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The Entrepreneurial Agenda by Robb Mandelbaum
Recent Entries
Inc.com Featured Blogs
January 8, 2008
Should I Join a Business Group?
Posted at 12:20 AM
I have been in numerous business groups over the years, and I've found it helpful to share problems, to share ideas, and to give and take suggestions and criticisms. When you work for someone else, you often have the opportunity to be mentored. But when you work for yourself, I find it's easy to feel tortured and alone. There are constant decisions to be made for which you may or may not have the appropriate expertise: value judgments, balancing responsibility to the company while being responsible to employees, difficult personnel issues, scary financial situations. Many of these things cannot be discussed wih employees -- either because they're involved in some way or because they, too, lack the expertise.
I started a new business about six years ago, that I ran for three years. It lost lots of money. I thought it was just a matter of time before it turned around. Had I been in a business group, I am confident they would have made me see the light. Unfortunately, the salesman part of me kept selling myself that I could fix it. I was delusional. It was an expensive mistake that I just might have avoided -- if I'd been sharing my experience with some other entrepreneurs. On the other hand, I've also seen situations where business owners have been emboldened by their colleagues in a business group to try to do things that they really weren't prepared to do. The consequences can be very, very serious. I've even seen it break up families.
Are you a member of a business group? Do you find it helpful?
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When you say "Business Group" what do you mean? Can you give a couple of examples?
I am a member of a business group called CHIEF EXECUTIVE BOARDS INTERNATIONAL their website is http://www.chiefexecutiveboards.com/. I have found them invaluable. I have been a member for several years and this group has helped my business grow 5 fold. There are people in my group that run businesses from $5-$300million dollars. You can’t get the kind of advice I get from anywhere else.
I'm talking about a group of business owners who get together on a monthly basis to discuss each others businesses. There are usually 8-12 people and they take turns hosting the meetings. They are advisory boards, not networking groups. There are some international groups that exist such as Vistage (formerly called The Executive Forum, or TEC), and YPO, Young Presidents Organization. The cost of joining a group is frequently in the $12,000 per year range, and can include an educational component. You could put together a group on your own, but it does require some work to keep it going; recruiting members and organizing. I have found that it is not as easy as it sounds.
Not all groups are as expensive. The Chief Executive Boards group (CEBI) costs me $650 quarterly. For that, I can attend a quarterly all day meeting with fellow entrepreneurs. They also hold two National Summits, included in their pricing, which enable me to meet with entrepreneurs from around the U.S. I joined because my management team told me I needed a Board. Once I became involved, I found the members to be brutally honest. Their feedback caused me to alter several things in my operation. My management team didn't like some of the changes, but I feel they were for the good of the company. Through CEBI I learned how to work "on my business," rather than "in my business." I sold my primary company several years back for a very healthy multiple of EBITDA. I truly believe that ideas from CEBI helped me and my team create some of the eventual value.
As a small business owner, I have found that:
1. groups whose members are in my field (marketing, PR) are amusing, but not terribly useful.
2. professional groups that customers belong to can be excellent sources of knowledge, but that's all.
3. groups of business owners/CEOs, such as CEBI (Chief Executive Boards) are golden, because they offer diversity of vantage point, have strict policies re: confidentialty and offer unrivaled opportunities to discuss ideas, challenges and "what ifs" in a relaxed setting, without risk.
Chief Executive Boards International http://www.chiefexecutiveboards.com is a group of CEOs and business owners like you're describing. Meeting less frequently keeps the cost to less than half of some other groups that meet monthly.
It's a great alternative to recruiting, paying and retaining your own personal advisory board -- that's difficult, expensive, and time consuming. Other business owners give it to you straight. Their only interest is in seeing you succeed.
Im a member of Vistage. One of the reason for the price of 900/month is that we get speakers 8 times/year and have a facilitator who has built and sold their own company. I have definitely gotten much more than that in value.
I'm a big fan and would recommend a CEO group to every small business owner who wants to grow their company.
With all the comments Inc. should do a story on these groups. It look very interesting and helpful. How do you forward this to Inc.?
