While thousands of CEOs will say that being part of a CEO peer advisory group has transformed their lives and their companies, too few of them ever join one. Most CEOs don’t experience what’s called “peer advantage.” By giving language to this powerful resource, the hope is that more CEOs and business leaders will discover how much they can benefit from it.
Smart Business spoke with Leo Bottary, vice president of peer influence for Vistage, about how participating in a peer group can benefit executives.
What is peer advantage and how can it help CEOs and other leaders who struggle with isolation?
As CEOs, presidents and business owners, we all at times face ‘make or break’ decisions that will have great impact on our business and personal lives. The peer advantages are being able to make these decisions with the benefit of having the wisdom, experience and expertise of peers who have been in similar situations and been successful.
Feedback from staff is most often tempered by agenda, biases and fears. Even advisers such as accountants and lawyers may be afraid to offer their honest opinions for fear of being fired. Without a peer group, an executive can wind up with groupthink, reinforcing what the CEO thinks and not challenging his or her ideas. But pulling a punch in the idea phase can get a company beat up in the market.
What are some other key reasons a CEO might consider joining a peer group?
CEOs join peer groups because they want better results and better lives. Executives can benefit from an empathetic, impartial sounding board. They offer CEOs both the insights to make the best decisions and the increased confidence to act on them.
Another benefit is diversity of perspective. By engaging with CEOs from a broad range of industries, executives discover best practices that can be applied to their businesses that they would not likely have discovered by working with leaders within their own industry sector.
Why is vulnerability a necessary element for a successful peer group experience?
Executives’ peers can’t give solid advice if executives are unwilling or afraid to share everything about what they’re facing. That includes being open about thoughts and feelings that may be difficult to share. The outcome will only be as good as the input.
CEOs can be hesitant to say what they don’t know. They may be guarded out of the fear of being exploited or perceived as weak for not knowing. Being among a group of people that can be trusted in a setting that is safe, confidential and free of judgment, not only helps in meeting a particular challenge, but also serves to build an enduring trust among group members.
How can peer advantage benefit and accelerate business growth?
An unbiased peer group operates with the best interest of the members involved. It challenges them, supports them and holds them accountable to what’s most important to their role as an executive.
A peer group gives members an opportunity to talk openly about strategies they’re considering and get honest, direct feedback that will help determine if those strategies will make a positive impact in the market. It affords CEOs the opportunity to work on their business rather than in their business. Given the myriad activities executives must deal with that can be a distraction, talking with a peer group helps CEOs recalibrate and focus their attention on strategically positioning their company for the future.
A peer group environment is free of agenda and bias. It’s safe and confidential, and a place where each member can question the most important parts of a leader’s life and decisions. The feedback from such groups can provide options to the CEO that will help them become better leaders, which can only improve their company’s results.
The results are ultimately what matter. Dun & Bradstreet surveys have shown that companies that are members of peer advisory boards significantly outperform companies that are not in terms of compound annual growth rates.
Insights Leadership is brought to you by Vistage International Inc.