Tugboat Institute @Edward Jones: Trusted Relationships
The Tugboat Institute® tribe gathered in St. Louis last week for Tugboat Institute @Edward Jones. This was our 9th Fall Exemplar visit and offered an in-person as well as virtual experience to more than 100 Evergreen® CEOs. Edward Jones is an Evergreen company with $1.7 trillion of assets under care. Their 19,000 financial advisors serve over 7 million clients from 15,000 offices located in approximately two-thirds of counties in the US and all 10 provinces in Canada.
Edward Jones was established in January 1922 by Edward D. Jones—known to most in the firm as Mr. Jones Sr.—who devoutly believed that all people who work for him deserved respect and fairness. He and his son, Ted, who joined the firm in 1948 as its 18th broker, shared an abiding passion for the business they were creating.
In contrast to their competitors in the securities industry that focused on cities with offices teaming with brokers, Ted had the visionary idea of serving farmers, small businesses and families in small American towns. He knew they had financial resources but were overlooked by the traditional investment companies. Peter Drucker would later call this “a market in contemplation.” To serve these people, Ted developed the idea of a single financial advisor in each small town and encouraged every advisor to knock on doors introducing oneself personally. This was a groundbreaking business model and sparked other disruptive innovations that Edward Jones follows to this day.
In 1972, John Bachmann, Ted’s successor, wrote a short memo that redefined the course of the company with the forward-thinking concept of expanding from their current 100 offices to 1,000 while still holding true to the core value of providing exceptional service to clients in rural markets. John ended his revolutionary memo with the missive to, “Act boldly now.” In fact, at the opening of its 1,000th branch in 1986, John raised the bar again, announcing his new Big Hairy Audacious Goal (BHAG) to establish 10,000 offices across North America and continue the tradition of building hyper local business—one financial advisor at a time.
John served as the third managing partner of the firm for an unprecedented 24 years. The position would later be filled by Doug Hill and then Jim Weddle. Each played a critical role in the development and success of the firm. For our exemplar visit, we had the privilege to have the firm’s sixth managing partner in just under 100 years host the experience—Penny Pennington.
Penny assumed the role in 2019 and shared with our members her view of a managing partner that remains consistent with her predecessors, “I didn’t take this job to be a caretaker.” Rather she is raising the ambition of Edward Jones by moving the company from a mission-driven firm to a purpose-driven one—where Edward Jones’ purpose sits at the headwaters of the firm’s culture, strategy, trade-offs, and execution. Along with this shift, the company is taking a “human centered” approached to complete wealth management for their clients.
During a fireside chat with Dave Whorton that kicked off the exemplar, Penny was clear that the success of Edward Jones is not accidental or inevitable. This candid conversation also allowed Penny to share in-depth her life story, the history of Edward Jones, and how the Evergreen 7Ps® principles come to life at the firm.
After the fireside chat, executives and leaders from Edward Jones gave a series of presentations on Evergreen practices instituted at the company, followed by frank Q&A sessions. The first talk focused on Purpose, and how Edward Jones’ purpose is the north star, and the “why” for the firm. Next the team presented the cultural and people practices necessary to make the purpose a reality. Their presentation expounded on the 5 mindsets that are integral to the company: lead by example, establish a place of belonging, continue learning, make effective decisions and grow community impact. As Penny eloquently put it during the Q&A after this presentation, “Being better versions of ourselves as human beings allows us to be better for our clients.”
Additional sessions included discussions on pragmatic innovation, the strategic advantages of ownership, the investment philosophy of Edward Jones, creating leaders and leadership capacity, the elevation of ethics beyond mandatory compliance, and the crucial role of volunteering and outreach projects that make a difference in the communities where associates live and work. Our membership was also treated to a talk by the firm’s fifth managing partner, Jim Weddle, who shared one of his greatest life lessons, “What got you here might not keep you here or serve you best.”
Those who attended were gifted with a deeper understanding that Edward Jones is a purpose-driven, dynamic, adaptive, learning organization that will continue to thrive and positively impact clients, colleagues, communities and society. It is this sentiment that makes Edward Jones exceptional and one also shared by the 200+ members of Tugboat Institute that commit every day to building leading and lasting Evergreen® companies.
Susanne Lally is Director of Marketing and Partnerships at Tugboat Institute.
How The Great Recession Helped Us Survive The Pandemic
When the Great Recession hit in 2008, I was five years into my career at Lloyd Companies, the full-service real estate firm founded by my aunt and uncle, Pat and Craig Lloyd, in Sioux Falls, South Dakota in 1972. As 2008 approached, we were coming off of our best years ever, having evolved to offer development, real estate, construction, and property management.
But the Great Recession would force a reckoning for our company and prompt us to make significant changes—changes that would ultimately allow us to survive through the recent pandemic as well. There’s no doubt in my mind that navigating that intense period strengthened our business, helping to ensure the long-term sustainability of our company.
Partnership Parameters: Good Partners Want Good Partners
My uncle Craig loves people and appreciates nothing more than seeing others succeed. As he and Pat built the business, he enjoyed working with friends and acquaintances in the community to develop properties. He sealed deals with a handshake, and he always honored his obligations.
But in 2008, when many people were overleveraged and without the cash reserves to uphold their obligations, we found ourselves scrambling to satisfy the banks when called to make up partners’ debts as well as our own. We depleted our cash reserves and stretched ourselves thin. It was clear that we needed to take a hard look at how we identify more financially conservative partners and implement best practices around our operating agreements.
That awakening prompted us to execute a process of due diligence in our operating agreements, wherein, together with our banks, we work to vet potential partners. This allows us to approach each deal with sound financial footing and assurance of a shared, mutual responsibility. Having seen how quickly things can fall apart in the face a financial crisis, we added critical clauses and language to formalize agreements and structure terms to ensure that each partner will be protected in worst-case scenarios.
In the years since, as we’ve developed projects with these guidelines in place, the process has been affirming. The reality is, good partners want good partners, and the upfront work to ensure a healthy partnership leads to long-term success and good will.
