Anderson Williams: Welcome to Bigger.
Stronger.
Faster.
the podcast exploring how Shore Capital Partners brings billion-dollar resources to the lower middle market space.
In this episode, I talk with Michael Burcham, Chief of Strategy, Research, and Talent Development at Shore Capital Partners.
We talk about why Shore Capital invests so much time, energy, and effort in talent development, both internally and across the portfolio.
Michael shares the foundations of learning at Shore Capital that go directly back to our founders and how their commitment to learning continues to drive a culture of learning and growth today.
We discuss how important it is in a rapidly growing company to ensure the company doesn't outgrow its people among other talent development trends and patterns.
We talk about the transition from individual contributor to manager, growing from an investment professional to a strategic and operational leader, and navigating, managing and leading change in the context of rapid company growth.
Michael, thanks for joining me.
Michael Burcham: My pleasure, Anderson.
Anderson Williams: So Michael, you've been around Shore Capital and investing and supporting the team from its earliest days.
How would you describe Shore's focus on learning?
Even when you go all the way back to when you met the guys, how would you just describe their approach in thinking about learning?
Michael Burcham: I think there's a hunger and a desire to really understand businesses at the very beginning.
Jim Forest and I had the opportunity to work with the four founders early on, each of them had come out of either legal or investment services and had not had the opportunity to really run their own businesses but were extremely curious about our learnings and how they could apply some of that learning to what they were finding in due diligence and looking at new companies.
And I think that desire just continued to grow as we began to have success and recognized the need not only for themselves to learn, but the people coming after them that would join us at Shore and also the people within the companies we acquired for their additional learning.
So I think it was there, Anderson, since the very beginning.
Anderson Williams: And when you first heard that or recognized that, how did that make you think or feel or consider them from an investor perspective?
Michael Burcham: I was very attracted to the model because I had worked with a number of private equity firms in my prior life of building my own companies.
Most of them were financial engineering kind of firms, and not terribly interested in learning and growing, particularly in an operating sphere of knowing how companies work.
What are the market conditions within companies thrive?
So seeing a group of investors interested in that really drew me to them to wanna learn more, and ultimately to join them in the journey to help create Shore Capital.
Anderson Williams: And we're 15 years down the line, about four years into formally investing in Shore University.
How would you just describe what that looks like today from those early days of recognizing you had founders who were really interested in learning and growth to now a large portfolio of companies, a large team, and a continued emphasis on growth.
Just describe a little bit of today from your perspective as well.
Michael Burcham: So Anderson, to do that justice, I think I need to talk about it from two perspectives.
One within Shore.
And the other within our portfolio companies.
Let me start within Shore.
I think today we really have come to recognize that we are more than investors.
We are company builders in the microcap space.
We will acquire many smaller companies in a single category and build a platform around them to create one larger company within Shore the knowledge of doing that to be a company builder is something that we want to translate down beyond our original four to six partners into the rest of Shore.
Our principals and vice presidents and associates, most of those folks have also not worked in any operating capacity of a company.
So understanding what it means to be a company builder, understanding the logic behind what we're seeing in companies, how to fix issues and true operating problems, how to grow organically are all things.
That we aspire to teach and learn and master inside Shore and Shore University has a big part of that in helping all of those individuals not just be really great at a spreadsheet and modeling something, but systemically understanding what it takes for that model that we've created to become a reality by understanding the operations and knowing what to do once we've acquired a younger company to help it become best in class.
In the second case of our portco companies, we acquire many smaller companies that have wonderful people who've been trained on the job.
Many of them started quite young with those companies.
Some of them have been there 15 or 20 years without formal education on their own, nor any formal training in leading and managing teams.
Each of these companies will grow likely eight or 10 X from where they're originally acquired.
In order not to lose that talent, we must invest in them so that they can also personally and professionally grow and oversee larger issues, oversee larger revenue, larger groups of people, and that just doesn't come naturally.
It takes some specific training to do that.
You know, I point out that to our partners frequently that.
If we aren't investing in our talent, the company will outgrow them and we'll just simply need to replace them.
And that's a negative because when we have to replace talent that has been there quite some time, part of that legacy knowledge of the company walks out the door.
