Anderson Williams: The Art of Business Leadership
In this episode of the Fortune's Path podcast, Tom Noser interviews Anderson Williams, Principal for Talent Development at Shore Capital Partners, a private equity firm that partners with entrepreneurs and industry executives to drive growth in micro-cap businesses. Anderson brings a unique perspective from his diverse background as a classroom teacher, entrepreneur, sculptor, painter, writer, and corporate advisor.
Key Takeaways
Topics Discussed:
Anderson's role leading talent and leadership development initiatives at Shore Capital Partners
How Shore Capital works with micro-cap businesses (typically small, family-run businesses) to help them scale
The Shore Leadership Academy's approach to developing leaders at different stages
How Anderson's background in fine arts influences his approach to business and education
The importance of trust and communication as foundations for leadership
The connection between art, education, and business leadership
How Shore Capital evaluates potential business partnerships
The growth strategy of consolidating small businesses to create mid-market companies
Key Takeaways:
Shore Capital Partners invests in micro-cap businesses with the goal of helping them scale, focusing on companies where the founders want to remain involved and grow with a strategic partner.
The Shore Leadership Academy focuses on developing leadership at all levels, from first-time managers to executives, with a curriculum that progresses from self-development to team leadership to strategic business thinking.
Anderson attributes much of his approach to business and leadership to his background in fine arts, particularly how it taught him to see differently, accept feedback, and continually iterate.
Trust is described as foundational to leadership, with three distinct dimensions: personal trust, organizational trust, and strategic trust.
The best teachers (and leaders) combine authentic passion for their subject with the ability to make content relevant to learners' real-world experiences.
Anderson describes education as being about delivery, while learning is about what people do with knowledge - applying it in new and interesting ways.
Shore Capital's investment strategy looks for "barbell industries" where there are many small players and a few large ones, creating opportunity to build in the middle through strategic acquisition.
Business success ultimately comes from human relationships: "We're humans working together with other humans and human-created systems to provide products and services to solve problems for other humans. And we call it a business."
Guest Bio:
Anderson Williams serves as Principal for Talent Development at Shore Capital Partners, leading their talent and leadership development initiatives. With a diverse background as a classroom teacher, entrepreneur, sculptor, painter, writer, and corporate advisor, Anderson brings a unique perspective to leadership development. He holds a Master's in Fine Arts from Cranbrook Academy of Art and has been with Shore since 2021.
Transcript
Tom: [00:00:00] What can art school teach you about building a business? How do you assess people for leadership? Strength. Does plein air painting have anything to do with understanding markets? These are some of the questions we ask Anderson Williams, principal for talent development at Shore Capital Partners, a private equity firm that partners with entrepreneurs and leading industry executives to drive growth in Micro-cap businesses. Anderson has been a classroom teacher, entrepreneur, sculptor, painter, writer and corporate advisor. He's been with shore since 2021, leading their talent and leadership development initiatives through a period of rapid growth and expansion. And he's our guest on this episode of the Fortune's Path podcast. Anderson, it's wonderful to see you. I appreciate you coming back. It's your second time around with us.
Anderson: [00:01:02] Yeah. Glad to be here.
Tom: [00:01:03] Yeah, well, you're a podcast expert, so I'm a little nervous. You do like 100 of these a day?
Anderson: [00:01:09] Yeah, yeah. Does does such a thing exist a podcast expert?
Tom: [00:01:14] There are plenty of people who do podcasts. I don't know if anybody's a podcast expert for sure. So you're now in an education role there in. Can you tell me a little bit about what that role is?
Anderson: [00:01:24] Yeah. So Shore Capital is a private equity firm that invests in the microcap space. So we partner with small businesses, often family run businesses or doctor run practices. But these are these are small businesses that have chosen to partner with us to scale. And as a result of being small businesses, they often don't have for example, a deep leadership bench to help them scale or a management layer to help them get to the next level or enter a new market or add a new product, whatever it might be. And so when we think about setting up companies for success, one of the things that we have to make sure we do is that we help them develop the people that will help them get to that next level as a business. So that's effectively what I help do my role as principal of talent development. And so I help our portfolio of 50 or so companies with their talent development needs to help them scale and grow those businesses.
Tom: [00:02:26] I mean, there's a lot in there, I appreciate that. One is that you guys are working on the Microcap space, small businesses, and those folks typically have a lot of pride in what they've built. And they also, not infrequently, are kind of control freaks. So why would they give that up? Because when they're, when they're taking money from. Sure. I'm assuming they're also giving up some level of control.
Anderson: [00:02:52] So ask that question one more time. It kind of cut out?
Tom: [00:02:55] Oh, sure. It was probably just me. So I was saying that if I'm a small business, I'll just speak for myself as a small business owner. I can't imagine ever taking money from anybody because they would tell me to do things I don't want to do. So why would someone do that? Why would someone join? Sure.
Anderson: [00:03:11] Yeah. And you, you might not be the right match. Listen, there's a lot of reasons that that somebody who's run a successful business is looking on taking a financial partner. And every partner is not the right partner some people are looking for they're out in the business, they're looking to retire, they're looking to cash out, and they're looking to move on and enjoy the fruits of their labors. That's not typically a the right match for us because we are looking we look at our partners and our founders as experts in their field and people who know their customers and have built a reputation. And so we want them to stay and partner with us. So the way that we do that is we, you know, they get some equity out of the business in an initial partnership, but then they have equity in the longer term, five year hold period such that the, the the benefit on the back end, if they stay with us and help us grow this thing and be partners, truly partners in the process, they stand to benefit significantly more on the back end of the experience. So it really is a situation where the right partner founder, seller for sure is somebody who still believes in the business, still wants to be in the business, still wants to grow the business, but wants a strategic partner, a capital partner to help get them to a level that they can't do on their own.
