CEOs Band Together to Find Someone to Talk To

January 29, 2009

As the economic storm rages, company chief executives are turning to peer-to-peer support groups to help each other ride out the recession.

Vistage International Inc., the largest of such groups, reports a record 1,800 new CEOs joined Vistage in 2008, an 8 percent increase over the number who joined in 2007. In the Bay Area, there are 190 new members in 47 groups.

“There are way more people joining than leaving,” Pastor said, without giving an exact net number. “The net number was up last year and is so far this year.”

Vistage has nearly 15,000 members in all its programs worldwide, including 10,000 in the U.S. About 9,000 of them in the U.S. are CEOs.

Where else can CEOs go and talk about their uncertainties, asked Rafael Pastor, chairman and CEO of Vistage. “When people are going through new circumstances (the down economy) they are more likely to reach out for help from their peers.”

Most peer-to-peer organizations include about a dozen CEOs from non-competing local firms who meet regularly to offer each other advice and support in confidence. The organizations also offer expert advice, speakers and other help. Each group has a leader; members pay a fee to join.

Paul Witkay is founder and CEO of the Alliance of Chief Executives in Walnut Creek, the only CEO peer-group organization based in the Bay Area. It has grown from 22 groups with 220 members in 2006 to 23 groups with 260 members in 2008. The alliance is planning a CEO roundtable from 7:30 a.m. to 10:30 a.m. Jan. 28 to discuss “Surviving and Prospering in a Difficult Economic Environment.”

Witkay relates how after discussing the issue with members in one Alliance peer group, David Hayes, CEO of Skyline Construction in San Francisco, cancelled a planned office expansion. Hayes used the money instead to increase his sales and marketing budget 25 percent. When the economy recovers, Hayes hopes the extra marketing effort will pay off.

Bill Kern, CEO of Green Bull Products Inc. in San Mateo, which makes green cleanup products to remediate pollutants, was a Vistage member for 14 years. He paid the $12,000 annual fee personally for the last two years because he found it so valuable. “It was essential to my ongoing success in business,” he said. Members don’t just discuss business, Kern said, but personal problems like divorce or caring for aging parents.

It’s not about the number of meetings or number of CEOs in the group, Witkay said: “It’s about getting the right CEOs in a room where they can talk totally honestly. It really is the only place they can talk about some of these things.”

Witkay and Pastor agree in tough times leadership is critical. “Since what we do is very strategic,” Witkay said, “our groups become far tighter and the members start using their fellow CEOs more.”

Competitive pricing, client service, marketing, staff retention are all topics CEOs are discussing, Witkay said. Witkay’s hearing some CEOs say reducing headcount can affect customer service; delaying an office expansion can free up cash for marketing, keeping a company top-of-mind with customers; poor communication or treatment can drive a top member of your team to a competitor. The business issues Vistage CEOs are discussing center around the “4 C’s:” Cash, credit, customers, costs, Pastor said.

That’s true regardless of the business climate, he said: “People in a bad economy are always making money.”