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Aug. 5, 2019

Experiential Learning and Increasing Value

Experiential Learning and Increasing Value

In this episode, Ed speaks with Director of the Old National Bank Center for Closely Held Business, Mark McFatridge. Part of Butler University’s Lacy School of Business, the center aims to work closely with privately-owned businesses in the...

In this episode, Ed speaks with Director of the Old National Bank Center for Closely Held Business, Mark McFatridge. Part of Butler University’s Lacy School of Business, the center aims to work closely with privately-owned businesses in the community. Their hope is to connect with small businesses (5 million to 100 million revenue) in order to help them assess their own definition of success and achieve the growth they need to get there.  The team has built up a sizable resource bank and strategizes one on one with companies to create actionable items and connect them with ideal partners and resources. 

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Ed Mysogland  0:00  
I'm your host at my sick land. I teach business owners how to identify and remove risks in their business so they can sell at maximum value when they want how they want and to whom they want. On today's show, I'm delighted to welcome Mark McFetridge, the director of the Old National Center for closely held business at Butler University in Indianapolis. As Director Mark works closely with privately held businesses to help assess and achieve company strategies by connecting them with ideal partners and resources. Prior to joining Butler, Mark held executive and strategic leadership positions in the financial sector for almost 30 years. Mark retired from banking and entered small business ownership with the purchase of one company in the startup of a second mark earned his MBA in finance and his undergraduate in accounting from the Andres B. Lacy School of Business at Butler University. Welcome to the show, Mark.

Mark McFatridge  1:37  
Thanks, dad really appreciate the opportunity.

Ed Mysogland  1:39  
Well, I give us a high level overview of you in the center. But do me a favor and talk a little bit more about you where you where you came from, and certainly about the new senator at Butler.

Mark McFatridge  1:49  
Yeah, now excited about that. So yeah, born and raised in Logansport, Indiana, Butler University undergrad in accounting. I went into public accounting right out of school and hated it almost from day one, and then moved into banking. And banking was pretty much 95% of my career after that, it's been a great ride, started out here locally, did everything on the retail side all the way through commercial credit to commercial banking, or my MBA from from Butler and finance and then moved to what was then union planters bank and became regents bank, regents gave me the opportunity to lead one of their markets and in Missouri and did that and then moved to the community banking world, where I was the president CEO of some banks and did some turnarounds. The last turnaround we did, we sold to a publicly traded bank in Little Rock, Arkansas, and that took us down there and was the CEO for that organization for two and a half years, retired from banking and bought a couple of little companies. So I moved into the small business ownership world and and, and then had the opportunity to come back and serve my alma mater with the Old National Bank center for closely held business. So really excited to be here. And and we're having a good time, it's fun time to be back on campus as well.

Ed Mysogland  3:14  
Well, certainly Butler is rockin in the, in the changing of the business landscape. So universities are getting more aligned with the business community and Butler seems to especially with this new new center, as well as the lacy School of Business. It seems as though you know, Butler is really trying hard to become I say a line but more of a hub for for small and mid sized companies. Can you tell me why? Why are universities getting into that? And, and I know Butler is leading the way, but can you can you talk a little bit more about some of the leading things that Butler is doing?