In addition to key learnings around partnerships, the drain on our cash during that period focused our attention on the importance of significant cash reserves. As property developers, we’re not averse to risk, and there were times in the past when we had operated from a cash-poor position, but the Great Recession provided a view into the potentially dire consequences to businesses that weren’t able to pull through due to a lack of cash. Having experienced that impact, we committed to maintaining a minimum of three months of operating cash on hand to be able to pay our people and maintain normal business operations should we have completely exhausted our emergency reserves and have no incoming revenue.
Planning and Process: Building Structures for Long-term Success
As we navigated the impact of the Great Recession on our bottom line and implemented key guardrails to protect the business moving forward, the need for defined leadership and strategic planning also became clear. We saw our industry hit hard, and we understood that if we wanted to build a sustainable business for the long-term, we needed to plan for that future.
Craig had spent years with his fingers in all aspects of the business—the visionary founder who still managed all divisions. Through 2008-2009, we felt the strain of that model. We were running really thin. Pretty soon, that became unsustainable. Craig was essentially managing all divisions, but he recognized at that point that it would be necessary to install key leaders to be accountable for each division and help guide us through this tough period. Having served in a variety of positions up to that point, I was given the opportunity to become the head of the construction division, my first key leadership role.
As we began to develop leadership of the various divisions, we also saw the need for strategy that existed outside the founder’s head and a clear plan for succession. That recognition led to the first strategic planning efforts in the company, in which we developed a seven-year plan to build out leadership structure and plan for my succeeding Craig as CEO in 2015. Craig’s daughter, my cousin Christie, stepped away from an operational role in property management to lead family governance efforts at the same time, which led to the creation of our advisory board, among other key planning efforts.
Pandemic: Preparation and Purpose
Those intense years of effort responding to the lessons of the Great Recession brought significant change to Lloyd Companies. We are now a team of 230 people with nearly $1 billion in assets under management in three offices and two states. We have a senior leadership team of nine and managers in place across seven divisions.
The development of that team, the formalization of many operational and partnership processes, and the commitment to cash reserves all proved essential in seeing us through the recent pandemic. While there were significant differences in the way the most recent period of challenge affected our business, having the security of cash on hand, resilient leadership, and reliable partners provided assurance that we would be able to care for our team, support our customers, and meet our financial obligations.
While I believe all of those changes have been and will continue to be factors in our sustainability, I think it’s our core value of long-term relationships—internally and externally—that has been, and will remain, the thing that carries us forward.
When our team was faced with the immediate impact of the pandemic on the business and on their personal lives, we moved ahead to operate from that foundational value to serve customers and support one another. Because if there’s any lesson to be gleaned from times of challenge, it’s this: you will typically not be judged by your character, demeanor, abilities, or limitations during the good times; however, your actions and the way in which you act will be highly scrutinized in the toughest of times. Fortunately, 2021 will be the best year in the history of the company.
Chris Thorkelson is President and CEO of Lloyd Companies.
From $1 A Day To CEO: A Remarkable Entrepreneurial Journey
I was born in a small town in Northern India, about 100 miles from Delhi. I lost my father when I was two-and-a-half, and my mother raised myself and my four sisters on her own from that point forward. She put what she could on the table through sewing work and rent from a small shop my father had owned, and we survived on about $1 a day.
From my earliest memories, I was well aware that as the only male child in our family, it would be my responsibility to provide for my mother and my sisters. Any hopes of rising up from poverty were on my shoulders. When I reflect on my experience, I see the childhood that was lost to me. I see the challenge into which I was born. But at the time, I just put my head down and did what I had to do. Aware of my need to be the breadwinner, by the time I was about 10, I became focused on that role. I thought to myself, okay, if that's how my life is going to be, then I need to perform. I need to produce results so that my family can survive.
The sometimes painful and challenging years that followed, as I made my way through childhood, pursued my education, entered into the professional world, and ultimately founded a company of my own, taught me that when you go through difficult times, you can become revengeful, or you can become resourceful. I always had the awareness in my heart and in my mind, that though I was enduring challenge life could be better.
From that awareness grew a commitment to create abundance—for my family and for others. I understood that people who experience scarcity, who don’t have enough food on the table, struggle not just for practical survival but to be kind and to experience joy and peace. And so, from childhood, I moved toward opportunity with one question in mind: How can I elevate others? This Purpose has steered me through pivotal choices and experiences in my life’s journey and now guides my Evergreen® company.
The first step toward opportunity—for me and for my family—was my realization that to move up and out, I needed an inroad to acceptance by my peers and my community. I was bullied at school and had few friends, and I was intensely aware of the need to overcome that isolation and become valued if I was going to make my way in the world.
The game of cricket offered me my first lessons in earning respect—and how that respect would create opportunity to elevate myself and others. Initially, I had no skills, and no equipment of my own, and other kids wouldn’t let me play. But I persevered, improved, and produced great results for the team. We won championships, and I won respect. With that respect came the opportunity to carry people along with me, to raise others up.
Success on the cricket field, alongside academic honors that led to tutoring work and brought income to our family, helped propel me forward in my small community, but I faced other challenges when I left home. At 15, I left our town and spent two years at a junior college that was unaccredited, wasting time and incurring debt that was a burden on my family. I hadn’t done the research to understand the system, and I returned home feeling defeated.
That was a dark period, but it offered an important lesson: falling short is a part of life; keeping that shortfall from becoming a failure is the only way to survive. As I had on the playground, on the cricket field, and in the classroom, I said to myself: I’ll do better next time. If I don’t try harder, I won’t get a chance to play. If I don't get a good score on this test, people will not respect me. I knew I had to make things happen for myself to be able to fulfill my dream of creating abundance for others. Failure was not an option.
I left home for a second time at 17 and spent three years at a different junior college. I worked incredibly hard and earned entrance to the most prestigious engineering university in India—National Institute of Technology. I also met my wife, Vijju, the love of my life, in those years.
