Group Therapy

Erik Anderson of Winston-Salem, N.C., had only been in business for four years when, he says, “I realized I couldn't continue working at this pace. We thought if we worked hard, we'd earn a good living. We were working really hard and we were hitting a brick wall.” That's when he joined one of the NAHB's 20 Clubs for remodelers.

After 20 years in business, David Crane of Nashville says, “I thought I knew everything.” But eight years ago, “I got to a growth curve in our company and … I felt out of control.” Crane turned to Business Networks.

When Jonas Carnemark's Bethesda, Md.–based company was, finally, steadily profitable, and he began to think about higher growth levels and an exit strategy, he was invited by Remodelers Advantage to join a Mentor Level peer review group.

At all stages and levels of business, more and more remodelers are finding value in peer review. The process is not magic; it's a simple concept, really — a forum for business owners to discuss common problems and solutions — but it seems to work magic for those who participate. For the nearly two dozen remodelers we interviewed, peer review groups have made all the difference in their business and subsequently their personal lives. To a person — whether they had a difficult experience; if they stayed for many years or left after a few; if they switched from one group to another — everyone said, “This is the best thing I ever did for my business.”

In the remodeling world there are three industry-specific peer review models — Business Networks (BN), Remodelers Advantage Roundtables (RAR), the NAHB's Remodelor 20 Clubs (R20) — that are similarly organized (see page 90 for details). Each has groups made up of geographically non-competing remodelers at similar revenue figures and stages of growth. They meet two or three times a year, for two or three days at a time. Members share financials, forms, and ideas for growth; offer support for everything from firing an employee or opening a new office to dieting and marital issues; and challenge one another to meet goals — or face consequences.

The meetings can be rigorous and emotionally draining. Both RAR and BN do individual critiques. Crane says he went into his BN critique “with fear and trembling.” But it got his employees to “buy into the Network process and … on board with the changes we wanted to make.”

Other types of peer review groups are composed of members from diverse businesses, and some remodeler groups focus on education as well as peer interaction (see “Other Peer Review Options,”).

Common to all the peer groups is the sense that you're taking on a “board of directors.” “In any discipline you're only as good as the people you rub shoulders with,” says Sue Cosentini. “You can't do it in a vacuum.” Cosentini, who has been in the “Fat Cats” R20 Club for the past three years, attests to having “19 coaches.”

Peer group members also talk about how they no longer feel they're out there all alone. Crane says his network keeps in close contact via e-mail so when an issue comes up “nobody has to reinvent the wheel.”

Cosentini offers a specific example of how the group brain trust helped her business. Her firm, Cosentini Construction, Ithaca, N.Y, works on the design/build model. One Fat Cats cohort who had been in business longer gave Cosentini his design/build agreement pricing matrix. “Before, I did a dog and pony show,” she says, but after working from these documents, her new process has “no free estimates and no competitive bidding.” It took the other remodeler 20 years to develop the documents, she says. Having this is “off-the-scale value.”

While some company owners will always know more than others, all the remodelers interviewed see that as a great asset for everyone. Chuck Russell's R20 “Parrot Heads” are “fairly diverse,” he says, and with 30 years in the business, his company, Westhill Inc., outside Seattle, is one of the oldest in the group. “We have a lot of systems” already in place, Russell says, yet he believes he has received as much as he's given. There's always someone in the group who has tried something and learned from it and can share the experience.

But there's more than business going on. Getting feedback from several other people who understand you is why so many remodelers say they feel right at home at the first meeting. “One of the great things about a peer group for participants is that they form a kind of community,” says Shawn McCadden, who ran a peer review called the Pinnacle Group through his Residential Design Build Institute. (As of January 2004, the program disbanded.) “It's a comfortable, safe place for them to share [joys and sorrows], interact with fellow peer group members, just call up and vent.”

Bill Medina of Salina, Kan., credits Les Cunningham, BN president, for saving his marriage. Fourteen years ago, he and his wife, Peggy, “were struggling.” Bill worked 60 to 70 hours a week. They had no formal business education and, he says, “no sense of priorities.” Peggy eventually left the business to pursue her own interests. At BN “there were some hard meetings and personal discoveries,” says Medina.

Each group — R20, BN, and RAR — has its supporters and critics. For some, R20 is too loosely organized, BN is too focused on the nuts and bolts, RAR is too soft. As with everything in life, each person finds a method that feels right for him or her. Yet, at some point in the process, despite the closeness and camaraderie, you may feel you're ready to move on.

Carnemark, now at the RAR mentor level, felt that he had gotten what he could from his BN group. He says Cunningham “brought an insightful focus on learning the numbers.” Carnemark saw change right away and “started making money. I learned to understand the impact business changes make on a balance sheet and P and L statement and was able to follow through with those changes with my accountant,” he says.

