For CEOs Only
A CEO peer group can be an invaluable learning and networking experience, but a waste of time if it doesn't fit a CEO's specific needs. Here's what to consider before joining a group.
Published March 1998
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How to find a CEO peer group that's worth your time--and money
In January 1997, Geri Johnson was grappling with the most difficult decision of her 20-year career as CEO of Johnson Oil, in Prineville, Oreg. Should she incur significant debt to bring her company into compliance with new federal regulations, or take on a partner--or simply sell out? Johnson, a 60-year-old self-described workaholic, longed to discuss her options with others in an atmosphere of candor and confidentiality. She found that in a CEO-only discussion group to which she belongs. Within six months, Johnson recalls other business owners in the group had "helped me separate the emotional from the practical." Once she had that clarity, she realized it was time to sell the petroleum-products-distribution company, which had revenues of more than $5 million.
Unfortunately, not all CEO discussion groups are created equal. Two years ago Craig Moreland joined a CEO peer group in hopes of finding insight and expertise that could help him grow his company. "Most of the people in my group were focused on daily firefighting rather than being strategic," laments Moreland, whose $2-million company, Coast Label, manufactures custom labels and tags in Newport Beach, Calif. "We were covering a lot of remedial things, like financial statements." Moreland spent a year in that group before switching to another, more sophisticated one. He had learned an important lesson: the wrong peer group can be a waste of time.
Until recently, a few large organizations, like TEC/the Executive Committee and Young Presidents' Organization (YPO), dominated the market for CEO-only discussion groups. Their annual fees were high (TEC charges up to $8,700), and their waiting lists were often long. But as demand has burgeoned, so has the number of smaller regional companies that assemble and facilitate peer-group gatherings. However, as Moreland discovered, it pays to shop carefully. Keep in mind that the most successful peer groups generally--
Attract Varied Expertise. Look for groups that offer a broad cross section of skills and strengths. Nancy Hanson, president of Roxbury Mills, a 48-employee knitting mill in Queens, N.Y., belongs to a Women Presidents' Organization peer group that includes not only other manufacturers but also an architect, a designer, and the head of an advertising agency. "It's like an advisory group that helps me gain a different perspective," says Hanson. She is currently devising a new marketing strategy to sell a custom product through an 800 number--a plan that requires the kind of expertise she probably wouldn't find in a room full of manufacturers.
In industries in which most companies do business only locally, peer-group diversity can be geographical. Peter Schrader belonged to such a group of construction companies for eight years and declares that Schrader & Co., his $1.2-million remodeling company, "is far stronger and my skills are far more advanced than they would ever be without that network." Through his group, Schrader, situated in Burnt Hills, N.Y., found a mentor in California who showed him how to integrate design capability into his company.
Stay Small. Experts agree that 10 to 15 people is an ideal size for a CEO peer group. With more members than that, you may spend most of your time waiting to be heard. Find out exactly how many members are permitted in a group, and beware of organizations that justify larger numbers because "not everyone comes all the time." A peer group with a spotty attendance record won't develop an atmosphere of trust and won't provide you with a consistent sounding board.
Stress Confidentiality. "At every meeting, we ask if anyone knows of any breaches of confidentiality," says Keith Alper, president of Creative Producers Group and a member of a Young Entrepreneurs' Organization (YEO) peer group. Loose lips get you kicked out of his group. "It's a totally open forum to discuss anything," says Alper, whose corporate-communications company is based in St. Louis. "It's almost like a religious experience, and confidentiality is absolutely sacred." Sound extreme? Maybe so, but it's a way to remind members to be discreet. Some groups will even ask you to sign a confidentiality agreement.
Clearly Define "Peers." You may think of your peers as CEOs who run companies as big as yours or who are in related industries. But not all peer groups have the same definition. Ray Silverstein, president of President's Resource Organization, a network of peer groups in Chicago, says that he likes to "mix up industries" but generally groups companies by the number of employees. Other organizations might put small and large companies together.