Mark McFatridge  3:56  
Yeah, yeah. Well, you know, the trend I think, was the whole universe is kind of transitioning from book learning to experiential learning. And and, you know, when, when I was on campus, and you were here to that, you know, you just sat up there and he listened to the professor speak and kind of go from there. And, and it's really flipped it on its head to to now the students are getting their hands dirty, and they're doing some real world experiences, and learning that way. And so, you know, one of the biggest reasons for that trend of engaging the local business community is to really find out what they need in terms of students when they come out and join the workforce. And so it's a really cool opportunity for us to just, you know, put people out there and ask them what they need and then start to start to direct our curriculum to match what the what the companies are searching for in recent college graduates. From from Butler's standpoint, you know, Think and how we're leading the way. And I do think we are leading the way it started and many moons ago by requiring two internships before you're graduating. And these are real or unchecked internships, not like you're making making copies and getting coffee for people. And frankly, in fact, Bloomberg named Butler as the top ranked university in the country for internships in 2016. So, you know, it's a really cool way to get started. But then we went to a whole nother level, in 2007, with the establishment of the Muller Business Consulting Group. And that's really a team of professionals that are on staff and students that are helping companies solve problems with an expertise, and they kind of focus on five different areas, to help businesses that its business strategy, growth, operational discipline, financial optimization, and human capital. And so that, again, that took that to a whole nother level, this engagement with the business community. And today, now, when you come in as a freshman in the School of Business, the first year students create their own business plan. As a sophomore, they actually launch a company, and that's called the real business experience program. And then in addition to that, we have student run investment funds, we have a student run marketing firm, and a student run captive insurance company, all of that to really focus on that experiential learning. And then you talk about the commitment that we're making on the building. It's about 104,000, square foot brand new building that opens up in about two weeks $50 million price tag, and but it's really designed to engage the the entire business community. So I think, you know, Butler's, identified, you know, what, what, how do we need to figure out what needs to be out there. And then I think we've listened to it, and we've, we've started putting people and then putting our money where our mouth is, and and really designing the facilities, the curriculum, just how we interact, to make sure that we're serving the business community.

Ed Mysogland  7:10  
Can you talk a little bit about, you know, how, how a small business owner in the community interacts with Bob?

Mark McFatridge  7:17  
Yeah, so there are a variety ways. You know, I've already mentioned that Butler business consulting group, so that group, with its with its focus on those five areas, you can a small business can engage with the butler business consulting group, they're going to get world class consulting, and help out help provide some value in the education of experiencial learning to to the students that are there, but benefit also from from those professionals that lead it. So that's certainly one way. The other way is the Old National Bank center for closely held business, we are designed really to help establish companies achieve success and that that definition of success is unique to each one of those companies. And one of the ways that we do that is when we onboard a new member, we have a member analytical package that consists of four different things, you've got a business valuation, so it's always really important to have an idea of what your company is worth, we do a business assessment, which is really kind of a SWOT analysis for how your business operates to help identify where your where your strengths are, and where your opportunities to improve our we perform and employee experience survey, which is really a culture survey to dig down into what makes your company run and how they do it. As well as a voice of the customer survey, which is a really important and deep dive with their customer, to see what that engagement is like to help identify differentiation, opportunities, points of lag, that type of thing. And so that does a really nice job of helping our member company, get a good grasp of where they are today. And then Edie we take that information, and we work with that client to help them figure out what they want to be when they grow up. And then we look at the whatever gaps may exist between where they are today. And then what they want to be when they grow up and then connect them with some of our accredited partners that can help them get to where they want to be.

Ed Mysogland  9:36  
Gotcha. So

Mark McFatridge  9:38  
yeah, so that's just a couple of ways that we can engage with, frankly, businesses of any size but but certainly when you look at Indiana and certainly the Midwest, you know those closely held businesses are really vital to that whole economy. So we're really set to work closely with with prime really help? typically smaller businesses.

Ed Mysogland  10:03  
Okay, when you say smaller business would tell me what the avatar is?

Mark McFatridge  10:07  
Yeah, you know, generally for us, at the Center for closely held business, we're looking at that 5 million to $50 million range and revenue closely held, meaning that whether that's a family owned entity, whether it's you and I go in as a business group to own a company, or, you know, again, just just closely held a smaller amount of investors, not not public, not publicly traded, let's say it that way. That's who we're set up to provide some some services to that we think could be beneficial.

Ed Mysogland  10:42  
Okay, so, so, the consulting group is different than the center or no?

Mark McFatridge  10:49  
Yes, that's correct. So, so, the butler business consulting group operates independently, there are a for profit arm of the lacy School of Business, that we actually worked very closely with them to perform that member analytical package. So we will be working in engaging with the butler Business Consulting Group to perform the member analytical package for our members

Ed Mysogland  11:12  
Old National Bank is is integral in the relationship with Butler. So are they are they a funding source? Where did they fit in? In all of this?

