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S2: Impact Investing Inglenook with Tom Doescher #55
23rd June 2016 • The Bonfires of Social Enterprise with Romy of Gingras Global | Social Enterprise | Entrepreneurship in Detroit • Romy Kochan | Gingras Global | Social Enterprise | Detroit Entrepreneurs
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Season 2: Impact Investing Inglenook with Tom Doescher #55

Romy catches Impact Investor,  Tom Doescher, for an interesting conversation on how he thinks about laser outcomes of creating and keeping jobs, the opportunity for impact in Flint and why advisor support is so critical in impact investing. Tom leaves the conversation with great advice for people transitioning from traditional careers to supporting impact investing as a second stage career.  Listen to the great artist, Eryn Allen Kane, and her song, Sunday, to close the episode.

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Barbara & Tom Doescher



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Romy: Welcome to the Impact Investing Inglenook of the Bonfires of Social Enterprise Show. This is our first Impact Investing segment of Season 2, and we plan to publish monthly.
Now, I am going to be a little disruptive here to some of the impact investing conversations. While financial capital is critical in impact investing, it is certainly not the end all and be all solution. You see, a truth I have come to understand is that without people support in the form of skill building, advice, brainstorming, networking, it is almost impossible for the social enterprise to succeed. I am not saying that it can’t happen. What I am saying is this: I have watched capital placed into social impact ventures over and over again for the last five years. My truth is this; the best outcomes are smaller dollar amounts put in over-time with high-powered people support to walk through the decision matrix of everyday business planning. So, my point here is that lending time and advice and people skills are just as important, if not more important than the money. The scenes have played out in front of me like Hollywood movies. With as much as I have witnessed, you would have thought I would have done a show on this earlier. Haha, sometimes it takes me a minute to realize it is an actual pattern.
So, on this episode, you are going to meet Tom Doescher. Tom is a great friend and has been a council to our firm, Gingras Global, for a long time. I am so thankful. Tom and his wife, Barbara, use their financial capital to both support non-profit charities and impact investing. They have a long history of sharing their resources with others around the world. I have asked Tom, for this episode, to hone in on what impact investing means regarding giving your time and helping with skill-building and advice.
You will learn that Tom’s focused outcome of impact investing – whether it is his time or money – is to create and sustain jobs. He is very interested in supporting the city of Flint, Michigan, specifically.
And, as a treat for any of you that may be listening that are leaving a long somewhat traditional career – thinking about transitioning to support social enterprise, he gives some great tips at the end on how to navigate that transition.
Okay, let’s listen in to my interview with Tom Doescher.
Tom Doescher : My business background is I was a partner in a consulting firm for over 40 years and worked in the last 20 years with manufacturing in businesses, auto suppliers, and built a very substantial practice and really loved working with businesses. On a personal side, Barbara and I led over 30 mission trips all over the world and we did medical teams, construction, children's ministry, and other sundry activities so that was the other part of our life.

Really as we were looking at what we call our next season, we said "What do we feel that we're being called to do?" Believe it or not we melded together our business activities with our ministry activities because really we're all about helping businesses create job. We have to have profits to have jobs, but our real focus is on creating jobs as it relates to helping people here locally say in Flint, I don't know what I can do for someone that needs a job. If I can help a businesshere be successful and be a good employer and create jobs, then I've fulfilled my mission.

Barbara and I started together in Doescher Advisers. She has an assessment tool that she administers that's been very helpful with us, with working with clients, and team building et cetera. Helping young owners understand different personalities et cetera in building a stronger team.

Romy Kochan : Tom, how did you start to land and narrow it in to employment being one of your key qualifiers for your impact investing?

Tom Doescher : Again, I guess we, Barbara and I stepped back and said, "How can we have our greatest impact in this next what we call, this next season of our life?" We felt that it was really jobs wherever we were at would be getting for profit jobs created would be the best impact that we could have.

Romy Kochan : Why would that be if we keep going there? What does that end up meaning in your opinion if you follow that out?

Tom Doescher : Yeah, if you follow that out, kind of the way I look at it would be if you can create jobs where people ... Good jobs where employers treat their employees with respect and dignity. You have someone that does something meaningful. They feel good about themselves, they're in a wage, they pay taxes, they're able to buy a house, they pay property taxes, maybe local city taxes. They maybe are involved at their local church, maybe at a not for profit. Just the whole community is stronger if we have people employed is my point of view.

Romy Kochan : The overall economic development of the community.

Tom Doescher : Exactly.

Romy Kochan : Sustainability where they don't keep needing more right?

Some people view that that's pouring in to a community in the form of donations. Some people that means only investment, some people means time. How do you start to view impact investing?

