Whoever said “It’s lonely at the top,” may have been a CEO. That’s because chief executives and business owners can’t just confide in and ask for input from anyone.
CEOs are fearful of showing weakness and are loathe to admit they don’t have all the answers. Where can CEOs turn for advice?
In a Harvard Business Review case study called “Who Can Help the CEO” one of the answers was other CEOs. “Talking to other executives in a network of peers, especially if they’re in industries different from your own, often pays off. Not worrying about competitive issues can free you up to say, “These are the kinds of problems I’m having, and this is what I’m trying. What do you think?,” says Jaithirth (Jerry) Rao, a founder of two successful technology companies.
Peer Groups as Active Networks
Whether the network is formal or informal, "A CEO should always have an active network," says Stephen Socolof, founder and managing partner of New Venture Partners, adding, "It often doesn't work for a CEO to ask for guidance from an executive he or she works with. Usually, the relationships aren't well suited to it, and the colleague lacks the kind of knowledge the chief executive needs to tap into."
One of the principal reasons CEOs migrate to formal peer advisory groups is they are readily available, and most leaders don't have the time nor the patience to cultivate their own. That's what led CEO Ami Kassar, who had resisted a long-time urge to join a group because of the time commitment, to relent and eventually join a Vistage peer group. Writing on Inc.com, he says, “I committed myself to spend a day a month with a group of peers to work ‘on my business’ instead of ‘in my business.’”
For Mr. Kassar, his decision to join a peer group was validated when he received advice after a few months from fellow CEOs in noncompeting industries “That transformed how I think of messaging and marketing my company, and an entirely new product line.”
Peer Advisory Groups Aren't Just For CEOs
You don't have to be a CEO or business owner to benefit from the value of peer groups. There are groups available that serve the needs of senior executives and functional leaders such as operations, finance, HR, marketing, sales, and others.
Many CEOs, in fact, use peer groups to help groom executives for higher-level positions. CEO Brooke Lee of Minneapolis-based Anchor Paper is part of a Vistage peer group serving business owners and chief executives but asked her president and CFO to join what's called a Key group.
His involvement, says Brooke, has been a game changer. "Vistage strengthened Eugene's leadership skills and provided him with an extensive network of other strategy-minded and growth-focused executives," adding, "It's also benefited me and our overall business strategy."
How Peer Groups Operate
Peer advisory groups, says leadership development advisor Beth Miller, “Create an environment where individuals can find and give support, solve problems and achieve their goals among like-minded people who face similar challenges. Groups are an excellent way for senior leaders to grow without getting mired in company minutia and politics.” Some even describe peer groups as “safe havens” or their “personal advisory groups.”
Most groups have seven to 15 members in noncompeting industries and meet at least once per month from a few hours to a full day. With the Vistage model, members meet one day per month. Each month a select number of members present real-life business issues and request feedback on how to address or solve the problems.
Sometimes the feedback is brutally honest, but that's what members want. "It's not always things you want to hear. It's what people think you need to hear," says Vistage member and Denamico CEO Kristin Dennewill.
Steve Pulley, president of Alliance Benefit Group, jokingly refers to his peer group as his “month therapy group.” He cautions: “If you don't like being challenged, you're not going to make it in Vistage. You have to be open and willing to accept advice from anyone in your group.”
But the rewards are endless says Bob Hildreth, founder of IT consulting firm ESP, “I don’t feel like I’m alone in running my business anymore. I now have a network of people who know and care about my business—a board of directors of sorts.”
The benefits of peer advisory groups are too extensive to list them all in a single article. But one of the best ways to determine if it's right for you is to attend a meeting sometime. These "test drives" can tell you if a peer group is a good fit for your style.
Ready to learn more about Vistage Minnesota peer groups? Gain insights from actual members in our latest eBook, "What Makes a Great Leader."