Commentary & Analysis
Just Between Us: Peering into the Inner Workings of Peer Groups
Some printers draw their power from peer groups: small, private circles of owners who use candor and confidentiality to solve common problems and share models for business success.
By Patrick Henry
Published: February 24, 2014
According to the American Society for Association Executives (ASAE), a sense of what it calls “community coordination” lies at the heart of the trade association movement. When people voluntarily join associations, says ASAE, it arises from a desire to work together on a common cause or interest.
Printers who want to experience this sense of community typically look for it in the kinds of not-for-profit trade associations depicted in this series of articles. There, besides common cause, they find extensive arrays of resources, products, and services aimed at drawing them more deeply into the spheres of influence that the organizations represent.
That’s as it should be, because continuously enriching the benefits of participation is what members of trade associations expect the groups to do. But, there can be times when association infrastructures matter less to printers than the simpler rewards of just being in a room with other printers who have fought the same fights, felt the same pain, and overcome the same obstacles.
At such times, some printers draw the power of community from peer groups: small, privately managed circles of company owners and senior executives who use candor and confidentiality to solve common problems and share experience-tested models for business success. Behind discreetly closed doors, and with responsibility to each other as their number one rule, blunt-spoken peer group members cut straight to the chase of tough management issues with a directness that the formalities of mainstream trade association activities don’t always encourage.
Often, what’s discussed in peer group conclaves shapes vital business decisions that can spell the difference between growth and stagnation for a printing company.
When Susan Moore, owner and president of Dumont Printing (Fresno, CA), first joined the peer group she belongs to four years ago, she was at a critical stage in consolidating her leadership of the firm. “I felt I was on an island and needed someone to help me paddle back to shore,” she says. Straight talk from peers helped her to refocus on essentials and steered her through subsequent decisions about expansion and acquisition.
David Pitts also says he owes some of the good fortune he’s enjoyed as the co-founder of Classic Graphics (Charlotte, NC) to the support of the peer group he has belonged to since 2000. “We share a ton of information with each other,” says Pitts, who has used the advice to help him quadruple the company’s volume and to bring about its successful sale to another firm. If a peer group has 10 members, he says, being one piece of it is “like having nine consultants that you have complete access to.”
Consultancy from a roundtable of equals can be applied in many ways—for example, as a context for decisions about capital investment. Mike White, president of CUAdvantage Marketing Solutions (Saginaw, MI), discovered this when he asked fellow peer group members for a reality check as he planned the purchase of the company’s first four-color press.
“With help from the group, I decided on a press and received support for pricing and workflow,” he says. “Press manufacturers tend to tell you what you want to hear. However, other printers tell you the good along with the not so good.” (In this case, peer critiques worked to the manufacturer’s advantage by convincing White to install a larger and more automated press than he’d originally envisioned buying.)
The “tough love” aspect of peer group interaction is its most appealing feature for entrepreneurial printers who understand that rugged individualism has its limitations as a business strategy. As peer group veteran Antonio (Tony) Pires, president of Professional Business Solutions (Fall River, MA), observes, “All of us have the ability to justify the wrong choices we make.” Sympathetic but unvarnished criticism from peers counteracts this by “forcing some accountability” and calling out foot-dragging on urgently needed decisions, Pires says.
Dennis Castiglione, executive director of Print America Inc., one of industry’s longest-running peer groups, agrees. Group members “pretty much lay it on the line to each other—we’re all in the business of keeping each other in business,” he says.
Managed by Procomm Marketing, Castiglione’s consulting firm, Print America consists of 11 member companies whose leaders meet three times a year to “serve as an external board of directors for each other’s organizations.” This includes benchmarking individual progress and, occasionally, making “interventions” where they’re needed, Castiglione says.
Mike Kind and Mitch Evans had logged highly successful careers of their own as printing entrepreneurs when they launched The Next Level Group in 2006. Today it comprises three peer groups that Kind and Evans prefer to limit to six or seven members each. The groups, organized by size and business type, meet monthly and gather for an annual symposium at which the members present their strategic plans for mutual review. Though the participants are dispersed from coast to coast, says Kind, “they feel like they’re not alone” when they commune in this way.
Geographic distribution insures that peer group members aren’t business rivals, and that separation facilitates openness—the key ingredient of peer group deliberations. The members of Print America, says Castiglione, are either in non-competing markets or are in “very friendly competition” with each other if they happen to be close by.
Rotating the locations of the thrice-yearly meetings also helps to take rivalry out of the picture. It works so well, says Castiglione, that PrintAmerica members sometimes dispatch personnel to each other’s plants to assist with equipment installations and other business undertakings.
Nevertheless, there are some constraints on what can be discussed and done. For example, says Kind, The Next Level Group prefers that members avoid talking about routine equipment matters so that they can concentrate on C-level management issues instead. Selling prices, too, are off the table, but not conversations about estimating, budgeted hourly cost rates, and other methods by which job pricing is established. “The cost of a job is a fact, but the price of a job is an art,” Kind says.