Tom: [00:04:35] It's you. It's the marshmallow experiment.
Anderson: [00:04:38] Yeah, well, I mean, different times of life, right? And different aspirations and those kinds of things. And again, when you're thinking about that, you're not talking about people who started their business to become billionaires. You're talking about a lot of people who started their businesses, and they've built great businesses, and they put their kids through school on those businesses. And and now maybe a second generation is taking over it. So it's all contextual for that founder and what their aspirations are.
Tom: [00:05:05] I got you. So when you guys are pitching a business to be their partner, because I imagine a lot of these guys are out, if they're at this stage of their development, they're talking to more than one funding source. And it does your work in the Leadership Academy enter into that conversation?
Anderson: [00:05:24] It does for a lot of our a lot of our teams. This is something that's really important to them. Let's go back to that idea of the right match for a partner with. Sure. You know, one of the concerns, there's a lot of bad perception about private equity and lots of fears about what private equity is. And that's a version of private equity that certainly does exist but gets all the headlines. That's a sort of scorch and burn trim, get really lean and sell on the back end. And that's quite literally the opposite of the way Shaw invests. That's the way you can't do that in Micro Cap. You're already lean. You're you're investing to grow. And so one of the real concerns, if you and you know, you're a small business owner, you've got friends and family, neighbors, community members that have worked with you, whether you're doing manufacturing or you're a doctor's office or you're a TPA benefits administrator, whatever it might be, these are family businesses. And so you're thinking not just about the ability to grow the business, to make money. You're thinking about, how do I protect my people? How do I take care of my people? How does a potential partnership like this give opportunities to my people that I can't give because I can't grow this, this business anymore? And so when we think about how to talk about the Leadership Academy, that's one of the things that that really is appealing to a lot of potential founder sellers is that this is a resource that's there from the investment side to help me build my team and to give my team opportunities to grow that I just haven't been able to do myself.
Tom: [00:06:55] So when someone is first acquired, this is an unfair question, but just I'm looking for generalizations. What sort of state are they in as a leader? I know there's all different kinds of businesses, but are there any generalities?
Anderson: [00:07:10] I don't think necessarily as a leader other than to say we are looking for people again, who are experts in their field that still believe in the business that have a really good reputation in whatever they do. Because regardless of the type of business, she is not approaching that investment as we know. Your business sure is approaching that investment. As you know your business, we know how to grow and scale businesses in this pattern. And so we're, we're we take a very operational lens to that. And so our expectation is that these are people. And it's part of our due diligence that these are people who know what they're talking about, who have good reputations and still are invested in the business, so that then when we bring in technology, when we bring in operations, when we bring in finance functions, when we bring in talent development, that that's adding and expanding on their expertise.
Tom: [00:08:12] Can you talk? You said growing it in a pattern. Can you talk a little bit about what that pattern is?
Anderson: [00:08:17] Yeah. So one of the things that we talk about a lot is we have investments in food and beverage. We have investments in business services, in healthcare in industrials and real estate. That a $10 million food and beverage company has more in common with a $10 million healthcare company than it does a $50 million food and beverage company that the pattern has to do with the scale and stage of the company more than it does the industry. And so we invest based on that stage and based on the kind of state of the industry. So so that's where that's where the pattern emerges, even if it's across seemingly really disparate verticals.
Tom: [00:09:06] So in your leadership academy, are you dividing people up by revenue?
Anderson: [00:09:10] No, because all of ours, we have roughly about a five year hold, period. And so when we think about the the investments we're making, we are working with anybody who is young and on the early side of their career and has opportunities sitting in front of them because of the growth of the company to become a first time leader. We're looking at people who have been leaders but now are becoming regional leaders. We're looking at people who have been regional or VP level leaders, who now have the opportunity to step into a C-suite. So it's really more a function of when we think about the Leadership Academy, the internal growth and the scale of the operation. Not so much revenue or vertical or anything like that. So it's like, what's the pattern with in terms of the people you're leading the, the, the scope and scale of the business you're responsible for and that kind of thing?
Tom: [00:10:04] Okay. Well, let's talk specifically about kind of how the Leadership Academy works. So you just described to me, I'm a recently acquired business. Let's say I'm a $10 million business, and I've got three people who I consider to be in leadership. What what happens?
Anderson: [00:10:20] Yeah. So they they simply, we register for Leadership Academy. We have two options for our bigger companies. That may be later in the hold, period. They can actually buy out their own cohort. And for our other companies, we have multi-company opportunities. So if you're in that situation, you have those three people register. The Leadership Academy is a six month program. It kicks off with a full day. Well, two half days in person where we we really get rooted in the foundations of leadership and, and what we're going to be talking about over the following six months. Then we do four months of bi monthly virtual sessions that are an hour and a half each. And then we come together at the end of that with another in-person full day experience. And really, the the trajectory and the arc of the six months is working on yourself as a leader, working on the business. And how do you make that shift from working in the business to working on the business is one of the transitions we talk about. How do you think about, critically your time spent as a manager versus a leader, and what should that be given your role? How do you think about transitioning from captain to coach, depending on where you're coming in? How do you move from having historically been an individual contributor to someone who's a leader of people now, and how do you reassess and reevaluate your role, your function, your value and all of those kinds of things? So there's this sort of arc that starts through the six months on working on you, thinking about your work, being more intentional with your time, thinking about your boundaries, thinking about your value, thinking about the most important use of your time, energy and effort, and then moving toward the team. And then by the time we come together at the end, we're doing some things that are really on the business where we're talking about points of difference and we're talking about value creation, and we're talking about some of those things that are a little bit higher level and more strategic business concepts.
