The role of the entrepreneur is at times exciting, challenging, taxing, rewarding, and … lonely.
The founder and “OOO” (Only Operating Officer) is in charge of, and responsible for, anything and everything in their enterprise. Most will have resources and advisors on particular topics or functional areas, but truly nowhere to turn to help them define and execute their roles of chief visionary, human resource manager, head of sales, director of engineering, production supervisor, facilities manager, and every other position the “OOO” can possibly hold.
As the business grows, the entrepreneur will need to develop skills in managing managers and eventually leading leaders. Delegation with concomitant authority and accountability, along with communicating the vision and mission of the business, will need to take place. This can be a very different skillset than the founder started with. At all times, the founder will be the only one in the business to have this responsibility.
What does a successful peer group look like?
At every point during this journey, the CEO peer group can be a valuable resource for the company and its founder. So, what makes up a well-run peer group? A peer group is a carefully chosen set of owners committed to meeting monthly and sharing a goal of growing or improving their companies. There should be enough members to provide a diversity of experience-based viewpoints but not so many that any member’s issue goes unheard. There should be a commonality of business size and stage. A mature firm has very different issues than the second-stage company. Similarly, a growth-oriented firm will find little in common with a business holding the status quo to provide a lifestyle for its owner. Only founders or owners should be members. Hired managers, even at the CEO level, have very different viewpoints and commitments to the business than founders. In fact, a hired manager’s common topic of discussion is managing the relationship with the owners.
The peer group should have strong ground rules to facilitate action and drive discussion around well-defined issues within the group. Members must feel open to relate their experiences. This requires a high level of trust between the members. For that reason, there should be no business relationship between the members. That means neither competition, nor vendor-customer relationships. Strict confidentiality must be agreed upon upfront and always enforced.
Finally, experienced facilitation by a third party is needed to move the agenda, help enforce the rules, and ensure the experience is valuable for all members. Ideally, the facilitator is available between meetings to assist the members in implementing decisions.
At the Small Business Development Center at the University of Wisconsin-Madison, the PEERspective™ curriculum is used for leading peer groups. Developed by the Lowe Foundation, it distills the best practices of peer learning and years of educational research into a flexible yet robust process to maximize value for members.
The value and benefits of the PEERspective model
A great example of the value of the PEERspective model came from a 20-employee manufacturer that had recently won a large contract, almost doubling sales. The concerns for the company were cash flow, workforce expansion, and physical space limitations. Once the CEO presented the background and limitations within the company, the members of the peer group were able to relate past experiences, which were applicable to the situation. Based on their experiences, the CEO was able to negotiate progress payments and partial shipments on the contract, easing cash flow and space concerns. Additionally, a key subassembly was outsourced minimizing the workforce impact and providing the company with a profitable new customer (and much less disruption).
Members of PEERspective and their companies benefit by:
- Exploring the ongoing definitions of the CEO/Founder role
- Engaging with sources of honest feedback by interested but not invested members
- Investing structured time working at the strategic level of the business
- Solving problems and learning experientially with other members
- Gaining experience with issues not yet encountered in one’s own business
- Receiving accountability from others on decisions made and implementation of those decisions
- Expanding one’s network of like-minded entrepreneurs.
Starting and growing a business is a constantly changing role for the founder and will be isolating at times. It taxes the skills, knowledge, and abilities of every entrepreneur. Peer groups provide support to founders, helping them gain wisdom from the collective experience of the members and sharing the common joys and challenges of the position itself.
Learn more about the PEERspective Program or call the Small Business Development Center at the Wisconsin School of Business at 608-263-7680.