Having spent what added up to five years in junior college, I entered into university a couple of years older than most of my peers. While I had considered those early years wasted, I realized in that setting that the challenge and life experience I had lived through had in fact offered me a gift of hard-earned wisdom. In the university setting, I had the opportunity to share that gift as a mentor to younger students. I had entirely lacked mentors in my own life, and I was happy to have the opportunity to provide support and guidance to others who might feel alone.
With my degree in hand, I left university intent on finally fulfilling my responsibility to my family and my commitment to helping others. I took my first job with the intent to pay off my family’s debts, marry, and move toward the possibility of entrepreneurship. It was always in my mind that starting my own business would provide the path to creating jobs, and thereby abundance, for others, and the potential to take that step drove me forward.
With that goal in mind, I initially had no intention of moving to the U.S., but three years after I graduated, a recruiter offered me the opportunity to come to the U.S. I saw the offer as a chance to learn and grow, to gain knowledge that could potentially expedite my entrepreneurial dream.
In March 1999, I landed in L.A. with a suitcase and $120 in my pocket and was hired by HP in Boise, Idaho a month later. I spent six years in Boise, honing my skills and developing technology. Vijju joined me shortly after I was hired by HP, and we built a nice life. But I kept thinking that while I had achieved my goal of lifting my family up and creating abundance for myself, I hadn’t yet given back to others in the way I had always envisioned. To do that, I needed managerial experience to move further ahead, to understand how to develop people and create more opportunity.
I took a position leading an HP team in India, learning key lessons around developing people—and affirming some aspects of management I knew to be true. Specifically, my time in India confirmed my understanding that people don’t leave companies, they leave people. As a leader, I committed to showing up for my team and to taking a deep interest in their work, their lives, and their families. I knew that if people understand that you genuinely care for them, they will follow you. If you use them as a commodity, they will stay as long as they have no choice, but they will leave as soon as they have a better offer.
In 2009, the time was right to take those lessons and my long-held passion for entrepreneurship and build a business. Together with a few former HP colleagues and a long-time friend, we founded In Time Tec, a software development company headquartered in Boise. Our shared expertise in software products and services offers clients meaningful software solutions, but from day one the business was created first and foremost as a platform for developing people and contributing to the world. Our Purpose, from the beginning, has been creating abundance; we just happen to build software.
Today, In Time Tec employs 650 people in the U.S. and India, and we continue to grow through our own profits for the purpose of creating jobs and developing people. We bring people together to serve clients with a shared value system based on trust, transparency, integrity, and leadership. What excites me as we grow is the opportunity that growth provides to help people find peace and happiness, joy, and self-expression.
As I look ahead, I’m more focused than ever on developing people. I spend significant time mentoring our team and educating myself in business and personal development to continue to build our culture of learning and offer opportunity to our team. I’m moving toward becoming more of a “Chief Mentoring Officer,” rather than Chief Executive Officer, but I'm not in a hurry, and I am not working on a set timeline. I want to ensure our longevity by developing other leaders who will uphold our legacy and embrace the opportunity to lift more people up.
It’s a gift now to reflect back on the arc of my journey. The abiding sense of opportunity and abundance that I felt beneath the surface of my life, even in the darkest and most challenging times, propelled me always forward toward this entrepreneurial dream that I’m living now. My goal, as ever, is to continue to use the gifts of my experience to create abundance for others.
Jeet Kumar is the CEO and Co-founder of In Time Tec and the author of the book, Insights into Creating Abundance
In Praise Of Self-funded, Paced, Intentional Growth
When my husband, Oliver, and I launched our Evergreen® business, Icicle Brewing, we were well aware of the risk involved in a capital-intensive business. Oliver is fifth generation in a farming family in the Yakima Valley in Washington state, and he had been raised through repeated, necessary cycles of bank loans and equipment expenses and the continual underlying stress of unpredictable events that shape life and finances on a farm.
But he also understood the long-term view and growth mindset that is essential for farming and for Evergreen business. He had observed the expansion and evolution of his family’s farm from hops to include apples and cherries, had raised his own cattle in college, and he always had an entrepreneurial vision to build something of his own.
When Oliver and I married after college and moved to the family farm, I was immersed in those same cycles. After several years on the farm, we made the decision to branch out on our own, investing in land and developing a vineyard—another capital-intensive enterprise.
In fact, it was our investment in the vineyard, which we funded ourselves, that left us cash poor and led us to take the first small step toward what would become München Haus and Icicle Brewing. With three young children at the time and the vineyard still in early stages of growth, we needed cash to pay our bills. We decided to open a small kettle-corn stand on one of two investment properties we had purchased in Leavenworth, Washington, a Bavarian-themed resort town in the Cascade mountains. While Oliver continued to work the vineyard, we brought our kids to Leavenworth each weekend, where I popped and sold kettle corn to generate a bit of income.
While the stand, München Haus, became popular, it wasn’t generating enough revenue to justify commuting indefinitely. In the spring of 2002 we made the decision to sell the vineyard and move our family to Leavenworth, using the profit from the sale of the vineyard to fund an expansion of München Haus to include a sausage grill and craft-focused beer garden .
As we put down roots and steadily grew our small business as we generated the profit to do so—literally one piece of equipment and one incremental improvement at a time—our Purpose became clear. We wanted our business to provide benefit for the community, to create a place for people to gather and connect, and to create jobs.
Those goals were the motivation behind each significant stage of our growth. In 2009, we secured a bank loan—a two-year-long endeavor in the wake of the Great Recession—to build a brewery and taproom on our second lot in Leavenworth. We had traveled in Germany with our family and had seen the role of breweries as community hubs in small towns, and we wanted to expand on our existing presence to offer that to our community. We knew that, in addition to investing in the facility and equipment to brew beer, we would need to hire a master brewer to bring that dream to life, which we did. With those early self-funded capital expenses, Icicle Brewing was born.
