The CEO’s Best Teachers

Posted on March 11, 2006

Your best teachers are people in the same position as you:  other CEOs.  Peer groups are an excellent, cost-effective path to learning lessons the easy way.  Here are the benefits of peer groups, the reasons CEOs don’t join them and what you should look for when you do.

Much as I wish it were otherwise, CEOs don’t know it all. Worse yet, they are often faced with decisions where emotions, hidden agendas, and opinions are all mixed up with facts. Who do you talk to when you need to make a decision but the situation is not at all clear?

The answer is a group of peers—other CEOs like you, who have been through the trials of business leadership. I’ll share the benefits.

Holistic View.  Other CEOs, like you, have to look at the organization as a whole. By definition, they can’t just look at the financial aspects, or the marketing aspects. Most of the big issues CEOs must face have implications throughout the organization, and myopic views do not help bring closure.

Gut Feeling.  We do so much to improve our brains, and then we rely on our guts. Other CEOs, like you, have well-developed intuitions. As you lay out the facts and circumstances as you see them, each of your peers will be feeling a gut reaction to your issue. Their minds will be synthesizing your facts with many earlier experiences that relate to what they are hearing from you. As they tell you their reactions, you can hear the commonality in their advice. If you’re leaning toward a “yes” decision, and all ten of your peers warn you against “yes”—look out.

A group of peers you know and trust can also push you to pull the trigger on an action you know you should take, but you are dragging your feet on. Sometimes we CEOs drag our feet out of fear, or uncertainty, or to avoid short-term pain. Or we’re just stuck. The harassment, cajoling, or encouragement of your CEO group can be invaluable for getting you past that emotional barrier.

Fresh Perspectives.  Another big advantage is that your peer group members have nothing to gain or lose by giving you their opinion. They should not be a customer, client, advisor, supplier, stockholder or board member. Their only currency is that if they give you honest advice, you’ll return the favor when they need it. No hidden agendas. Likewise, you have nothing to lose in being completely honest with them and showing your soft, indecisive underbelly to them. They can’t fire you (like your board can).

Occasionally, one of your peers in your CEO group will have specific expertise—like how to prepare for an IPO. That can add to the value, but it’s not the main value. Most expert advice will come from consultants, or if you’re a member of a larger CEO organization, you can reach into many other groups of CEOs to find those who have expert-level knowledge in a very specific area. At the very least, you may find referrals to great, proven consultants your peers have used.

Why don’t all CEOs join a peer group? I’ve found that the main reasons are:

Arrogance.  Some CEOs think they know it all, and that most other peers don’t have much more to contribute. This is nonsense. Just read some business journals and you’ll find tons of CEOs doing better than you, and hundreds of amazing innovations they brought to the table. It’s not just about fixing problems. It’s about seeing things from a different perspective to uncover new opportunities. Some of the most valuable insights I’ve gotten from my peer group came from hearing the triumphs and issues of the other CEOs, then applying the lessons in my business.

Embarrassment.  Some CEOs are afraid to show their underbelly. They are too embarrassed or insecure to say, “I don’t know what to do,” or “Here is what I am about to do, does anyone have any better ideas?” Joining such a group requires a commitment to be real—to be honest with your peers. If you put on the “I am fine and have no problems” show, it will be transparent and the group will likely reject you.

Too Busy.  The number one most powerful asset that every CEO should tend to is their own knowledge and experience base. CEOs should have a training program of their own design. Many CEOs forget this, and instead allow their own knowledge base to deplete with time (as everything does). Staying sharp and fresh, and making the best possible decisions should be your first investment of time and energy. It may not feel urgent, but it’s really important.

Nobody Has My Problems.  I know everyone feels they are special, and of course, you are. But your problems and challenges usually aren’t that special. Somebody has been through it before, or at least something close enough to it to give you valuable advice and perspective. Even if you come up with some issues that your group doesn’t help you with, getting great advice every other time, or every third time, is still a big benefit. Further, if you’re part of a larger peer group with hundreds of members, you can reach beyond your own working group to find someone who can help you.

Not all peer groups are made equal. Some of the most important aspects to look for are:

A Great Facilitator.  They keep the meetings on track and challenge the group to dig deeply and tackle key issues. They also serve to remind everyone to hold everyone else accountable over time.

New Blood When Needed.  Members of peer groups come and go for various reasons. You need an organization that has new peers coming in and can put the right people in your group to keep things fresh. The right people are usually people with businesses of similar complexity to yours.

Members You (By and Large) Respect.  In order to value the advice you get, you must respect the other members of your group. The right mix of people is difficult to find and maintain, so you need your peer organization actively managing this.

Regular Meetings.  You can’t bond with your peers if you don’t meet with them regularly. Also, you will spend too much time “catching up” and not enough time tackling issues if you meet only every now and then. Nothing is more powerful than having 10 peer CEOs staring at you asking why you didn’t do what you said you were going to do just 30 days ago. The thought of this can spur you into action.

Eagerness to Grow as CEOs.  You and your peers in the group really should have both a burning desire to do better and the humility to know you have a lot to learn.

Strategy versus Tactics.  For CEO-level peer groups, the focus has to be on strategy and vision to get the maximum benefit. Tactical issues can be handled outside the main meetings on a phone call/e-mail basis.

Personally, I’ve made back the membership dues and time investment from my membership in the Alliance of Chief Executives many-fold. Every year, I think I am a smarter and better CEO – yet the more I meet other top CEOs, I learn still more. Thankfully, I love to learn.

Takeaways:

• CEO peer groups offer unique benefits, but they require the commitment, trust and honesty of all who participate.
• The best peer groups have great facilitators, regular meetings and a shared desire to grow as CEOs.
• The collective experience of a CEO peer group increases the likelihood that someone has experienced the same issues as you – and can offer help.