Lessons for Leaders from Middle Market Companies

JOE CAHILL

Hi my name is Joe Cahill. I am the COO of the Project Management Institute, PMI. Thank you to our new and returning listeners to the Center Stage podcast series. As always, today’s podcast is exclusively and proudly sponsored by the PMI Knowledge Initiative. The Knowledge Initiative is a community of professionals and thought leaders that are focused on the art of getting things done. This global community is sharing knowledge, developing new thinking and harnessing the collective intelligence of the entire PMI global community as it relates to the future of work.

So, onto the program. It’s my pleasure to be here today with Tom Stewart. Tom is the Executive Director of the National Center for the Middle Market, the leading source for knowledge, leadership and research on midsize companies, based at the Fisher College of Business at The Ohio State University. Mr. Stewart is an influential thought leader on global management issues and ideas, an internationally recognized editor and publisher, authority on intellectual capital and knowledge management, and a best-selling author.

Before joining the National Center for the Middle Market, Stewart served as Chief Marketing and Knowledge Officer for the international consulting firm Booz and Company, now called Strategy And. Prior to that he was the Editor and Managing Director of the Harvard Business Review, leading it to multiple finalist nominations for a National Magazine Award. He earlier served as the Editorial Director of Business 2.0 magazine and as a member of the Board of Editors of Fortune Magazine.

Tom is a best-selling author. His most recent book is Woo, Wow and Win: Service Design, Strategy and the Art of Customer Delight. His other books include The Wealth of Knowledge: Intellectual Capital in the 21st Century Organization, and Intellectual Capital: The New Wealth of Organizations. He has contributed chapters to four other books and published articles in the Harvard Business Review, Strategy in Business, Fortune, Business 2.0, Inc. magazine, Financial Times, The Hill.

Tom has delivered lectures and seminars across the U.S. and in more than two dozen countries worldwide. So, welcome, Tom.

TOM STEWART

Joe, thank you, it’s great to be here with you.

CAHILL

I want to start off and ask you some questions about middle markets. So I think we know that the middle market is the most dynamic sector and source of most of the jobs that are out there, the job growth generally speaking. At the same time, it’s underserved by advisors, policy makers and others. Could you define for us what the middle market is for our audience and then explain your view that the middle market occupies a sweet spot between resilience and runway?

STEWART

Yeah, happy to do that. And it’s a really interesting thing. When I came to the National Center for the Middle Market six years ago, I had worked at HBR, I had worked at Fortune, I had worked and lived and breathed in a universe of mostly large companies, international companies, so on and so forth. And while I read a lot about entrepreneurship and startups and the romance of the garage in Silicon Valley or whatever it was, the existence of these companies in the middle was... They were the forgotten middle child of my universe and I think to some extent, the forgotten middle child of a lot of other people’s.

The middle market we define, looking at census data, as companies with revenues between $10 million and a billion dollars a year, which is a big spread but that’s the middle third of private GDP. And these companies, as you said, over the last ten years have accounted for about 60 percent of net new jobs. I mean that’s... We have the belief that it’s the small business person that is the dynamic growth plate of the U.S. economy, and for heaven’s sake they are important, but it’s in the middle where you get both scale and resilience and that’s that intersection of resilience and runway.

During the financial crisis 2008-2010, obviously some middle market companies failed, but those that survived, and it was the vast, vast, vast majority, actually added jobs during that period of time. And so there is that resilience on the one hand and yet, because they are not up at that multi-billion dollar enterprise level, there also is the room to grow, the expansion from Indianapolis to India, the expansion from Dayton to Dallas, the expansion of new lines of business.

So there’s a lot of organic growth in the middle market. It’s an extraordinary group of companies, mostly private, 85 percent private. So that is one of the reasons that they are less attended to than either small business or the Fortune 500.

CAHILL

That is quite an amazing stat that they’ve created 60 percent of new jobs. To me that’s a big take-home message about the middle market. But here we are in this Covid-19 crisis and it’s hitting everybody, including the middle market. What are the lessons that could be learned from middle market industries in this regard?

STEWART

Well the first lesson is that they’re being hit. I think the lessons of Covid will be lessons that we learn over the next few months as people try to move from first aid to some sort of sustainable path toward recovery. But our data from the end of March say that 25 percent of these companies say the impact will be catastrophic.

