Weekly Thoughts: Small Business Elegy
Here is something that caught our eye this week:
Small Business Elegy
The Chenmark partners spend a lot of time acting as a sounding board for our operators as they grapple with the leadership obligations associated with running a small business. From finance to operations to technology to marketing, an effective small business CEO must be extremely adaptable, understanding how to drive towards a big picture vision while also paying close attention to day-to-day minutiae. Despite the broad range of responsibilities, all of our operators — across industry and geography — report that finding and retaining good employees is their main inhibitor to growth.
To be clear, we are not talking about how we fare in the battle for white collar talent at Harvard, Stanford, or MIT. Given the work performed at our companies, a good entry-level employee generally means that she is reliable (consistently shows up on time), has a clean drivers license (rarer than you’d think), and has a desire to work hard (including overtime, when necessary). It is a far cry from trying to wine and dine the Ivy League candidates who did best at their case study interview.
Recently, we were interested to see our human resource dynamics echoed in J.D. Vance’s 2016 best-selling book, Hillbilly Elegy: A Memoir of a Family and Culture in Crisis, which used Vance’s personal story to the explore broader socio-political dynamics undermining economic opportunity, and by extension, good old fashioned hard work in certain demographic or geographically defined groups. While Vance’s book is centered on Appalachia, many of the issues extend far beyond the Blue Ridge Mountains, as we see many similar dynamics playing out in our workforce on a daily basis. For instance, every week we have people apply to entry-level positions, confirm the interview time and location via email, and then simply not show up. Some people will even interview, accept jobs and then not show up the first day. Others will simply stop coming to work, not because they have taken another, more desirous job, but because they decided not to work at all. Sometimes we feel like Dagny Taggart trying to figure out where her train crews have gone.
Regardless of political affiliation, one could be forgiven for feeling overwhelmed by the deep problems and potential implications presented in Hillbilly Elegy. On this point, Vance provides some stark commentary on the problem and the reality surrounding its solution:
“People sometimes ask whether I think there’s anything we can do to ‘solve’ the problems of my community. I know what they’re looking for: a magical public policy solution or an innovative government program. But these problems of family, faith, and culture aren’t like a Rubik’s Cube, and I don’t think that solutions (as most understand the term) really exist. A good friend, who worked for a time in the White House and cares deeply about the plight of the working class, once told me, ‘The best way to look at this might be to recognize that you probably can’t fix these things. They’ll always be around. But maybe you can put your thumb on the scale a little for the people at the margins.'”
At Chenmark, we acknowledge that the breadth of public policy issues highlighted in Hillbilly Elegy are beyond our ability to effect. However, we believe strongly that the door of economic opportunity is one that should be open to all, and as business owners, we believe it is our obligation to ensure that all our companies create mechanisms to allow for upward mobility given the right attitude and performance. For this reason, we work with all our CEO’s to establish clear frameworks for how an employee can advance through the ranks, how performance will be evaluated, and how employees can take responsibility for their own professional development. As one of our CEO’s noted in a recent all hands meeting while encouraging each attendee to update his/her LinkedIn profile, we aspire to train and promote talented professionals even if it means those people eventually leave to pursue other roles in different fields or geographies. While such a framework is commonplace on Wall Street or Silicon Valley, it is exceedingly rare in more blue collar industries despite being, in our opinion, no less applicable. While progress is sometimes slow and there are no silver bullets, we hope that our efforts in this area will, over time, ensure that our companies stand as employers of choice, and in so doing, can tip the proverbial scale in our local communities for years to come.
Have a great week,
Your Chenmark Capital Team