Dana Borowka, CEO of Los Angeles-based Lighthouse Consulting, started preparing for the economic downturn two years ago and he is better off today because of it.
Borowka is a member of Vistage International, a CEO peer-group organization that is seeing a record number of CEOs turning to peer-to-peer support and counsel during these tough economic times. Vistage-member CEOs spend one day a month with up to16 other executives from non-competing firms examining their business and economic issues and offering one another guidance and support.
In 2006, a Vistage expert speaker warned Borowkas group about the upcoming economic troubles and got him thinking about how Lighthouse would fare. Borowka and his team built a business plan to diversify client mix, minimize financial risk and reevaluate marketing strategies. They assessed the marketplace, analyzing issues likely to affect their clients, and took steps to ensure their products were relevant and valuable in these challenging times.
Well in advance of the market shifts, we anticipated that companies would be looking for ways to better use their current staff, make more targeted hiring decisions, and do more in-depth employee screening, Borowka says. My Vistage CEO group challenged me to think ahead and their advice has proved indispensable to our success today.
While many Wall Street companies anxiously await relief from the federal government, Borowka is part of a growing number of Main Street chief executives who are helping each other weather the economic storm. A record 1,800 new chief executives joined Vistage in 2008, an 8% increase over the comparable number in 2007.
What makes Vistage uniquely valuable is that CEOs across all industries bring their collective real-life experience together to help each other identify opportunities, recognize pitfalls and solve problems, says Rafael Pastor, chairman of the board and CEO of Vistage International. In this tough economy, CEOs arent looking for a quick fix. As they face circumstances theyve never seen before, they need ongoing help from other executives and experts to figure out what to do and how to do it. Vistage is helping CEOs deal with the key issues of cash, credit, customers and costs and holding them accountable to deliver results. He adds: Many of our members are being challenged by uncertainty and anxiety in ways theyve never been before as leaders, and were also helping them to be confident, calm and courageous.
Despite their record low confidence levels in our overall economy, approximately two-thirds of Vistage-member CEOs still expect their own companys revenues, profits and hiring to be the same or better in the next 12 months, according to the Q4 2008 Vistage CEO Confidence Index Survey. This relatively positive outlook reflects that small businesses tapping into peer groups, mentoring and expert resources are better prepared to weather the current economic storm.
Growth in a Down Economy
Kevin Reddy, CEO of fast-casual restaurant company Noodles & Company in Colorado, has been a Vistage member for three years and echoes the value of peer groups.
In todays environment, you have to stay focused on whats truly important, says Reddy. Being part of a peer group is probably more valuable today than it is in good times. Theres an enormous benefit in having a group that you can go talk to and that has no agenda beyond listening to you, challenging you and helping you become a better leader of a better company.
While most concept restaurants are contracting and halting growth plans, Noodles & Company continues to expand. Reddy opened 34 new restaurants in 2008 and has plans to add 35 more in 2009.
How can they grow during these times when access to credit is so challenging? Recently, the 200-unit restaurant chain changed its capital structure and Reddy credits his Vistage group for helping him focus on the long-term implications, debt and raising capital.
Reddy brought the issue to his Vistage group, which walked him through the pros and cons of raising money, terms sheets and private equity versus going public. His group of 14 other CEOs from a variety of small to large businesses helped Reddy navigate the waters and create scenarios for all possible options.
We were able to bring in some very good partners and raise capital well in advance of when we absolutely needed it, he says. Even in this tough economy, Noodles & Company enjoys financing at good rates.
From Surviving to Thriving
Dominique Raccah is the owner and publisher of Sourcebooks, an independent book publisher just outside of Chicago. Nationwide, the publishing industry is struggling and the environment isnt expected to improve for some time. With the help of Vistage (she became a member in 2005), Raccah is protecting and growing her business by closely scrutinizing price points, customer demand and product mix, and extending the publishing firms distribution network.
Although the publishing industry takes economic slowdowns harder than most, and competitors are conservative, my Vistage Chair and group helped me realize my company is better positioned than I thought and it might be an opportune time to make an acquisition, said Raccah. I was in survival mode and wasnt even thinking about growing. The acquisition idea came up within the last six months, we just closed the deal, and the feedback and excitement are amazing.
Main Street business leaders are bracing for a long, tough fight, but our CEOs are nimble and resilient by nature, says Vistage CEO Pastor. Were optimistic about the creativity and strength of small and mid-sized business leaders in 2009 and were helping Main Street businesses not only survive, but thrive in these most challenging of times.
Vistage is a CEO peer organization with nearly 15,000 members in 15 countries. In addition to their peer groups, Vistage CEO members have access to expert resources speakers and receive monthly one-to-one coaching from a mentor called a Vistage Chair. The sharing of information in a Vistage group is completely confidential, allowing for the open exchange of problems, ideas and solutions.