We'd much rather invest in someone and upgrade them so they can oversee and manage something larger than to lose them because they weren't able to grow or we did not invest in them.
So that's our second big area of investment for Shore University is to make absolutely certain that across all of our portfolio companies, from frontline managers all the way to the C-Suite, individuals have opportunity for professional development and growth.
So the company does not outgrow them as it grows with Shore.
Anderson Williams: And when you think about this, Michael, you mentioned earlier that this was not something you necessarily had experienced in your private equity experience in the past.
How did Shore make the case for this kind of investment?
They've invested in an entire team and put learning tools and leaders throughout the organization to support both internal learning as well as portfolio company learning and yet there's always this question about the return on investment as it relates to investing in people.
How do you think about that from an investor perspective?
You started to hit on it before, but in terms of not just talent retention, but the value we're able to create with our partners over time and with their teams.
Can you give some context for that?
Michael Burcham: Sure.
I'd be happy to.
Let's talk about Shore first.
The return on investment really is derived in understanding what are the strategic growth drivers of a business and what will ultimately drive enterprise value for each of our businesses.
Now, let me translate that to everyday terms.
What that means is that we can't just simply say we want to see 10% organic growth.
We need to know what kind of organic growth and is it coming from outbound initiative, inbound initiatives, channel partners through marketing initiatives.
Each of those have a different approach and some of them work well in one category that sure may invest in and not so well in other categories.
Understanding when we acquire a young company what it will take for that young acquisition company to be prepared to grow and to have the infrastructure under it also requires investment.
And the ROI on that is phenomenal because if we do not invest properly in infrastructure, we build a house of cards that won't last.
So quite often you see in Shore, even with people, our first few acquisitions, fuel, getting the right talent in place, getting them trained so that as we begin to add to that company, it will grow in scale and have a really strong platform underneath it.
I think across our portfolio companies, the ROI can be seen in being able to translate their strategic vision and to execution and those tools to be able to do that require professional development and training to be able to do.
Many of the individuals who are part of the firms we have acquired, they've done one or two or three things for a very long time.
We're wanting to expand to adjacent spaces.
We wanna focus on customer retention, which is also a massive driver of ROI.
So whether it's retaining more customers or larger share wallet of those customers in the portco company, those are also key ROI initiatives and drivers.
I think the ultimate measure of a return on investment is when we go to exit and when those organizations, whether they be financial or strategic, who want to buy a Shore company, begin to speak about the value they see inside the company.
I. The platform we have built, how prepared it is for growth, the growth we've delivered over the first five years, and a belief that will continue for the next five to 10.
That ROI is also measured in the multiples we are paid for our companies.
So I think we see it all along the way from the beginning on how we invest in the right talent, helping them being prepared to lead, how we do organic growth, acquisition and operations expertise.
And then finally, what we see ultimately in the multiples we're paid at exit.
Anderson Williams: And I have to believe that the companies interested in buying a Shore portfolio company at exit are looking not just at the numbers, but at the people that can scale once they buy our company as well.
That this is not just a matter of saying, Hey, this is a great market, it looks like this is a good company, but they're buying the team too.
Michael Burcham: Absolutely Anderson.
The numbers are nothing more than the footprints in the sand of behaviors.
Behaviors are driven by habits and know-how and that know-how only comes with development of people.
So if you only look at numbers, you're looking at an outcome with no knowledge of a process.
When you look at how people perform their job, how they're trained, the processes they use, then you can really understand how the outcome is derived.
Anderson Williams: You know, as I listened to you talk, I can't help but think we've done just as an example of one of our program offerings, a Leadership Academy at this point for about four years and for close to 700 people at this point, and.
As you were describing, people who joined Shore through an acquisition, they've been really good at their job in that founding company, in that company that chose to partner with us.
But they don't always know why they were good.
They've worked for a founder seller, they've done their job really well, but because they've never had to scale it or they've never grown to the degree that they had to teach somebody, they didn't even know how good they were in many cases.
And part of this development is enabling us to capitalize and expand on that knowledge we acquire as well.
Michael Burcham: So many of them were great individual contributors.
They'd never had a team to train.
They never had a team to oversee.
And I think probably something even harder is how to teach someone you have onboarded how to do your job so you can do the next level job.
