Monthly Archives: June 2021

Lessons I Learned Working For A Family Business

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It was not a conscious decision, but I went to work for a family business.  In fact, I really didn’t understand what I was getting myself into.  To be clear, it’s not all bad.  But different.  And complicated.  Sometimes messy.  Kind of like a family. 

Here are three things I learned.

  1. Peter Principle Is In Full Effect: 

“The Peter Principle is a concept in management developed by Laurence J. Peter, which observes that people in a hierarchy tend to rise to their “level of incompetence”: employees are promoted based on their success in previous jobs until they reach a level at which they are no longer competent, as skills in one job do not necessarily translate to another.”

Examples of the Peter Principle were all over the place.  We would move people around.  And, they would fail miserably.  And, we would try them in some new role.  Repeat.

  1. Just When You Think You Were Out…

One of the primary reasons that the Peter Principle is really common is that leaving is not really an option.  You do not really resign from your family.  Or get fired from your family.

I have not held a lot of roles, especially compared to some of the resumes that I see with multiple one and two year stints.  However, I have never really considered being a “lifer” anywhere.  In a family business, a lot of folks are lifers.  Maybe it is not their only option, but it is the only one they will consider.

Second (and third, and fourth, etc) chances are common.  We had one guy, a family friend, who had been fired multiple times.  And rehired.

Also, you will find a lot of people, who will really only have one experience on their “resume”.  This is not to say they are not competent.  It is just to say, they will only have one perspective.  Which can make driving organizational change difficult.

  1. Work and Play Blurred

The lines between work and play were very, very blurry.  Or maybe the right way to say that is, the lines between professional and social were complicated.  For someone like me, who tries to separate work and life a bit, realize that you will be on the outside.  And viewed as a bit unusual for trying to separate the two.

Folks in the organization, who typically would not have the attention of the CEO, went on vacation with the CEO.  Or maybe lived with the CEO.  Or was married to someone related to the CEO.  And that worked outside the family of the CEO.  There were lots of relations – same last names, siblings, spouses, cousins, etc.  You get the point.  It is a very, very complicated organizational chart to navigate.

Family Adventure: Camping In Grand Teton N.P.

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We spent the last two weekends camping in Grand Teton N.P.  Here are some highlights.

Campground:  

We stayed at the Signal Mountain Campground in sites #69 and #68 for the two weekends.  The campground itself is moving toward the north part of the park, but not quite all the way up to Colter Bay.  The location is off of Teton Park Rd. and is right on Jackson Lake.

The two sites we stayed at where both in the “generator free” zone.  Theoretically, there is a vehicle size limit in the campground as well, but that did not seem well enforced.  

Both sites had private paths down to the lake, which was key.  We preferred #68 vs. #69, since the site had more space for your tent, etc.  Site #69 is better for small RVs that do not need a tent.

Hikes:  

We did six hikes.  Here they are in my order of preference:

  1. Cascade Canyon – This was a great hike.  We opted for the (fairly expensive) boat ride across Jenny Lake.  And once we cleared most the folks who stopped at inspiration point – other hikers thinned out considerably.  We went up the North Fork of the trail for about another half mile or so and found a good lunch spot.  The views were amazing.  We want to come back and try to make it all the way to Solitude Lake, but need an earlier start.
  1. Hermitage Point – This was pretty long hike (~9 miles), but the views were worth it and the traffic was surprising low.  We had an awesome lunch spot all to ourselves.  I would suggest hiking clockwise.  The opposite direction we hiked, but you would get better views of the mountains.  
  1. Woodland and Lake Creek Trail – We did this hike on our way out of the park on our last Sunday.  The trailhead is in Laurence S. Rockefeller Preserve, which is a cool story and worth researching.  The hike is short (~3 miles) and easy, but nice.  Traffic was not bad, despite being close to Jackson, due to limiting cars in the parking lot (no overflow parking on the road allowed).  We waited a bit for a spot, but it was worth it.
  1. Taggart Lake – We did this hike heading out of the park on Sunday of our first weekend.  Since we had to break camp, we got a bit of a late start and the trailhead was packed with substantial overflow of cars onto the shoulder of the road.  Despite all the other hikers, this was a pretty enjoyable hike and we snagged a great lunch spot on a rock in the lake.  The hike was ~4 miles and pretty easy.
  1. Grand View Point / Two Ocean Lake / Emma Matilda Lake complex – We affectionately called this one Daddy’s Death March.  One, the parking lot is not where the book said it was going to be, so we added another 1.5 miles or so on unexpectedly.  Two, it was hot.  Three, we wove a few trails together, so my family was convinced we were lost, while I on the other hand knew we were in Wyoming the entire time.  In all seriousness, I think we would have liked this hike better if it had been cooler and we had saved ourselves some mileage at the beginning.  I think we hiked ~11 miles.  These trails are toward the north side of the park and away from the mountains, so much lower traffic.  And I did particularly enjoy the trail segment between Emma Matilda and Two Ocean Lake, which we walked heading westerly and were staring at the mountains the whole time.  We did see three separate piles of bear scat, so bring our bear bell and spray.
  1. Signal Mountain Summit – This was our first hike of our first weekend and it disappointed.  The view at the top was marginal.  The hike itself – while low traffic – was not that great.  A plus was the trailhead was at our campground.