Tom: [00:12:29] So in that first, if I understand this right, excuse me, you kind of work on yourself and then you work with your team and then you work in the business.
Anderson: [00:12:37] That's kind of the arc. So. So when we come together, we we actually our very first, our very first session in the kickoff is on trust. And what's interesting about that time is that when I say our first session was on trust and our second session is on communication, you get a lot of leaders who are, you know, maybe a little more established, and they go, oh, okay. So it's for like new, you know, young leaders and and they're really missing the point. Yeah. And there's good data to show that even if you're way up there in the organization, you're struggling on trust and and communication. Because those I say that that trust is the foundation of your leadership. Communication is the medium. If you don't get those right, if you haven't thought critically about those things, the rest of it's not is going to continue to be a grind. And so we just established some of those foundations that become callbacks through the rest of the six months together.
Tom: [00:13:32] So let's talk a little bit about that. Skeptic who says, well, this is pretty basic stuff. How do you overcome that with them?
Anderson: [00:13:42] You talk about the difference between basic and foundational. And you bring up things like, okay, so you think you understand trust. So we talk about trust in three ways. We talk about trust in terms of personal trust. We talk about trust in terms of organizational trust. And we talk about trust in terms of strategic trust. And as soon as you even introduce a simple framework like that, it's like, well, what is what's the difference? And you start talking about, well, organizational trust. We all think about trust from a personal level. But organizational trust means do I understand the daily processes that I work on. Do I do I trust my team? Does my team have my back? Are we doing good work? Are we doing what we say we're going to do? Are our daily practices fair? Are we open? Are we honest? Are we transparent as a team? And and and that becomes something that really becomes at the level of the manager and the day to day team. And then when we talk about strategic, we're talking about the direction of the organization. Do people trust that leadership of the organization are making the right decisions? That we're living our mission. We're heading toward our vision, that we're living our values. And the only way you give people an opportunity to trust those things is to show them what they are. Right. And a lot of people would say that your frontline employee doesn't need to know your company values, or your company values aren't that pertinent. Well, then you're missing out on the chance to live them organizationally and to build strategic trust in them at a higher level.
Anderson: [00:15:11] So even just pulling the string a little bit on some ways that we dive deeper than basic, you know YouTube video discussions of trust that really are rooted in, in just interpersonal trust typically opens those things up. That said, there is nothing better than, Then one of their own team members going and coming back and saying this was something different. And we were just in an interview reviewing some footage from an interview yesterday with someone who's a young executive at the executive level who went through the leadership academy, already has an MBA from an elite school, kind of. Did the leadership Academy thinking, well, I'm just going to see what this is. I've already got my MBA. And his response was, this is nothing to do with what I learned in my business school. This has to do with people. And this has to do with practical day to day application of leadership. It's not reading a Harvard business case study. This is living my day to day life as a young executive. And how do I apply these principles from problem solving, decision making, delegation, dealing with conflict healthy tension, communication, trust, all of those things. But every day, not in a vacuum, not in an academic setting in my day to day life. And that's what we really emphasize. We always talk about and I push and we start every session with, what did you try since last time we were together? None of this matters if you're not going out and taking something we discussed and trying something different, and that might be simply having a conversation you haven't had before. It doesn't have to be big steps.
Tom: [00:16:51] So when you designed your curriculum, you just rattled off a bunch of things that feel like there's subjects within the curriculum. Was that based on like, how did you arrive at those subjects? How did you sort of arrive at your concept of leadership?
Anderson: [00:17:04] We we evolved a little bit over a couple of years and a number of these iterations. My boss and partner in the process, Michael Burcham, has, has taught and coached and mentored for decades and has been highly successful in his own right. So he brought his experience. I brought my experience. We merged those together initially, and then we just iterated what what felt like it was resonating, what felt like it needed to be tweaking until we got to a model, after maybe 18 months, that we felt like, this is we can't be all things to all people. But this is a stable, foundational piece that's going to that's going to sort of meet our objectives.
Tom: [00:17:45] Let me change topics a little bit. So you also have a background as an artist. You're a writer, you're a sculptor, you're a painter. And are those things hobbies that are unrelated to work, or do they resonate with you in your work as an educator or. So is that work life balance like one is in one bucket and the other is in the other bucket? Or tell me a little bit about the relationship between you as an artist and you as an educator.