Castiglione notes that because Print America members are so open with each other about their finances—even to the point of sharing 12-month rolling averages—job pricing doesn’t come up except in hypothetical examples. Strict rules apply, however, to other kinds of interaction within the peer group.
Print America’s bylaws state that a member may not try to hire personnel from another member without the employer’s knowledge. The bylaws also bar Print America companies from acquiring or merging with each other. This is no small restriction for the members, says Castiglione, given that “the vast majority are in acquisition mode.”
But, even as they observe these red lines, peer group members still have plenty of leeway for unbuttoned talk about where their businesses are headed.
Moore, who spent more than half of her 23 years with Dumont Printing as the company’s de facto boss before stepping formally into the role this year, was grateful for the frankness of her counterparts at two pivotal stages in her career. In 2011, she purchased Dumont’s main competitor in a buyout that she says “made us whole again” but also confronted her with challenges of integration. More recently, she acquired full ownership of Dumont Printing and with it, full responsibility for the fate of the company and its 45 employees.
She says that guidance from the peer group helped her navigate the twists and turns of merging two cultures in the buyout of the rival firm. And, If her peers occasionally were “harsh” in their assessments of how she behaved during her progress to full ownership of Dumont Printing, Moore never resented it. She credits their no-nonsense coaching with keeping her from getting caught up in the drama of the deal and with enabling her to exude the single-minded confidence she would need to make it succeed.
Moore’s experience will come as no surprise to White, whose 42-year-old business specializes marketing collateral to the credit union industry. Probably the biggest benefit of peer group participation, he says, is the fact that “we all check our attitudes at the door.”
“We are used to doing things our way—after all, that is why we are owners,” White acknowledges. But he also points out that pooling wisdom trumps groping for answers in isolation.
“It really is amazing to have seven or eight opinions on a subject, knowing that another owner has experienced the same issue and is telling the story and the outcome,” he says. “I feel much better about making a decision after consulting with a group of professionals, many of whom have already had this very issue.”
Sometimes it's easy to quantify the value of the advice. Pires says that in one discussion, he discovered that Professional Business Solutions, a multi-division marketing services provider, was paying a “dramatically higher” rate for insurance than other firms in the peer group. Armed with the knowledge, Pires renegotiated with the insurance company and cut his annual premium by $10,000.
In other cases, the benefit of peer group interaction lies in the fundamental insights it yields into the choice between failure and success that every printing company faces sooner or later.
Pitts recalls a peer visit to a plant where business had gone into decline after 9-11 and its ensuing recession. “They showed us quality this and quality that,” he says, but not a strategic plan for pulling out of the slump. “We told them that they weren’t going to quality their way out of their current stagnation,” Pitts says. The advice, which included a stern admonition to go to market differently, was not heeded, and the company did not survive.
A more inspiring example came from a peer-group company whose owners, Pitts says, “refused to not be profitable” no matter what hardships or setbacks came their way. He notes that at the time, his own company was “average” in terms of profitability—a status that began to seem mediocre to Pitts in light of what these peers were achieving. He took the lesson to heart, and eventually, he says, Classic Graphics “radically improved” its profit picture by doing as they did.
Living up to shared expectations is the key to maintaining motivation in a peer group. “When we say we are going to do something and we don’t do it, we get called out on it,” says White. “It is never in a harsh way, but a reminder as to why we wanted to do it in the first place and find out what is holding us back.”
“It is the accountability factor that keeps us on track,” he says.
But, even the most self-driven peer groups require facilitation and management, and those professional services cost money. The Next Level Group charges members $495 monthly, offering new joiners a full refund on a four-month trial membership should the newcomer—or the peer group—decide that the fit isn’t right. At Print America, the tariff is $1,000 per quarter. Paying fees like these, Pitts observes, “is not something you would do for the hell of it” or if the perception of value and ROI were not clear.
Printers looking for peer affiliation also can find it within Printing Industries of America (PIA) and the National Association for Printing Leadership (NAPL). Both national trade associations operate peer group programs.
Wherever a printer connects with a peer group, he or she had better bring along an open mind and a thick skin. “This is beyond networking—these guys bare their souls to each other,” Castiglione says. He adds that when members need interventions, their tough-loving peers don’t hesitate to “dress them down and kick their butts.”
That sometimes makes for attrition. “If people find the accountability to be too much, they leave the group,” Kind says. But for those able to stand the well-intentioned heat, it can be well worth hanging in.
Pitts says there’s no substitute for having “the phone number of the president and his willingness to answer any question,” including queries about finances, when one peer group member reaches out to another. In his view, that insight can be more powerful than the information provided by industry ratios and other financial reports that don’t get down to specific, individual cases.
What clinches it for Moore is the “security” of being able to discuss her problems openly in a setting that is “much more intimate” than what mainstream trade association meetings typically provide.
That speaks directly to the exceptional trust and transparency that sets peer groups apart. As Moore puts it, “We’re all good at grounding each other.”
Next week: free association: some concluding thoughts on the roles of print industry membership organizations.