Rhonda,
Good point. I will talk to Inc. There is a big difference between what groups cost, what they provide, the level of expertise the leadership has, and how much energy is put into matching the right people together to get the best results. The group is only going to be as good as the participants. One problem I have encountered is having Presidents join who are "nice", but don't have the ability to contribute. Being a President of a company is not like other "professions"; law, medicine, accounting etc. Those require a degree and training. Some Presidents fall into it. I have found some organizations to be unwilling to set a standard of contribution. "Moving them on" isn't pretty, isn't comfortable, and to some people isn't nice. If you don't, the quality of the experience is reduced, and the best people leave. Just like business.
I am a facilitator for The Alternative Board TAB in SW Florida and currently facilitate 3 TAB Boards. (When I owned my own INC 500 company I was a member of one of these Boards.After I sold my company I became a facilitator for TAB.) We meet on a monthly basis for a half day and discuss the problems and opportunities that each company is currently facing. We have owners of companies that have sold their company for a very high multiple as well as companies that have doubled in size each year.
I would like to see this written about more. WSJ radio talked about it a month ago. This would be a good article for Inc. to write about. I consider my board a key to my success. Let me know if I can help.
The Alternative Board (TAB) has more than 3,200 peer board members throughout North America and a location in S.A. The founder wrote a book, excerpted here by Inc. Magazine,
http://www.inc.com/articles/2006/07/fishman.html
that included stories about peer board members and the value they received from their peer board experience. TAB qualifies members for appropriate boards as well as qualifies, trains and certifies facilitators, so the quality of the board experience is high. Combined with a private coaching process designed specifically for entrepreneurs to achieve their vision of success strategically, the board & coaching combination is a powerful educational, operational and planning resource for any forward-thinking business owners who want to build a more profitable and valuable company.
I am interested in this. I would like to see what Inc. would write about this. I know it is best to learn by others mistakes I wonder if this would be a place to learn. This "CEBI" thing sounds great and affordable.
I have been a member of the Entreprenaur Organization for the last 7 years. Over 6,000 owners of over $1,000,000+ businesses world wide. One of the keys is peer to peer learning. A typical discription of the group by members is "life changing". It is a great group well worth the time and effort to be a member
I belong to a group, American Small Business Coalition, www.theasbc.org. It is a membership group that caters to small business marketing to the federal marketplace. The group is open to large businesses. Guy Timberlake, the Chief Visionary Officer works with all companies assessing their needs and goals and facilitates the opportunities to meet the needs and goals. His company hosts many Agency outreach, round table and industry day events. This is one group a business person will never regret joining.
A group of us originally met as part of one of the formal business groups. When they messed up, we decided to start our own private group. No fees or dues, just the agreement to be: candid, open and provide the best advice we could without having a hidden agenda. It has worked extremely well (we have been doing this for over 2 years). We have seen enough challenges and changes in our business and personal lives that the six of us give and receive significant value. That being said, our primary issue is finding additional CEOs to join (which the formal groups take care of since that is their source of revenue). One or two more would be ideal and much over 8 or 9 CEOs would get problemmatic (I could discuss our experience and reasoning on this decision to limit the numbers below what most formal groups put in place). Although we all share in the hosting, it still benefits from having one person willing to go the extra mile to keep it going. When we decided not to proceed with a formal external company we evaluated our alternatives. We did not like the concept of having 10 or more members "forced" on us. We also had a hard time justifying $10k or more per year per person for administrative ("facilitator") work. In addition, the organizations' themselves did not provide enough extra value in the way of networking, speakers, etc. How do we measure what we have done...? Each of us can each point to meaningful advice given and acted upon, mistakes avoided or faster decisions made. One unanticipated outcome of meeting every month, we have developed a friendship with each other that is rare to obtain in this email, telephone, texting, etc. world that we live in.
Glenn,
I have had a similiar experience. You hit the problem on the head; getting new members. That is where a significant amount of the dues go. The other problem you also stated; "getting someone to go the extra mile." I have found that there is a benefit to having someone to followup up on all of the details and "chair" the meetings. While I agree it is difficult to justify where the $10k plus money goes, I have also found it difficult to keep a group going without the "facilitator". The other benefit is that if you do get an experienced facilitator, they will add to the experience because they will have the benefit of working with many different business owners and can add to the conversation.