Mark McFatridge  11:21  
Yeah, no, they really are. It's been just an incredible relationship. And, you know, Old National Bank basically did the same type of analysis that we did, and really saw that, you know, in the state of Indiana alone, that there are over 500,000, closely held businesses that employ more than two and a half million people that's just in the state of Indiana. That is their, that's kind of their bread and butter of the type of clients that they serve. And so when we approached them with this opportunity back in, well, I guess we finalize it in May of 17. They were all over, they thought this was just a great opportunity for them to contribute back. And yes, they wrote or made a commitment of $5 million to support the center to keep it to get it off the ground and running and doing the right thing so that we can help closely help businesses be successful.

Ed Mysogland  12:15  
Got it. So coming back to the, to the consumer journey, so to speak, I have a business I show up at the center. And and you do you do my assessment. So then then what happens then? So now I have all this information? There's obviously holes that I didn't know about, who didn't, I guess who did the work? Who, who was coaching me? And how, how does all of that work?

Mark McFatridge  12:45  
Yeah, great, great question. So so we get the results back from the butler Business Consulting Group, and then either me, or some of our volunteer advisors will sit down with the member and these volunteer advisors are going to be typically are going to be retired CFOs that just want to contribute and help and help out, but can also provide some some ongoing kind of guidance as as, as the membership continues to grow. So we'll sit down, we'll take the results of the member analytical package and compare him to where the company wants to be when they grow up and identify those gaps and really walk through and prioritize how do we go about how do we go about addressing these to help your company be successful in whatever that is. And you know, it's interesting, the definition of success can vary all over the place, right, you could have a a multigenerational company, and their their definition of success is to make sure that that transition to the next generation happens smoothly. You could have a company that's growing like crazy, and they have the ability or capacity to go public, that's their definition of success. Or you could have a group that feels like like, you know, they maximize their value, it's time to sell and exit. And so all of those things, really play into what that definition definition of success is, which then helps determine helps us determine what partners we have accredited partners in 12 different categories that we can reach out to, and bring on and make the introduction, the company and the partner will we can contractually engage with each other and then we'll help facilitate that relationship as needed. And again, kind of follow it along the process to make sure that these companies are getting the access to great partners that that will help them achieve their success.

Ed Mysogland  14:52  
What's I guess, what's the maximum number of members that that the center can can hold, so to speak? Yeah,

Mark McFatridge  14:59  
it's really really unlimited, frankly, you know, we'll start slowly, we want to make sure that we're bringing on and treating and providing great service to these members when they onboard, we want to make sure and continue to reevaluate to make sure that the analytical package is, is doing what we intended it to do, and they're getting great service from that. So but as we're able to continue to expand and move on and and bring more advisors on, really that animal or that membership base can can grow almost almost without a cap, you know, I think if we start getting over the 100 to 200, that'd be a really nice good number that we can start bringing member leadership together and and start doing some some additional consulting, whether it's on family based businesses, whether it's on leadership development, whether it's on really whatever. That'll give us some more depth to the types of products and services that we can we can offer to our members.

Ed Mysogland  16:10  
And after the initial assessment fee, I mean, it's all inclusive, or is there additional cost beyond the the initial membership fee?

Mark McFatridge  16:19  
Yeah, no, the initial membership fee is $10,000. And that includes the member analytical package that includes attendance at two of our semi annual conferences. And then then the access to our accredited partners. So So that's year one, in year two, that that annual fee reduces to $5,000. It includes a, an updating of the analytical package, and as well as the attendance at the conference. So for for those size companies. It's a it's a pretty inexpensive investment in understanding where they are and where they want to be, and, and having the connectivity to these tremendous partners that we've been able to add. Yeah,

Ed Mysogland  17:05  
one of the one of the things and in, in working with business owners, I mean, what one of the challenges that I think everyone has is, is divulging and, and coming to, you know, this is my business, you know, and there's a level of either, you're, you're really proud of it. And then then you get the gut check on, oh, maybe there's a bunch of things I could have done. Or it's, you know, there's a level a level of embarrassment, where there's some reservation of look, I don't I, I don't want to show you kind of thing, and we see it, but we see a lot in that type of situation. I mean, I'm assuming all of everything that they share with the universities is confidential, correct?

