1. small
business
Sharing secrets
Peer groups can help businesses get ahead
By Susan Hirshorn
HEARING MIKE KUKOL of Horizon better organize and interpret his financials resource. However, they are not new. Modern
Landscape & Irrigation Company talk about and how to identify unprofitable areas that peer groups evolved from the “mastermind
sharing his confidential business information needed to be changed or eliminated. group” concepts laid out in Napoleon Hill’s
with the owners of nine other landscaping “There’s real support here—a kind of inti- classic book Think and Grow Rich, which was
companies, you might initially wonder if the macy,” says Kukol. “I remember one of the first published in 1937. Since then countless
owner of this Wyckoff, New Jersey, firm is a guys calling me at night to say that he thought self-described mastermind and peer groups
bit crazy. I was making a mistake on an issue and that have emerged in business, professional, edu-
Kukol and his fellow landscapers are he wanted to make sure I corrected it. He did cational and social spheres.
members of a peer business adviser group, not have to do that, and he actually convinced Today’s peer business advisory groups are
which is loosely defined as six to 12 business me to make the change.” usually put together by business associations
owners or executives who meet to discuss The right peer group can also open doors or private consulting firms (see “Peering fur-
their companies’ challenges. With the help of that might otherwise be shut, as Jeffrey ther”). They typically unite like-size compa-
a trained facilitator, the participants share Anderson, co-owner of Bulletproof Info Tech nies, based on annual revenue, into different
their successes and obstacles, giving them of Red Deer and Calgary, Alberta, discovered. groups to keep the discussions relevant. Aided
opportunities to learn from others who’ve had He is part of a peer group of 12 information by the explosion in online communication,
similar experiences. technology service firms, each from a differ- today’s groups increasingly combine in-per-
Kukol says he isn’t worried about spilling ent Canadian province or American state. son meetings with email, secure Web video
secrets to his competitors “because each “In our field there are big players who get conferencing and cloud-based data-sharing
member of my peer group operates in a dif- a lot of attention from vendors,” says platforms such as Dropbox or SharePoint.
ferent geographical market and we all signed Anderson, a Costco member. “Our company But don’t confuse those free (or nearly
agreements to the effect that what is said in is one of the smaller players—only 19 people free) groups formed on social networks (such
the group stays in the group,” he explains. right now. Getting the attention of some of as LinkedIn) and industry discussion boards
The reasons for joining a peer group are those vendors can be easier if you’re part of a (such as Service Roundtable) with genuine
many. Beyond reducing the sense of isolation peer group.” peer business advisory groups. With peer
that often comes with being the boss, peer groups, membership fees can range from sev-
groups enable participants to share strategies From Napoleon Hill to the Internet eral hundred to many thousands of dollars a
that can increase profitability. Kukol says his In the quest for solutions to increasingly year. Also, you must be voted in by group
group helped him boost profits during the complex business challenges, Anderson and members and you get to know them person-
economic downturn by showing him how to Kukol agree, peer groups are a valuable ally. Social networks and discussion boards,
24 The Costco Connection MARCH 2013
2. Peering further
Industry-specific peer advisory
organizations
● The Leader’s Edge (landscaping
companies)
www.jeffreyscott.biz/leadersedge.
html
● HTG Peer Groups (information
technology service companies)
www.htgpeergroups.com
PHOTODISC ● AgWeb(farmer peer groups)
www.agweb.com
on the other hand, may be populated by thou- A good facilitator. A facilitator holds
To locate groups in other industries,
sands of folks you don’t know. the key to creating a comfortable and informa- contact your professional or trade
tive environment. “He or she should stimulate associations.
What to consider before joining discussion and keep it on track,” says Jeffrey
Beyond the cost of membership, there are Scott, a Costco member in Trumbull, Cross-industry peer advisory
some key issues to consider before joining a Connecticut, who serves as facilitator of organizations and business
peer business advisory group. Kukol’s group. Scott employs a process he calls associations
Which type? Peer groups fall into two “peeling the onion.” “This involves moving ● The Alternative Board
broad categories: industry-specific (like people beyond the knee-jerk responses and thealternativeboard.com
Kukol’s and Anderson’s), where member encouraging them to ask more questions to
companies come from the same field but get at someone’s underlying issue,” he explains. ● Vistage
International (Vistage
operate in different geographical markets; Connect)
www.vistage.com
and cross-industry, where members are in dif- Challenges and rewards
ferent, noncompeting fields. Peer group participation is far from the ● TheAmerican Small Business
With industry-specific groups, partici- touchy-feely stuff of talk shows. Prep work and Coalition
pants generally share similar business pro- attendance are required if you expect your www.theasbc.org
cesses. A key advantage is that you can know peers to take you seriously. Accountability is ● Renaissance
Executive Forums
how you compare with others in your field part of the culture, as is being able to give and www.executiveforums.com
and learn how to close the performance gap. take constructive criticism.
The geographical diversity of members isn’t Warns Kukol, “You have to defend your ● The
Chief Executive Officers’ Clubs
an obstacle to this; as Anderson explains, numbers and business practices to your peers. www.ceoclubs.org
“Although a member in New York City may Sometimes it feels like answering to a board of ● WomenPresidents’ Organization
have a higher billing rate than one in Calgary, directors and sometimes like being on the www.womenpresidentsorg.com
they also typically have higher expenses. So if witness stand with nine prosecutors.” But he is
● Entrepreneurs’
Organization
we look at things on a percentage basis, such quick to emphasize that his peer group expe-
www.eonetwork.org
as gross profit as a percentage of revenue, our rience “made me think and act more like an
financials are very comparable.” owner and more professionally.” ● NortheasternUniversity Center for
Cross-industry groups typically comprise Anderson agrees, adding that when he Family Business (Massachusetts)
businesses from the same geographical and his peers first got together “everyone felt www.cba.neu.edu/cfb/peer-groups
region. Participants can give each other a bet- guarded—afraid of disclosing our secret ● TheConway Center for Family
ter understanding of the local business envi- sauce. After a while we realized that we’ve all Business (central Ohio)
ronment, build up each other’s local referral got the same problems and most of us have www.familybusinesscenter.com
network and offer insights on shared issues. the same secret sauce. Since joining the group
● TheO.Berk Company Family
For example, the Canadian Association of we execute our plans more quickly.” C
Business Forum (New Jersey)
Family Enterprise hosts peer groups that deal view.fdu.edu/default.aspx?id=1218
with such issues as transitioning leadership in Susan Hirshorn is a frequent contributor to
a family-owned firm. The Connection.
MARCH 2013 The Costco Connection 25