Experience meets inspiration in the form of John Abrams, of South Mountain Company - a $7.5 million design/build firm in Martha's Vineyard, Mass. - and winner of the inaugural Fred Case Remodeling Entrepreneur of the Year Award. The qualities that won him that accolade are well on display in his body of work.
On Business As Community
"Companies are entities that people start, capitalize, run, work for, buy and obtain services from, sell, and disband. But South Mountain has become, for us, as much a community as a company. We not only build houses, we build connections and bonds between people, between people and land, and between commerce and place. We are organized around the idea of maintaining and perpetuating an ongoing business community."
--From The Company We Keep (Chelsea Green, 2006) with permission from the publisher. (See link to publisher at the end of this article.)
On the sustainability of small construction companies
"So many builders and remodelers are at an age where legacy is an issue. Many feel that the day they stop working is the day the business ends. That's it. What else are they supposed to do? They haven't been exposed to any other models.
"There's a growing recognition that employee ownership is a good legacy approach, but also a growing sense that sharing ownership makes a healthier and more productive workplace. But it's very slow, and it's all about power. People feel that if you give up power, you have less. My sense is that if you give up power - to the right people - you have more. But that's the tricky part and the part that produces fear - finding the right people."
--Source: interview with Abrams, August 23, 2007.
On craft and craftspeople
"Craftspeople have strong feelings about what they make and how they make it. Sometimes there are elaborate discussions in our shop about a single piece of wood-recognizing how the grain runs, how it grew, and where the strength is; considering the orientation that will work best for the function intended; speculating about how to tease out all its beautify and how it will finish. Conversation ranges seamlessly from the overall qualifies of the product to the most subtle and detailed elements of the process. We have more disagreements about wood and joinery than about money.
"Craftspeople take their time. You can't rush quality; it develops at its own pace. You can't rush the skills of craft, either. They have to be absorbed over time...When we need to hire new employees, we try to pick people who, inherent to their commitment to craft, enjoy a sense of playfulness and joy about what they do."
--From The Company We Keep (Chelsea Green, 2006) with permission from the publisher.
On the use of reclaimed and locally sourced lumber
"In general, for character, quality, and low environmental impact, salvage lumber can't be beat.
"We use salvage lumber for upwards of 80% of our interior and exterior finish work...By the time it is mined from river bottoms, dried, shipped, and milled, it is expensive. But we install it and apply no finish, and it will literally last forever. No maintenance, absolutely durable, and it weathers to a beautiful silver gray. Unbeatable...
"We build most of our exterior doors, and for the last decade or so they have been made from salvage redwood, most of which comes from dismantled wine and beer vats. Why redwood? Vertical grain redwood is the most dimensionally stable wood we know of, and there is a decent supply of high quality salvage redwood.
"The successful use of salvage requires large inventories, a good network of supply, specialized equipment, and careful integration of design processes to encourage best use and avoid square peg/round hole material use. It's like the saying, 'Never try to teach a pig to sing. You'll waste time and annoy the pig.' The same goes for reclaimed wood; the material must be appropriate to the use. For example, reclaimed wood often has character defects that add to its charm. Sometimes people say, 'I want to use reclaimed wood but I want it to look flawless and perfectly color-matched.' That's unusual with salvage...
"Our wood comes from all kinds of sources: wine and beer tanks, pickle barrels, whiskey barrel racks, dismantled warehouses and water towers, barns, - you name it. A wonderful by-product is the fine stories and interesting histories that come with salvaged wood. We share these stories with our clients in their owners' manuals. For example, our bread-and-butter wood is reclaimed cypress which is mined from river bottoms in the south. This material, known as 'sinker' cypress, is timber that sunk to river bottoms in the South during the era - around the turn of the century - when they were logging the old growth cypress forests.
"...When salvage is not appropriate, we try to use local woods that come from our area or region. The epitome of this approach is to use wood that is cleared from the site where we're building or wood that is too misshapen to interest loggers. In our coastal area this is tough, because mostly all we have is twisty, gnarly, undersized oak trees. We've begun to put these throwaway trees to use as post and beams - with surprisingly pleasant results. Driftwood, too, has become a source of high-character railings and furniture."
