Problems With CEO Peer Groups and Why Working With An Experienced Consultant Might Be The Better Option

CEO peer groups like Vistage, The Alternative Board, LX Council, and Drive Wheel offer numerous benefits, such as shared experiences, networking, and diverse perspectives. However, there are also a plethora of potential drawbacks to consider when comparing CEO peer groups to working directly with an experienced business consultant:

1. Cost vs. Benefit:?

CEO Peer Groups charge membership fees. These fees can be high, which might not be justifiable for all businesses, especially smaller ones with limited budgets. More importantly, you do not know what you are going to get with a CEO peer group.

Consulting fees can also be high, but the best consultants are sometimes willing to work on a performance basis. Not only do consultants work on a performance basis, some firms, like mine, offer a performance guarantee that the client will get a significant project ROI if they complete their consulting project.

2. Time Commitment:

Peer groups require attendance at regular meetings out of the office, which can be time-consuming. Some peer groups require a day long commitment, others a half day commitment. CEOs have busy schedules, and dedicating substantial time to peer group activities detracts from the CEO’s focus on their business.

Consultants, on the other hand, can be more flexible, work on site, and meet around a client’s daily work commitments and business schedule.

3. Confidentiality Concerns:

Sharing sensitive business information in a group setting can raise confidentiality issues. Even with non-disclosure agreements, there is always a risk that sensitive information could be inadvertently leaked or used competitively.

Confidentiality concerns when working with consultants is not as big of a risk, especially when working with Certified Management Consultants? (CMC) who subscribe to a Code of Ethics.

4. Quality of Advice:

The quality of advice can vary widely depending on the composition and experience of the group members. Not all advice may be relevant or valuable, and there can be a risk of groupthink, where dissenting opinions are not adequately considered.

By contrast, the scope and breath of a seasoned consultant’s experience should be much better than that of any member of a CEO peer group in terms of relevance and value.

5. Relevance of Discussions:

The issues discussed in peer groups might not always align with the specific challenges a CEO is facing. The general nature of discussions can sometimes lack the depth needed to solve complex problems. Moreover, the focus of a peer group is usually on individual leadership where a consultant’s focus is on business improvement.

Consultants who are working on site for a client can, again, engage the client at a much deeper level because they can be on site and are very knowledgeable about business issues affecting companies.

6. Group Dynamics:

Personality clashes or dominant individuals can affect the effectiveness of the group. Group dynamics play a significant role, and not all groups function smoothly or productively.

7. Lack of Accountability:

Unlike a consultant, peer group members are not held accountable for the advice they provide. This can result in recommendations that are not practical or fully thought through.

Again, consultants who are working on site for a client can engage the client at a much deeper level.

8. Diverse Business Sizes and Industries:

While diversity can be a strength, it can also be a limitation. CEOs of companies of assorted sizes or industries might face vastly different challenges, making the peer group’s advice less applicable.

9. Dependence on Facilitator Quality:

The effectiveness of the group often depends on the skill of the facilitator. An inexperienced or ineffective facilitator can lead to poorly managed discussions and less productive outcomes.

10. Risk of Complacency:

CEOs might become too comfortable within their peer group and fail to seek out additional or alternative perspectives. This can limit their exposure to current ideas and innovative solutions.

11. Lack of Improvement Scorecards:

Peer groups do not offer comprehensive business analyses, root cause analyses, suggest metrics to measure change, or create improvement scorecards like consultants.

In conclusion, while CEO peer groups can provide valuable support and insights, it is important for CEOs to carefully consider these 11 potential negatives and assess whether such a group is the right fit for their specific needs and circumstances.

Different from CEO Peer Group, consultants offer detailed business assessments followed by customized solutions that can be tracked against scorecards and should result in better outcomes.

About Greater Prairie Business Consulting, Inc.:

Greater Prairie Business Consulting, Inc. is an award-winning, national consulting practice serving entrepreneurs, small to mid-sized privately held and family-owned businesses and middle market companies of any type with revenues between $1 million and $250 million. The firm helps small, mid-sized and middle market companies maximize their performance and exit.

Greater Prairie Business Consulting, Inc. can be reached by calling 1-800-828-7585 or emailing [email protected] .

About the Author:

James J. Talerico, Jr. is an award-winning author, speaker, and a nationally recognized small to mid-sized (SMB) business expert.

With more than thirty- (30) years of diversified business experience, Jim has a solid track record and an A+ BBB rating helping thousands of business owners across the US and in Canada tackle tough business problems to improve the performance of their organizations.

His client success stories have been highlighted in the?Wall St. Journal,?Dallas Business Journal,?Chicago Daily Herald, and on?MSNBC’s Your Business. He was named “Texas Business Consulting CEO of the Year,” by?CEO Today Magazine, identified as a?“Top 10 Management Consulting Entrepreneur to Watch in 2023” by Entrepreneur Magazine, was listed among the?“10 Most Visionary Companies to Watch in 2023” by Inc. Magazine, and has also been ranked among the?“Top Small Business Consultants”?followed on?Twitter.

For more than half a decade, Jim was a regular guest on “The Price of Business,” a nationally syndicated radio program on Bloomberg Talk Radio and has also appeared as a subject matter expert on many FOX Radio interviews. He is a regular contributor to several blog sites and has frequently been quoted in publications like the New York Times, Dallas Morning News, Philadelphia Inquirer, The Entrepreneur’s Review, and on INC.com , in addition to numerous, other industry publications, radio broadcasts, business books, and Internet media.

Jim received a Gold?“Stevie Award”?for?“Thought Leader of the Year,”?a Gold?“Stevie Award”?for?“Media Hero of the Year During Covid”?and a Bronze?“Stevie Award”?for?“Best Entrepreneur”?in the Category of?“Business and Professional Services”?at the?American Business Awards ??in New York City. The competition received more than 3,700 nominations and is the premier accolade for business excellence in the US honoring organizations of all sizes and industries. Jim also received an?“Outstanding Leadership Award”?at the Money 2.0 Conference for his contributions to the financial services industry.

Jim is the author of “8 Steps to Becoming an ETHICS FOCUSED ORGANIZATION,”? a small business certification program that utilizes a unique eight – (8) step approach for strengthening ethics in any organization. The certification program won the Better Business Bureau’s “Torch Award for Ethics” for the North – Central Texas Region, the International Better Business Bureau’s “ Torch Award for Ethics,” and a Gold “Stevie Award” for “Ethics in Sales” at the International Sales & Customer Service Stevie Awards ?. Participants who complete this certification program are eligible to receive eight – (8) continuing education units from the University of Texas’ Division of Enterprise Development.

Jim received his Certified Business Exit Consultant (CBEC) ? designation from The International Exit Planning Association (IEPA) to help entrepreneurs, small business owners, family businesses, and middle market companies maximize their business exit, and he received his certification in succession planning from the ASPE.

Jim is also a Certified Management Consultant (CMC) ? and an active member of the Institute of Management Consultants.

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