Peer Groups — Strength in Numbers

IMAGINE JOINING an exclusive business group that requires members to undergo a virtual audit of their finances, a club where you’re expected to share detailed information about company practices. Picture wanting to host a meeting where your facility is given a white glove inspection, followed by a brutally honest critiquing session by the other members of the group.

Some people might respond, “Oh, I get the joke. This is what happens when you cross the IRS with a proctologist, right?” Nope, it’s what a company encounters when it joins the Print America peer group.

Print America is a tightly knit fraternity of 12 privately held printers that each generate in excess of $10 million in annual revenues. The group, which celebrated its 25th anniversary in 2007, meets in person three times a year to discuss best practices and issues confronting their respective businesses.

Two of the meetings are hosted by member companies, with a third taking place at an industry event typically held by the PIA/GATF or NAPL. The group also gathers on a monthly basis via Webinars, where individual companies provide, among other things, demonstrations on their area of expertise.

The meetings hosted by member companies feature the aforementioned white glove inspection followed by a thorough analysis of those findings. The soul-baring exercise is hardly limited to the meeting host, according to Dennis Castiglione, executive vice president for Modern International Graphics of Eastlake, OH, and Print America’s executive director.

The financial statements of each member are recorded side-by-side on a quarterly basis, allowing the group to compare and contrast the figures. The numbers are also held up against the PIA Ratios to provide analysis on how companies not only compare to the group, but to national averages.

Disclosure is a deal breaker for member applicants who object to the open airing of financial undergarments.

“You need to be very ‘open book’ with the members,” Castiglione says. “We can look at numbers line-by-line and see who’s doing what in a given area. Members can ask questions like, ‘How did you manage to keep that percentage down? Why is your cost in this area so high compared to other companies in the group?’ They get to talk about what works and what doesn’t, what are the best business practices, etc.”

Not About to Fade Away

Castiglione believes Print America has devised the ideal chemistry to keep members interested long after most peer groups have faded. Members are firm but fair and pull no punches when they discuss their various challenges or offer responses to other members. Their technology philosophy is bleeding edge, and participants are decidedly risk takers. Membership has allowed each of the companies to flatten the learning curve in a number of areas.

“It’s kind of like having a board of directors outside of your company that knows your industry,” Castiglione says. “That’s one of the real strengths of this peer group and one of the reasons it’s sustained itself.”

The meetings are very structured. In addition to the host critique and analysis of financial results, each meeting has a theme. Breakout sessions have included CFO huddles, IT discussions and print production, and another is slated to include sales and marketing issues. This draws in various levels of member participation, not just top executives, which helps to keep the group fresh and interesting.

Membership has many privileges, including the economies of intelligence. The brightest minds of the group recently helped cobble together general business continuity and disaster recovery plans, pulling in the best ideas to devise a template for all to use.

Member companies are held to a high standard of ethics. Each company is expected to send a representative to every meeting. Information divulged at the meetings or otherwise is expected to be kept in strict confidence and not shared. Members must also respect the employee rosters of others in the group from a hiring standpoint.

Companies are selected partly on geographic considerations to keep regional rivals from joining. But in the event companies find themselves with redundant clients, respect is shown to the senior vendor or the companies involved come to an arrangement. It is very much a self-policing scenario, which speaks well of the group’s ethics.

Trite though it may sound, there is tangible strength in numbers. Print America companies have developed subcontracting working relationships with one another, leveraging their respective product and service capabilities to become a quasi-national network. Castiglione’s Modern International Graphics, for example, has generated considerable interest among its fellow members due to its highly advanced Web-to-print capabilities.

“If the right opportunity presents itself, we utilize each other’s capabilities,” he says. “The group becomes a resource for manufacturing, as well as information and ideas.”

The evaluation process for prospective members begins with an application and financial disclosure. Castiglione conducts a telephone interview with the candidate, to seek out their motivation for joining and to get a sense of what the company represents.

Once that hurdle is cleared, Castiglione and a Print America board member fly out to the candidate’s headquarters for on-site interviews. Here they gain insight to the culture of a company. Castiglione and the board member then prepare a report, which Print America’s board evaluates, leading to a vote on the membership question.

It’s the bare honesty and multi-level involvement that have prevented Print America from becoming stagnant and losing members. Castiglione is hopeful of keeping the ball rolling in the foreseeable future.

Still Going Strong

“Twenty-five years is a significant life for a peer group,” Castiglione says. “Modern has been involved in some groups in the past. What I’ve usually found is that when we’re through the first round with all of the members showing off their plants, once we’ve done some of the obvious stuff, unless there are particular issues to resolve, people’s interest starts to wane.

“We require attendance by every organization at each meeting. In 99 percent of the instances, it’s the principal of the company who attends. So I think we’ve done a pretty good job.”

A similar organization with only slightly different objectives is The Peer Group. The Peer Group was born in the 1990s and fell by the wayside before being reincarnated in 2003 by some original members and Gregg Van Wert, the immediate past president of NAPL and currently a consultant for The Haven Group.

The Peer Group boasts 13 organizations and, like Print America, seeks to share best practices and business improvements with membership. These printers register sales typically in the $25 million to $65 million range. Company CEOs gather two or three times a year—as administrator, Van Wert organizes and sets the agenda—for a two- or three-day meeting.

The group contains 13 different business segments (such as human resources, IT, financial and sales) that involve various levels of member companies, which network with departmental colleagues through e-mail and teleconferencing. This provides the forum to discuss problems, challenges and opportunities of common interest.

According to Van Wert, the aim of The Peer Group is to provide one-to-one counsel for members. “We’re not looking to replicate or replace what you can get from associations. The value is sharing of best practices among a small peer network of individuals who trust and respect each other, not only as executives, but the companies as well.”

The Peer Group doesn’t have designs on growing any bigger. Van Wert notes that many firms inquiring about membership have been turned away out of competitive considerations with existing members.

As for the broad stroke or the big picture meetings, executives aren’t concerned about the various technologies. Thus, these meetings are more geared toward vision.

“Most of the talk is about strategy and the future,” Van Wert concludes. “Our CEOs really want to talk about where they need to take their companies, where the strategic opportunities and challenges will be. That’s where we seem to spend a lot of our time—and rightly so.” PI