As visitors and locals came to love our beer and spread the word, increased demand led us to sign on with a distributor, which shrunk our margins but broadened our reach, and ultimately led us to outgrow our original facility. In 2017, we were bursting at the seams in our downtown brewery, and we made the decision to purchase a new property and expand again. We built a production facility and purchased a packaging system, which were our biggest capital investments to date. We funded that expansion through financing that included taking a mortgage out on our family home, which we recognized was a very personal risk but felt was a calculated step, justified by demand.
With an eye on innovation and customer experience, we purchased an experimental brewhouse and remodeled our taproom at the downtown location at the same time. That investment in production, packaging, and innovation proved invaluable through the COVID-19 pandemic. When retail shut down, we were able to shift our focus to packaging, marketing, and distribution efforts, as well as developing new experimental beers.
In 2021, we’re celebrating the ten-year anniversary of Icicle Brewing and the 20-year anniversary of München Haus, which provides an opportunity to reflect on our Paced Growth over time. Each stage of our growth has required that we evaluate and reaffirm our commitment to growing a private business through our own profits. Our journey has been a constant balancing act between funding improvements and capital expenses to keep us growing and relevant while also maintaining profitability, which has allowed us to take care of our people and protect our business. Throughout, we have been steadied by our desire to grow within our means and base that growth on increasing demand.
We’ve taken a series of financial risks to respond to the demand, but we’ve always understood that taking those calculated steps to grow leads to long-term sustainability. Our paced, intentional growth has meant we didn’t need to take on outside investment, and though we’ve been approached by interested buyers, we’ve never seriously considered selling. We love what we do and we want to continue to grow the business with our team.
As we expanded, we have also evolved the organizational structure by building a leadership team and a board of directors and to engage in a more formalized growth strategy and planning process. We know these governance structures and planning processes will further improve our company’s long-term prospects to the benefit of our people and to the communities we serve.
Through that planning process, we made a decision in 2018 to gift a portion of our ownership to key employees to strengthen and incentivize our management team. Oliver and I also transitioned out of daily operational roles to assume advisory positions in the company—Oliver is Chair of the Board and I lead culture and employee professional development efforts. That change allows us to continue to steward the business while empowering our team to innovate and to lead our long-term success. We see endless possibilities for the company and the team, and we look forward to seeing where and how the business will continue to grow.
Pamela Brulotte is Co-founder and owner, with her husband Oliver, of Icicle Brewing Company and München Haus.
Why Franchising Is "Truly An American Gem"
I entered into college with what I thought was a clear career path. I was surrounded by friends and family who had pretty serious professional plans—to be doctors and lawyers and geologists—and I followed suit, with my eye on mechanical engineering. But when my Pop died in my first year, I found myself, at age 19, at a crossroads. My world was unraveling, and I no longer knew what I wanted to do with my life.
That juncture proved pivotal for me because it forced me to think about what I really wanted to study and how I wanted to make my way in the world. What I knew was that l loved team sports and the spirit of group efforts. I wanted to be part of something bigger, to take a different path.
I changed gears to pursue a degree in economics, focused on studying how teams and crews operate effectively—not just if they win, but how they win. That change in course would lead me toward what has now been a 40-year career leading franchise companies and helping individuals build highly productive and profitable teams that set industry standards.
My own experience in the franchise world began with my decision to sign on as a franchisee with College Pro Painters, an organization that put young students in charge of their friends to paint houses. I launched my franchise in Philadelphia in fall of 1982. My experience with College Pro showed me the power of a values-driven organization to provide an onramp for entrepreneurial leaders and help create economic opportunity for individuals and communities. I was hooked.
From that point, I stayed with College Pro for 10 years before co-founding CertaPro Painters (the full-time version of College Pro). From there, I went on to serve in a variety of roles for FirstService Brands, which is the parent of CertaPro. FirstService Brands owns a portfolio of franchises, including Paul Davis Restoration, CertaPro, FloorCoverings International, California Closets, and Pillar to Post Home Inspectors. Today, I serve as President and CEO of FirstService Brands, CEO of California Closets, and as 1st Vice Chair of the International Franchise Association.
My experience leading and growing franchise businesses around North America has led me to understand that franchising provides the most democratic distribution of wealth in the world. This model is truly an American gem. It offers a low-risk entry point for high performers to start and scale businesses, often with minimal initial capital investment, and with the benefit of systems and processes of established brands. I also believe that these businesses are uniquely aligned with the Evergreen 7Ps® principles, offering values-driven leaders a path to building Evergreen® companies to benefit families and communities.
To see the value proposition and opportunity in franchising, it’s first important to understand the model. A franchisor is the owner of a great idea—a brand, or a promise that’s delivered and measured. The franchisor develops and owns the intellectual property around that brand (the trademark and the methods of operation to train and support that idea to be duplicated in other locations). A franchisee enters into an agreement with the franchisor to implement that idea and the associated processes in a new location, benefitting from the centralized marketing and other systems, to execute in their communities. The franchisee pays the franchisor a set royalty (five percent, on average) and controls and makes decisions around the other 95 percent of the revenues. The key to success for the franchisee is to scale the business, generally through adding team members over time. While some franchises are more capital heavy (restaurants, for instance), others are capital light and can scale more quickly.
I see the overlap with Evergreen businesses clearly in the foundation of a shared value set, the characteristics of successful leaders across Evergreen companies and franchises, and in the impact of these business on individuals, families, and communities.
When I began with College Pro, I saw the impact of guiding values that inspired and connected franchisees and led to success for the business. The values were presented as an acronym, D-R-I-P, which stood for: Deliver what you promise; Respect the individual; Practice continuous Improvement; and Have Pride in your work. These were repeatedly emphasized so they would be instilled throughout the organization. When I went on to lead CertaPro, we understood the role of guiding values and also learned very early on that successful franchisees shared specific personal qualities. Over time, we created a screening tool to evaluate potential franchisees, based on their preferences, which we refer to with the mnemonic, A-T-L-I-P, which stands for: Attainment, Tenacity, Leadership, Introspection, and Precision. Across both businesses, those who became successful entrepreneurs in the franchise model operated from a shared value set and embodied these key qualities.
