Accountable to Each Other – Financial Post Article

Author: Barry Critchley for the Financial Post

Orginally published at http://www.nationalpost.com/Accountable+each+other/3268917/story.html

What do the Canadian arm of Crayola, organic food manufacturer Hain Celestial, household product maker Umbra and AVW TELAV, which provides audio-visual services for corporate events including the upcoming G8 and G20 summit, have in common?

They are all members of Presidents of Enterprising Organizations, a Toronto-based business organization that’s mandate is to help business leaders find success through being able to connect, think and grow with each other.

The members go about meeting those objectives through peer advisory teams that meet once a month, in which input and, hopefully solutions, comes from fellow members with assistance from executive advisors, who generally are former members and retired businesspeople.

“The chemistry of the group and the executive advisor are critical to the success of a leader’s participation and our ability to help them reach their goals and objectives,” said Leon Goren, PEO’s president.

“The discussion is about situations, opportunities and decisions that a leader is faced with today, more often related to strategy, people and the culture of an organization.”

In other words, “the groups push each member to succeed. You are almost accountable,” Mr. Goren said.

“The group has been invaluable in bouncing off concerns or raising issues that I may not have thought of,” said Johanne Belanger, president of AVW TELAV, who has been a member for five years. Ms. Belanger works for Freeman Group, a family-owned company in Texas. “It’s been very valuable,” said Ms. Belanger who is working on a U.S. acquisition.

“People [in the group] who have had experience in buying U.S.-based companies have been able to provide insight into culture and governmental issues.”

However to be effective, the sessions have to deal with successes and failures. “The idea is to share experiences so that a member can save his company from mistakes made by another member,” Mr. Goren said, adding if a solution can’t be found internally the advisors will then arrange meetings with their contacts.

Each member is required to give a commitment of about three hours a month to their team, at least six hours a year with their executive advisor plus attendance at an annual two-day retreat.

“Everything is driven by the desire to learn and share with each other” Mr. Goren said. PEO also runs about a dozen seminars a year, the most recent on pricing strategies. There are about 100 members — double that of six years ago — divided into 10 groups. The members come from three main areas: companies with revenue of less than $5-million; senior executives; and a group of chief executives. It costs $6,000 to $15,000 a year to become a member.

PEO was formed in 1991 by New Zealand native Mark Rivers because he saw first hand that [company] “leaders didn’t grow with the growth of the company. Instead they self-destructed.

“Peer advisory learning,” became the solution he said, defining that as “people [sitting] around the table sharing their experiences with a bunch of chief executives [who] start to challenge each other.

Mr. Rivers, who also created The 50 Best Managed companies program when he was at Arthur Andersen, argues trauma and peer pressure are the two main sources of change. The 50 Best program was established to recognize excellence in Canadian owned and managed companies with revenue of more than $10-million. The National Post is a partner of the program now.

Mr. Goren, a chartered accountant, president of PEO since 2003, became a member when he co-founded justwhiteshirts. com, one of Canada’s first online businesses.

He soon realized PEO had to make changes, including some members. “They were there for the wrong reasons. We are about building relationships and trust and not being economically dependent on each other because [being independent] allows us to be unbiased. We have to be objective.”

While Mr. Goren and Mr. Rivers have had some spats, Mr. Goren said his job was made easier because Mr. Rivers allowed him to run the operation.

“Mark was ready to help build out our entire service model which encompasses two other companies Breakthrough Growth [a consulting company] and CEO Capital [a private equity fund.] The timing was right for Mark to relinquish control though it’s still his baby like any entrepreneur.”

Mr. Rivers agrees: “I am great at connecting the dots and facilitating breakthrough — running organizations is not really my thing.”

Mr. Goren’s newest challenge is to double the operation in the next few years. Mr. Rivers said growth will come from three sources: an investment in its sales capability; create opportunities to build relationships and build a long term “succession strategy, where we get the next president” [of a member]. PEO plans to offer short-term trial memberships of three months.