In an age of rapid change, more and more CEOs are turning to one another to help solve their companies' problems.
WHEN ERIC LESIN SET ABOUT building a proper foundation under his young company, he started with a problem in geography and wound up with a problem in geometry.
Lesin, founder and chief executive officer of Cipherlink Corp., in Los Angeles, returned to the United States in 1983 after a six-year stint in Venezuela with a division of Exxon Corp. A loner by nature, he had been far from home during the formative years of California's high-technology establishment and thus knew none of the local players -- nor did he have access to any of their collective expertise. What ties he did have to the high-tech infrastructure were through the venture capitalists on his board of directors, and they were often more a source of anxiety than a vehicle for acclimation. When serious questions about Cipherlink's marketing strategy arose a year later, Lesin found himself feeling more isolated than ever.
At roughly the same time, Lesin was persuaded to join a CEOs-only high-tech network just starting up in the Los Angeles/Orange County area. Known as the Southern California Technology Executives' Network, or SoCalTEN, the group offers data research, market information, and, as its centerpiece, a lineup of small affinity groups in which 12 to 15 CEOs can bounce one another's problems around a table in strictest confidence. Scores of CEOs were signing up. Conceived as a response to the kind of informal, highly dynamic information-exchange that goes on all the time in the restaurants and health clubs of Silicon Valley, SoCalTEN was part of a broad spectrum of formal support groups that have been springing up in recent years. As networks go, it was an elite model -- exclusive, expensive, industry-specific -- and, judging by its quick popularity, a good sell.
This is not to say that Lesin joined his roundtable group with no reservations. Like most growth-company CEOs, he had little time for idle socializing; one full day a month out of his working schedule was a sacrifice of no small proportion. At $3,000 a year, dues were not cheap, either. Perhaps most significantly, thanks to a seminar in board management, his sense of estrangement from his own directors had begun to wane by the time the group got going.
Still, despite the improvement, Lesin was beginning to realize that no matter how professionally managed and generously supportive, Cipherlink's board would never dig too deep for the unvarnished truth. They couldn't.It was geometrically impossible.
"The old pyramid drawing is not how things work in the real world," Lesin explains."It's really more like a great big ball, with the CEO sitting in the middle of it, surrounded by his various constituencies: shareholders, employees, customers, and so on. Each constituency wants to see something different in the CEO. What absolutely none of them wants to see is indecisiveness. You cannot walk into a board meeting and say, 'Hey guys, I have no idea how to sell our main product.' They'll start soliciting resumes for your job."
It was just such a situation, however, that he faced. Cipherlink's first product (a device that retrieves data from any application on any computer and loads it into any other computer, all without a programmer) was so different that it had no market competition. Without competition, there was no clear advertising or pricing strategy for the company to follow. "If the product's so good," Lesin kept hearing, "why isn't anyone buying it?" No good answer suggested itself.
Finally, Lesin took his concerns to his roundtable group. The group -- 14 other CEOs in such businesses as software, bubble memory, and fiber optics -- sat quietly at first as Lesin began walking them through the history. Ten minutes into the monologue, a colleague raised his hand and said, "Listen, Eric, I've been in the [electronics] business for 15 years, and I don't know what the hell you're talking about."
At that, the floodgates didn't so much swing open as explode.
"By the time it was over," says SoCalTEN assistant director Andy Paterson, who sat in on the session, "Eric was almost on the floor. I mean, if these guys couldn't figure his product out, what were his customers supposed to do?"
Lesin now credits that one afternoon with saving what might otherwise have been a failing operation. "We never changed the product," he says, "but we sure overhauled the marketing plan. Today, we advertise a front-end service to collect data and a back-end service [to input it]. Two different markets, both very profitable for us. Simple, right? It didn't seem so simple then."
Lesin's lesson extends far beyond the narrow framework of Cipherlink's marketing difficulties -- beyond, indeed, the broader issue of managing decisively in the cutthroat marketplace of high tech. In an age of information saturation, when managers can turn to any number of sources -- seminars, newsletters, books, trade associations, and yes, even magazines -- to cross-reference data or to find role models for problem solving, the evidence is mounting that the more enlightened executives turn mostly to one another.
The vehicles by which they do this take many forms. From CEOs-only clubs like SoCalTEN, with its focus on peer mentoring, to the laid-back boosterism of a Houston breakfast group emphasizing "lead exchanges" among member service companies; from the personals-column flavor of a Boston venture capital club to the extended Rolodex of Baltimore's National Alliance of Professional & Executive Women's Networks; from small-town greasy spoons to trendy urban health clubs; all over St. Louis (and down in New Orleans), networks and networkers seem to be finding more and more places -- and reasons -- to flourish these days.