After six years, Carnemark felt he had outgrown BN's model and moved to RAR. As owner of a 17-year-old $3.6 million design/ build company, Carnemark and his mentor group focus on issues particular to their niche, like “how do you grow a design/build [firm] where design is a profit center?”

Leon Noel, president of Lehach Inc., in Roseburg, Ore., started a remodeling company in 1988, after 32 years with a wholesale distribution company servicing the kitchen and bath industry. He joined RAR five years ago but only attended two meetings. He felt it wasn't teaching him anything new. But he clicked with Les [Cunningham] and says “I haven't looked back.”

Peer review tends to be for the basically healthy company. “If your company is drowning,” Remodelers Advantage owner Linda Case says, peer review won't “throw enough customized information [your] way fast enough.” She suggests hiring a consultant. (As a side note: Many people in peer groups have separate consultants who help them implement the goals determined at the peer review sessions.)

You also have to be prepared to “hear the news,” as Les Cunningham would say. “Some people, especially entrepreneurs, don't want to hear the bad news, and they don't take it well.”

Because everyone in the group undergoes the same sort of scrutiny, it makes it easier to accept what BN terms “suggestions and perceptions.” Says Cunningham, “We try to offer a positive way to bring accountability. We don't slash and burn.”

Regardless of which group they're in, peer review participants can be like religious converts, urging everyone to join. “If you're not involved, I'd highly recommend you get involved and see which one best suits your needs,” says Jim Strite of Strite Design + Remodel. Strite, who often speaks to remodelers and teaches courses for RAR, oversees a successful $2.7 million company in Boise, Idaho. They “offer opportunities and skills beyond other types of group settings. Both BN and RAR provide a strong culture and goals and procedures so you can excel.”

Patty McDaniel, president of Boardwalk Builders in Rehoboth Beach, Del., had been in R20, and about 18 months ago started with RAR. She says joining a peer group was the best thing she ever did. “You think you'll be told how fabulous you are and what really happens is they clean the mirror for you,” she says. “They help you make the tough decisions you can't make yourself.”

Shawn McCadden, former head of the Design Build Institute in Arlington, Mass., and facilitator of the Pinnacle Group peer review, who is now a franchise systems manager with DreamMaker Bath & Kitchen, offers the following questions to consider when researching a peer review group.

Certified Contractors NetWork based in Ardmore, Pa., and run by 30-year veteran remodeler and professional contractor trainer Richard Kaller, focuses on education and training and a version of the peer group model through its Internet NetWorking Conference, known as CINC. The highlight of CINC is the Webinar (Web seminar) — up to six live weekly one-hour sessions covering sales, production, administration, and business planning issues. Members communicate through a phone bridge or computer with VoIP or by typing messages in a chat section of the computer screen. Contractors can log on from a computer or cell phone. Members receive a set of manuals about various aspects of the contracting business and one-on-one telephone consulting to get them started on the Webinar program.

There's a $3,500 start-up fee, which includes thousands of dollars' worth of tapes, plus one-on-one instruction; a $550 per month fee, which includes one-on-one consulting, member discounts, newsletters, recordings, and use of the CINC programs. www.contractors.net; 610.642.9505.

MasterMind Training, based in Cummings, Ga, offers help via teleconference as well as a select peer review group. President Phil Rea, who had been a remodeler for 15 years, facilitates a peer group of 20 top remodelers that meets once a quarter. He expects to start another group of 20 next month. “We're entrepreneurial based,” says Rea, rather than grouping people by revenue or size. Platinum Group members pay $10,000 a year to attend four meetings, have access to all MasterMind teleconferences and to SuperConference, a two-day annual event. www.mastermind-training.com; 866.441.7445.

TEC International (originally The Executive Committee) is a leadership development organization for chief executives. Membership is by invitation only, but interested CEOs can contact TEC offices to see if they qualify. The traditional program, for companies with more than $5 million in annual revenues, costs a one-time enrollment fee of $1,800 and $950 per month. The Emerging Entrepreneur program, for companies with revenues between $1 million and $5 million, requires a $1,000 one-time fee and $750 per month. Members meet each month with up to 15 other CEOs from non-competing industries. Once a month each member also meets privately with his or her group “chair.” www.teconline.com; 800.274.2367.

Another diverse-industry group is TAB (The Alternative Board), a franchise operation. TAB groups comprise up to 10 locally based non-competing business owners. Members are matched by revenue and employee size as well as by perceived problems and opportunities. Typical members have between $1 million and $15 million in revenue. TAB, which operates in three countries, offers a hot-line for business questions (answers given by any facilitator or member); two conferences each year; and does full administration and billing for the franchisee. Membership is by invitation only and costs between $400 and $600 per month depending on market and size of company. www.tabboards.com" ; 800.727.0126.

This is by no means an exhaustive list. Look on the Web for other reputable groups that might meet your needs.