--Source: www.somoco.com.
On power-sharing
"We're all equal owners at South Mountain. Each owner owns one share and has one voice. I have no veto authority. They could be talking about firing me right now..."
--Source: phone interview with Abrams, July 26, 2007
On challenging "the gospel of growth"
"A cherished business doctrine is that growth must be a primary business purpose: 'grow or perish' is a mostly unquestioned truth. At South Mountain we favor certain kinds of growth, but not expansion for its own sake...We embrace growth to achieve specific goals, but always with consideration of the consequences: it may disrupt and endanger treasured qualifies. We look for ways to develop and thrive without enlarging, thereby holding to limited growth.
"When we grow, it is by intention rather than in response to demand. We think about 'enough' rather than 'more' - enough profits to retain and share, enough compensation for all, enough health and well-being, enough time to give our work the attention it deserves, enough communication, enough to manage, enough headaches."
--From The Company We Keep (Chelsea Green, 2006) with permission from the publisher.
On consensus decision-making and employee benefits
"Not long ago I was deeply moved by a decision of the South Mountain owners. One of my partners, who had recently adopted a child, presented a proposal for an adoption benefit. It was well researched and he made a good case. Birth parents have all their expenses covered by our medical insurance, while adoptive parents have none. He proposed that our maternity and paternity leave should be formally extended to adoptive parents, that they should receive a $2,500 to $5,000 cash benefit to offset part of their expenses, and that the new benefit should begin with the next adoption.
"Discussion led to the conclusion that if we're trying to create parity between birth parents and adoptive parents, the $5,000 figure was too low. We settled on a larger number. After a final inquiry to affirm consensus, one of the owners asked, 'How many think this should be retroactive?' Nearly everyone's hand went up. Again we probed for consensus and found it. This meant a large unexpected payment would go to the partner who had suggested the benefit. A tear rolled down his cheek, and he sat in silence, unable to speak.
"When everyone feels there is enough for them, the impulse to share the abundance has a chance-just a chance, I'm saying-of prevailing. It becomes clear at moments like these that the financial bottom line is only a tool in service of the multiple bottom lines by which our company measures its ultimate success."
[Editor's note: in 2007, the Dave Thomas Foundation for Adoption listed South Mountain Company among the 100 companies with the best adoption benefits.]
--From The Company We Keep (Chelsea Green, 2006) with permission from the publisher.
On the dynamics of employee ownership
"...I am reminded of the way the Roman army handled daily rations. Rations were in the form of large loaves of bread, each sufficient to feed two soldiers. This presented a problem, since when the soldiers had little to do, they tended to fight among themselves, particularly over who got the bigger half of the loaf.
"The Romans developed a nifty solution. They passed a regulation that one soldier had to divide the loaf and the other chose which half to take. Employee ownership is a similarly self-enforcing system. Each owner's actions on behalf of the others, and the company, are actions on his or her own behalf at the same time...
"One thing seems certain to me. If businesses were owned by the people who did the work, if the people were no longer subjects, the rewards that resulted would be distributed far more equitably than they are today. That could only be a good thing."
--From The Company We Keep (Chelsea Green, 2006) with permission from the publisher.
On thinking like a cathedral builder
"The idea is that cathedral builders, when they started working on their grand undertaking, they knew that they probably wouldn't be able to see it completed. This is just a metaphor that I use for long-term thinking, which I think is in short supply in this culture and changes dynamics in such big ways.
"For instance, we have this affordable housing problem we've been dealing with in Martha's Vineyard. I see people get frustrated by how little seems to be happening, how hard it is to get anything done. They're thinking in terms of a year or two. But if you look out 10 years, or 30 years, you think, Wow, this will be done. I think this helps to energize and give us hope and not let go. Short-term thinking often ends up being very disappointing."
--Source: phone interview with Abrams, July 26, 2007.
On the profitability of affordable housing
"Affordable housing doesn't add to our bottom line, but it's not a drain, either. Our model is that we do a lot of high-end design/build work and a lot of affordable housing work at the break-even point. Our wealthier clients support our affordable housing efforts and the policy initiatives we're behind. Not only are we charging them more money, but we're doing their projects effectively so that we make healthy profits and can afford to do affordable housing projects that don't lose us money.