Anderson: [00:18:16] You know, Tom, I attribute everything I do and how I approach almost everything in my life to my study of the arts, how I think, how I make decisions, how I prioritize, how I work, how I create, what questions I ask, how I ask questions. All of those come back to learning how to create and not just create. Because in an in in some class, you were given an assignment and you went and took that as a prompt and went and created something. I did a master's in fine arts at Cranbrook Academy of Art, which is one of the few remaining kind of experimental learning communities of of the early 20th century. And it's a place where it's a laboratory. You go there as a student, quote unquote, and but you have no assignments, you have no teachers, you have no classes. You're there with other creators, and you have a department that's led by a creator, but it is a community of collective and shared and peer learning. And that is something that someone who didn't like school and thinks, oh, man, you know, I could go to school without dealing with grades. That sounds awesome. I can promise you, it's a whole lot harder if you take it seriously to learn how to generate and regenerate your thinking and your creative output, with no one giving you any prompt to do it with. And that was a powerful and transformative kind of experience. Which then leads me to the type of work I've been able to do, and the type of work I've looked to do over the kind of duration of my career.
Tom: [00:20:04] Well, education sounds a lot like running a business.
Anderson: [00:20:07] Yeah. Yeah. I mean, you got to make some stuff up as you go, and you got to learn really fast. And you've got to be the one who learns. You don't sit back and and wait for someone to teach you.
Tom: [00:20:19] And you also don't always get honest feedback. You know.
Anderson: [00:20:22] It's like and and all feedback is not useful.
Tom: [00:20:25] Yes.
Anderson: [00:20:25] Right. And so you have to be super clear on what it is you're trying to accomplish. Because I can put my art up on a wall, which happened many times and get completely destroyed in a critique. Just get eviscerated for an hour. And some of that feedback was useful. Some of that feedback gives you something to go work with. And some of that feedback, you just have to put it in a box and say, yeah, I see how they saw that, but that was their opinion. I don't think that has to do with where I'm going. And so even even learning how to organize and think like that, whether you're building a product or you're running a business or managing a customer in any form or fashion, is is a skill that that quite honestly, we don't teach very many places.
Tom: [00:21:09] So when you think about as yourself as an artist is that a practice or is it kind of a the embodiment of a philosophy or an idea.
Anderson: [00:21:24] You know, I. When I was in college I went to college to play baseball. That was my intent. What position? Second base.
Tom: [00:21:35] Oh, nice.
Anderson: [00:21:36] And I wasn't on scholarship, but I had applied through the coach and full intention of walking on, and. But I also knew that going to college, I was interested in exploring some new things. And art and studio was definitely one of those. And so I got to college and, and realized I couldn't play baseball and try all of these new studio courses because the practice times and three hour courses didn't work together. And so my baseball career was done and I was going into the arts, and I never looked back. That said that was the first time I had ever experienced learning that felt self-driven, where I started to read things because I wanted to read them, or I started to spend extra hours in the studio slash classroom rather than thinking that it was all compulsory. It was the first time, despite, you know, by that point, a decade and a half of school that I had moved from doing school well to becoming a learner. So that was sort of the first phase for me. During college, I also studied abroad, and I studied painting and drawing in Aix en Provence in southern France. And that was an immersion type of experience. And that experience was profound in the sense to your question that I came back and I said, this isn't just something that I like to do as a hobby or that I find fun. This is something about who I am. And from that point on it was just part of who I am. And, and that was that was an important shift.
Tom: [00:23:31] It's really interesting thinking about so there's that process of exploration of sort of well, you mentioned earlier about putting a painting on the wall and getting eviscerated and then being able to make a determination about like what was worth keeping and what was worth forgetting. I mean, you're 19, 20 years old. That's not an easy thing to do. It's not an easy thing to do at any age is to take criticism and then to be able to sort it. And then you said you went to France and you had that kind of immersion experience. No one's critiquing you at that point. But how how do you know you're getting better?
Anderson: [00:24:07] Well, you are getting feedback. I mean, you're getting feedback. You know, just as an example, you know, for six weeks that I was there, I packed up a backpack with my classmates every morning at 8:00 and went out into the countryside, where Paul Cézanne painted and painted for 2 or 3 hours, put an easel, walked out into a field, set up the paints, and was out in nature. And the principle there was they were trying to help us learn how to see. Yeah. And how to get our brain out of the way and how to get our ego out of the way and capture the experience of standing in the presence of Mont Sainte-victoire rather than painting a picture of Mont Sainte-victoire. And as you think about that feedback, the feedback wasn't about what did it look like? The feedback was about that process of getting us to see and where they could see that our brain was working and saying, this is what a leaf looks like. This is what a tree looks like. Rather than saying, this is what I'm am standing in the presence of.
Tom: [00:25:13] That to me feels like a market. So there's the same sort of like a lot of times when we look at a market, we'll think how can I take advantage of this? So how do I manipulate this market as opposed to being, as you saying, standing in the presence of it to understand it? There's so many difficulties of seeing in business, particularly if we look at our customers and do we see our customers or are they sort of like extensions of us? And I feel like well, anyway, I'm interested. You're you're nodding in agreement. I'm interested to hear what you think.
Anderson: [00:25:47] Well, I think I think part of the the interesting challenge, and it's one that's hard to explain is. Your customers may be telling you they want X. Yeah, or they have problem Y. That is most of the time, like any of us, different than the underlying problem that needs to be solved. Yeah, because we all present our problems, our needs, our requests based on the information we have, based on the scope and scale of our worldview. So we ask somebody what technology they need. Well, the only technology they know is Facebook and Twitter and TikTok. And so they tell you, well, I want TikTok, but for this or I want. And so the context isn't around the solution. It's around the sort of presenting problem based on the known understanding of the optionality. Right. That to me is to some degree the same thing as standing there and accepting what Mont Sainte-victoire is telling you it looks like, right? And my job is to listen and to to be open to what's being said, and then to ask the questions that get to the underlying solution and opportunity. And it is not about people being smart or dumb or knowing their business or not. It's just about knowing we're all biased toward, you know, the scope and scale of what we know and what we've experienced. And if you're a great problem solver, you're a great product owner, you're a great artist. You have the opportunity to see things differently. Yeah, that's ultimately what makes it kind of great.
