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For Vistage, It Is Time to Lead by Example

Vistage International has always been about leadership.

Its new owners are taking that to heart, pursuing an aggressive growth strategy and brand awareness campaign, and committing $5 million to back those efforts.

The for-profit membership organization does one thing: help executives grow their enterprises through a network of support groups and mentors. The center of that effort is Carmel Valley, where Vistage employs 150 people.

The company, which does not disclose specific revenue, has achieved double-digit growth over the last five years, said CEO Leon Shapiro, who is finishing his first year with the company.

TowerBrook Capital Partners and Education Growth Partners bought a majority stake in Vistage in late 2012 from a group of private investors for an undisclosed sum. The new owners see even more room to grow.

Beyond its 17,000 members in 800 vertical markets and 15 countries, not many people know about Vistage, Shapiro said from his third-floor office overlooking Interstate 5. The organization has an average of 5 percent penetration in U.S. markets, he said. And while he doesn’t know what saturation looks like, he’s certain that there’s “plenty of room” for improvement.

“The brand is not widely recognized,” he said. “The work is not widely understood.”

Shapiro’s first goal after becoming CEO in April was to review Vistage’s brand and its go-to-market strategy, and make some changes. Vistage unveiled a new brand and brand strategy in September, and website changes followed in November. Also new are a regional structure and an events-based strategy that Shapiro calls scalable.

Shapiro, an East Coast transplant, replaced former CEO Rafael Pastor in April. Pastor still sits on Vistage’s board and is the organization’s largest individual investor. He also handled the sale and continues to have the new CEO’s ear, Shapiro said.

Many Minds Solving Problems

Vistage’s target market is small to midsize companies, which it defines as up to $100 million in revenue.

Top executives from those companies are assigned to groups of roughly a dozen peers. San Diego’s 312 active members are split into 27 groups. The region has 14 group leaders, called chairs.

Under each chair’s guidance, executives spend a full day per month hashing out each other’s business problems. The peer group will likely follow up on those problems during the next monthly meeting. Members are free to take or leave their peers’ advice, Shapiro said — as long as they do it deliberately.

Typically, the executives in the group come from different vertical markets. Members are not grouped with competitors, and group members pledge to keep their conversations confidential.

The power of 12 to 16 minds working on a project is amazing, Shapiro said. “There is no other substitute for this peer group process.”

Marketing on Tour

The sales cycle — the process of putting people into groups — takes time and effort, Shapiro said. But once exposed to a group, a typical member stays seven years, Vistage officials said.

Hoping to spread the word about its services and attract new members, Vistage will soon embark on a 22-city speaker tour. The Vistage Executive Summit will begin in San Diego with an all-day program Feb. 25 at the Hilton La Jolla Torrey Pines. Focusing on innovation, the day will include talks from Cameron Herold, former chief operating officer of 1-800-GOT-JUNK, and University of Michigan professor Richard Curtin. Local speakers include executive coach and author Marshall Goldsmith and San Diego Chargers CEO A.G. Spanos. Event information is at www.leadinginnovationsd.com.

Vistage plans to produce a new executive summit every year, Shapiro said.

New Owner, New Leader

Some may know Vistage by its former name, The Executive Committee, which was shortened to TEC. The business, founded in 1957, took its new name in 2006.

New owner TowerBrook, based in London and New York, is also an investor in the BevMo retail chain and True Religion Apparel Inc. Co-owner Education Growth Partners of Connecticut invests in publishers and other education-related businesses. One of its recent investments is eScholar LLC, which offers data warehouse technology to 13 state education departments.

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