Business ownership should be the most enjoyable "job" in the world. If running your business has turned into a never-ending to-do list or tedium, watch the slide show below for some tips to make business ownership fun again.
Positive Peer Pressure
Excerpted from C.O.S.E. publication by PETER D. BROSSE, ESQ., CONWAY,
MARKEN, WYNER, KURANT & KERN CO., LPA
Abstract from article by Karen J. Bannan
Being the No. 1 decision maker at your business can be gratifying. But, who do you talk to when your job gets stressful? Who can you turn to for help with daily challenges and frustrations? Many small business owners are relying on their peer groups to be such valuable sounding boards.
A popular networking option for those seeking advice, education and camaraderie, peer group membership is quickly catching on as an essential tool for small business success.
When his general manager quit suddenly, Ed Bunzol was left in a quandary. The President and Qwner of Addison, Ill. based Metron Electrical Rebuilders, a company that manufactures aftermarket auto parts, needed a new GM right away. But, what was the best way to recruit? Bunzol knew want ads often attracted too many applicants, most of them ill-suited for the advertised job.
To winnow down the applicant pool, he wanted to craft an ad that specifically described the perfect candidate. Still, he wasn't quite sure what to write. That's when he took his problem before a group of other small business owners, his peers. Within hours Bunzol had just the right wording for the ad.
Unlike business associations, peer groups have little to do with promoting groups of like-minded professionals. Instead, they concentrate on the individual's needs. Of the three main types of peer groups, one type is more geared to skill and knowledge-building, bringing in guest speakers and educators. A second type, sometimes called a mentoring group, functions as an informal sounding board for members to discuss and debate issues of concern. A third option combines all of the above, mixing education with socialization.
All three types of groups meet on a regular basis, either weekly or monthly. Usually the organizations, which can have hundreds of members, are broken into smaller sub-groups of a dozen or fewer people. Because each sub-group has no more than one member of a certain business segment, competition between members is not a problem.
Peer group founders say their organizations give small businesses access to knowledge and contacts that would be difficult to find outside the groups. Aside from business opportunities and information, many small business owners say peer groups provide something that no other group can, an instant panacea for the loneliness and isolation that comes from being your own boss. Steve Craney, President and Founder of RiverSide Electronics in Lewiston, Minn., says his group gives him much-needed boosts, but also holds him accountable for setting and completing goals.
Norma Menkin, the Founder of Gainor Staffing in New York and a member of a business group similar to CEO Focus called Let's Talk Business!, says another fringe benefit of peer groups is the new business they can trigger. When small business owners get to know each other, they are more likely to call on a fellow owner when they're in the market for that person's services. "There's definitely a high level of trust within the group," she says.
Finding Your Niche
While the premise behind peer groups might sound like a great idea, integrating that idea into your life may take a little work. Unless you find a group that meets your personal needs, attendance can cost more than just a few hours of your time. For one thing, peer group fees aren't cheap. Membership dues can range from several hundred to tens of thousands of dollars each year. Often the more you pay, the more exclusive your group is.
Craney got involved in his current peer group in 1986, a few years after starting his own business. Since he was familiar with formal corporate-based peer groups, Craney worked for a large business before venturing out on his own and he was looking for something a little less structured.
"I'd been to other peer groups and some of them were very formal. They quote the Harvard Business Review and Jack Welsh," says Craney, who takes two days out of every month and drives 100 miles to his group meetings. "I can get that on my own. I was looking for a group of people who don't fit into the corporate structure, people who are used to thinking outside the box."
Developing the Right Dynamic
So how do you build a successful peer group? Most importantly, say experts, everyone in the group should be at the same income and experience levels. Mixing brand-new business owners with those who have been around for years can create tension or boredom.
"The problems you have with a $50 million to $100 million company are very different than those you'll have running a company that falls into the $1 million to $15 million range," says Bunzol. "Someone who comes in at a drastically different income level is going to fit into the group like a round peg fits into a square hole."
"Strong group leaders are essential, and these facilitators must be able to both lead a discussion and sit back and let it happen. They also should be willing to exclude people who don't fit with the group's dynamic," says Alec Horniman, a professor of business administration at Darden Graduate School of Business Administration at the University of Virginia. "The downside to every group is that there's someone with a different agenda than the rest," he says. "That can really hurt a group if it's left to fester." Also destructive to a peer group is a member who talks too much outside of meetings, which is why most reputable groups require members to sign confidentiality agreements.
Members are quick to sing the praises of their peer groups, but they will also admit their faults. Most cite two examples: The caustic or outspoken member and those who join and never show up. One expert says business owners can protect themselves from negative group members by being careful not to disclose a lot of personal or professional information too soon after joining. "Any group setting is going to become increasingly personal and when you get in that position, it feels great. You may have a tendency to go overboard," says Horniman."You have to remain cautious, not skeptical but cautious, to get the most out of a group."
Still, most members say the benefits outweigh any risks. Says Menkin, "You're getting an amazing support system that helps you build every part of your business and advises you about strategic planning, public relations, and business opportunities. When you voice concerns and goals in front of other people, they have a lot more strength to them."