Many of the values and personal characteristics that lead to success for our franchisees reflect Evergreen 7Ps principles. While some of the crossover is clear—between Tenacity and Perseverance, People First and Respect, Pragmatic Innovation and continuous improvement, for instance—Paced Growth and Profit are also as essential in the franchise model as in Evergreen companies. A franchise is successful if it grows to a specific, optimal scale in a given industry and location—that’s what the model is built to do. When these businesses grow and become more profitable, they create more opportunity.
Creating opportunity is what my life’s work is about and what the franchise model does best. By providing the right person the chance to build a business within the guardrails of an established brand and practices, franchises de-risk the onramp to entrepreneurial success. Individuals can invest time and effort to scale a business within their community, providing more jobs as the business grows and keeping the majority of the earnings in the community as well. When it comes time for the franchisee to transition out of the business, he or she has the added benefit of selling an established brand, which generates a higher sale price, selling to employees, or passing the business down to a second generation within the family. In all three scenarios, the enterprise continues to thrive in the community and create more opportunity.
The benefit of franchises to fuel the economic engine of a community in this way is clear across industries and geographies. The franchise model serves 140 industries, with approximately 725,000+ franchisees operating today. More important, it can play a significant role in lifting up individuals and families in underserved communities. In locations where other businesses may not want to invest resources, a franchise can offer an entrepreneur the opportunity to assemble and deploy resources quickly to get a running start. And when these businesses are restaurants and healthcare services, which may not otherwise be launched in these areas, the positive impact can be transformative.
When I made the decision to step into franchising, I couldn’t have anticipated where it would take me. When one door closes, another opens. The early, unanticipated change in my life experience propelled me off the expected path and forced me to engage and act upon shared values, contribution, and community, and my career in franchising has allowed me stay focused on these pillars ever since.
Charlie Chase is IFA 1st Vice Chair of the International Franchise Association and President and CEO of FirstService Brands, Inc.
Fostering Mentorship Provides The Greatest Dividends
When I was hired at Rincon Consultants as an entry-level scientist, I joined the firm hungry to learn and to make the most of my opportunity. When I landed and executed a big project early on, I caught the attention of one of the co-founders, then President and CEO of the firm, Mike Gialketsis. From that point, Mike became a mentor, and we developed a relationship that shaped my career trajectory and is reflected in my leadership of the company today.
In the beginning, if I’m being honest, I was overly confident. Mike saw my promise, but he also understood the need to challenge me. He made me question my decisions and my knowledge through a number of really uncomfortable conversations. During those early years of Mike’s mentorship, it was his commitment to my growth as a leader that led eventually to my role as CEO of the company.
Learning from someone who pressed me to question my assumptions and to approach things differently forced me into critical yet flexible thinking. Mike also gave me a lot of room to run, allowed me to make mistakes, and then helped me process and understand the lesson from each experience. Most of the time, he had a good laugh, too, which in the moment was infuriating but offered me welcome perspective over time: it’s not the end of the world to fail; it’s an opportunity to learn.
At the time I began my career at Rincon, the company employed roughly 50 people, and Mike took an active role in mentoring several of us. Today, every single person Mike mentored serves in a leadership role in the company. We have developed a deeply rewarding culture that values the lessons learned and not just the victories. Our firm now employs about 350 people in 13 offices, and mentorship remains a priority.
Our efforts have not been an unmitigated success. We had years of high turnover, when a sink-or-swim mentality led to attrition, and we didn’t yet have the programs and processes in place to help nurture retention. We’re still navigating the challenge of maintaining the culture of our founders as we implement operational structure to support our growth. In the last four or five years, as we have found our footing, we have been able to develop clearer guidance around career development and mentorship that supports our foundational spirit of informal connections, camaraderie, and generous guidance while providing a company-wide program for the benefit of all employees.
Today, career development and mentorship starts on a new employee’s first day. In my role as CEO, I onboard every new employee, from entry-level on up. My goal in those early interactions—part of a week-long process led by our Chief People Officer and other principals—is to describe the “Rincon Way,” to educate new hires in our culture and values, and to establish a common language and connection from the beginning. I want people to launch their path at Rincon with a firm foundation, understanding that we will support their career path—and that a key driver in their success will be developing meaningful relationships within the company.
Another key aim of those sessions is to break traditional perceptions of strict leadership hierarchy by setting the precedent of open access to our leadership team and myself for ongoing mentorship. I explicitly tell new employees that my calendar is open, and they are welcome to book an appointment any time. And yes, that means I spend a lot of time talking with folks. But I believe that time spent nurturing relationships and fostering mentorship provides the greatest dividends. If we want to grow leaders from within and give people confidence that they have a long-term future and a path to advancement at Rincon, our leaders need to show up.
In addition to my role in onboarding, I mentor about eight team members on a reoccurring basis. The goal of these mentorships is two-fold: to provide guidance in specific aspects of a person’s role that might need attention to allow him or her to progress to the next level of leadership and to coach high-potential team members, the rising stars who will lead our next generation. In both cases, my intention is to develop trusted relationships over time that will allow for productive coaching and leadership development. I realized long ago that to be able to send a message and have it understood, or better, not misunderstood, you need to surround yourself by people who trust that you are genuine, and you cannot fake genuine.
Alongside my individual role as a mentor, we have developed a company-wide program to support informal and formal mentorship relationships. Often, given the culture of connection at the company, these relationships still unfold organically. When that happens, we encourage mentors and mentees to notify HR of these relationships and to provide regular updates so we can support the connections. If an employee is seeking a mentor and has not connected with someone informally, the HR department and the employee’s supervisor will work together to align the employee’s goals with the appropriate mentor. All employees are eligible to request mentorship, but participation is voluntary.
