are increasingly becoming the enabler of business, Jim says. “What’s valuable is not the product, but the impact the product has.”

But in order to be truly innovative, a business needs to have impact through scale, he insists. It’s therefore not enough for a startup to have a cool, creative idea. With the support of corporates, startups can scale and their great ideas can get out there. And along with the creation of businesses that address problems in the world that need solving, according to Jim, the future might just look brighter for us all.

See also: 'If you want to make a positive impact in the world, start a for-profit social enterprise'

All photo: Startup Guide

*This article was originally published on October 17th, 2018 and updated on December 11th, 2018.