It Gets Lonely at the Top
Excerpted from C.O.S.E. publication by PETER D. BROSSE, ESQ., CONWAY,
MARKEN, WYNER, KURANT & KERN CO., LPA
Business owners who operate closely-held (non-publicly traded) businesses find themselves from time to time in need of new ideas, a sounding board, or a mentor to assist them in issues affecting their business. However, since it is common for a closely-held business to be run by family members or a limited number of individuals who generally also own the business, the resource of knowledge and ideas are limited to those few people. Therefore, resources can be limited and ideas can become stale. It can become frustrating and lonely leading a closely-held business. There is a solution. A board of advisors. This article will discuss the use, establishment and operations of a board of advisors.
What is a Board of Advisors?
A board of advisors is a group of people having various areas of expertise, who generally have no economic stake in the business and are appointed by either the governing board or leadership of a business to advise the business’ leadership on specific issues. There is no law requiring the appointment of an advisory board. A board of advisors is simply a tool used by a business’ leadership to provide input on issues faced by the business that require certain expertise or experience which the leadership may not have.
Why Not Hire Multiple Consultants?
Consultants, like a board of advisors, make recommendations to the business’ leadership. However, consultants are typically hired on a project basis. Conversely, a board of advisors is comprised of individuals who have made a long-term commitment to the future of the business and, therefore, develop an intimate knowledge of the business and its leadership. This longterm involvement with the business permits the advisors to have knowledge of certain facts, which a consultant may not be cognizant of and which may be important variables necessary to more fully assist a business’ leadership when problem solving or planning.
How Does a Board of Advisors Differ from Other “Boards”?
State statutes require that all corporations have a board of directors. Under Ohio law, for example, a board of directors must consist of not less than three (3) directors. However, if there are only one (1) or two (2) shareholders, then the board of directors may be comprised of directors numbering one (1) or two (2) respectively. The requisite number of directors may differ from state to state. The board of directors are elected by the shareholders or owners of the corporation. The directors make decisions regarding the day-to-day business of the corporation to which the corporation is then bound to implement through its officers. Of course, today there are other entities of choice, including limited liability companies and partnerships. Limited liability companies are typically managed by either a board of managers appointed by the owners of the company or by the members (i.e. owners) of the company. Likewise, partnerships are managed by the general partners. In all entities the governing board or the owners themselves make decisions which legally bind the entity and must be implemented by the leadership of the business. There are several significant differences between a board of advisors and the governing board of a business. First, the governing board is by statute required to be elected or appointed by the owners of the business. The board of directors as stated above, are elected by the shareholders, the owners of the corporation. The board of managers are appointed by the members or owners of a limited liability company. Also, in a closely-held business it is common for the owners to be on the governing board. However, a board of advisors is typically appointed by the business’ leadership and is not generally comprised of owners of the business.
What’s more, appointment of an advisory board is voluntary and are not statutorily required. Moreover, unless specifically stated, there is no specific term for an advisor to serve. Conversely, a director must be re-elected after serving a specified period of time. Unlike the decisions of a governing board, decisions of a board of advisors are simply recommendations, and are not binding on the business. The advisory board’s recommendations, of course, may be adopted by the governing board of the entity. Only at that time are the recommendations binding on the entity. However, such decisions would be the decisions of the governing board and not of the board of advisors. Additionally, the governing board typically has a fiduciary duty and liability to the owners of the business and sometimes to third parties. This is not true of an advisory board since it acts only in an advisory capacity and it's recommendations are not binding on the business. This fiduciary duty and liability associated with serving on a business’ governing board is probably the most common reason why it is difficult for closely-held businesses to attract individuals who do not have a stake in the business to serve on the business’ governing board. Additionally, since an advisory board is composed of individuals who do not own or manage the business, it permits objective and independent thought and the added benefit of limiting conflict among the leadership of the business. This is especially true in family businesses and in the common situation where the owners are also the decision makers. A governing board comprised of individuals with a personal stake in the business may cloud their ability to see beyond the four walls of the business. A board of advisors comprised of independent individuals who do not have a stake in the business may more clearly see the issues at hand and may more freely express their views.
Who Should Comprise an Advisory Board?
Advisory boards should be comprised of outsiders—individuals who do not have an economic stake in the business and who will be impartial and objective. A primary goal when establishing a board of advisors is to get fresh and objective viewpoints and to encourage a see exchange of ideas and advice. This is most likely to occur where the person has no economic stake
(i.e., loss of an account or client or investment). However, before appointing a board of advisors, the business leadership should first determine the purpose of the board of advisors and what areas it requires mentoring or decision making assistance. For example, some boards of advisors discuss and advise on issues such as compensation, employee matters, management issues, acquisitions, and divestitures. Other advisory boards may deal specifically with certain areas of the business such as marketing, strategic planning, or management. The expertise of the board of advisors may include legal and accounting, financing, and marketing. It is not unusual for the business’ attorney and accountant to participate on the board of advisors.