"We don't have to have wealthy clients to make this work, though. We have to do good work and have efficient practices."
--Source: phone interview with Abrams, July 26, 2007.
On embracing change within a company
[Editor's note: From the South Mountain Company employee newsletter Paycheck News, 1993]
"Thanks to all of you for your participation in the Company meeting last week. Thanks for your forthrightness, your sincerity, your concern, and your ideas. Thanks for speaking from the heart. You really made it happen and I believe we've achieved a kind of turning point...We'll never build a perfect house, nor will we ever be a perfect business. We'll never even agree about what a perfect business would be. But by the expression of your needs and desires, you will make things a little bit better, and over time I believe this will be significant.
"The meeting pointed out many things that need to be worked on. This will happen slowly, over a period of years. Rome wasn't built in a day. And I'm sure at times it will seem like we're moving backward instead of forward. You don't discover new lands without losing sight of the shore for a while. But if we keep having these meetings, and stick with our topics, and follow up on the information generated, I think we're likely to continue our progress and realize some benefits that will affect us all...
"Winston Churchill said that people 'stumble over the truth from time to time, but most pick themselves up and hurry off as if nothing happened.' Let's make sure we hang around."
On employee ownership in other companies
"I was on a panel at a restaurant in Manhattan named Colors, which has a remarkable story to it. Its proprietors are 50 former employees of the restaurant Windows on the World who, by the luck of the schedule, were not at work on the top of 1 World Trade Center when 73 of their co-workers were killed in the 9/11 disaster. Rather than sinking into despair after friends and jobs were lost, these people harnessed their hope to begin this wonderful co-operative venture.
"Each owns a piece of the venture and shares in the profits, if there are any. Each submitted a family recipe to help shape the eclectic menu. The name, Colors, reflects the 22 nations from which the members of this new co-op come, as is shown on a giant mural in the restaurant.
"This is how to design an optimistic future. It was great to be there."
--Source: South Mountain Company employee newsletter Paycheck News, 2006
On the long-term viability of employee ownership
"So far, employee ownership is working at South Mountain...One potential difficulty I see is a kind of cultural hardening of the arteries. There are occasions when I worry that we are becoming more concerned with security and less willing and able to take chances. Can we keep the conservatism that comes with age from overtaking our spirit of innovation? I don't know the answer, but I think that the goal is a healthy balance between stability and risk-taking.
"The key to keeping vitality may be what business consultant Peter Barnes calls 'intergenerational yielding.' We, the owners and leaders of this company, must continue to welcome new leaders. We must look to younger people to do more than hold steady; the business must evolve if it is to continue to thrive. We're hard at work on this one, and we are beginning to have a broad spectrum of ages among our owners. Maintaining and expanding this diversity will become an essential task of the next decades, so that there will always be a fresh group to dare to innovate, and to carry on."
--From The Company We Keep (Chelsea Green, 2006) with permission from the publisher.
On delegation and trust
"I suppose the best advice I can offer is to trust others. It can be difficult and frightening to let go, but the rewards are always greater than the risks. When we empower others, we build new capacity that did not previously exist.
"For me the hardest part to learn has been that such empowerment must carry with it the understanding that they will do things their way, not my way, and to learn that this is okay, because there is always a collection of successful ways to do any one thing, not just one way. And the greatest reward is seeing that sometimes, when people do things their way, it turns out to be a better way, which is good for me, good for them, and, most importantly, good for the company."
--Source: e-mail from Abrams, August 29, 2007
On South Mountain Company's success without employee-ownership
"My gut feeling is that we might be as successful as we are in certain ways, but there's no way that we would have this sense of passion and commitment and excitement and overall good feeling. People walk into the place and feel it. I think it's truly tied to ownership."
--Source: phone interview with Abrams, July 26, 2007
[Book quotes were excerpted from The Company We Keep: Reinventing Small Business for People, Community, and Place (Chelsea Green, 2006). Used with permission of the publisher, www.chelseagreen.com. To purchase the book, go to www.chelseagreen.com/2006/items/companywekeeppa.]