To further encourage wide participation, our Professional Development Committee has also created an intranet channel devoted to mentorship, through which we provide regular resources and program updates, as well as data around benefits of mentorship. We’re a group of scientists, after all, and I’ve found that our team likes to analyze everything from a data standpoint to understand if it has value. When we can provide study results and research around mentoring, we get better buy-in across the board.
In addition to encouraging broad mentorship—formally and informally—and supporting those who engage, we take intentional steps to identify and support rising stars in their career path planning. When we see significant leadership promise in an employee, we create additional points of exposure to business management and leadership experience. One of the key experiences is an invitation to an employee to serve on a committee within the company. This engagement provides welcome insights into the business, and, more important, these committees serve as fertile ground for developing mentee/mentor relationships between rising stars and key executives across the organization.
As a growing company, the process of developing a formalized mentorship program is ongoing. But I think that the culture of mentorship that shaped my career trajectory and that of so many other key leaders here will continue to serve us well. Ultimately, my goal in all the efforts around mentoring at Rincon is to develop more leaders grounded in trusted relationships to drive the company forward.
I feel the responsibility of carrying the water, of continuing to nurture the culture of mentorship that guided my path and which I think is the key to propelling our continued growth. As we continue to grow and evolve, I know that our success in that effort and all we do will not be dependent on any one individual but on the shared, long-term vision of our current and future team.
John Dreher is President and CEO of Rincon Consultants, Inc.
How This Century-Old Family Business is Preparing for the Next Generation’s Leadership
Our family began farming in Lodi, California the late 1800s, when my great-great grandparents emigrated from Germany and began growing non-irrigated watermelons. From that humble beginning, the family grew their holdings and ultimately bought a vineyard in 1916. Each generation since has built on the efforts of the one that came before, continuing the legacy of stewardship of the land.
Our business, LangeTwins Family Winery and Vineyards, grew from that foundation, a partnership between my father and his twin brother, who bought land from their parents and launched their own viticultural company at the ripe old age of 25.
So, I’m a fifth-generation member of our farm family, but a second-generation operator in LangeTwins Family Winery and Vineyards. I’m the first of our three, but, really, the eldest of five. Let me explain. I have two brothers and two cousins on my uncle's side, and we were raised as a family of nine. Two sets of parents, five kids, living next door to one another in houses built 100 yards apart, in the middle of 200 acres of land without a neighbor to be seen.
Suffice it to say, my brothers and my cousins were my playmates and closest confidants as we grew up together—literally in the middle of our family business. Our bond began in the sandbox and was fostered through family dinners and days spent exploring the edge of the Mokelumne River, hiking, riding horses, and attending country schools together.
Our parents nurtured our connection further by taking us on backpacking adventures through the Sierra Nevada mountains and further afield. Our family travel, which included trekking trips in Nepal, Africa, and Patagonia, offered us experiences that deepened our love and respect for the natural world and for one another. “We are better together,” was our parents’ refrain.
Those experiences often put us in challenging situations together—climbing Kilimanjaro is no easy feat—and we learned how to support one another and how to communicate. We also learned one another’s strengths and weaknesses and how to navigate disagreements. Ultimately, we gained a shared passion and perspective, a family trove of insight and experience.
Our connection also grew through our shared daily experiences within the business. As the children of farmers, we lived the daily and seasonal rhythms of the family business together, very aware of the natural cycle of the growing season, the harvest season, and the celebration of the fruits of our labor. As a family, we were in the fields, in the office, and participating in the social and business development events related to the business. I distinctly remember sitting at the table in many discussions with Robert Mondavi and his team, talking about vineyards and grapes and wines. As cousins, we absorbed that essential informal education together.
After each leaving the area for college, all five of us came back to the family business with that foundation of shared experience and deep, inherent knowledge of one another and of our family’s values. We were very fortunate that, before we returned our parents had the foresight to assess what their perspective was on our generation’s role in the business. They understood that family businesses often capsize under the weight of misunderstandings and misalignment around the vision in the succession between generations, and they were determined to avoid that scenario.
They developed family governance, creating a family council and an advisory board and laid foundational groundwork to establish the rules of the road for our generation’s entry into the enterprise. Their goal was twofold: To maintain the integrity of the family relationships; and, to ensure that the contribution of the individual would be additive to the business. In other words, there would be no free rides.
With this foundation in place, there was a clear path for my generation to step into the company. Today, all five second-generation family members work in the business. People always ask us, “How did you decide who would be in charge? Who would have which role?” And for us, those questions never actually arose because we very naturally fell into a cadence of looking to expand on our individual expertise. There was never a wrangling for power because we had spent 30 years growing together, wrapped in the fabric of our family’s shared values and understanding what it takes to grow a business together.
In recent years, our generation has spent considerable time reflecting on our “why” and articulating our vision for the company, which is to cultivate a lasting impact, together. We know that one important aspect of cultivating that impact is to intentionally knit our children’s lives and experiences together, to strive to create the same bond and lasting connection we have in the next generation.
To that end, we’re continuing on many of the beloved traditions of our generation—backpacking, spending time on the land and in the business, sharing meals and family celebrations—but we’re also looking for new opportunities to grow and connect. We know that our kids will have different interests and passions, and we want to honor that curiosity and share experiences that allow us all to grow and learn together.
Just as our generation had freedom to explore and pursue our own path—we were never burdened by an obligation to return to the family business—we want to open the aperture on experience for this generation. I hope that if they choose to come back and work in the business, the work we’re doing now to sustain and deepen their bonds will provide a foundation of love and shared experience, the ability to collaborate, and a broad perspective that will foster the innovation that’s essential in an Evergreen® business.
Marissa Lange is President of LangeTwins Family Winery and Vineyards
A Risk Worth Taking: Building an Evergreen Business
In 1996, my wife—then my fiancé—and I were living in Vermont, where we had graduated college several years before. Originally from Columbus, Montana, I was looking for a way home. I had been raised on a ranch about 100 miles east of Bozeman, which my family had homesteaded and worked for five generations. My connection to Montana ran deep, and I felt a strong calling to come home.