Mark McFatridge  17:50  
That's correct. Yes. You know, over time, and this would only be with with a member's authorization, what we would love to do over time is utilize the data that we gain from these analytical packages, to help our professors do some case studies. So, you know, we can watch a variety of companies of member companies grow, and we can see the value of their company grow. And, and the correlation with the customer engagement or the employee experience, the cultural survey, man, what a cool bunch of data that we can help provide some of our professors as they continue to do research and become published. But obviously, we would not do that without a member's authorization. And certainly upfront everything is, well, it's always confidential, unless we get some authorization to do some other things.

Ed Mysogland  18:49  
When you look at the businesses that you're, you're you're working with, and you've done the assessment, you know, you've got availability for case studies, because they've been a member over time. You know, where did where does it end? I mean, what, what is what, what is defined as success with a with a member?

Mark McFatridge  19:11  
Yeah, I think, yeah, I think it depends, you know, I think each each company has an individual definition of success. So some, you know, maybe wanting to help help pass down to gen two from generation generation, some may want to go public, some may just be focused on growing their valuation of their company, and, you know, for for long term growth. Others may be seeking operational efficiencies. So I think I think the, the goal of what they get out of the center can vary every year or every two or three years and they just continue to update that. And the and that's the cool part about it is the categories of partners that we have, we can really make that introduction and help them do whatever they want. Due to achieve whatever they want to achieve, yeah, certainly

Ed Mysogland  20:03  
Butler has the horsepower to do it these days. No doubt. And this goes back to, to my, one of my initial questions was Why? Why are universities getting into this? And that? I mean, it's it's happening more and more across the country that that more are talking, you know, there's schools that are offering business valuation designations or classes associated with that. There's a number of them that are some similar to Butler, where they talk about transitions and risk management. I mean, why would why get into that there's, there's got to be another, an easier way to do it, then then to build a center and to try to corral the small business.

Mark McFatridge  20:51  
Yeah, well, I really, and I think, I think it really boils down to broadening the definition of a student, you know, that today, a student is no longer just and 1819 year old undergrad that's coming straight out of high school, or, you know, a professional seeking their, their, their MBA, it's now we can say that we're in the, we're in the business of educating people, and that education can be, you can run your business better you can, you can, you can grow more value in your company, you can identify ways to, to work with within family business situations. So it frankly, it's just broadening the definition of a student. So it stays within our mission, it's just a unique way to expand that that definition of a student and, and help them get to get to where they want to be. So while while, you know, the age may be different, it's really no different than, than helping that 1819 year old, it's teaching them things that they didn't know before and that are valuable to them, and help them accomplish their personal and professional goals.

Ed Mysogland  21:59  
Yeah, I totally agree with you. In fact, as I as I, as my, my two daughters are, are approaching college and you know, hopefully entrepreneurship, you, you don't want them to pay the tuition outside of school, you know, you you don't want them to, to not understand credit, and how a business works and the flow of cash in and out of out of accompany and, like you said culture and value and all those things. So I can totally see how it would be of value for for the students. And I think that a lot of business owners will will certainly embrace, embrace this, because like I said, there's just so much horsepower and so much information that's floating out there that when you can put it into a collegiate setting where it's synthesized and distilled in a fashion that you can understand it. I mean, I think that that is very powerful. I would be remiss to talk about the Small Business Development Center, also under the hood of the center. Can you talk a little bit about it?

