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.”