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Last Update: Sunday April 11, 2021

Key Idea: Establish A Board Of Directors

Chris Fortune believes that you get better faster when you are surrounded by experience.  Chris'  Dad and other veteran executives serve on the board at Saris.  View all the videos of this episode.

Key Question:

A: 

Every successful business owner has mentors, people they trust to whom they go for advice and a few have a formal board of directors or a board of advisors.

Q:  How does an owner go about forming a board?

A:
Chris recruited his banker, attorney, father, father-in-law and the president of a bike company who truly represents the customers. His father is one of the innovative members of his team and you might remember that he had come up with a brand new product. His father-in-law took a company from $500,000 to $150 million in sales. This tells us that you should not put relatives on the board just because you enjoy their company. Every person must have experience to bring to the party.

Many owners in our library depend upon bankers, attorneys and CPAs which is smart because these professionals see inside of so many companies. They can offer both hard data for benchmarking and anecdotal insight depending upon the problem you are trying to solve.

Q:  How do I attract experienced business leaders to serve on my board?

A: Just ask. We have found that extraordinarily successful business owners want others to succeed. Simply ask the person you want if they have time in their schedule to serve. Meeting quarterly is enough and you don't have to spend a lot of money. You can serve a nice lunch in your own conference room, supply your finanical statements and your goals for the future then launch a discussion by asking: What do you think we need to be doing that we're not now doing?

Compensation is optional. The owners we know don't pay board members. Probably the people you want are already wealthy and don't want money. What they really want is for you to ask them hard questions, listen to them, act on their ideas and then report back to them the results. This gives them a sense of accomplishment and they will be anxious to come to the next meeting to see the numbers.

In addition to having a board of directors, many owners belong to peer groups which can help as much as a board of directors. Vicky Carlson owns a Herman Miller Dealership and she is a member of the Herman Miller Dealer Council. This is the perfect group for Vicky because all of the members do exactly what she does and they all share their financials. There may not be anything like this group that you can join, however, you can think about finding some group that will teach and inspire you. This type of learning is called peer-to-peer learning. According to the Edward Lowe Foundation, "A peer network consists of a small group of chief executives who meet regularly in a confidential, supportive environment under the direction of a seasoned facilitator. The group typically ranges from six to 14 participants who operate noncompeting businesses." The power for Vicky is that her colleagues do exactly what she does and they all share their financials.

We have taped many programs about business owners who tout the groups they depend upon for inside information to solve sticky problems and will mention just a few of the options. If you are under 40 years of age, you can join Young Entrepreneur's Organization. If you are a woman, there is the Women President's Organization. If you have about $1,000 a month and will commit to a year's membership, you can join The Executive Committee, better known as TEC. The web site of the Edward Lowe Foundation has a group locator and links to articles about peer groups. As a member of a peer group, we believe that the biggest benefit of a powerful peer group is there is no advice given. We only tell our own stories of how we solved or failed to solve a particular problem. This way, you are guaranteed information from the real world.

Look for a group that does not try to sell to each other, one that has a facilitator to keep the discussion on track and one that does not bring in speakers.

Think about it

Do you feel alone at the top? Are you in a group that helps you solve problems? Can you make a list of your dream board members? 

Clip from: Saris Cycling Group aka Graber

Madison, Wisconsin: Sara and Chris Fortune bought Graber Products in 1989 when it had 24 employees and $3.3 million in sales. When we taped this story there were up to 60 employees and with revenues over $10 million. They continue to grow, changed the name of the company to Saris Cycling Group, and are very committed to keeping their manufacturing in the USA.

Actually, manufacturing is on its way back to the USA!

That is not prophetic verse but the reality of our advancing technologies where highly educated workers can do it better, often faster, and sometimes cheaper than anywhere in the world.

This episode is a case in point: And, this story comes from the heartlands of America. These are the kind of people who love this country and all those basic freedoms to do the right thing in the face of adversity. They have done it right and now they ship their products around the world.

When Chris and Sara bought Graber Products, they bought a solid business with a good reputation, but the sales were flat. The employees were dedicated, but the company needed fresh energy to start growing again. To dump the stodgy image of the company that he bought, Chris found an Italian fashion designer who came up with improved form and function for his bike racks. Chris believed that the market was ready, willing and waiting for new ideas and he was right. Customers have flocked to the new products and employees love to come to work.

They are their industry leaders. They have kept manufacturing in America. And, their industry recognizes them for their generosity of spirit, moral courage, and ethical leadership. These people are quiet heroes,  new pioneers making the world a better place.

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Saris Cycling Group (once known as Graber Products)

Chris Fortune, CEO

Visit our web site: http://saris.com

Business Classification:
Manufacturing, Sports (Biking), wholesale

Year Founded:

Establish A Board Of Directors

HATTIE: Oh, in your old age of 44, you've mellowed out?

CHRIS: Well, I was a branch manager at 30 years old, running a $3 million or $4 million company. And, you know, you develop a win-at-all-costs attitude. I’ve found that's a very short-term approach to life and business. Over time, you really hone your approach to life.

I have a great mentor, my wife's father, Phil Hendrickson. It's great to have somebody like him to guide you and influence your life and give you certain goals and values to run a business.

HATTIE: Was he a small business owner?

CHRIS: He was a business owner and a manager of a business. He took a business from $500,000 to $150 million. I watched him do that. When we bought our business eight years ago, I asked him to be on our board. He is really the person I go to for advice. He's my mentor. It's great to have somebody like that, someone who has been there, done that; someone you can trust.


HATTIE: How did you develop your board?

CHRIS: We selected people that we knew. Our banker, Bob Atwell, is on the board. He is a tremendous resource. He understands our business and we have a very honest and open relationship. Our corporate attorney is on the board, as well as my father and Sara's father. We also have somebody that was the president of a bicycle company. He is a great adviser. Whether you have a board or you have people around that you can use as a resource to validate what you're trying to get done, it is important to have input from people you know and trust.

HATTIE: Or to say, `Well, Chris, you're crazy.' Has the board ever said to you, `Oh, my gosh, don't do that'?

CHRIS: Yes. We were looking at buying another company, and we went through the whole analysis. The board didn't feel that the timing was right and so we listened...

HATTIE: And you respected that. 

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