Not long ago I was talking with Georgia-based general contractor Chris Sheridan about an industry peer group he joined nearly nine years ago. I was curious about how it operated and the benefits he was seeing from peer-to-peer evaluations and performance benchmarking.
Chris said he was a board member for the state and national Associated General Contractors of America (AGC) when he first learned about the AGC’s involvement in the Performance Roundtable Program, offered by the Family Business Institute. The peer-group program is developed specifically for CEOs, presidents, and company owners who want to improve their business and further develop their skills as leaders.
Since joining the program in 2004, Chris and seven other members of his peer group have met twice a year. All members are from different parts of the country, so there are no competitive issues and members feel completely comfortable sharing information. According to Chris, the goal is to give everyone full visibility into each other’s business. In fact, prior to each meeting they send in all their financial information, including balance sheets, income statements, employee safety reports and salary details. A Performance Roundtable facilitator then normalizes the data for quick comparisons and benchmarking.
The evaluation doesn’t stop there. Meetings rotate between each member’s company office. The person hosting the meeting is asked what he or she wants the group to dig into while they are on-site. Then the group – minus the hosting executive – interviews the company’s employees, writes up a SWOT analysis, and provides a set of recommendations. The resulting conversation is frank and eye-opening.
For Chris, the biggest value of his peer group is their objectivity. “They’ve been able to see things in my business that I couldn’t see myself,” he told me. Based on their recommendations he has improved his business and has a much better succession strategy. He has moved his best project manager – and right-hand man – into a position overseeing other project managers. He now is less involved in day-to-day management and focused on business direction. And he is considering a “youth movement” to continually bring in young workers that will carry the company forward. He also has a good handle on how his company stacks up with his peers in terms of cash position, profit margins, risk, safety and other key measures.
Chris admits that when he first joined the peer group he thought that it would be a good thing to do, but he didn’t realize how much it would positively impact his business. He firmly believes that if he had kept doing the same thing and not made any of the group’s recommended changes, his business wouldn’t survive after his tenure as president. That’s what I call peer power!
How are you using peer groups to improve your business?
About the Author
Deb Carpenter-Beck is a writer and marketer with more than 25 years of experience in the construction and real estate industries. She often writes about technology and best practices and is passionate about helping contractors and real estate professionals achieve their business goals. You can follow her on Twitter @SageDebCB.