“The Power of Peer Networks, Part II”

Continued from Part I

Speaking the lingo

In most peer networks, questions dominate the discussion. Thoughtful inquiries lead individuals to rethink their assumptions and examine issues with fresh eyes. Expect to be asked questions such as:

• Why do you say that?
• To what extent do you truly believe that?
• What’s really at stake here?

Peers also learn to frame comments diplomatically:

Why peer networks work

A recent study in the British Journal of Psychology found that sharing personal experiences with others is critical to handling change effectively. Reflecting on what you’ve learned and gaining insight from peers’ experiences broadens everyone’s perspective and prepares you for the ups and downs of building a business.

Founders of fast-growth companies often find that a peer group doubles as a strategy session and therapy. They collect tips and tools to manage professional challenges, but also gain emotional support and resolve to address personal issues.

For business owners who dislike consultants, peer groups offer an alternative. Unlike consultants who swoop in and tell a CEO what to do, peers listen and shed light on a situation by drawing upon their own experiences.

In fact, many consultants to fast-growth businesses have expanded their services in recent years to include peer groups. Wendell Smith, president of the Executive Resource Center, a Sacramento-based consulting firm, decided in 2000 that three of his clients needed a platform to discuss business issues with their peers. So he gathered eight other entrepreneurs and launched monthly “mastermind meetings.” He now hosts three peer groups.

Time well spent

Busy CEOs often question whether they can find the time to attend monthly peer-network meetings. Many groups expect members to show up regularly, and those with spotty attendance are sometimes asked to leave.

Terri Levine, an executive coach in North Wales, Pa., prefers to host “virtual peer groups.” She leads one-hour phone meetings with about 10 to 15 executives (about half are founders of second-stage companies) once or twice a month. “Not only is it easier on them to call in via our ‘phone bridge’ line, but people really pay attention and don’t get distracted this way,” says Levine, founder of Comprehensive Coaching U. “By phone, there’s no negative body language. It’s less threatening.”

Levine used to facilitate peer networks in person, but found that attendees were reluctant to open up, so she launched the phone sessions in 2000. Now participants need little prompting to discuss the issues they face.

Indeed, many business owners compare peer networking to getting an MBA, having an informal board of directors or assembling a team of mentors who care about them and their success.

Writer: Morey Stettner, a management writer and trainer in Portsmouth, N.H., is author of “Skills for New Managers” (McGraw-Hill, 2000). stettner@attbi.com

CEOs Making it Happen: Peer Networking

Finding new truths

“What makes my peer group so valuable is it challenges my assumptions,” says Mercia Tapping, founder of Allergy Buyers Club in Newtonville, Mass. “A few years ago it was a built-in truth that the goal of a fast-growing company like mine was to sell at a certain point rather than keep on building. But my peers would ask, ‘Is that what you want to do?’ and ‘Do you need the headache of outside investors?’ Those kinds of questions got me to rethink my assumptions.”

In 1997 Tapping launched her company, an online community for individuals with allergies. Her company’s gross revenues grew 400% last year, and her Web site (www.allergybuyersclub.com) attracted 500,000 independent visitors in 2001. She joined CEO Roundtable LLC in 1999 and also belongs to a group of women entrepreneurs.

Peer groups have given Tapping a lot of practical advice. For example, they helped her recognize when it was time to set up a finance department and invest in software tools that would beef up financial controls.

Generating great ideas

When someone defrauded Alex Von Allmen for thousands of dollars of calls to Kuwait, Afghanistan and Pakistan, he consulted his peer group, part of the Executive Resource Center.

“They gave me ways to handle it, from contacting my insurance company to going after the PBX manufacturer for reimbursement. These are steps I might not have thought about on my own,” says Von Allmen, co-founder and president of Logolab Inc. in Folsom, Calif. Logolab, a logo design firm, saw gross sales increase 31% in 2001.

“Every owner needs this kind of outlet,” adds Von Allmen. “In many cases, your staff isn’t qualified to go over these types of issues — or the issues you want to discuss involve them.”

Logolab is in the process of introducing a new design service, and Von Allmen was sure to ask for his peer group’s input, taking photographs and samples for them to review. He got ideas for pricing, distribution and even names. “Visuals allowed them to get a better idea of the service,” notes Von Allmen. “If you want the most complete feedback, bring visuals to the meeting.”

Rebounding from a low to reach a new high

Ames Adjai had hit a low point in his career when he joined TEC (The Executive Committee) in 2001. The Chicago-based business he co-founded in 1995, AWE Inc., was losing altitude and needed a lift. Today his technology strategic consulting firm is in a rebuilding phase as his peer group cheers him on.

“At first I resisted opening up in my group. They told me I was this smart, angry, defensive guy. Now they can’t believe the change in me. I’m much more relaxed,” Adjai says. “In order to move on, I had to let go. There’s a tendency to keep up old patterns, even when those patterns aren’t part of the solution, but TEC wouldn’t let me.”