CAHILL

Oh boy.

STEWART

How long that catastrophe will last is another question. At the same time, 80 percent told us that they felt that they could be up and running within six months of the opportunity to become up and running. Now that was the end of March. I think at that point a lot of us thought, a lot of people may have thought that that this was going to be turning out the lights and turning them back on, rather than the long slog that is becoming clear it’s going to be.

But it is interesting. Every crisis is different. But insofar as we can go back to 2008-2010 to what happened during that ten years of expansion that followed, these companies have... they are cautious about debt, they are nervous about getting out over their skis, they want to see something... They tend to under-promise and over-deliver when we ask them about, as we do every quarter, about their revenue growth in the last 12 months and their revenue growth expectations for the next 12 months, ditto with jobs. They almost always have reported growth expectations that they have beat by a full percentage point or more.

So I think that if they follow that pattern, that “slow and steady wins the race” kind of pattern, and the agility in seizing opportunities when they emerge. You know, they “watch, watch, watch, jump” rather than “pilot, pilot, pilot, scale”. And so if we see those behaviors come forward over the next few years I think there may be more lessons from the middle market.

CAHILL

So it makes me think, your statistic just before that about 85 percent of middle market companies are private, how does that come into play in terms of their ability to be resilient, to react and lead in what happens to be post-Covid or beyond Covid?

STEWART

Well again, it’s TBD. We’ll see. But a couple of things. Number one is that your view of capital might be a little different if the capital is your mom. Right? You are not necessarily dealing with a Milton Friedman wealth-maximizing investor or you may be more... about a third of those private companies are family businesses. So I think that is partly where you get that let’s be cautious, let’s not get out too far ahead of ourselves, let’s not out drive our headlights. I think you may get some of that.

Another third of those private companies have private equity investments. And in the middle market private equity tends to be a little different from the stereotype of loading a company up with debt and then making them sweat it out. Yes, you do see some of that but you tend to see in the middle market an awful lot of roll ups in private equity and an awful lot of, let’s see what we can do to improve working capital management, which is a big opportunity for middle market companies, they tend to satisfice when it comes to working capital management. They could do better.

So you may find behaviors coming forward where people are really applying good nuts-and-bolts efficiency kinds of things while also, as I said, keeping alert for opportunities to grow and having a little bit more agility in their ability to seize those opportunities than big companies might have.

CAHILL

You characterized the other day to me that middle market companies as having big company opportunities and problems while having small company resources. What high-level insights could you offer on this dichotomy?

STEWART

Let me give you a couple of examples of it. Talent certainly was... when we asked in December what’s your number one problem, talent was the number one problem and it was the shortage of talent. Where can I get people. This is obviously not going to be a problem, unfortunately not going to be a problem in the next few quarters and let’s hope it becomes a problem soon again.

But you think about this, some of the issues that you have here are employer brand. I think even at the height of full employment, Google was not wanting for qualified applicants. They’re pouring in over the transom to Google. Whereas midsized companies without perhaps as much brand recognition often struggle to project the opportunities that they provide. So that’s an example.

Another similar example also comes with talent development. A rule of thumb from the Society for Human Resources Management is that you have one person in HR for every 75 FTEs you’ve got. So if you’ve got a company with 300 FTEs that’s four people in HR which is like three generalists and an admin. How are you going to do training and development under that circumstance? You don’t have the resources to do it. And yet you need to develop your people in part because you need to develop people because you can’t find them on that outside market, right?

So you’re caught between these two things - how do I develop my people and/or how do I project an employer brand to get the people if I need to, if I can’t grow them at home. Those are the kinds of examples of... I’m growing like crazy, I need to add employees, blah, blah, blah, how do I do this? But yet, I don’t have the resources to command the labor force to come to me or the resources to grow my own, so how do I resolve that.

That is an example of it. You see similar things with globalization, you see similar... different kinds of things with operational improvement opportunities where actually middle market companies tend to be a little bit more ad hoc but also a little bit more likely to be precise in the kinds of operational improvement projects that they undertake.

CAHILL

Can you give me an example of that?

