• 800-232-LOWE (5693)
  • info@lowe.org
  • 58220 Decatur Road, Cassopolis, MI 49031

The Power of Peer Networks, Part I

“The Power of Peer Networks, Part I”

‘Your choice of peer group will be a key determinant to success or failure in your life.’ — Colin Turner, "Born to Succeed" (Texere, 2001)

As a second-stage business owner, you face challenges every day. Should I fire this poor performer? Do I need outside investors? What’s the best way to renegotiate our lease? Even if you trust your gut and have a knack for making smart decisions, you might still lack information, experience or perspective. That’s where a peer network can help.

“Most entrepreneurs talk to their clients, employees and families when they need advice,” says Larry Kesslin, president of Let’s Talk Business Network in New York City. “Those are all really bad places to share your business challenges.”

That’s why Kesslin leads quarterly peer-collaboration sessions for business owners. Since he co-founded his company in 1994, he’s seen firsthand the benefits of assembling a group of second-stage business owners in a room and encouraging them to share ideas and solve each other’s problems.

A peer network consists of a small group of chief executives who meet regularly in a confidential, supportive environment under the direction of a seasoned facilitator. The group typically ranges from six to 14 participants who operate noncompeting businesses.

Unlike traditional networking, members of peer groups do not exchange leads or business referrals. They do not sell to each other.

Peer networks differ from venture-capital forums, where entrepreneurs pitch their companies to an audience of potential investors. Although business schools, universities and small-business development centers often sponsor such venture forums, peer networks are usually formed by organizations devoted to helping founders of companies gain wisdom and grow as leaders and problem solvers.

Peer networks are sometimes called peer-advisory boards, CEO roundtables, executive forums or mastermind groups. Most of them do not advertise or actively recruit new members; instead, they rely on word of mouth from participants who rave about the support, insight and direction they gain from sessions.

Maximizing benefits

A peer network produces a greater payoff if you’re humble and eager to learn. That means showing up at meetings ready to receive knowledge and relate your experiences about running a fast-growth business. Individuals who think they have all the answers, lack the patience to listen or judge too quickly will derive less value from their peers’ comments.

A good facilitator will instruct everyone to speak in team-oriented language. Business owners may not like what they hear when others criticize their plans or urge them to do something they’d rather not, such as terminate a poor performer. But if harsh suggestions are communicated in positive terms, participants can accept advice without fighting back.

Continue to Part II

CEOs Making it Happen: Peer Networking

You get what you give

Ross Friedman“Small businesses like mine don’t have the ability to assemble a formal board of directors that provides a voice of reason — a sounding board to help a CEO make decisions,” says Ross Friedman, CEO of Windward Builders Inc., a custom-home builder in Lake Forest, Ill. “I use PRO (President’s Resource Organization) as an ad hoc board of directors. All of us in the group face the same issues, from staffing to insurance to HR, even if we’re in different businesses.”

PRO is a Chicago-based advisory network for small, fastgrowth businesses, and Friedman has attended its monthly peergroup meetings for 10 years. “We share our problems, successes and failures in a confidential manner,” says Friedman. “It’s a great way to bring new perspectives to your business. But you have to be willing to speak up in meetings and share issues you face. If you sit back and expect everyone else to do all the work, you won’t get much out of it,” he explains.

Over the years, PRO has taught Friedman how to brand his business and that he can’t be everything to everyone. “You have to focus on a niche, work your company’s strengths and walk away from business that falls outside of your strengths,” Friedman says. “That’s hard to do when you’ve got lots of overhead and various promising opportunities in front of you.” The strategy has worked. In the past year Windward’s sales have doubled.

Big-picture expertise

Dan Tissembaum"I get at least one nugget of information I can use in every peer meeting, from dealing with managerial problems to cashflow management," says Dan Tissembaum, founder and president of Penguin Entertainment, a disc-jockey service in Austin, Texas.

"More than that, though, is the way we focus on things we might otherwise ignore. For me, a peer group is about not getting caught in the day-to-day operations of the business so you can look at the big picture," Tissembaum adds.

Tissembaum started attending a monthly peer network in early 2001. Today he’s hooked. His group — composed of about six CEOs — meets through the Business Success Center.

Tissembaum devotes about three hours a month to his peer group, and he believes that the time away from the office is well worth it.

In the past 18 months, he’s struggled to develop a clear positioning strategy. Tissembaum presented his marketing materials to his peer group and received a thorough critique.

"In one meeting, I presented a concept for a 12-page brochure and got hammered," he observes. "It was a heated discussion and forced me to think of the benefits of the brochure."

In-house peer concept

Shannon RogersPeer networking isn’t just for executives. "With the proper facilitator, it’s a tool for everyone in an organization," says Shannon Rogers, founder of Progressive Technology Inc. in Rocklin, Calif.

Rogers founded Progressive Technology in 1988, and annual sales reached $1 million in 1991. In 1997 Rogers joined the Renaissance Executive Forum (REF), and four years later revenues increased to $3 million. Today he runs a trio of businesses that generate $5 million in revenues.

Three years ago Rogers asked his REF facilitator to lead a session for the 30 employees of Progressive Technology. The facilitator asked the group questions such as, "Who are your competitors?" and "What do you do best and worst?"

In response, the group came up with a variety of ideas that included revising the employee manual and launching preventative-maintenance and quality programs. With each idea, the facilitator assigned responsibility by saying, "OK, who wants to be in charge of that?"

The brainstorming proved a success, and results came quickly: The next month, Progressive Technology’s monthly sales increased by about 65%.

"When I first got into REF, I remember another new member saying that the cost (about $400 a month) was too expensive," recalls Rogers. "I saw it differently. I figured I was buying access to information I couldn’t buy anywhere else.

"I’ve never trusted consultants — they’ll tell you what you want to hear," Rogers adds. "But with my group, you’ve got 10 or 15 people giving you information every month about their industries and challenges."