A board of advisors may be more effective when other business owners from non-competing similar businesses participate on the advisory board. For example, if the business owner distributes a consumer product to big box retailers, the inclusion of a person from a business which also distributes non-competing consumer products to similar big box retailers may be advantageous.
When organizing a board of advisors, it is important to keep in mind that the board should not be so large as to be unmanageable. Initially, perhaps the business may only include a small number of advisors. As the business evolves, additional expertise and views may be added by increasing the number of advisors or replacing members of the board.
What Business Will Benefit from an Advisory Board?
Both startup and mature businesses could equally benefit from a board of advisors. Why? Generally, the same issues and problems that exist in a startup also exist for a mature company. For example, it is common for a startup company to have cashflow shortages, principally from insufficient capital. Mature companies may also suffer from cashflow deficiencies, but rather than resulting from insufficient capital, cashflow difficulties may be caused by fast growth and collections of accounts receivable failing to keep up with the capital needs to fund the growth. The dilemma to be dealt with is still the same. Both startup and mature companies have issues of compensation and hiring employees. Not only may they have in common the issue of how to attract talent, but also how to retain the talent once the employee is hired. Consequently, new and mature business may equally benefit from the implementation of an advisory board.
A board of advisors can be a very valuable tool to a closely-held business, affording the business and its leadership expertise, objectivity, and experience that the business owners and the leadership themselves may lack. Additionally, an advisory board permits the business owner to have mentors, a sounding board and permits the business owner to share the problems and successes of business ownership and operation with individuals committed to the future success of the business—making the top less lonely.
Reasons to Hire a coach
- You get the help you need to redefine your role in your company, develop clarity and establish long-term results.
- You will get help from someone who operates a successful business, who's been there, who understands the language of being "at the helm" alone.
- Week after week you will get the help you need to make the decisions necessary to lead your company where you want to take it.
- You will discover new alternatives and opportunities currently available to business owners.
- Your frank discussions with someone not beholden to you will help you determine what you need to change as a manager and as an organizational approach.
- You will avoid mistakes by learning from all the experiences of my 15 years in the business of coaching businesses.
- You will look at everything from a broader perspective and have the support to make changes.
- You will begin to think more creatively and learn how to ask for input from multiple sources.
- You will benefit from a network of resources I, as a coach, have developed over the years.
- You will learn new techniques for problem solving as coaching is on the cutting edge of business change and transformation.
Reasons NOT to Hire a Business Coach
- All aspects of your business are highly productive
- You are able set goals, make plans and follow those plans to achieve your goals
- You think that having a coach or advisors is for wimps
- You have a crystal clear vision of where you are going in your professional and personal life
- A minimum of a 6X ROI for investing in yourself holds no appeal to you
- The career or business advice you can get from friends and colleagues is always in the strictest confidence
- You have mentors who can motivate you and hold you accountable
- You are currently living the life that you envision for yourself
- You sales team is working at high efficiency
How do members benefit?
1. Owning a business isn't easy. You have probably felt like you were making decisions in a vacuum?
2. Have you ever wished you had someone to talk to that "got it?"
3. Have you ever discussed important business issues with employees only to regret it later?
If you answered "Yes" to any of these questions then consider a CEO peer group. These mastermind type groups allow business owners to band together to solve common business issues.
If you find a good group, it should a) act as a sounding board or informal board of advisors, b) hold you accountable to your goals, c) allow access to other's experiences and best practices, and d) be fun.
What is a CEO group?
CEO Groups are company presidents, general managers and CEOs who work together as an informal board of advisors. Typically, they meet monthly and work on business issues confronting our members. The group acts as a board of trusted advisors to each other. Group members benefit in a variety of ways:
- Increased accountability
- A sounding board of business owners to bounce ideas off of
- A strong support network
- Access to professionals with complimentary strengths
- Improved delegation skills
- Better balance between work and home life
- Increased profitability due to using best practices from other industries
- Improved level of business expertise
What types of businesses belong?
Every variety of business. Service, manufacturing, sales organizations, minority-run businesses, female-run businesses. It is this diversity that adds to the value.
Shouldn't I want a group with people in my industry?
No! Your industry has inbred thinking. What it takes to break things loose is ideas from people who don't know all the "unwritten rules" of your industry. We have seen it over and over, all the great ideas are from the people far outside your industry.
Aren't the groups full of people who are struggling?
Absolutely not! Every business has the occasional crisis. However, typical group members are the successful CEOs who want to be even more successful. Groups are full of bright, driven men and women. For instance, in one specific market example, a group consists of three MBAs, a PhD., an attorney/MBA, two Ernst and Young Entrepreneur of the Year Finalists, a Statewide Blue Chip Award Winner, and a publicly traded company (NASDAQ).
Have you participated in a CEO Peer Group or Shared Advisory Board?
- 33% No.
- 19% No, I have only done those Chamber of Commerce-type meetings.
- 33% Yes, I currently participate.
- 14% Yes, but I no longer participate.
Related Post: Leveraging Positive Peer Pressure
Related Post: It Gets Lonely at the Top