Tom: [00:27:31] I think excuse me. That's the most interesting thing about running a business is how many things you're wrong about. And then are you able to recognize, like, oh, I was wrong about that. And then when when you start to adjust things get so much easier. I feel like when I'm. Fortune's path is more in alignment with our customers and what they're asking for and how they want to work. And as opposed to the idea that we have about what Fortune's path ought to be things get much, much easier. And it also feels like people are attracted to us more when we're not. I mean, sort of approaching the world with a preconceived notion of the outcome.
Anderson: [00:28:19] Yeah. Well, I mean, it's the it's the the shift between here's the product that I have. Don't you want it?
Tom: [00:28:26] Yeah.
Anderson: [00:28:27] Versus here's how I can help you solve the problem that you have. Let me show you how I actually understand the problems you're dealing with.
Tom: [00:28:35] Yeah. And I also think a lot of times you need to get the customer to define the problem. And there's a therapeutic aspect. You talked about how people will say, I want TikTok, but for X. And so they've arrived at a solution without as you sort of standing in that I can't pronounce the French field, but standing in the French field and saying, feeling yourself in the presence of that rather than, well, let me see, what does it look? Oh, there's a pill over there. And so I'll, you know, it's a very, very different approach. But it's also he talked about trust at the beginning of the conversation. There's a lot of self trust that has to happen in that situation because there's vulnerability in not having the answer. And in allowing, as you said, the environment to tell you to be present in the environment rather than outside of it manipulating it.
Anderson: [00:29:30] Yeah. And I think, I think that this goes back to the to the question about how the arts play a role in, in sort of how I work. That self-trust is based on understanding that you're probably wrong.
Tom: [00:29:48] Yeah. That's right. That's the most important thing to know. Yeah.
Anderson: [00:29:52] And that there is always a better way.
Tom: [00:29:56] Yeah.
Anderson: [00:29:57] And that the next painting, the next sculpture is the next To experiment in this journey of getting somewhere, of seeing the world, of building the product of whatever that might be. And I think the that approach, that creative approach while it's hard to get there, lowers the stakes and once it lowers the stakes, you become far here and you become freer. You you trust yourself in that process. And so, you know, maybe you make a bad move. Maybe you choose the wrong direction for a product. Maybe you have something that doesn't land the way you hoped it would land. Well, it was an experiment on the journey, learned from it quick, and moved to the next version. And that to me is what the creative, the creative process is. A bad painting is no more the end of the journey than a good painting.
Anderson: [00:30:57] You still have to figure out how you move to the next one to get better, or how you want to adjust your message, or how do you want to adjust your approach? Or how do you want to? You know that that this is just all a constant iteration.
Tom: [00:31:09] It's really so this I want to come back to private equity for a second. And so I'm a that new business or not new business, but established small business suddenly gets a bunch of money. They suddenly get some capital. Talk to me a little bit about the reactions that they have when they get that and how their mindset needs to change. So you're talking about, like, as your growth as an artist, I have to transform myself from being someone who is trying, as you said, you're capable of being present in that field rather than kind of outside that field and drawing it is there when I suddenly get money and my my opportunities change. What's the transformation that I have to go through?
Anderson: [00:32:01] Well, I think it's important for the way we approach investing is that it's it's I had a previous company that was VC backed that I joined at the seed stage, and that was more like, write a check, make a bet, go make it happen. Your bank account now has X million dollars in it. In our environment you get a financial partner. And so you are working with a team of people who understand your business, who did the research on why this was a good business and market to invest in. And so you've brought in strategic partners. You've brought in finance partners. You brought in people who understand technology and growing and scaling businesses. So it's not sort of a now you suddenly have a lot of money. Now, that said, one of the things that's just an example, that's one of the things that I think is really Illuminating for for where we sit, we have a company that was in the food and beverage space family owned kind of business. And had the opportunity making baked goods, had the opportunity. They knew if they could get a certain type of oven that they thought that they could probably double their business.
Anderson: [00:33:27] But that oven will just say cost, you know, $4 million. Well, when I'm the business owner, that $4 million is my retirement. That $4 million is my kids college education. When you bring on a financial partner, you have the ability to look at that analysis and say, this type of oven creates this kind of output, and this is what our bet is. And now you have a financial partner that strategically sort of says, I agree, that looks like it's right. Right. And now you have the capital to invest to advancing the business. And in this particular case, that that particular oven actually outperformed in a shorter amount of time. The, the, the investment sort of prospectus. And it's just an example of where some of these businesses are great businesses. But the trade off between a capital investment like that, that feels like it's coming out of my house at home and a capital investment that, that, that can that instead can just become a smart strategic business investment is kind of the shift.