The problem was, there were very few jobs available in Montana at that time. I was dissatisfied with my work selling institutional research to money managers and traders because I felt disconnected both from a tangible product and from the culture of the customers I served. A job in manufacturing and creating a company had always been a strong interest.
When I learned of an opportunity to purchase a small, homegrown business in Livingston, I said yes. The company’s founder, a seamstress, had built a business creating soft toys for dogs and cats, stitched by a network of home sewers, which were sold to about 200 independent retailers. It was at a scale where I could learn by doing the work, and the former owner had agreed to take my calls and discuss ideas and concerns through my first year.
All that to say, it was a risk—there was a real possibility that I could fail. But I jumped in with both feet anyway—not because I had a passion for pet toys, but because I had a vision to build and grow a company in Montana that would provide opportunity for people and positively impact the place I loved.
Having bought the business, I made a series of decisions in the first year that went against what the former owner and current business best practices advised. While I recognized the risk at each point, I felt strongly that every step was necessary for the sustained growth that would help ensure jobs and opportunity for people in our region. That was my north star.
Those early decisions included renaming and rebranding the company—Pet Pals became West Paw, Inc.; attending an industry trade show, something the former owner had never done, to introduce our brand to a new audience; and, committing to maintaining a direct-to-retail model to keep us close to our retail partners and avoid being beholden to any one large customer. I also decided to double down on domestic manufacturing at a time when people were offshoring left and right. I knew that to honor my purpose of bringing good jobs to Montana, I needed to make our products here.
I think all of those decisions made in the early years of ownership were pivotal and represented what I recognize now as the first significant phase of growth in the life cycle of our company. In retrospect, they seem courageous, but at the time, they just felt right. I was willing to take big risks, and I think those big risks paid off because they were aligned with my core values and with where I wanted to take the company.
But if you were to chart our growth story onward from those early years, the graph would not reflect a straight upward trajectory to the right. We’ve navigated several periods of challenge, each ultimately an opportunity to recommit to sustainable growth and our purpose.
In 2008, the momentum and excitement of those early years had transitioned to what felt to me at the time like a slogging pace. I was burned out, and I found myself at an uncomfortable moment: I didn’t like my business anymore. I was ready to sell. I thought that if I could find the right local person who would keep the jobs here—or tell me they would—I was ready to get out.
Just about that time, my wife, Kerry, who from the early years had been a valuable advisor and was watching me struggle, shared an article with me about the National Center For Employee Ownership (NCEO). She encouraged me to attend an upcoming NCEO conference, and I went. It was the right decision. I came home both inspired by the idea of working toward employee ownership and with the realization that I needed to hire a management layer. If I was going to continue to grow the business, I needed a team around me.
Investing in my management team was a strategic and financial decision that allowed me to step away from the intensity of managing so many aspects of the business and get inspired again to grow the company. By 2012, with the support of the new hires and new products that continued to focus on environmentally friendly materials, we were in fact growing quickly and trying new things. But we found that we had grown into a problem, as well: one of those new things we tried was to change our production systems, which was a failure. By the end of 2012, we had a negative book value. We were not bankable.
It was that crisis—as it is for so many businesses—that really inspired us to open our books and implement the Great Game of Business (GGOB) operating system. I launched GGOB with a simple five-line P&L and conversations with the team about how we were growing and why we were bleeding cash. Then, we invited GGOB’s Rich Armstrong to Bozeman to help us implement the financial literacy portion of the operating system and the huddle rhythms. There’s no doubt that the crisis was painful, but implementing GGOB helped us come roaring back in 2013 with profitable growth. The entire team was able to see the impact of financial literacy and open-book management.
Over the next several years, we maintained profitability, but I started to recognize, again, a sense of stagnation. We were all getting a little too comfortable, and our growth was slowing—we seemed to have lost our hunger. It was clear that we needed to innovate to push into the next phase of growth. We did two things in response that provided the renewed momentum we needed: we brought in new product designers to launch new product lines and we began intentional training around growth mindset.
Through our in-house training curriculum, we focused on first asking the question: How can we show up in our work—across all positions from manufacturing to accounting—with a growth mindset, as opposed to a fixed mindset? We created related themes in the next couple of years to rally the team behind this approach. The first, in 2019, “Beat Your Commit,” was focused on stepping out of complacency and driving accountability; the second, in 2020, was “I Drive Growth,” honing in on how each individual can drive growth in their personal lives, the life of the company, and in our community. In 2021, we are once again on a high growth trajectory, and we’re embracing the theme of “Sustainable Growth”—a theme I hope will guide our Evergreen® company for many years to come.
When I started to grow our business in 1996, I don’t think I really understood that we could have a company of nearly 100 people, attracting employees from communities all around our region to work here every day over three shifts. While I had a vision of creating good jobs, I didn’t imagine the extent to which we could impact people’s lives. By providing careers and training, financial literacy, healthcare, and other benefits, West Paw is making a difference in families and communities, which brings me great joy. I’m grateful for the perseverance of our team to work through each challenge and continue to grow in our purpose.
Spencer Williams is CEO of West Paw.
People of All Faiths Are at the Heart of What We Do
My mom and dad, Paul and Carol Kuck, founded our family company, Regal Marine Industries, in 1969. From the beginning, my dad used to say, “We’re in the people business, and we build great boats.”
We still believe that today. We strive to put People First, embracing policies that many Evergreen® businesses support—competitive pay and benefits, professional development and training opportunities, and an employee hardship fund, among them. Another powerful way we have found to support our team for over 20 years now is by providing workplace chaplains.
We know that our 750 team members come to work each day with a wide variety of goals, concerns, and challenges, and we want them to have a resource to address not only professional issues but to support their spiritual and emotional wellbeing. We want our team to know that we will walk with them when life is good and help them when they struggle—because we all do.