Tom Doescher : I would say that a lot of it is in our case would be time, so I'll give you a recent example. I have a new client that I've discovered is actually has financial difficulty and they employ about 40 people. They've been in business for 30 years and so when I discovered their financial situation, I elected to I'll say donate some of my time for now. I told the owner that I'm doing this for those 40 people and their jobs.

It's just really clear to me why I'm doing what I'm doing and it keeps going back to employment and for more people to be employed long-term in how they feel of themselves.

Romy Kochan : I know you might not be an expert at all the data around Flint. What's your perspective on the demographic needs of Flint, why it needs impact type investing?

Tom Doescher : Flint, I'm told was one of the most affluent cities in the United States back in the 40s and 50s, and maybe even into the 60s. We all know that General Motors who used to have 60% market share in the US is now down to I don't know 21% or something like that. All of those jobs that used to be in Flint disappeared and people that could move somewhere did but others were just left there. It's a very sad story of a town that was really depended on one major corporation who essentially downsized substantially because of the market.

Romy Kochan : I've always felt that's what your specialty is this the high achievers if you will. You want to help those who are really working hard to help themselves right?

Tom Doescher : Right, exactly. They're out there and one of the things that I have observed my whole career is there's a lot of business owners that are great employers that are having huge impacts in their community but you don't even know them. You don't know their name, you don't even know what they're doing. I'm really looking for them in this community, that really what I'm all about is I want to get connected to those people which I know are out there.

They just don't go around pounding their chest. They're just quietly being effective and being great employers and helping their community. Most of those people are the backbone of a local charity usually, if you get into their lives. They don't go around talking, bragging about it, they just do it.

Romy Kochan : What would be a scenario of a win when you find a typical candidate that you just described? What would be a sample of a win where you says, "Man, either my capital and my time was effective there."

Tom Doescher : I guess it would be where I'm wise enough to come up with some ideas that would be beneficial to them. One common idea that I have is often in a business, there's a cycle where the owner can get it to a certain size but really needs to bring in what I call a number two. A lot of times we cal lit a COO. I've been helpful in helping people see that, okay.

In helping them get the help they need to identify and bring in a number two person into their business so they can continue to grow. The owner can do the things they're good at and the COO can do many of the other chores that can be handled by someone like that.

Romy Kochan : Tough to make that transition from working in a business to working on the business. I think everybody battles with it when they're making a transition from a micro business to a small and then becoming a large small business. It's a tricky thing to transition too. In your opinion in those scenarios when they are at that level trying to take that next step, do they often need just skill building and advisement or do they also need capital, or does it even range depending on the situation?

Tom Doescher : I think that's more people to me, I think the good businesses can get the capital they need, it's really the people. I just mentioned the COO concept. I also work with people on I'll call it the opposite issue which is maybe their top number two or three people in the business have outgrown the business. Maybe the owner has people that have worked for him or her for a long time where in positions that they shouldn't be in.

The owner is struggling because the people that I work with are very loyal to their people sometimes to a fault. I've helped them with either repositioning that person to another position inside the company or sometimes depending on the attitude of the person, they maybe need to even move out. The reason that I say that is that's a blockage for them to grow because when I think a successful business it's very simple. Just get the best people you can and things will happen.

If you have someone at a high position who doesn't deserve to be there, you're not going to get the best talent I'll guarantee you that. Now, you get somebody in that job who's really is an Olympic athlete using your word, they'll attract more good people and good things will happen to that business. I think it's more people. I think as I look at organizations, it's more about having how many good people, how many A-players do you have at high level in your business. Companies that have more A-players are going to do really well.

Romy Kochan : A term that's used so much in this impact investing space, everyone anchors on a familiar parable of you can teach a man to fish. It's better to do that. As you play that out in this world of impact investing, I can say "Okay. They might know how to fish or they might have some basic skills. They do need a little capital to buy the pole maybe or little bit of equipment, their place on the lake."

Really from there on out, they really do need to be surrounded by experiences and others who teach them all the different techniques. That doesn't really stop, you're hitting on one of the points here in 2016 that to me is really specific about impact investing that we've figured out will last five years. Everybody thinks it's a 100% financial capital that needs to be inserted and you just got to wait a little bit to get it back. It's actually a little capital on a lot of skill- based support advisement is what we have found is really working.

Tom Doescher : Right. I mentioning to you earlier, I just read the Elon Musk book and I didn't know much about him before I read the book. He's brilliant. What he's doing isn't just marketing. He is a scientist and so when I think of that and I think of businesses in each of the positions in your business you need to attract people that really do love and are passionate about whatever that area is.