All of those require some very specific investment in people, because I think human nature is to hold on to your expertise, to not share it for fear that you're not valuable anymore.
Shore's model is quite different.
We actually need you to teach the people around you to do your job because we desperately need you to move up and do the next job.
This isn't about becoming obsolete.
Actually, the fastest way to be obsolete at Shore is not being able to teach someone how to do the work.
Not what you happen to know.
Anderson Williams: Yeah, well I had a great ongoing coaching relationship with someone at one of our portfolio companies who was involved in the leadership academy.
And as part of that, you get coaching from me and from our team for participating in Leadership Academy.
And she had been with the company about 10 years.
The company had obviously joined a Shore platform.
She was an outstanding individual contributor and had naturally been promoted into a management role, and she was really struggling and couldn't figure out why, and she was working more hours and doing more work, but it was largely because she had never had to make that transition that you were describing.
Michael Burcham: So, let's be really honest here.
In many cases, the only example of leadership they ever had was that founder entrepreneur who really didn't know how to train and develop people themselves.
So they've never had an example of what it looks like to really train and develop others.
So it sounds like she was just working harder, not smarter, trying to develop people around her.
And my guess is largely through a to-do list or over micromanaging or standing over their shoulder rather than true, legitimate teaching and then getting outta the way and leading through others, which is one of the best courses I think you teach.
Anderson Williams: Well, and that's one direction.
In this person's specific direction, she just wasn't giving anything away.
She thought, how do I, how do I get Michael to do that?
I know how to do that.
I can knock that out in 20 minutes.
And she had run herself 20 minutes by 20 minutes into working seven days a week and had a three or four person team for the first time who was looking around going, well, what do we do?
Michael Burcham: Yeah.
Anderson Williams: And while she was running herself ragged.
Michael Burcham: No one can do it as good as me.
Anderson Williams: That's right.
Yeah, that's right.
But it was with the best of intentions, but without being able to reframe, and I shared with her my simple math equation I wanted to plant in her mind was, listen, think about it this way:
when you do it you get one point.
As an effective manager, if you get somebody else to do it and it's done equally well, you get two points.
Michael Burcham: Mm-hmm.
Or maybe 10.
Anderson Williams: Or maybe 10.
Right.
But it's not the same thing.
It's not just about getting it done, it's about knowing who needs to get it done and what's in the best interest of the team to get it done.
Michael Burcham: There's another dimension of this I think we should bring up at this point.
It seems perfectly fitting right here, and that is in our service and data economy.
Everyone is in sales.
Almost everyone in the organization has some touchpoint with a customer or vendor partner or channel partner, and it's important that everyone understand what that means, that they're carrying the brand of the organization, that they are helping form first and meaningful impressions of our work.
You know, I am lead director at our orthodontics business, and from our folks on the phone to the people at the front desk, to the assistant who is helping the orthodontist, to the people who follow up on appointment schedules.
Everyone has a role in a customer engagement.
If we really want the individual patient and their family to feel like what they experienced was absolutely extraordinary.
That bleeds over into our business services vertical with the folks who are putting water purification systems in individuals homes.
In our food and beverage industry where we're creating baked goods and spices and blends for restaurants and even into our industrials where we're doing HVAC systems and roofing and plumbing and electrical.
Many of those people are technicians, yes, but they're also our most important customer experience advocates, and they're quite good at being a technician, but often need some additional training to be the kind of customer experience advocate that we would all hope for.
Anderson Williams: Yeah.
Well, and I think that's one of the patterns that I've recognized through this process is that people are complicated.
Most of the problems that we're facing in our businesses are actually not that complicated.
It's the people behind them that are complicated.
So as we think about developing people, our approach is very much getting down to the core of what is driving people and how are people making decisions.
And one of the things that's really clear, when we have high performers, they know their goals.
When we have high performers, they know how they contribute and that their work matters.
When we have high performers, they understand the customer and they understand how our business drives value.
All of those things, if any of those are absent, right?
We have teams that are struggling and it's because we've lacked the communication of context and the understanding that how I enter data matters.
How I answer the phone matters because this is how we create value for our customers, and I think that once.
People understand that and start to make their own decisions as motivated humans who want to do well and do right by the people around them, it transforms performance.
Michael Burcham: Absolutely.
