Small Business Rage – One CEO’s Perspective

I don’t get mad very often. It clouds my personal and professional judgment. But I’m mad right now. I’m the CEO and a founding partner of Convergent Performance, LLC – a veteran-owned small business providing training to those who protect the rest of America – U. S. Marines, Coast Guard search and rescue operators, wildland firefighters, doctors, nurses and even long haul truck drivers who pull hazardous materials over our highways. Our products and services make their jobs safer and their people more productive. Every one of our 20 plus employees clearly understands both our business and humanitarian mission. We work hard and take our jobs seriously, and none of us have a golden parachute should our efforts fail.

Five years ago, my partners and I left secure government and corporate jobs, borrowed a million dollars, and armed with little more than some good ideas and a Spartan work ethic, started our own business. Three years later, we had paid off our loan, added a couple of dozen good paying positions to our payroll and have since plowed every available penny into growing our product line, infrastructure, quality, employee benefits and services.

We do not outsource any of our work, because we believe in American small business. Even though we could save 20% on printing costs if we shipped it overseas, we contract our work to a small businessman who runs his print shop out of a cinderblock building in Bend, Oregon. Even though we could save over 25% on software development if we outsourced it to India or Bangladesh, we contract this work to another veteran-owned small business in Woodbridge, Virginia. I know and trust these owners. They have our interests at heart as I do theirs. The point is that American small business is tightly intertwined and moves forward with symbiotic relationships like these. Economic downtimes hit small business hard – and even before the meltdown, many of my competitors were laying off good people. Now the future is dark indeed – and even a well planned and well run business like ours must make some very difficult decisions based on an entirely new playing field.

But in spite of all this, I wouldn’t take a government “bailout” (handout, hand up, work out, or whatever other bogus cliché gets invented) if Secretary Paulson hand-delivered gold bullion to my 300 square foot office that I vacuum myself. If we can’t make a go of this, we are not about to ask the rest of America to pay for our lack of foresight or mistakes. It violates the ethos of entrepreneurship – you make it on your own merits. Small businessmen are a proud, hardscrabble lot. If we fail, we will find other ways to make our mortgage payments and get our kids through college.

It is clear that the double whammy of a severe recession and the coming massive tax burden creates a treacherous future for American companies like ours. But how we will react to this challenge is the difference between people like us and the financier class that run the mega-corporations. In the midst of this storm, when our company could be pulling in our sails, laying off employees or asking for a part of the government handout – we took a new bold risk. After long deliberations on how the economy might drive our future, we hired a world class expert last week to create a new business line called “Reinventing Ethics and Leadership in American Business and Government.” It will become a training, assessment, reporting and accountability system built around the premise that personal accountability and sound character still count. The lessons from this recent disaster need to encompass more than a few public hangings of corporate execs and a couple dozen new business books.

Leaders of character were once the hallmark of what made American business and government the envy of the world, at least before the train jumped the tracks over the past few decades. The corner on the quality movement moved to Japan, our production jobs moved to where ever the lowest priced workforce could be found and American big business types lawyered up and demanded golden parachutes before even accepting a position. The time for mandatory accountability and a new code of business conduct has come. We must start with a new model for the next generation of business leaders. At Convergent, we are putting our money (not the taxpayers') where our mouth is and weighing in to be a part of the solution to a problem we were not a part of creating. But if we build it – will they come?

Every supervisor, manager and executive in each company that receives a dime of taxpayer money in this bailout – as well as every regulator that oversees how they spend it – should be required to take this ethics and leadership training and pass the end of course exam – since they failed the recent real world test so badly. But it is unlikely that government regulators and big business types will find the few dollars that it would take to achieve the cultural change that is so badly needed. After all, they have multi-million dollar executive retreats, lobbyists and legal fees to think about. But build it we will, and market it, and service it and all of the other things good businesses do - and hope to turn a profit.

Small businessmen in America are walking the wire without a net, but we’re used to it. What we are not used to is watching the dollars that would find their way into our customers' supply chain given to rich dudes who couldn’t manage their own businesses. Even worse, we object to being personally and business taxed out of existence to prop them up to make more mistakes. But at the final turn of this road, we will remain fluid and look for opportunities to turn lemons into lemonade – at least until the corporate bank account hits zero - it’s what we do.

Tony Kern, Ed. D.
CEO, Convergent Performance, LLC