Tom: [00:34:37] Yeah. And there's a a high degree of trust and belief in that as well. There's a David Bowie has a great quote about working as an artist where he says, it's like you're walking out into the ocean and you want to go just past the point to where you can put your feet on the sand and where you're a little uncomfortable. And I imagine there's a lot of, you know, businesses that you guys are investing in where they're pretty much like up to their knees, sort of. And they're like, this is comfortable. I like it here. And getting them to go further out and take take more risk, be in an area that they don't know quite as well. Because there's a bigger upside up ahead. Like, do you do people I mean, I think artists often hit a wall. I can say I've hit a wall. I can speak for myself. And although I don't think of myself as an artist, but that's a whole other podcast. Anyway I when you have a client, when you have a partner who is hesitant to go a little further out into the ocean. Does that come up in the leadership Academy? Is that something that you guys talk about? Is that more like, you know, we're going to take you off to the side and talk to you.
Anderson: [00:36:00] That's more that's more pre and early investment stage, right. The whole the whole premise and principle for finding the right partner to partner with Shore and Shore to partner with them. Is that our going back to the idea of pattern recognition. We're we talk about helping you go grow bigger, stronger and faster with less risk. Because we've done this. There is a general direction playbook. There is standard kind of infrastructure to your finance and accounting that needs to be put in place to scale there. You know, even regardless of the business, there are people investments that we need to think about. And so really our goal is actually to make that growth less risky.
Anderson: [00:36:47] And that that's part of the partnership model.
Tom: [00:36:50] These companies must be terribly difficult to source. I mean, how do you there's quite a lot of conversation to sort of feel somebody's out to understand like, well, they do they really want to move ahead or are they just kind of want some money right now?
Anderson: [00:37:03] I mean, there's hundreds of thousands of small businesses out there. We we look at the industry first and explore industries that we think are ready for these types of investments and can be successful in these types of investments. And then we look for the experts in those industries. And we might bring on somebody or start having a conversation with someone about being a board member or an advisor before we ever even have a company in place, because we know that we can look objectively or analytically at an industry and say, this is a good industry, but we also know we don't know that industry. That's not our business. So then we make those connections. And ultimately those people often know some of those. I mean, it's it's hand to hand. It's not this is not mass sales. And so a lot of what we do is just our, our investment teams going out and meeting people. We have events as an example called day with Shaw, where we invite people in to learn more about us and what I think is beautiful about that particular model. And indicative of Shaw's approach is about half of that time is introducing Shaw to these people and maybe having a compelling speaker kind of generally talk about things. But then the other half is Shaw getting out of the way and saying, you have other founders here who have made the decision to partner with us. You have time with them now to ask all of your questions, comments and concerns. And we're getting out of the way. That goes back to trust, right? And and so it is high, high relationship building, high networking, but not in a volume sort of way. It's deliberate, it's targeted, and it's working through industry experts and those networks that live inside of a particular industry.
Tom: [00:38:55] Nobody sells better than your customers. And it sounds like that's kind of the model you guys are following is that you have a combination of outside folks, people who are already working with you, and then you you get together and they get a chance to sing your praises, in essence.
Anderson: [00:39:12] Yeah. And and, I mean, we don't ask them to make it rosy. I don't think anybody's going to trust it if it sounds like it was all roses. Right? Like, suddenly you've been running your business for ten, 20, 30 years, and now you've got a bunch of finance people who are meeting with you every Monday, and it's more meetings. Yeah, yeah. And they were asking you to change from your QuickBooks to a new technology. And they're asking like it doesn't come without stressors, right. So and and without, you know, stressors on your team, not just on you as the sort of lead. So, you know, I think that candor is, is how you sort of flesh out who the right partner is. Because, listen, we if we if we partner with someone who's not in that place.
Tom: [00:39:53] Yeah.
Anderson: [00:39:54] It's it's it means years of recovery when the partnership isn't sort of well vetted or someone, you know, on either side. There's kind of an issue there. So it's really important we find the right early partners in particular for a new platform.
Tom: [00:40:10] So is there kind of a curriculum path for those organizations where you have some buyer's remorse? It's kind of the the short bus kids kind of, so to speak.
Anderson: [00:40:19] Not really. I mean, those, those any, any changes at that level are really at the, the level as to distinguish between Leadership Academy as an example, that are at the level of the partnership and the investment team. And that's not the space that I'm working in.
Tom: [00:40:37] Gotcha.
Anderson: [00:40:37] Right. I'm working in the space where where it's more on the operational and implementation side. You know, just as an example, we grow a lot. Most of our companies grow through acquisition. Well, when you acquire a new team, you have all kinds of habits and practices and cultural norms that get acquired. You have new expectations that you have to implement. You have tons of change. You need to lead and manage. And and that's a lot of where our leadership academy gets routed.
Tom: [00:41:03] I got.you. So that's that's important. So when you're buying one of these companies you have your five year hold period. The expectation isn't that they're going to, you know, go four x or five x organically. The idea is like, all right, now you need to find people or organizations who you would buy. Who do you know in your market. So there is a consolidation element to this for sure.
Anderson: [00:41:26] And and organic. Right. We have to show that that the companies we buy, we make better.
Tom: [00:41:31] Yeah, yeah.
Anderson: [00:41:32] Because we're selling them on the backside of this. And we need to show that we've set them up for the next phase of scaling for whoever buys on the back end of the whole period. But yeah, most of our companies, you know, some with a handful of acquisitions, some literally through dozens or even hundreds in a couple of cases, are acquisition driven. We talk about in our investment approach, barbell industries. And when we're looking at an industry we want to invest in, we think about in a barbell industry. On one side, you've got a lot of small mom and pop players, and on the other end you've got a couple of big ones. And those two make up the majority of the market, but you don't have a lot in the middle. So that means that if you grow to that middle stage, you've got opportunity for you've got opportunity for consolidation in the the one side of the barbell because there's so many mom and pops. And then you've got the opportunity to build that middle zone, that middle market kind of scale with the opportunity for a larger player to to be a potential acquisition or partner partner in the future.