Mark McFatridge  23:07  
Yeah, we have just a great partnership with the central Indiana Small Business Development Center. Andrew karthi, is the leader of that group, and just does a tremendous job. Their focus is very similar to ours. They provide a lot of guidance, a lot of education. But their focus is just a little bit different. They focus more on startups and much smaller companies. And there's no there's no annual fee to join the SBDC. But they do a great job of just sitting down with business owners or prospective business owners and walking them through things that they need to keep their eye on helping to introduce them to bankers, or attorneys, or CPAs, who can help them with their financial reporting or banking needs or whatever to get them to do what they need to live their dream of owning their own business. So it's been a really great partnership. We've got a great referral source report referral network back and forth, as their as their companies kind of graduate as he was kind of our joking term as they graduate from the SBDC. You know, they can move into the Old National Bank center for closely held business. If we have some that come to us. And they're not quite at that level, either from a revenue face or just an organizational space. They're just not quite ready for us. It's a really easy referral, because I know that those folks over there are doing just some tremendous work and and right now they're kind of nomads. They don't have offices on campus, although they're on site quite a bit. But once we move into our new building here in a couple of weeks, there'll be right literally right beside us in the new building and and that'll even help facilitate more The growth of our relationship a one that's already really great.

Ed Mysogland  25:04  
Yeah. And, and again, those guys are are great to work with we send, we send our folks down down there too. So it's great to see you working from cradle to grave, so to speak.

Mark McFatridge  25:17  
Yeah, yeah. And it's been fun as we start to explore various partnerships. There's a new group in town. Well, it's been put together by an attorney at ICE Miller, Christina Fugate called the Indiana Franchise Association. And so we're doing some, some work with that group. And again, it's all about that education of, you know, between franchisees and franchisors, what what are their needs to help grow. And so I think we'll continue to expand our partner base, as long as it makes sense, as long as it continues to fall under that umbrella of education. I think you'll see us continue to partner more and more,

Ed Mysogland  25:58  
and I'm looking forward to it. I mean, it truly it is, it is a real special place. And Butler is just poured gas on the fire as far as entrepreneurship goes,

Mark McFatridge  26:09  
Yeah, I'm glad you and I got here before they got way before they got really good. We didn't ever got accepted. That's,

Ed Mysogland  26:18  
oh, well, I want to be sensitive to time. So my last question that I give everyone is what's one piece of advice to give our listeners that would have the most immediate impact on their business,

Mark McFatridge  26:31  
you know, one of the things that that I've learned over the years and and it's been in business and and really can be applied to your personal life, too, is to listen to understand not to respond. And as I kind of put that in a business perspective, if you can start to engage your employees at every level, and listen to understand what their needs are, what they're seeing on a day to day basis, and then help them engage and put that action. In motion. Man, you're going to be really successful, you're going to you're going to learn things that you never knew existed both opportunities and problems, and really develop that culture of people that don't just see it as a job. They see it as my owner, my my leadership really wants to hear what I what I have to say. They listen, and they understand where we are and whether they implemented or not, that just developed a really strong culture that will lead to tremendous performance. So I boil it down to listen to understand not just to respond right

Ed Mysogland  27:43  
on. Well, I appreciate your time. I I certainly in as as an alumnus, I'm, I'm so thrilled about what they're doing. And my daughter is strongly, strongly looking there. And so I'm kind of stoked to see to see whether she lands there. But certainly as being one of the partners that that's, that's down there. I'm just so stoked on what we're doing. Yeah,

Mark McFatridge  28:11  
me too. It's been it's just been really energizing for me to come back and be back on campus and just the energy that's around a college campus but but then being, you know, my alma mater two times over, and just seeing what we've been doing. I've been watching it from afar, and now I'm in the middle of it, and, man, I could not be more proud. Look,

Ed Mysogland  28:34  
I sure appreciate your time and and we'll certainly keep you posted on on new developments that come from us, and I hope you'll do the same.

That sounds good. Thanks for the time it you got it.


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Ed Mysogland (EP4)

In this episode, Ed speaks with Director of the Old National Bank Center for Closely Held Business, Mark McFatridge. Part of Butler University’s Lacy School of Business, the center aims to work closely with privately-owned businesses in the community. Their hope is to connect with small businesses (5 million to 100 million revenue) in order to help them assess their own definition of success and achieve the growth they need to get there. The team has built up a sizable resource bank and strategizes one on one with companies to create actionable items and connect them with ideal partners and resources.