If it's shop floor, if it's making this, if it's selling, having people that just love to sell, love to help customers out. That's what you're looking for is people that's just are really at the top of the class in each of their respective areas, HR. People that just love to have the right procedures, and processes, and development programs, and et cetera. When you see them in a business, you see that area of the business just thriving because you have someone that just is credibility talented and passionate about what they're doing, it's not just a job.

Romy Kochan : Do you feel Tom that any of the ... I mean you have also invested, I don't want anyone to think that you haven't. Do you find that the actual capital investment gets glamorized a little bit more than ... Let me see if I'm saying this the right way. Maybe a little bit more credit goes to them, the money contribution and the talent piece, the advisement can't get left behind?

Tom Doescher : Yeah. It's more obvious. If I have a good idea, how does that really play in. Most people won't even know it's my idea for starters. I've had several situations with clients, again using your word Olympic athlete clients. I have a CEO who is in a buying data client and he shared the story with me and so I thought about it, I came up with a very non-traditional solution for him.

I even told him, I said "You're not going to like my suggestion but think about it and you do whatever you want to do." He called me up about a month later, he had taken my advice and did something that was really not the path that he would have come up with and it worked. I'm happy for him. I was happy with the joy in his voice and when he shared with me how it did in fact work but no one sees that. It's different thing, I invested a million dollars in whatever product, or company, or whatever.

Yeah, but it's my calling. What I'm really at peace about today is clearly my calling is to come up along side of these owners. The ones that are open to advice. As you know my recent blog series talk about in my adviser a coach. In my blog series I make the case that ... Because people want to call me a coach, and I'm not a coach, I'm an adviser, I'm a partner. I come up along side of a CEO as if I'm in it with him or her and the advice I give would be what I would do if it was me. There's risk which is part of what I like about business.

It's all about you don't know if you're right or wrong, you're hoping you're right. You go down a path and when you're in it together, there's a degree of camaraderie and fun about it that, "Hey, we were right," or, "Guess what, we were wrong." We'll know, we'll find out whether this is a good idea or bad because it's going to be either be successful or fail. I think some of my clients like just having me next to them as they're going through it and realizing that I understand the whole thing, I have the whole picture.

I had a client recently had a issue with their largest customer that was extremely sensitive and the CEO only told one person inside the company and me about it. We worked through that together. I go, "Okay, he decided to get me involved in it. I guess I must be offering something of value him." This was my conclusion.

Romy Kochan : Yeah, you're a trusted partner, you're a great listener too.

Tom Doescher : Thank you.

Romy Kochan : About a year ago maybe a little longer now, I sat down with you and I was talking with you about these proposals I kept getting asked to write. They were large dollar amounts for the size of our business was. I think I remember telling you, remember that one of them was like a million dollars and I said, "Gosh, I'm writing this. I was writing the best presentations I thought I could make." You said something to me that was brilliant, you said, "Romy, agree to move in dollar amounts of 5,000, agree to do that next amount of work at the most."

It was one of the best pieces of advice you gave me, because I started getting the deals because even though they were demanding to know the price all the way until the end. When I give them the price, they'd even say, "I know that's about a million dollars Romy, just tell me what it is." When I stopped doing that, they started moving forward. At that moment, I had this light bulb about impact investing actually about that 5,000.

Everybody is saying, "What's the total need? What's the total need?" Often, putting all that capital at once, can sort of give the entrepreneur a whole new problem. Solving it all at once doesn't give that business owner or the team a way to walk through some of the problems that they might solve without it. Now, I have a mind sense that meeting about a year and a half ago that let's put little bit in and see what happens to the rest.

Because, capital changes other variables, it's not just the one that you see in front of you. I found that my biggest resources were the other skill building services that I put around it. I don't know how that will develop but I now have my brain on put capital in a little bit at a time and then put the talent around it, put the skill building, the advisement. That is what I'm witnessing is really moving the needle forward. I don't know if it's the same and other parts of the country, it's just something I'm watching right now.

Tom Doescher : There is we talked about money, I recognize that money is limited. By the way, whether you're big or small, there's never enough money. I love being in these meetings and I go, "Well if we were a bigger company we'd have more money." It's like you'd have bigger list of things you want to do. There is no difference. Part of it is I guess the way that I think is have a picture where we're generally heading. Then put in place some steps, I'll use the word invest money in time and then keep assessing are we going in the right direction.

Working it all out at the beginning, you have no idea until you actually put it in play where it's heading because it may take you as a business. If you may go somewhere that you didn't anticipate, that's even better than what you really had as your original picture. You have this big picture, call it a strategy, or whatever you want to call it, label it however you want to label so I know generally where I'm headed.

I know a company that went into China with a...