STEWART

Yeah, it’s interesting. We did a study three or four years ago called the Operations Playbook in which we looked at… We did a comparison and contrast between big companies and mid-sized companies in terms of things they did about operational excellence. And one of the areas we looked at was problem solving. There’s a problem in the plant, there’s a problem in the factory, what are the tools you use in problem solving?

And one of the things that was very interesting here was that compared to the big companies, middle market companies were much quicker to... they were much less likely to sweep the problem under the rug. I mean, my wisecrack is there’s no rug, you can’t sweep it under. The CEO works next door, not three states away and on the 35th floor. So, much more likely to surface the problem immediately, much more likely to go for root causes, the kinds of things the Toyota production system people will tell you, and much more likely to bring in a series of measurements about success that included the impact on customer satisfaction.

The big companies were much more likely to say this is our toolkit, we are Lean, we are Six Sigma, we are TPS, whatever. They have a toolkit which they would apply, sometimes it wouldn’t necessarily fit. And they were much more likely to use cost as a measure. Middle market companies use cost too but partly I’m thinking the big companies are trying to say I’ve got a plant in Indiana, a plant in Illinois and a plant in Wisconsin, I want to make sure to measure the same way, right?

CAHILL

Mhmm.

STEWART

So we’ve got a single playbook and a single cost measure, it’s easier to compare that.

CAHILL

It’s a lagging indicator too. It makes it even easier.

STEWART

That is also true. So it’s different approaches, one a little bit more ad hoc but a little bit more custom. And then the question is, would it be better if you had a system to apply, have you found a way to capture that knowledge so that you can reuse it the next time things come up, right?

Another similar but different thing in the same study. One of the things we asked in that study was, do workers, do people on the line, understand the strategy? And middle market companies, they are much more likely to understand the strategy so they are much more likely to make decisions at their work stations in the knowledge of oh, this is what we’re trying to do, this is how we make money here. A bigger gap there in the large companies.

So you have a little bit… potentially more room for empowerment but then you have potentially more need for knowledge capture and sharing because you may be doing a bunch of things ad hoc.

CAHILL

Right. Do you attribute that, folks knowing the strategy, is just because of the closeness in these groups? Or is it because they don’t rely on these big frameworks or scaling of frameworks that are out there that are brought in by big consulting companies?

STEWART

I think it’s a combination of the two. And having worked for a big consulting company, I don’t necessarily want to lay all evil at their door.

CAHILL

No, no.

STEWART

But no all joking aside, I think part of it is, yeah, you can see it. You can see the customer, you can see your boss, you may be on a first-name basis with the CEO. So that’s part of it, there may be more informal discussions that help that happen.

And I think it is also true that insofar as you are aware of what’s going on in the business and not just aware of what’s going on on the visual cues on the factory floor or whatever it is, you may actually have... I’ll use the cliche, you may have a view of the wall as well as the bricks and of the cathedral as well as the walls. It may just be a little bit easier to do.

On the other hand, there may... you also wonder about, and this here I’m speculating, in a larger company you’re more likely to have formal incentive plans—these are the targets you’ve got to hit, tick, tick, tick, tick, this is your bonus opportunity, this is what it’s going to be. Insofar as those are aligned with strategy those might actually do a really good job versus less formal incentives. As I said, I’m speculating about that.

CAHILL

Can you speak to, in the same environment, innovation and how middle market companies manage innovation and further even digital transformation?

STEWART

Yes, really interesting question. First of all, one of the things that you mentioned at the top of this conversation, and it’s true, is that there is a lot less rigorous, researched knowledge about mid-sized companies. You can’t just take a framework the works for Proctor & Gamble and lop off two zeros and say hey, go do this. Or a framework that works for a startup and multiply by 100 and say hey, go do this. And innovation is a really good example.

A lot of what we know about innovation and innovation management is sort of based on stuff that looks at large companies. And its got portfolio theory and you’re going to have a certain portfolio of bets of different kinds and different likelihood of coming in and so on and so forth. We found that the typical middle market company has three innovation projects in a year.

CAHILL

That’s... yeah.

STEWART

Portfolio theory ain’t gonna help you there, right?

CAHILL

No, no.