The chaplains we employ through Marketplace Chaplains, a third-party service, are integrated into the company as caregivers. We consider them part of the Regal family, and they support team members in a variety of ways. Throughout the work week, male and female chaplains spend time at the company, visiting and checking in with the team. Currently, we have six different chaplains who rotate through the company any given week and who, as a group, reflect the diversity of our team. They are charged with supporting team members of all faiths, without any agenda or bias.
The interaction between chaplains and team members is often very casual—they are connecting as caring friends, asking after people’s families, and building trusted relationships. As those relationships develop, the chaplains often have a deep knowledge of an employee’s family and personal life and are able to step in to provide comfort and counseling when a challenge arises and share in the joy of positive life events. Our chaplains have officiated at Regal employees’ weddings and funerals, provided marital counseling, and shared in many other milestone events among our team.
While some companies do employ full-time chaplains as members of their team, we appreciate the separation of working through a third-party provider because of the confidence it offers team members around confidentiality. We don’t receive any information about any interactions between the chaplains and team members, which we think allows for more authentic sharing around potentially sensitive topics. That’s the approach we have taken, but there are certainly a variety of ways to provide this benefit for your team.
After 20 years of offering Regal team members this resource, workplace chaplains remain a core pillar of our benefits. But the benefit is one tile of the larger mosaic of our People First picture. It’s one more way we can support the whole person as they come to work each day at our company, which is what this is really all about. We love to build boats, and it’s awesome that we get to do that, but at the end of the day, it’s people that are at the heart of what we do.
Duane Kuck is CEO of Regal Boats.
Tugboat Institute Summit 2021: Connected and Curious
Every Tugboat Institute Summit is special. Its uniqueness reveals itself as two-and-a-half days of experiences unfold in the idyllic setting of Sun Valley, Idaho—a safe place to take off the armor, reflect, and be fully present. It was particularly meaningful to bring together Evergreen® leaders for this summit after a year of being apart.
As such, we were certain that the spirit of reconnection would be the unofficial theme of this ninth annual celebration. Tugboat Institute® members and event speakers were finally able to detach from Zoom screens and reacquaint themselves on a socially safe and human level. However, as we came together it was clear that the drive to gather was more than reconnection. It was a resurgence. A determined display of strength in numbers. Over 135 attendees, from 133 companies, in 27 industries, based in 33 states showed up and shared. The highest in-person summit attendance thus far.
The energy began to build with pre-program meetings. First Year Orientation provided 47 new members a warm introduction to the Tugboat Institute Summit experience thanks to the guidance of Tugboat Chairman, Jeff Snipes and Tugboat Institute’s Maria Hilton. Veteran attendees Elizabeth Glasbrenner, Mac Harman, Don MacAskill, and Lester Thornhill balanced the practical with the personal by sharing their insight and lessons learned. A workshop for large, multi-generational companies rounded out the half-day schedule and was led by Jennifer Pendergast, John L. Ward Clinical Professor of Family Enterprise and Executive Director of the John L. Ward Center for Family Enterprises at Kellogg School of Management, Northwestern University. The ideas formed during this meeting became part of the conversation for Jennifer’s presentation to all the attendees later in the week.
Mindfully curated TED-style talks comprised the next two days of programming—a mix of thought-provoking business ideas, post pandemic best practices, Evergreen principles in action, and personal journeys to inspire change beyond the boardroom.
Dave Whorton, CEO and Founder of Tugboat Institute, kicked off the experience with a brief history of venture capital, the development of the “Get Big Fast” playbook, and how Evergreen businesses prove there is an alternative path to growing leading and lasting companies. Gary Kunkle, PhD, Sr. Research Associate of University of Wisconsin, and David Eichhorn, President and Head of investments at NISA continued this thread by sharing insights around sustainable growth and how to manage the challenges that accompany a long horizon strategy. Jennifer Pendergast and Steve Shifman, CEO of Michelman, spoke to the crucial role of planning a healthy transition of leadership in family-owned businesses along with navigating the emotional element of this professional and personal process.
Best practices and innovative methods of building healthy and productive work environments while balancing business with creativity were topics addressed by Lisa Picard, CEO of EQ Office, and Leslie Jackson Chihuly, President and CEO of Chihuly Studio. Going back to the basics and the critical importance of instilling character in our youth and educational systems was the theme presented by David Holmes, Director of Character Collaborative. Steve Preston, CEO of Goodwill Industries International, asked attendees to reconsider their current hiring filter and apply a more enlightened approach to finding talent outside of the halls of academics.
People making an impact was at the center of the following talks. Dave Petersen, President and CEO of O.C. Tanner Company, and Susie Quesada, President of Ramar Foods International, focused on the abundance of professional satisfaction and innovation that comes from a People First workplace. Evergreen business leaders Tom Rosztoczy, Michael Spraggins, and Lester Thornhill presented tangible ways to create real change in your own community and beyond. Melvin Gravely, CEO of TriVersity Construction, and Conni Reed, Founder and CEO of Consuela, vulnerably shared deeply personal stories that profoundly shifted the thinking and perspective of the audience.
Following the talks, the attendees were given the opportunity to reflect and further discuss during afternoon adventures and evening celebrations at iconic Sun Valley locations. Whether on a bicycle, the golf course, or around an intimate conversation at dinner, attendees noted the depth and ease of connection with their peers despite the year gap at in-person events.
There is no doubt that the commitment to the Evergreen movement remains strong despite a global pandemic—an intact community of purpose-driven leaders united by the Evergreen 7Ps® principles and the common ground on which they build companies that last and make a difference. We look forward to continuing the conversations in our upcoming Tugboat Seminars, Tugboat Institute Fall Exemplar visit to Edward Jones, and again at Tugboat Institute Summit 2022.
Until then…be curious.
Susanne Lally is Director of Marketing, Trademarks, and Partnerships at Tugboat Institute.