Anderson excellence is driven by the hundreds of little touch points that happen between the names on the org chart.
I tell folks all the real work happens in the white space between the names.
Very little real work happens directly in the org chart.
It all happens in the interconnected spaces among the names.
So Anderson, I'm particularly interested in hearing your take on the skill development of a first time manager.
It's a key target customer group for us at Shore University because we know that if they fail, they are often the glue that holds things together.
Talk to me a little bit about what you have observed or learned in teaching first time managers how to really think inside a Shore company.
Anderson Williams: I think the first thing to really recognize for anybody listening is that by the nature of where and how Shore invests in the market, the companies we acquire very rarely have built what you would codify as a management layer.
And so when we are building companies, we are building that management layer in a sense, organizationally from scratch.
Now, as you've described, we are building on the talent that we've acquired that have worked in these companies individually for years and decades in many cases.
But they have not been in what you would call a management layer.
So for example, somebody may have run a particular practice or a particular plant, and now we have three plants or three practices, and we want them to become a regional.
And in that case, you move from the culture you helped build and help define, and that you know, with a team that you know well and leading in that context or managing in that context.
To now managing people who have no idea who you are.
Michael Burcham: And that you did not hire.
Anderson Williams: And that you did not hire, and whose culture you don't yet understand.
Yeah.
And now you have three of those instead of the one that's like in your backyard where you grew up working.
So that transition to management isn't just about the mechanics of management, knowing how to delegate, knowing decision making, those are important, but building those relationships is step number one.
And without that.
You are not gonna delegate anything anyway 'cause nobody's bought into you yet.
So we always step back and talk about the foundation of everything that we do as trust.
And some people will say, oh, trust that's basic.
Trust is absolutely fundamental and foundational to every relationship and every working relationship.
Whether you're in the C-suite or you're on the front line talking to a customer or delivering on an assembly line, it doesn't matter.
The team has to trust you.
You have to trust the team, that you're safe, that you're cared for, that you're looked out for, all of those kinds of things.
So what we have to do often, especially when we're moving someone from a single location type of management role into a multi is help them diagnose what they've experienced.
One of the real joys of teaching and developing adults is adults show up with a world of experience, and rarely have they had time to reflect on or discern the wisdom that they're walking in the room with.
And so the place we start is what do you know?
What's worked well for you?
How has that worked well?
Why has it worked well?
What hasn't?
And then start to think about what parts of those stories and those narratives we can control.
And what parts we need to go cultivate from the ground up in a new environment, or go into that environment and learn about that environment itself and figure out how you fit into it.
So it's this, it's really just this human process that's rooted in building trust, establishing communication, and then figuring out the purpose of why you're all together and how you're gonna work to achieve that.
Michael Burcham: So I have a thought for you on that, on particularly on trust.
I think as humans.
We individually are slow to trust.
As managers, we assume everyone should implicitly trust us.
There's a bit of irony in all of that because the fact that all humans are slow to trust, we must earn it.
And as a manager, we actually earn it through consistency of both communication and our work.
And quite often that manager who goes from one location to managing three, is so hurried and busy.
They fail to create a consistent pattern of how they show up.
When they show up, how they communicate.
They may commit, we're gonna have a weekly meeting and they have one every other week.
Or they may go two months without one.
'cause they say, oh, I just been so busy never realizing that an undelivered promise has just destroyed any foundational trust they had attempted to build early on.
Anderson Williams: And the other important part about this that's specific to our context is everybody I work with across the portfolio is experiencing massive change.
Michael Burcham: Oh yeah.
Anderson Williams: And so if your company has just been acquired and you work on that team, they probably didn't ask you your opinion about whether or not they should sell the company.
Michael Burcham: Probably not.
Anderson Williams: And yet it's probably changed your work.
It's probably changed a lot of things about the technology you use, your sense of who you're connected with.
It's a time of vulnerability.
Michael Burcham: Sure.
Anderson Williams: And so we also do a ton of work at all levels about navigating change and managing change and leading change because that is our context.
And if we don't recognize that you as a new manager are not just stepping into a team, you're stepping to support a team that's wondering what in the world has happened to them over the last 12 months.
Michael Burcham: You know, I think we found that true in the partner founders we acquire.