STEWART

And at the same time, the typical middle market company is 30 years old. So bet the company innovation projects… no, this is a 30-year old company, it’s a generation and a half old, we’re not riding one horse here. So you have to think about this.

What we found was interesting, that the most successful companies... First of all, they got a lot of input. The innovation included a lot of people, it included marketing, it included sales, it included operations, it included... You know, it wasn’t just Gyro Gearloose in the lab working separately. The more they did, including the CFO, the more internal, the more breadth of internal teams they had, the better. And also, the more external interaction they had, whether it was with academics or customers or whatever. So they heard a lot of voices. They had good measurements and they had a strong connection to strategy.

The less successful innovators tended to be conservative. They would innovate with line extensions, known markets, known science, known technology, let’s innovate in that little area. And they got just as big a reward as they did from riskier bets because they were less good at the risky bets.

But the guys who were out there on the frontier, new products, new science, new markets, those tended to be these people who organized for innovation by making sure they got a lot of input and then, having really good - to come to the meat of your work - really good project management in moving those innovations forward with a lot of agility, a lot of continuing input from the outside as they went.

CAHILL

So with regard to project management and even agility skills, if we were to inject more of that into middle market companies, how would that support them? How would that further their success?

STEWART

One of the nice things about project management, if you do it right, is that it is not bureaucratic. It can become, like anything, you know, anything can become stilted. But middle market companies struggle to find something that I call just enough process. We need a strategic planning process but we don’t need something that burdens us. We don’t need a huge, big bureaucracy to do this, in fact, it’ll kill us. We want to grow our revenue but we don’t want to over-grow the business.

And I think project management provides an opportunity to create sort of a honeycomb effect of this is how we’re going to work on this initiative, this is how we’re going to do this, this is how we’re going to... And scoping these projects, and if you do them right, I think it provides a discipline that can give you a lot of forward momentum without a whole lot of burden on your back of administrative process.

Now you’ve got to capture the knowledge, you’ve got to scale it when it’s appropriate. You’ve got to make sure that the projects connect to the strategy that you want to do rather than being off there on their own. All those things are important. But it really is a kind of nutshell-sized amount of process that can really help move companies forward.

CAHILL

Great. So what I’m going to do is just shift a little bit to talk about your book Woo, Wow and Win. I want to get your insights into customer experience. I know that at PMI, we in the last two years, have really made major changes through our transformation to focus on customer-centricity. And what’s involved in that is really understanding the customer’s journey and their experience and, as you say, providing that delight to the customer. So can you give us some of your big lessons that we need to understand and our audience needs to understand to create that customer delight?

STEWART

I’m happy to. Woo, Wow and Win, which I have a co-author on that, Patricia O’Connell, the subtitle of that is Service Design Strategy and the Art of Customer Delight. And the word design is really important. It is becoming more important than product quality or a price. I mean, it is rising in its importance. And I think we’re seeing right now, as companies strive to serve customers right now, that maintaining some sort of customer experience and connection is difficult and they are seeing how critical it is. So one thing is that.

The second thing is that you’ve got to design it in. It’s not something you slap on at the end. It’s like quality. You lay it into the very keel of a company. People often talk about surprise and delight. And Patricia and I emphasize uh-uh, set an expectation and meet it. It’s like quality. You want to be able to deliver a great customer experience on an ordinary Wednesday with ordinary people with IQs of 100 who had a little bit too little sleep last night. You want to make it possible to do that every time and it is a design issue.

How do you get there? Number one is you have to understand what you’re trying to offer. I mean the Ritz Carlton is offering a different customer experience from Motel 6. You wanna think about what’s your value proposition. We identified some archetypes of those, the trend setter or the bargain or the safe choice or the classic, there are different value propositions and each of them has different implications for what a satisfied, delighted customer is going to have.

So you have to translate that then into what that experience is. And then you have to, as you said, you map that across the whole customer journey. And an interesting thing about this is especially now in service businesses, you have multiple touch points with the customer. It’s not just when you pick up the car and drive it home. I mean, you’ve got a whole... Everybody involved in this has an opportunity to affirm or screw up that experience. You have to map that journey.

And then you have to map it on two sides. You have to say all right, this is where the customer is at every point, this is what she wants, this is what she deserves, this is what she expects at every point, what do we have to do to make sure that we do that? And what is the backstage mapping of our activities to the customer’s activities?

