Group therapy for business founders

February 18, 2014 4:05 pm

Group therapy for business founders

By Andrew Bounds and Jonathan Moules

In the back room of a brewery in the northwest of England, the boss of a family-owned manufacturer is discussing India. He explains to the assembled group – which is made up of owner-managers just like him – that his attempt to set up a factory in India has so far only led to frustration.

With properties hard to find and a local agent dragging its feet, he asks the others if he should find another partner. “How can you build trust over a distance?” he asks.

The dozen or so people around the table ask questions and weigh in. One lost a lot of money in India and ad­vises pulling out; another says the business should keep its manufacturing in the UK; all agree he needs professional advice as well. One recommends a lawyer; another can put him in touch with an owner with a similar experience.

The group meets regularly under the aegis of Vistage, one of a growing number of peer-to-peer business mentoring organisations that enable owners and managers of smaller businesses to give mutual advice.

The aim is to be different from federations that emphasise networking, lobbying and courses. Formal self-help groups are more structured, however, than a pub lunch or a round of golf. This Vistage group meeting is usually led by a facilitator, Chris Charnock, who is also a business coach.

“This is about self-development,” says Mr Charnock. Members are from private and listed companies, some family-owned, with turnover up to about £50m.

One of the attractions of such peer to peer groups is getting closer to the – potentially harsh – truth, since their employees and even non-executives often shy away from challenging the boss. Jason Zickerman, chief executive of The Alternative Board, another peer to peer organisation, says: “They are receiving objective advice from other business owners who have no other agenda.”

The talk sometimes becomes heated as participants’ plans are eviscerated by their peers – as the Vistage gathering at Robinsons Brewery in Greater Manchester on a recent frosty morning admits. Members of self-help groups generally agree these are “four-walls” meetings.

Busy owner-managers are short of time, but William Robinson, the sixth generation of his family to be invol­v­ed in the brewery, says the commitment is worth it. “It is a day a month to ‘developing me’,” he says, adding: “It is a day to work on the business rather than in the business.”

A guide to self-development

The Supper Club has various formats but the most powerful, says founder Duncan Cheatle, is where the same group of people meet regularly for “vicarious learning”. These are his tips for a self-help group:

● Have rules aboutinformation remaining confidential, but also make sure no member ends up sharing details with a rival. For the same reason, hold meetings in private rooms to avoid sensitive details being overheard by interested outsiders. How much does that happen? “Surprisingly often.”
● Appoint a facilitator for each meeting. “Structure makes things happen. We don’t have many shrinking violets – a chair knows when to move the conversation on.”

● Give and get: all must contribute if all are to benefit. “We also have a rule about no overt selling.”

● Make a commitment and make sure you know why you are giving up valuable time, which could have been spent with family or friends, to do this regularly. “If you don’t turn up, you let the others down and destroy value.”

He describes the experience as a fast-track management course, inc­luding the tricky issue of family relations. He has divided the managing director role with his brother Oliver, who runs the pub division, and their father is still a regular visitor. One of the brothers’ biggest challenges has been broadening the brand’s appeal, for instance by brewing ales with Manchester band Elbow and Bruce Dickinson, lead singer of Iron Maiden.

Vistage, which was started in the US in 1957 and has more than 19,000 members in 13 countries, has operated in the UK for 25 years. The average UK business member employs 125 people and turns over £11m.

Newer UK networks have also emerged, such as London-based The Supper Club. Formed in 2003 by Duncan Cheatle, it started after a dinner organised for eight friends who were running businesses. The discussions were so fruitful they decided to meet again in a month, and another business was born.

The Supper Club has just under 300 members. The average turnover of members’ companies, many of which are fast-growing, is £17m.

On a recent evening in a pri­vate dining room in Soho, a small group of Supper Club members was freely discussing marketing, raising funds, and hiring and firing – especially the entrepreneur obsessions of people and money. The talk turned to an employment law question and they visibly leaned in over the polished table to listen and hold forth.

The dynamic works because of the exchange of ideas, says one particip­ant. The mood of a previous meeting was against UK government proposals for workers to yield employee rights in return for equity, until one maverick spoke up in favour and a lively discussion ensued.

Practical, mutual advice is one of the big benefits. James Hibbert joined The Supper Club a couple of years after starting his bespoke tailoring service Dress2Kill. “A lot of the questions were about staffing, and my background was at [recruitment firm] Michael Page, so I felt I could be useful,” he says.

In turn, he found it helpful to be in the company of founders who had “been there, done that”. He recalls being struck by founders who had sold their businesses admitting that their greatest regret was no longer being involved in the cut and thrust. “I remember one couple discussing going into receivership,” he says.

Later he also took a peer-to-peer learning course at business school and picked up a mentor, Sir William Goodenough, chairman and co-founder of design agency Design Bridge.

Kimberley Stufflet, owner of Preferred Aviation Underwriters, a pilot’s insurer in Atlanta, US, joined The Alternative Board because of high staff turnover. After listening to her peers and using the organisation’s software, she changed from considering only ap­plicants with a certain college degree and took more account of important personality traits. “There comes a time where you need to ask for outside help,” she says.

“It’s like having 14 [affordable] non-executives,” says Vistage member Ste­ph­en Lund, joint managing director of Advanced Component Technology, which supplies the oil and gas and power industries.

The non-exec analogy is the reason why The Alternative Board’s groups of business owners are dubbed “boards”. Member companies have $1m-$100m turnover. It has about 3,500 members, mostly in the US and Canada, but also in Europe and New Zealand.

Members of all three peer group organisations agree that personal matters inevitably get mixed up in the talk.

Vistage member Rob Armstrong, who owns Armcon, which supplies moulds and mixers for concrete, says: “It gets near the bone.” Mike Armitage says fellow members helped him rediscover his joie de vivre after he was ousted in 2007 as chief executive of the company co-founded by his great grandfather.

Mr Zickerman recalls encountering one business owner at The Alternative Board “who had not taken a day off in years. He had a bad relationship with his wife and children”.

Advice on prioritising, delegation and time management from fellow members transformed his life: “The ‘board’ has not added a penny to the bottom line but he does not work weekends and has had his first family holiday in four years.”