When it comes to being a CEO, the oldest cliché is also the truest. It’s lonely at the top. And difficult. The sense of isolation—and insulation—are what make it so tough for so many. During uncertain times like these, it’s even worse, and the stakes are even higher.
But there is a solution—or at least a tool for tackling your toughest issues, one that’s simple and vastly underutilized by the majority of chief executives in the U.S.: Each other.
“If this advice seems simplistic, I can tell you—it isn’t,” says Ram Charan, one of the most in-demand advisors to CEOs and boards in the world and a regular contributor to Chief Executive. “Far too many CEOs I have worked with make the mistake of neglecting development of this ‘personal board of directors,’ as some call it.
“Some CEOs form relationships through peer networks, like the Young Presidents’ Organization or Chief Executive Group’s Chief Executive Network,” says Charan. “Others meet periodically with a small group of CEOs from other industries…Nurturing this group takes time and commitment, and there is no shortcut. But it is well worth the effort. Hiring a professional coach or a psychiatrist in the midst of a crisis won’t cut it.”
Data backs up Charan’s points. A study conducted for Chief Executive benchmarked our CEO Network members versus industry peers and found:
- Faster Growth (On Average). Members of Peer Networks experienced average revenue growth rate just above 5% last year compared to an industry average of only 1.62% — more than 200% faster growth.
- More Profitable. Members of Peer Networks enjoyed operating margins of 22.6% last year vs. an industry average of only 10.26% –more than twice the profitability.
- Overall Performance. Executives who set aside the time to attend industry specific meetings in order to exchange best practices and work on their businesses experienced dramatically superior operating results.
So what are peer networks and how do you get involved? Interchangeably called CEO peer groups or networks, these organizations generally arrange regular meetings in confidential environments where CEOs can share ideas, best practices, experiences and advice. High performing executives value the perspective of other leaders, as well as the wisdom that comes from the practical experiences learned by others in similar circumstances.
For those who are not familiar, there are many types of groups—local, national, member facilitated, professionally facilitated. The key is to find which one is right for you, and we have a great guide which can help you through the process. A few key points to think about:
- The size of the enterprises being run by peers in your group will directly impact your ROI in membership—in both time and money.
- Meeting with peers who run comparably sized enterprises—and face similar challenges—can accelerate value and time efficiency.
- You will likely receive the highest quality, highest quantity insights about your business from non-competing industry peers.
- When mixed with CEOs from a variety of industries, every meaningful conversation requires background explanations of industry norms, competitive dynamics, technological threats, and even language. Key business drivers and metrics vary widely by industry, so evaluate a potential peer group’s real ratio of “explaining” to “insight”.
While there are a number of great groups out there for CEOs, including a couple convened by Chief Executive Group, these five are likely the best place to start your search. Here’s a snapshot of each:
Chief Executive Boards International organizes and facilitates local peer networks for CEOs, Presidents and Business Owners in various cities across the mid-West and Southern U.S. Most groups meet quarterly for a half day with one annual national meeting to accommodate the schedules of busy members who lead mid-market companies and don’t want to meet monthly.
Chief Executive Network. Launched in 1990, CEN focuses on helping CEOs meet with peers in their industry (but not competitors) running similarly sized companies. Industry focus gives CEOs not only outside perspective, but also specific, actionable ideas based on directly relevant, real-world experience. National industry groups meet several times per year in convenient, airport-hub locations to maximize the return on time invested. CEN also rolled out a CEO100 Group for CEOs who run complex organizations with at least $100 million in revenues.
Entrepreneurs Organization. Founded in 1987 by a group of young entrepreneurs, EO enables small and large business owners to learn from each other, leading to greater business success and an enriched personal life. Their mission is to support entrepreneurial education and engage entrepreneurs to learn and grow.
G100 targets “the largest and most significant global companies” for membership and allows members to counsel and connect with each other in a private, off-the- record atmosphere of candid and informed discussion. Meetings are led by a core group of recent chief executives and senior advisors to CEOs. Membership provides access to two meetings a year in which presentations are facilitated and prepared by top representatives from various advisory firms regarding businesses most pressing issues.
Vistage. Vistage membership includes a local, monthly group meeting plus an individual solo meeting with your group coach. Monthly group meetings are hosted by the members on a rotating basis. Founded in 1957 as The Executive Committee (TEC), the organization underwent a name change to Vistage in 2006.
YPO. Founded in 1950, YPO is the largest CEO peer organization with chapters in 120 countries (approximately 50% of the membership is outside the U.S.) Members join a local “chapter,” which are further broken down into one or more “forums” (each forum is comprised of 8-12 local members in a mix of business sizes and industries). Forums meet monthly for a half day, typically hosted and facilitated by each member on a rotating basis.
As Charan says: “Loneliness during these times isn’t entirely preventable—but from my experience working with dozens of chief executives, I can tell you that the feeling can be quickly overcome. By putting into place a structure before those situations arise, leaders can avoid much of the uncertainty, fear, and clouded judgment that loneliness inevitably creates. The core of this structure is simple, essential and too often overlooked. First, you must assemble a group of people who act as a sounding board. Second, you must engage in the right kinds of conversations.”
Your peer CEOs can help in ways no one else can—because no one else really knows what it’s like to be a CEO.