Tom: [00:42:42] So it's interesting. It's like you're you're coming in on the small end of the barbell, and then you're rolling up other folks who are on the small end of the barbell to try to move to the middle. And then that's when Shore exits, because there are people who are on the big end of the barbell who might want to buy that, or somebody who might want to enter the market and say I can end up in a dominant position in this market.
Anderson: [00:43:05] And part of it is, I mean, the reason that works is that we put in the work to build the operations. Yeah. Like we are hands on, as I keep saying the word partner, we are partners in these businesses like we are investing in talent. We are investing in technology. We are investing in data. We are investing in day to day operations. We're helping build their board of directors. We're helping develop often first time CEOs to lead these businesses. That's that's work that quite honestly, most private equity firms don't want to be in.
Tom: [00:43:34] Sure.
Anderson: [00:43:34] And it's the space that we love and happen to have proven to be quite good at.
Tom: [00:43:39] So let's use that as a transition to go back to education. And part of your role there as a teacher, it sounds like there's sort of a teaching spirit to all assure you have taught in the past, you're obviously a teacher now and you've had teachers in your own life. What makes a good teacher? And can you tell a story about somebody who? A teacher from your past?
Anderson: [00:44:07] I tell a story that I think stretches the the definition, and then I can come back. And I've told this as recently as probably two weeks ago.
Anderson: [00:44:17] When I was in college, I was an English major and a studio art major, and I all of my final requirement courses for my English major were filled up, and I had to get a British literature course in there. And somehow the only thing that was left, shockingly was an Hope I get this right out of respect to my teacher. Was an 18th century British women. 18th century British women's literature course.
Tom: [00:44:48] There you go.
Anderson: [00:44:49] There was another word. Reformation or something. There was another word in there, too. And so I was in that course as the lone male and of only six students I could not have been less interested in what we were reading. And quite honestly, I'm old enough now that I can say I didn't read most of it, but my teacher was so passionate and so wonderful that I felt compelled to do a good job for her as a 19 year old, a 20 year old right to out of respect for the passion she had for the subject that I wasn't going to just, you know, fake it. There's something there to what makes a good teacher, right? This authenticity and this passion. It was similar and true for my printmaking professor, who taught me to enjoy the smell of the ink and the sound of the ink and the smell of the mineral spirits and the feel of paper and the tension and oppress. And he just was I mean, it was just in his bones and in his DNA. And I was drawn to that. And I enjoyed printmaking a whole lot more than I enjoyed 18th century British women's literature, as it turned out. But that, that that to me is fundamental. And I think it doesn't matter the subject, it doesn't matter how much, you know, if you can't convey that. And I think when I go back and I look at the college professors I had, they might have been doing it might have been a really interesting topic and they might have known everything about it.
Anderson: [00:46:31] But if they acted like I was like an annoyance that they had to teach me that that was that was a killer. So, so that passion is, is part of it. I think the other part is, is respecting and acknowledging and integrating the student experience, whether that student is a young executive or that student from previous work is a 14 year old. How do you integrate this idea? We can just use this because we've used this as an example. What does trust mean to them? So that when you provide a framework that they go back and can apply that to their real world and their real lives, which then leaves them wanting more of this journey that you start working with them on. That's why I go back to saying, what are you going to do tomorrow based on what we talked about today? Yeah, that none of this matters in theory. This is not academic. So I think the other part of that is making it really real and really applied, because it's not about what, you know, as a quote unquote teacher. It's what they do with whatever it is you're trying to share.
Tom: [00:47:38] Yeah. That's really that's a really important insight, in my opinion, in instruction and teaching is that it's what you said. It's not about what you know. It's what they do. And they have to take the information you place before them or the skills you place before them and put them into their own context in order to be able to access that at a later date. And also if it's going to have any hope of changing their behavior, because I think education ultimately is about behavior change. Yeah.
Anderson: [00:48:15] And I'll take that back, Tom, to, to our discussion of art.
Tom: [00:48:18] Yeah.
Anderson: [00:48:18] So, so when you make the decision as a creator to put something out into the world, You've invited the world to interact with it.
Tom: [00:48:29] Yeah.
Anderson: [00:48:30] So you can't stand back and say, oh, the world doesn't understand me.
Tom: [00:48:34] Or you can't say, oh, the band doesn't get it.
Anderson: [00:48:37] Yeah, good luck with that. Right, right. And that's one of the things I saw a lot of artists do and, and, and was an for me to say I don't want to be like that. If I'm choosing to put this out for other people to interact. I've. I've invited a relationship. Now, I can't just try to manage my side and my purpose. I need to manage the relationship. I look at that same thing as happening with a teacher. It's how I am putting this out into the world to create activity, to create dialog, to create learning. And that's that's the shift. And I often have talked about the distinction and clarifying, like being an in education versus being in learning.
Tom: [00:49:22] Yeah.
Anderson: [00:49:22] And if we really were talking about learning. We would reform education in a different way. But when we talk about education, we're thinking about the system of delivery rather than the process of people taking something and then doing something with it on their own, or expanding on that knowledge or applying that knowledge in new and interesting ways.
