5 Common Mistakes CEOs Make When Choosing a Peer Advisory Group

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If you want to go fast, go alone.

If you want to go far, go together.

African proverb

Let’s expose a dirty little leadership secret: It’s lonely at the top. Many chief executives—regardless of company size—don’t regularly hear the tough truths about their own performance as chief executives and about their businesses. Human nature being what it is, many organizations are unwittingly set up so that CEOs receive information that their employees and boards think the CEO wants to hear… not what the CEO should hear and needs to hear.

A study conducted by the Center for Leadership Development and Research at Stanford Graduate School of Business found that many CEOs struggle with isolation. It also revealed that while almost two-thirds of CEOs don’t receive outside leadership advice, 100 percent of respondents said they’d be open to making changes based on advice and feedback if they did.

This isolation issue is real. And it’s exacerbated by the increasingly complex, fast-changing, uncertain world in which we live. Left unaddressed, isolation can be detrimental to a CEO’s effectiveness, to the company’s performance, extending even to the CEO’s health and to personal and professional relationships.

This is no time to go it alone. Executive isolation is a fever, and the best prescription is an executive peer group. Let’s explore the common mistakes that CEOs and presidents make when selecting a peer advisory group.

Mistake #1: Selecting the wrong peers.

Most CEOs belong to industry and trade associations. Let’s not confuse these important affiliations with peer groups. The highest-performing peer groups are defined by how diverse they are, in terms of industry, section, background, function, education, and life experience.

The drawback with industry-specific groups is that when it comes to truly making better decisions faster, we’re usually breathing the same stale air everyone else is. In addition, there’s a limit to how much members are willing to share, because, let’s face it, the other folks in the room are our competitors to some degree. Sure, the tone is friendly and cooperative enough, but we hold back when we get close to the high and low ends of the spectrum of performance and results: if my company is killing it right now, I might not want to share all the ingredients of our secret sauce, and if I’m struggling, a trade show is probably not the place where I’m going to ask my peers-competitors for help.

Economist and author Mark Parrott states that certain industries are actually bellwethers for the economy, or the talent market, or the regulatory environment. Others bring an expertise or perspective that’s simply hard to come by in everyday circles. The best peer groups are not only diverse, they’re also very selective. They put a premium on fit, chemistry, and confidentiality, and they share set of values that really matter, namely, vulnerability, transparency, trust, learning, and growth.

Recommendation: Look for a peer group that’s industry-diverse, follows a selection process, and has a shared set of values (in writing!) that all members sign up for and adhere to.

Mistake #2: Settling for comfortable group environment.

If you’re the smartest person in the room, then you might be in the wrong room. CEOs who want to up their games are not looking for a leadership book club. Some so-called mastermind groups are really mutual admiration and support societies.

The strongest CEO peer groups view vulnerability as a strength, not a weakness. They are safe harbors where confidentiality is sacrosanct, with high levels of both respect, intimacy, and, most of all, challenge. A good peer group knows how to make the uncomfortable comfortable and the undiscussable discussable.

Recommendation: Remember that gold doesn’t sharpen iron. As Neale Donald Walsch says, “Life begins at the end of your comfort zone.” When evaluating a peer group, ask for examples of how it could help you with your blind spots and confront your assumptions. If a peer group doesn’t challenge you, then it won’t change you.

Mistake #3: Assuming that a true peer group must be peer led.

Research by Shapiro and Bottary discovered that high-performing peer groups share an interesting attribute: they’re facilitated by a “smart guide” or moderator who not only has experience and expertise in business, but also takes personal and passionate ownership for guiding everyone involved maximizing their group and individual potential.

“Servant leader” was a common theme that kept coming up in this research. Pioneered by Robert Greenleaf in 1970, the concept of servant leadership posits that employees aren’t there to make the leader successful, rather it’s the leader’s job to provide the guidance and resources to make employees successful.

Many of the best peer advisory groups have smart guides are really good at three things: asking the right questions, listening for what’s not being said, and facilitating fierce conversations. These smart guides also have a fearless commitment to creating a learning environment that works for busy, high-powered leaders.

Recommendation: Make sure the peer group you’re investigating has a smart guide. Connect with current group members and ask if the guide has visible passion, experience, a servant-leader mindset, and knows how to keep things fun.

Mistake #4: Downplaying the power of a structured, proven process. 

Good peer groups know how to have skilled discussions. They follow specific rules of engagement that lead to good decisions. If there’s no process or discipline in place, then a discussion can easily devolve into a free-for-all where the decisions that are reached are influenced by the stronger personalities in the room.

Peer group members report better outcomes and more satisfaction when there’s some structure because their time is so scarce for them. Done right, members often report that they learn as much about their own leadership when they’re helping another member as they do when it’s their own issue being discussed.

Recommendation: Evaluate the rigor of the peer group’s methodology. You want to see a highly strategic and structured approach as its centerpiece. Confirm that it includes steps for properly framing an issue, asking questions, and leveraging the power of the successful leaders in the room.

Mistake #5: Sacrificing accountability for socializing.

It’s great to have a group of business peers who are friends who’ll cheer us on and maybe even pick us up when we stumble. Truly high-performing peer advisory groups also have a strong culture of accountability.

The term accountability isn’t always everyone’s favorite word. For some it’s synonymous with stick, somewhere among punishment, micromanagement, and mean-spiritedness. What would make a busy CEO want more “stick” in their lives?

Author Rafael Pastor says there are two types of accountability: imposed and voluntary. Most of us already have plenty of the former. When CEOs regularly get together with no other agenda but to challenge each other to grow and to be more effective—voluntarily—they experience a more empathetic form of accountability that can only come from people who can relate to being a CEO.

Recommendation: Embrace the notion that peer accountability is a support system for winners that helps increase one’s effectiveness in other areas of accountability. Ask about the mechanisms and cadence by which accountability is incorporated into the peer group’s process.

Who you surround yourself with matters. Avoid these five mistakes to find a safe and confidential council of contemporaries that can be your personal laboratory for professional and personal growth. Trusted peer groups are the best solution for the tremendous responsibilities and solitary challenges that men and women at the top face. Well, that and more cowbell.

Thanks for reading!

Hi, I'm Kurt Greene, owner of Arrow G Consulting. I also lead CEO/executive peer groups in Knoxville for Vistage.

When I’m not helping CEOs and senior leaders to improve themselves and their companies, you can find me re-arranging the stack of unread books on my nightstand, daydreaming about airplanes, and seriously thinking about getting the ol' college rock band back together. Learn more about the exciting work we're doing here at Arrow G Consulting HERE.