I was part of a local Chamber "CEO Roundtable". Sounded great. No support -- we were on our own for meeting place, time, meeting process, etc. Fell apart in 1 year after a couple of members moved, went out of business, etc. There was no "sustaining force" behind the group.
A HUGE part of the value-added by "catalysts" like CEBI http://www.chiefexecutiveboards.com is that they continuously recruit members (to replace natural attrition - it does happen), they schedule the meetings, book the locations, buy lunch, nag members who don't respond, etc.
Another comment, Jay. In partcipating in dozens of these meetings, I've learned it's tough to judge the "contributions" of any given member, even over a year of meetings. Just when you least expect it, a "sleeper" emerges and just blows you away with his insight into a member's situation.
So, I've concluded that a business owner or CEO willing to show up and spend a day helping others is a "quality" member -- they'll select themselves out of the group if they don't measure up.
I have been a memeber of a CEO Forum for a little over a year now. I have found it extremely helpful. Although the members of the group are in different businesses, once we discuss a particular issue we realize that we are dealing with the same problems. Problems include distribution, pesonnel, budgeting, product lines, marketing plans etc. One of the best things about the group is that when a really tough decision needs to be made, having the sounding board and encouragement to make the right decision is invaluable. Procrastination in a smaller business can be a killer.
As a side note, I agree with the above comments re: having a facilitator. A facilitator (or more than one) is essential for keeping the group together and focused.
I have been a part of a particular CEO Roundtable group for close to 8 years. It was assembled and faciliatated by The Board Forum (www.theboardforum.com), Laurie Kirk owner and facilitator.
I honestly do not think I would be where I am professionally w/o the advice, counsel, support, and encouragement of all the members. When I was diagnosed with cancer which subsequently lead to the selling of one business and the start of an entirely different one, my fellow members displayed the values which set our group apart from others. Members have come and gone, but the core values of respect, integrity, honesty, confidentiality, generosity of time and talent; as well as intelligence and business acumen, remain the same. These values are critical to the success of any roundtable. It may take awhile to find such a group in your area, but the time and energy to find a good "match" is well worth it. I have belonged to larger, more National roundtables, but much prefer this regional Board Forum.
Ms Kirk has assembled many in the New England area and is always looking for good members and facilitators to interview and "place"!
Attention fellow bloggers!! You will notice that many posts come up 2 or 3 times, because as soon as you post, a message comes up that says it didn't go through. It did! The software has a bug that they are trying to fix. Please just hit post once. Thanks Jay
CEO roundtables are all about peers who respect and trust eachother, and it works for everyone who is a member of a well run group. There are different models, you just need to find the right one for you. I was asked to facilitate a roundtable by CEOs when they no longer liked the way an organization was running their group. That was 10 years ago. I now have numerous groups http://www.theboardforum.com While we are regional, our model is accelerated (2 facilitators per group). Decisions, problems and strategies are openly discussed and acted upon. It takes honesty, a willingness to listen, to share and learn, and the desire to help others . Our groups range in revenue from $2 to $80 million, yet everyone realizes they don't have all of the answers. If yu can, visit several roundtables to compare, then choose the best fit for you.
This stuff sounds good. I have never heard of it before. I wish more were written about it. I would like to know more.
As noted above, Peer Group Advisory Boards are a fantastic tool for small business owners. I run a group called BANG! (Brainstorming, Accountability and Networking Group) in the Kansas City area for smaller business owners at a lower price than some of the other choices. (http://www.aspirekc.com) The business owners in the group come out of the meetings energized, focused and ready to keep growing their business.
Having said that, I have a friend that's in a Vistage group at a much higher price point and he really gets a lot out of it.
Laurie's advice above about checking into alternatives is a great one - I believe every business owner that wants to succeed should belong to a group like this!
As a woman, I have found real value in my seven-year affiliation with the Women Presidents' Organization (WPO) www.womenpresidentsorg.com . The WPO is a peer group of women who each own and run a multimillion-dollar business. Each group is limited to no more than 20 women, and no competitive businesses are accepted within a group.
