Top execs find needed feedback – Peers provide sounding board

It’s lonely at the top.

Although most are used to calling all the shots, small-business owners sometimes need a sounding board or some sound business advice.

But often they find there is no one to whom they can turn.

By Donna Bozzo
Special to the Chicago Tribune

http://www.chicagotribune.com/business/chi-0312290002dec29,1,2759077.story?coll=chi-business-hed

That’s what real estate agent Honore Frumentino says she struggled with when she started her own company, the Honore Frumentino Team with Koenig & Strey-GMAC in Deerfield.

"When you’re No. 1 in your profession, there’s not too many people you can go to who will be totally honest with you and can talk about your business at your level," she said. "Not many people will say, `You’re wrong; you’re really off base.’"

But now Frumentino says she gets by with a little help from her friends. Fourteen years ago she and a group of real estate agents from around the country created a peer group to help each other take care of their business. They call themselves the Success Mastermind Group.

"At the time, we were all selling real estate, and we were trying to grow our business," she said.

"We had all read the book `Think and Grow Rich’ by Napoleon Hill, which talks about the power of the mastermind. With the power of the collective mind, amazing things can happen."

The group meets four times a year and conducts conference calls between meetings.

Frumentino says members consult each other on everything from marketing strategies to best-business practices.

She says she has found the experience invaluable.

"We love picking each other’s brains," she said. "We say, `Here’s the obstacle I have. What should I do?’ Sometimes you come to a meeting, and you’re just ready to unload. Then you’ll bring up your current challenge to the group and someone will suggest something you never thought of, and you instantly feel better and you think, `Hey, this might work.’"

She says she can rely on the group because its members are all experts at what she does.

"They’re used to doing business at your level," she said. "We talk about what is working, what we’re struggling with, share our financial statements, look for ways to increase business, and try to keep each other accountable, which is really important."

Small-business owners who don’t have the time or contacts to build their own network can turn to companies that do it for them.

"Most small businesses don’t have a board of directors," said Ray Silverstein, owner of President’s Resource Organization. "So when they have gut-wrenching questions, who can they go to who is not biased?"

For a start-up fee, along with a quarterly fee ranging from $550 to $825 depending on company size, Silverstein creates peer groups for small-business owners and facilitates these groups throughout the Chicago area. He says PROs give small-business owners who don’t have the resources to create their own group or meet the qualifications of national groups the opportunity to have a group of experts they can meet with on a regular basis. He says members come from a wide range of white- and blue-collar industries, most generating $2 million to $5 million in annual revenues.

`A very open dialogue’

"We create a venue for small-business owners to get the advice they need to run their businesses," Silverstein said. "We meet together month after month and create a very open dialogue where they can put issues on the table. People use this group as a sounding board or a think tank to discuss development of staff, marketing strategies or products. We create corporate fertilizer so we can nurture small businesses and help them grow."

Silverstein says groups like his create accountability and help business owners focus on long-term strategy.

"In a small business, owners basically report to themselves," he said. "They can get caught up in the day-to-day and don’t always set aside time to think strategically or establish priorities for their business. Aside from insight, we try to create peer pressure so people continue to move along on their path. If a member says he wants to branch out at a meeting, at the next meeting we’ll say, `You mentioned you wanted to branch out, what steps have you taken?’"

If at first you don’t succeed . . .

Jeff Furst, owner of FurstPerson, a Chicago-based recruitment and outsourcing company, says he found success with a peer group he joined through the Young Entrepreneur Organization. Although he says the group was initially helpful, he eventually learned it had some limitations.

"As time went on, the process became a bit frustrating," he said. "The group didn’t always adhere to the process of conducting meetings and there was often poor attendance."

Furst says he also felt like he outgrew his peer team in terms of expertise.

"I felt as time went on my business was growing and my issues were changing, and it was becoming difficult for some of the members to comment on some of the topics I would bring up," he said.

"In groups like these it’s important that you speak in terms of your own experience rather than just give blind advice. I didn’t feel like I was walking away with the answers I was hoping for."

Furst says he found another way to get those answers by forming his own board of advisers with the help of Chicago-based Board Advisory Corp. Instead of meeting with fellow entrepreneurs and small-business owners, he tailor-made a team of experts he pays to meet with him on a regular basis.

"This group is dedicated to helping me run my business," he said. "With the peer group, you rotate presentations, so it’s not always your turn to get your issues on the table. With the board of advisers, I control the agenda. I control the topics. I get my issues resolved. Also, because they’re dedicated to working on my business, the advisers become more familiar with my business than the peer group members did."

"A board of advisers helps business owners focus on the right things in business and brings a wealth of information and contacts to help them get business done," said Bill Fisher, owner of Board Advisory Corp., which has offices in Wilmette, Chicago, New York and Los Angeles. "They are there to give their advice. They’re called on for their expertise."

Fisher agrees that objective advice is crucial for business success.

"Advisers are independent and objective–they tell it like it is," he said. "The trouble with small-business owners is they don’t have someone objective to talk to. They have their relatives, their lawyers, their accountants. These people are not objective. And they will often shy away from giving advice. It’s important to have an independent and objective source of information."

Double the impact

Fisher says that although peer groups can be effective, he believes it’s ideal to have both a peer group and a board of advisers because the advisers are often more objective.

"The peer group often has its own agenda," he said. "The other CEOs in the group are always thinking about their own company, which they should be. A board of advisers focuses solely on the CEO and his business, and they’re not always trying to apply what’s going on in the meeting to their own agenda."

Fisher says advisers may also bring specialized expertise to the table.

For example, a medical supply company may choose to form a board of advisers made up of physicians.

Or they may simply offer a point of view from the trenches. For example, Furst says he was able to make a marketing presentation more executive-friendly by conducting a dry run for his board of advisers.

"We were struggling with some of our marketing efforts, especially on an executive level," he said. "I talked it through with my board and they gave me great feedback. They are all high-level executives. They gave me ways to present it in a more executive-friendly way without changing the message."

Fisher says the cost of hiring a board of advisers can vary from thousands of dollars to tens of thousands of dollars, depending on the size and scope of the business. He says many businesses find it worth the investment.

"There’s nothing like having a focused group of objective people who intimately know your business," he said.

"It’s frequently the difference between success and failure."

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