And so there’s that horizontal connection—me and the customer, right? The customer is on top, I’m underneath, what do I do? And then there’s a vertical connection because the customer is moving across that journey, how do I make sure that as we move from marketing to sales to service to delivery to service, how do we make sure that we are continuing to deliver that experience? So it is a mapping project.

And what’s really interesting, we were working with a marketing technology company that had picked up some of the ideas in the book and was using them to organize their projects. Because we developed sort of a report card of empathy, expectations, elegance, things like this that we think were important for customer experience. They rated themselves on those.

And then out in the rest of the world in the company there were all kinds of projects going on that were about improving this software, doing this, developing new software and things like this. And one of the things they did is they tried to figure out how do we connect each of these projects to the experience we are trying to create, so that the projects are coherent with... they are focusing in on an experiential result rather than going off and defusing... they are centripetal rather than centrifugal as they move toward the experience.

So yeah, you’re doing your project, by the way, what does that project have to do with our goals here about empathy? What does that project have to do with our goals about elegance and being easy to do business with? So it was a very interesting way of tying a suite of projects to a large strategic outcome and I think a good way of thinking about how to turn customer experience goals into a series of activities that are going to improve the business all around.

CAHILL

So those outcomes of empathy, expectations, elegance, if you embed those into the project, I mean, you get that alignment, you certainly get the results.

STEWART

Yeah or you make sure that this project.t.. We’re doing this project, why are we doing this project?

CAHILL

Here’s the outcome, yeah.

STEWART

Here’s an outcome and we are making sure that the project is connected to our customer experience goals as well as cost goals, whatever other goals there might be.

You know, sometimes I think that corporate initiatives start out like a bunch of tulips in a vase. They’re all standing up straight but then after a couple of days they start going every which way, spreading out.

CAHILL

For sure.

STEWART

How do you make sure that they stay focused on what you are trying to deliver? And sometimes thinking about, you know, the customer has a certain moral authority, if you can capture the voice of the customer and say that’s important, that can help turn those tulips back to where they ought to be so that they’re giving you the result you want.

CAHILL

So did you also see the additional complication of maintaining that experience as you jump through channels, like face-to-face channels, digital channels? It does get complicated, right?

STEWART

It’s huge. And I think the omni-channel ambition is one that a lot of people have and very few people have achieved. And right now I think every company in the country and probably every company in the world has discovered all of the weak spots in its omni-channel experience. And I think we are also all seeing companies that have been moved to online with varying degrees of success in terms of what it’s like but also simply their ability to handle things.

We are seeing right now companies that relied on the phone a lot and then it’s much more difficult when the phone is... when people are working from home. I mean we’re really seeing... I guess the blessing in disguise, if there is any in this, is that we have learned… and everybody who is paying attention here should have a punch list of all the things they have now learned about how to improve that omni-channel experience. It should feel like I’m dealing with the same company.

CAHILL

Exactly.

STEWART

Whether I am on the phone or in the store or online it should feel like L.L. Bean, right? And right now I will forgive you but, boy, this is a real opportunity to be earning about this and I think in terms of digital transformation projects but also customer experience projects, we are creating the business case for thousands of them right now.

CAHILL

I have to ask you a magic formula question. It’s really about how much time and investment should companies be allocating to customer experience and customer delight. How would you advise generally companies to be reallocating their investment?

STEWART

It’s a tough question because I think the real answer is that you want to make sure that all of your investments have something to do with customer experience. Now you may be making investments right now in reducing your real estate. You may be rethinking how you’re going to serve people on a shop floor because you’re thinking about safety. The thing I think that’s important is that the customer should be in the room in all of those conversations in a very real way.

The analogy to quality comes back again. Back in the early days of TQM, there were a lot of people who thought that quality was a cost and that quality was an added expense. And the argument from Deming and TQM was no, actually, you save money, quality improves both customer experience and the bottom line because you don’t have to do rework.

CAHILL

Exactly.

STEWART

And in a similar way a great customer experience means that you’re going to lose fewer customers, keep more customers, attract more customers because of that experience. So I think a really important thing is to just make sure that that... a clear view of what you want that experience to be.