Members use WPO as their advisory board to discuss critically important business problems and opportunities. The fact that these business issues often overlap into our personal lives, is one of the reasons why an organization exclusively for women works so well for us.
The need for such an organization is reflected in the skyrocketing growth of WPO across the US and Canada. Almost every major US city has one (or more) WPO chapters, and the organization continues to expand like wildfire!
Why don't you consider membership in The Alternative Board? They facilitate peer advisory boards across the country, all owners of small to medium companies in non-competing businesses. It's a formidable resource having eight to ten board members helping you with the issues in your business and it's very cost effective (far less expensive than a business coach or Vistage). You can visit them at www.TABBoards.com.
I'm an American based abroad, and my membership in the local American Chamber of Commerce is very valuable. Most of the people there are business owners like myself.
I also go on some web forums, like one specifically for CEOs of software companies, and those are helpful also.
I have been running 3 businesses since 1977, and I've never had a advisory commitee or a board of directors. I had a indepth business analysis done 5 years ago and it was strongly reccomended that I have a board of directors or join a business group. I elected to join a business group 3 years ago with 2 facilitators in Southern Maine, and it's one of the best things I have ever done to help my businesses and my bottom line. There are things that we talk about that just cannot be discussed with employees or family members for obvious reasons. Also, noone in the business group has a vested interest so you are assured that their advice and comments are straight forward, sincere, and most often brutally honest. It is the type of feedback all businessmen need. I would recommend it to anyone who has a open mind and wants to grow his Company.
Here's a great example of how peer groups work. At a recent meeting of Chief Executive Boards International http://www.chiefexecutiveboards.com a member brought up a problem employee. He got great advice from his board which, if followed, is 90% likely to solve his problem without negative repercussions.
Confidentiality rules prevent giving any specifics about the member, the city, etc. The general lessons learned, however, by both that member and the rest of his board are summarized at: http://chiefexecutiveboards.blogspot.com/2008/01/when-do-you-decide-to-do-something.html
A 7-step process for dealing with problem employees is also included.
Take a look at PeerSight, http://www.peersightonline.com we've developed a new approach to peer advisory boards to lower the cost of membership both in 1. time and 2. membership dues.
Absolutely joining a business group is critical for most of us who are not Jack Welch. Actually, even the top guys have coaches and have their groups for support and learning. Do you know one single Olympic athelete who does not have a coach or learning situation? I'm in Entrepeneurs Organization and Vistage. Both are different and offer great value. There's no way I would have survived my dumb business decisions and made it this far, or even survived in biz, without them. The cost of membership is nothing compared with staying in biz and doing well.
These boards really work for the right type of CEO/business owner. I highly recommend Executive Forums as I run boards in North Orange County having been a CEO member and saw first hand the value of meeting with peer executives!
I have been a member at EO (Entrepreneurs Organization) for the last 4 years. EO has presence in more than 38 countries and has members over 6500. You can visit www.eonetwork.org for more details.
Every state has a minimum of one chapter and within chapter there are numerous forums. Each forum has 8-10 members. The forum meets once in a month, and meeting is hosted either at the hotel (central location) or one of the member office locations. Attendance at forum and participation is mandatory.
The eligibility to become EO member is that you are a founder of the company and have sales of at least $1M. Each forum has members from various industries so that the competition is eliminated and members have freedom to talk about the issues. More importantly the meetings discussion (business and personal) is confidential.
EO members do not give advice but share real experiences. The experiences that people share are priceless and unique in nature.
Membership to EO is through invitation. EO is not expensive to join. Typical fee ranges from $3000 - $3500 per year.
Every chapter hosts educational, entertaining, family and sports events, events run one per month. So the fee is justifiable. Some of the chapters events in our area were: The one minutes Manger by Ken Blanchard, Effective Leadership.
EO hosts ‘EO Universities’ and members will have access to meet other members from various parts of world. The opportunities are endless for some one who is expert in networking!
EO recruits members who are passionate about their business and life.
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