Peer to peer groups

During my last post I was talking about study groups and how they can be used as a platform for developing a captive insurance strategy. While writing the entry I also thought about some of the other benefits that come from participating in a peer to peer group.

The first and foremost advantage of participating in a peer to peer group is getting honest feedback from others in your group. The problem we have in our own businesses is that people who work with and for us rarely tell us the entire truth. Even if we ask those who work with us a direct question, we rarely get a totally honest answer. Sometimes we are able to figure out what the real answer, but more often than not, we are told what those who work with us think we want to hear.

The reason this happens is because of fear. Our employees often believe that if they told us what they really thought we would fire them. Or, at the very least think less of them if those employees were completely honest about their thoughts. And, for most of us in management, we really don’t want to hear the truth about what our employees and co-workers see as the truth. We want them to agree with us and help us move the company agenda forward.

Many business owners I work with might agree that their co0-workers and employees aren’t always honest with them, but they will say their advisors are honest in the feedback they give. Advisers are just as likely to not tell the owner or Client the whole truth. This is because every advisor has had the experience of telling a Client information the Client didn’t want to hear. The result of passing this information on often becomes the loss of the Client to the advisor.

Since our advisors and our employees don’t tell us the truth, the question becomes where can the owner of the business go to hear unbiased feedback on their actions. This is where a peer to peer group becomes extremely important for the owner of the private business, no matter how small that private business is. In a peer to peer group you are likely to hear honest feedback from others in the group. Since the other members of the group don’t work for you, there is no reason for them to not tell you what they really think.

My personal experience with having this work was when I owned a vending company. For about two or three years, the members of my peer to peer group kept telling me it was time for me to sell my business. None of the advisors I worked with and none of the employees or co-workers I worked with gave me this advice.

It was a good thing I sold my business. During the two years after selling the business 30% of the companies we were doing business with left the area. Had I continued to own my business, it would have been doubtful that our business would have been able to continue operating. This is a case where my peer to peer group not only gave me good advice, but helped save me from a potential personal and corporate bankruptcy.

My favorite peer to peer group for owners of businesses that have over $5,000,000 in sales is Vistage. Not only do they have an excellent program of peer to peer feedback, but they also include personal coaching as well as providing it’s members with access to very competent speakers who make monthly presentations on a variety of strategic topics that are important for the members of the group.  One of the factoids I like about Vistage is the average new member will triple their profits over their first twenty four months of membership.  This often will more than pay for the cost of joining and participating in the group.

If you can’t afford or don’t qualify for a Vistage chapter, then I strongly suggest you put together your own group. All you have to do is call three people you know who own a business. Ask each of them to invite two people they know and you know have a peer to peer group formed with twelve members. Make sure the members don’t compete with each other and have the meetings be informal and meet on a monthly basis. The value you will get from these meetings will more than make up for the time and effort it takes to start the group.

Who knows, you might even get advice that will save your business.

Josh Patrick