We used Hiking Grand Teton National Park by Bill Schneider as a reference and it was worth it.

Other Thoughts:

A few other thoughts – aside from the park is phenomenally beautiful and we had two great weekends.

On the Cascade Canyon hike, I was pretty surprised at how many folks we saw venturing fairly far up that trail that were totally unprepared for any change in conditions.  Think shorts, tshirts, poor footwear, and little to no water or food.  We live in a mountain environment.  The weather folks are mostly guessing and they are wrong a lot.  Be prepared.

The first weekend was very busy.  Jackson looked super busy – we just drove through it.  Some of that was a hangover from Memorial Day weekend, but I would be prepared for lots of traffic and some long lines.

Our annual National Park pass continues to pay for itself.  We bought ours at REI.

We live at about 6,700’ so the altitude was not an issue.  That was about the base of most hikes.

Being On Vacation Is Not An Excuse For Being An Asshole

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Before you “revenge travel”, consider this.

I grew up in Florida.  I hate Orlando.  And most parts of Florida south of that point.  Too many tourists.

We have been here in Park City Utah for about 18 months now.  I am most certainly not a local, but I am grumpy like one.  And I understand why the locals are grumpy.  Too many tourists.  There is a reason on a weekend powder day, the locals are in line by 8:30a and back at the parking lot by 10:30a.  To the guys in the pickup truck from Idaho the road rage merged into us in the turn lane at the Canyon resort on a panic powder day – I hope you got stuck at the Orange Bubble lift line and all your powder lines got packed out.

Traffic laws also apply when you are on vacation.  Slow down.  Especially if you do not know where you are going.  Which obviously you don’t.  To the guy in the minivan that flipped me off on Moose Wilson road in Grand Teton last weekend because you had to yield for 30 seconds on the one lane bridge, I hope the pictures you took out the window of your van sucked.  Sucked more than having to drive a minivan.

There is also wildlife.  I want you to see a moose.  I think they are cool.  There was one sleeping in my neighbor’s front yard the other day.  So, the moose jam you are creating is not impressing anyone.  Respect the wildlife.  Act like you’ve seen some before.  And, you probably miss most the wildlife because of the previous point.

Locals also shop at the grocery store you are storming through like a hoard of locusts.  Grocery shopping is not a timed event.  Rather than be that tourist, learn to pre-order everything online for pickup.  One, it will save you a couple hours of your vacation.  Two, it will create a local job. 

But mostly, please remember that being on vacation is not an excuse for being an asshole.  You are not more entitled than anyone else, especially the people who live where you are vacationing.

You Cannot Eat Growth

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History may not repeat, but it seems to rhyme.  I am totally plagiarizing that quote for somewhere, but I am being too lazy to go reference it.

But I feel like I have seen this story before.  And it ended fairly predictably last time.  Lots of publicity around high growth, but unprofitable business.  And asset classes with no inherent earnings power.

Remember, you cannot eat growth.  Growth won’t pay mortgages or tuition.  Or really anything else for that matter.

The focus on growth and sales, for the sake of growth and sales, feels eerily reminiscent of the late 1990’s and early 2000’s.  You can see some of that in metrics like the following:

The only part that seems to be missing is some metric like “eyeballs”.

The concept of scaling a business and taking market share is not lost on me.  However, many of these growthy businesses have no clear answer to when can you stop scaling and focus on driving operating leverage and creating economic profits.  Do not underestimate the operational challenges in turning that corner.

If you were running your own business that was your livelihood, would you prioritize sales growth or cash flow?  Why would you think about investments in other situations any differently?

At some point in the future, more investors are going to be forced to think about that and decide which one matters more – sales growth or cash flow.  

In February, there started to be some pullback in some of the growth oriented names, most evident in the pullback in the NASDAQ 100.

“There’s probably no one reason.  However, an increasing focus on future cash flows would be bad news for many of these names.  A change in speculative appetite is a change in the degree to which investors care about cash flows at all — the degree to which they believe that there will always be another person (the “greater fool”) who will pay more for an asset than they did.”

Focus on math and fundamentals.  Boring, yes.  A little FOMO, for sure.  But, unlikely to lead you astray.