And it is not necessarily white glove. You wouldn’t want a white glove experience at Walmart, right? That’s just cognitively dissonant, right? But what should that experience be? And if you have a clear view of that then all of these other projects, you want to just make sure that you’re advancing that.

And they don’t all have to be a customer experience project. You want to make sure that A, that you’re not screwing it up, and B, using that quality analogy, everything you do ought to be able to be seen as advancing the customer experience.

And I don’t mean facetiously. I don’t mean with a sophist’s kind of argument. Everybody can do that kind of BS. But in a serious way the customers voice ought to be in the room and heard and spoken for really loudly, the way it is in those middle market companies with the improvement projects. I am improving something on my factory, is my customer feeling it? You ought to be able to demonstrate that.

CAHILL

Thank you for that. I’m going to shift gears a little bit. I’m going to ask you, you spent 12 years at the World Economic Forum and that’s... I’ve done it once so it’s quite an experience just to do it once.

STEWART

It’s heady.

CAHILL

I’d like to ask you how much do you think organizations like the World Economic Forum and related organizations, you know, the companies that show up, would benefit from the service of project managers and agilists who basically make it their life’s work to make ideas a reality?

STEWART

Oh, that’s an interesting question. I sort of think that the... I mean, you’ve been there, you’re at 6500 feet, the air is thick with idea and thin with oxygen, right?

CAHILL

Exactly. Yeah and execution. That’s why I’m asking, the execution muscle. Yeah.

STEWART

Yeah it’s really not there. And that’s why I think that there is a certain amount of, I guess, legitimate criticism about all of these things, like hey where’s the real world. I mean what does this have to do with us in ordinary life.

And so on the other hand, one of the great opportunities of places like the World Economic Forum or summer camp, for heaven’s sake, is that you get to hear all kinds of ideas that you have never heard before. I remember hearing the then-mayor of Chicago, Richard Daley, the second, I guess, talk about how his constituents were different from his dad’s constituents. His dad’s constituents were plumbers and his were knowledge workers but with different backgrounds and so on and so forth, things like that that stick with you.

So that interdisciplinary opportunity is I think really important. I think a lot of businesspeople get very focused and they get nose to the grindstone, they get “I am only interested in widgets or gadgets or whatever it is I’m doing.” And the opportunity to have insights from the wide, wide world is important.

And one of the things that Patricia and I found in our book, and you’ve heard these stories too, is that you get ideas for companies and for things from places you didn’t know. The Genius Bar at the Apple Store, Steve Jobs’ idea was make it like the concierge desk at the Four Seasons Hotel.

Netflix got its idea for an all-you-can-eat subscription model from gyms, from the Y, from Gold’s Gym or whatever it is. And in turn, an airline in California called Surf Air, which is an all-you-can-fly for a month, if anybody were flying, business model got their idea from Netflix. They didn’t get it from American Airlines or somebody else. So the opportunity in places like that is to say oh, that’s interesting…

CAHILL

Right because it’s already invented in many ways.

STEWART

It’s invented in some other industry, yeah, and I can transfer. I don’t necessarily think that projects... Obviously the project of putting on something like that is pretty good and they do an amazing job with that. But I think that part of the advantage of those things is it’s a place for you to open your eyes to new things and that’s when you then come back and say, hey, I saw something, let’s figure this out, there may be something here.

And that’s when the PMI skills start coming in. I mean, execution is so much the name of the game. You know that. But dynamic, innovative thinking, out-of-the-box ideas are really important. And then you want to put them in a box to do something with them.

CAHILL

Right. That kind of insight is very important. I have learned that myself just in my career. I think it becomes intuitive once you have experienced what you just described. Maybe prior to that, maybe not so much. So it’s a good insight.

Let me ask you, when you were growing up or even earlier in your career, where did you derive inspiration for your work that you’ve done? You’ve had a fantastic career. Did it start somewhere?

STEWART

Yeah but it’s hard to know where. I sometimes think that if I could go back to my 20-year-old self or 16-year-old self and say, “Guess what, Tom, you’re going to be having this conversation with Joe Cahill of the Project Management Institute...” I’d say, huh? If I look back at the path, oh yeah, everything is logical in retrospect, in our retrospective coherence, our 2020 hindsight. But could I have imagined it going forward? I don’t know. No, no way.