Tom: [00:49:43] That's I've been calling you an educator through the podcast, hoping that that was a compliment, but it sounds like maybe I missed the mark.
Anderson: [00:49:50] No, but it's an important distinction, right? I mean, I'll accept being an educator, but my goal is not to be an educator. My goal is for people to learn.
Tom: [00:49:57] Yeah.
Anderson: [00:49:58] And I can't control what they're going to learn. What I control as an educator is what I, what what pebbles I throw into to their, their ponds and what ripple effects that can, can sort of happen. And what are they ready for.
Anderson: [00:50:12] What is their context suggesting. What are their resistances. What's relevant and not relevant here and now versus what might be relevant in six months or eight months or in ten years.
Tom: [00:50:22] So that's you're kind of getting at a tricky area in education. That's measurement. And so, you know, there's a lot to be said about formal education, or I'll just say kids in schools is that a lot of that stuff is geared towards measurement rather than learning. How do you all avoid that trap within your leadership academy? How do you determine what's working from a curriculum standpoint and what isn't?
Anderson: [00:50:49] Well, and this is about professional development, right? This is totally optional. And it is we don't assess.
Tom: [00:50:59] Right, right.
Anderson: [00:51:00] The the process is one where we're assuming as particularly as an adult learner, you know, I say you're coming with a ton of experiences that I don't know.
Anderson: [00:51:12] My job, if I do it well, is going to help you retrospectively learn more from those experiences, give you the chance to rethink some of those things. And, well, maybe that didn't happen because of this. Maybe it actually ended up being about that. Or maybe I never thought about this angle and that's why this unfolded. So that then as you move forward, go back to pattern recognition. You see that similar pattern and you address it differently next time. And so the feedback is in people's ability to manage their day to day stress. The feedback is their people's ability to manage a team to perform and hit their measures, that the feedback is in retention, the feedback is in all of those things that are in the day to day execution of their work. And just as an example, I had one Leadership Academy participant reach out recently and in addition to doing the Leadership Academy, I had done some coaching with this person in the last coaching call. They were really frustrated with their situation and thinking maybe they had made the wrong career move and maybe this was coming to an end. And we talked through and reframed what conversations she could have, how she could present her concerns differently than how she was thinking about them. How those things what answers she was really looking for. What was she was she was feeling and what would help her feel differently? And with. I got a call maybe a month later. And she had been promoted.
Tom: [00:53:00] Wow.
Anderson: [00:53:01] And was all things were not absolutely perfect.
Tom: [00:53:06] They were better.
Anderson: [00:53:06] She was managing them much better.
Anderson: [00:53:09] And so let's let's talk about sort of measures from the perspective not only of this person's growth and development. But let's talk ROI. Yeah, let's talk about being able to to not have to spend the money and time and lost capacity to replace that person. Let's talk about the fact that an internal promotion is more likely to stay in the company and not turn over again for the next 18 months. So there's there's this ripple effect that that comes from just learning and thinking about how I manage myself in a moment of conflict, how I think critically about communication, and not just what I want to say, but somebody else's frame of reference. How do I make sure I communicate in a way that people see we're aligned on the same goals and values? This isn't just about me being upset about a thing. This is about my interest in the business and in our customer and the care we provide, whatever those things might be so appealing to those common interests as you communicate. Those are all things that we're talking about.
Tom: [00:54:08] Right? Yeah. I mean, it's interesting because it's like you're not trying to go for direct attribution of because you attended because you scored a 70 on this assessment. You were then able to go out and, you know, improve something by x percent. It feels like you're placing the Leadership Academy in the context of the entire business and the relationships of all the people within that business. And as you say. So if somebody has is at a crossroads and you have an intervention and then they have a positive outcome, you're willing to accept that your intervention had some impact on that positive outcome without having to do a cost benefit analysis.
Anderson: [00:54:52] Yeah. I mean, I always come back to something that I say with, with frequency and is rooted in, in our approach to what we prioritize. Going back to your question about curriculum. We're we're humans working together with other humans and human created systems to provide products and services to solve problems for other humans.
Anderson: [00:55:12] And we call it a business. And so if we start, if we ignore those basic human things we're ignoring the foundation. If we don't talk about things like trust communication, relationship building, those kinds of things, culture, climate, all of these things, then we're missing the relational component. And if we start with just the business, we start with the transactional component. When the relationships we have as a team, the relationships we have with our customer, those are the potential transformational moments. And so we we we get the tail wagging the dog a little bit. Yes, we have to run a business. The business has to make money. And it has all the all of those components that we learn. But but we can't distinguish those transactional and lagging indicators of business success from the relationships we've founded the business on.
Tom: [00:56:07] I love that. Well that's an excellent area to end on. Well, Anderson, it was so nice seeing you again. And I, I really enjoyed talking to you.
Anderson: [00:56:17] Happy to do it. Let me know when we're going to do episode number three.
Tom: [00:56:32] A Fortune's Path podcast is a production of Fortune's Path. We help service and technology businesses address the root causes that prevent rapid growth. Find your genius with Fortune's Path. Special thanks to Anderson Williams for being our guest. Music and editing of the Fortune's Path podcast are by my son, Ted Noser. Look for the Fortune's Path book from Advantage Books on fortubespath.com I'm Tom Noser. Thanks for listening, and I hope we meet along Fortune's Path.