The challenge of leading change is even more complex if this was your company and you've become part of a Shore platform because certain things are just going to change and uh, what you had historically seemed to work pretty good for you, and it probably did when you were a small company.
It just doesn't work at scale.
So I think even our founder partners.
Are challenged sometimes to let go of the past and to embrace anything new.
And when they feel that it comes through in all kinds of body language and conversation.
And if you've got a frontline underneath you that already feels vulnerable, and they see that from a founder partner, it only amplifies their feeling of insecurity and uncertainty.
Anderson Williams: Yeah.
I always give the example because I've seen it so many times, but it's the example of someone who has spent years managing and building a spreadsheet for their company.
or their QuickBooks for their company, and they are the expert in that spreadsheet or in that QuickBooks.
But now we gotta move to grow and scale beyond a spreadsheet.
We often, from a business perspective, think, oh, it's just, of course we're moving from Excel into some proper technology.
But what we don't recognize is, Michael, if that's your spreadsheet, I've taken your expertise.
Michael Burcham: Right.
Anderson Williams: And you're feeling really vulnerable by not being the go-to person, and now I've put you in a position to have to learn something new when you are really happy with the process you used to use.
And if we don't recognize that thing that can be so easily marginalized as an insignificant change is transforming how one sees their contribution to their work, then we're gonna miss the opportunity to really bring people into fold to help us build and we're gonna have people resisting change and we're never gonna know why.
Michael Burcham: That spreadsheet is where they felt they added value.
Anderson Williams: For sure.
Michael Burcham: So even more than their expertise, this is my value to a company.
And when we change all that, they feel almost in free fall of what will be my new value.
If my old value is no longer here.
Anderson Williams: For sure.
Michael Burcham: And the odd thing is we need them more than ever.
We want them engaged.
There's so much work to be done.
Inherently, their value is no longer this spreadsheet.
It's a higher order.
Only through engagement with peers across our platform, meeting other people like them who are a year or so ahead in the journey and have kind of crossed that chasm from what was to what now is will they ever find the confidence to let go of the past and take hold of that future because they can meet peers across other even Shore portfolio companies.
It says, I know how you feel.
I went through that journey myself.
The other side is pretty darn good.
I'm in a better spot.
I'm a higher contributor in my company.
I feel higher value in my work, and I'm making a difference in ways I wasn't making before but until they get to experience that, the fear of letting go is very hard.
Anderson Williams: Michael, just to wrap us up, if someone's listening and they're thinking about partnering with Shore or private equity, what key messages do you have to share with them about investing in their people and the opportunities that are ahead, particularly with a Shore Capital?
That may be hard to know or to see because they haven't lived it and because given so much other change as we've discussed, it's just hard to discern what happens to my people.
Michael Burcham: I think if I were gonna leave listeners with a single message, it is that your financial partner, if you are going to take your 20 years of work as a founder, entrepreneur, and partner with private equity, as a founder partner, you wanna make absolutely certain that financial sponsor not only believes in professional development, they put their money where their mouth is and they're doing professional development, not even for just themselves, but for their portfolio companies.
I think when people dig into what we're doing at Shore Capital through Shore University, our leadership academies, ELA, CXO, and all the other programs we will talk about later.
You will realize that this isn't just lip service.
It's a massive investment we're making in people because we know living through the change of the 21st century and all the things we are dealing with to create ultimate value in any company, we must make sure people have the right resources and tools and training to do higher order jobs, and we are deeply committed to ensuring they have those skills.
Anderson Williams: If you enjoyed this episode, be sure and check out our other Bigger.
Stronger.
Faster.
episodes, as well as our Microcap Moments and Everyday Heroes series at www.shorecp.university/podcasts or anywhere you get your podcasts.
This podcast was produced by Shore Capital Partners and recorded in the Andrew Malone podcast Studio with story and narration by Anderson Williams.
Recording and editing by Austin Johnson.
Editing by Reel Audiobooks.
Sound Design, mixing, and mastering by Mark Galup of Reel Audiobooks.
Special thanks to Michael Burham.
This podcast is The Property of Shore Capital Partners, LLC.
None of the content herein is investment advice, an offer of investment advisory services, nor a recommendation or offer relating to any security.
See the terms of use page on the Shore Capital website for other important information.