But I’ll tell you one thing that is there for me. I have always been clever, and clever with words, clever with puzzles. When I was in high school I was on the debate team. I loved being on the debate team. I was good at it. My debate coach once came up to me and said that he, with a look of concern on his face, because in debate you’d debate on the affirmative side of a question at 10:00 and on the negative at 11:00 and the affirmative at 12:00, you’d go back and forth.

And he came to me with this look of mock concern and said somebody who has been judging your debates came to me and he was very worried about that boy Stewart. Mr. Boyd said, why are you worried about him? He said, well, he seems to be equally enthusiastic on both sides of the question. And at that point, Bill Boyd held out his hand and said, congratulations, you have figured it out.

But the thing that was interesting is, two things, number one, words in service of an argument, words in service of a point always have excited me. And I think if there is a thread that runs through my career - it started out in book publishing and then into magazine work with Fortune and then HBR and then now - it’s this collecting of things to say here’s a bunch of facts about the world, can we find a thread that puts them together and can we turn them into something that’s interesting for other people to hear. That’s the thing that’s common.

And what inspired me to that, I don’t know, but it is the thing... whatever it is, that’s the thing that continues to make me think, yeah, that’s right, this is interesting. And I can put this together in such a way that might help people or that they’ll get an “ahh” or an “aha” kind of thing, a bit of insight. And that excites me.

CAHILL

It’s like exercising your strength in service of your goal. I mean, it’s perfect. Let me ask you in closing just one last question. What are the most important takeaway lessons or applications that stand out from your work, one or two things that you want to leave the audience with?

STEWART

Let me give you one. A friend of mine has occasionally asked me to speak at a business ethics class that he teaches at City University of New York. And when I come in there’s these bright kids and they have been talking about kinds of things and I like to talk about... the way I tend to focus it is on what does an employer owe employees and what do employees owe an employer. That is the topic that I try to develop, like, what’s that contract, implicit or explicit.

But I begin, I usually go up and I come to the class and I find somebody in the front of the class—pre-Covid—and shake their hand. I just shake their hand and I say, to me the handshake is some sort of ultimate symbol of business. It means we’ve got a deal. We shake our hands, first of all, glad to meet you, that’s one thing, but the second thing, at the end of a business arrangement, whatever it is, I’m hiring you, we’ve got a contract, there is a handshake.

I say, what does that handshake mean? What is involved in a handshake? A good handshake has equal pressure on both sides. You are taught, your dad or somebody teaches you to reach all the way in there so that one person’s fingers aren’t squeezed versus another. There’s various things. And you talk about that handshake a little bit.

And then say, all right, let’s go up the arm of each person on the handshake and say what are the obligations that we have established with that? I think that is a pretty good metaphor. And you can start thinking about employment, you can start thinking about the deal with customers, setting the expectations and meeting those expectations, that’s a handshake. Right?

And to me, that’s a metaphor that can help you understand what you want a deal to be. And there are handshakes that are exploitative, there are handshakes that have lies behind them. You don’t come back to shake that hand.

And so I think that if you think about the work I’m doing every day for the National Center for the Middle Market, the work one is doing in a project, the work you’re doing with a customer, that metaphor I think... what’s the handshake and what do I have to do to make sure that I deliver on that handshake, that it’s a real handshake. I think that is a good way addressing a lot of things, not only ethical but just like, have I done my job today, what should I do by 5:00 today.

CAHILL

That’s interesting, the metaphor and the topic of ethics and how important it is in really getting things done quite frankly, at the project level, at a personal level, at a company level. Without that understanding and that trust, which is implied in what you’re talking about, you can’t get to that next step, or rarely.

STEWART

Yeah, or you have a whole lot of friction trying to get there, yeah.

CAHILL

Yeah, that’s it. Well Tom, thank you so much for spending time today with me and our audience. Your insights and your background were, are much appreciated by everybody here, including me. It was my pleasure and I hope to be working with you again in the future.

STEWART

Joe, this was a lot of fun. And, yeah, as Ernie Banks used to say, “Let’s play two.”

CAHILL

That’s it. This is the handshake.

STEWART

You got it.

CAHILL

All right.