Mom and Pop’s Revenge

Don’t underestimate the speed and execution of a smaller shop.

Def.: Mom and Pop Shop. A common characterization of a family-owned company, usually small, closely held, and tightly run under original or second-generation ownership; often used as a term of derision or condescension by members of large companies; unsophisticated, provincial, or parochial; perceived as lacking in the most current skills, tools, or manufacturing methods. Often viewed as predisposed to surviving as a business and ensuring family succession first, with growth for growth’s sake a secondary priority. Not innovative. Inflexible in business practices. Rarely for sale. Content to operate in their space. Stuck in their ways.

Your operation? Or perhaps someone’s cursory impression of it? Certainly you have heard someone belittle a company by saying, “They’re nothing more than a mom-and-pop operation.” How did you as an owner feel when you got wind of that summary judgment? Was your comeback equally dismissive and snap-judgmental (“Typical remarks by someone who’s never met a payroll in their life”)?

Console yourself that you know what you know. You’re here, actively and successfully participating in your local economy and our industry. You know you’d go crazy in a big company. The politics, the backbiting, the petty rules, the busywork, the layers of approval needed to get anything done, and the pointless mandatory “enrichment” sessions. Not for you. You’re unemployable in that environment. Which in a strange way may also be consoling.

Paradoxically, it is because that corporate environment exists that your small business has part of its market. You do things the big guys can’t do – or can’t do well.

Take heart, second-class citizens in the Steerage Section of Entrepreneurship: I come not to bury Mom and Pop, but to praise them.

A very large and famous company, one whose name you would immediately recognize among the tech behemoths, needs help. It builds so-called autonomous vehicles. That company and its subcontractors in the EMS world produce mounds of defective AV printed circuit board assemblies that need immediate troubleshooting and failure analysis (many thanks, Industry 4.0). Said company also has the best failure analysis lab notoriety and cashflow can buy. No expense spared; no capability overlooked. Engineers can obtain precise and definitive answers to all their vexing reliability questions, so long as they’re willing to wait.

For two months.

Wars are fought in less time.

Two months is ample time for small problems to become big problems. Think Petri dish.

Enter Mom and Pop, the sharp end of the commercial spear, modest appearance notwithstanding. That would be us who stand between a problem and its immediate solution.

The Big Company sought us out and signed us up to provide those gap-bridging, time-sensitive services their spit-shined, state-of-the-art lab was institutionally incapable of providing quickly enough to make a difference. We provided the same services as the big expensive lab, but in two days. We’ve been performing these services now for three years, week in and week out. Somebody likes us.

Mom and Pops are specialists in efficiency. Sneer at that at your peril, but corporate sclerosis is good for business.

Sophistication, n.: 1. the process or result of becoming cultured, knowledgeable or disillusioned, especially CULTIVATION or URBANITY; 2. the process or result of becoming more complex, developed, or subtle, usually enlivened with a dash of cynicism, world-weariness, or nostalgic envy for past glories, real or imagined; 3. related content that is taught in “reputable” business schools, and in France.

Allegedly, what a Mom and Pop Shop is not. Quaint, yes; cutting edge, hardly, thus say our betters.

An EMS company I know is now run by its second generation of family ownership. It has grown in four decades from a niche fabrication/PCBA design business into a full-service EMS provider. Without changing hands, or brand, or vision, or focus, or mission statement. All while preserving a loyal core production team. They know what they do well, and they stick to their knitting. The bills get paid. The employees like coming to work every day. They tend to stay for years. A handful of them come to work because they’d have a hard time securing work elsewhere. At this company, the janitor is developmentally disabled. He has a job. And his dignity.

I’m familiar with another small company that kept a bookkeeper on the payroll for a year, despite showing clear signs of cognitive decline. Cognitive decline and bookkeeping do not mix well. HR takes a dim view of that combination in a large company environment. Nevertheless, the small company supported this person in the hope that an alternate job, or a medical solution, could be found, given time. Once again, peoples’ self-respect matters just as much as the bottom line.

I’m aware of two husband-and-wife ownership teams who had the unique good fortune to start their entrepreneurial journeys in the trough of the 2008-09 Great Recession. Economics textbooks and business school case studies suggest that venturing forth as owners during the second-worst economic calamity in the United States since the Great Depression was suboptimal and not recommended (that’s why they’re the experts). Nonetheless, both couples persevered and are thriving today. Mom and Pop. They get stuff done. Was it hard? Yes. Painful in some respects? You bet. Did they build layers of knowledge and character and grit from the experience? No doubt. They’re still here. Lessons like that tend to stick.

There’s the family-run EMS company in New York; the well-known second-generation EMS/Iab in the eastern half of the country; the test engineering company in the DC area, also second generation. And a host of manufacturer’s representatives across the country. Small- and medium-sized alike. Father/son. Mother/daughter. Husband/wife. Life partners. All family-owned, however family is defined. Mom and Pops are everywhere.

And to those who would maintain that small companies are technically deficient, I would direct your attention to the Canadian consultants, family-run, who developed a proprietary process to evaluate long-term reliability in high-end military printed circuit boards, and the instruments to monitor the process and provide data to support. The mittelstand is not restricted to Germany. Perhaps their marketing of such companies in North America is more self-effacing, and they just get on with it.

Stories like these rarely populate KPI charts. Auditors unravel when confronted with situations like these. They depart from the script. They’re tough to categorize. That’s not how sophisticated companies conduct business, with their battalions of HR “experts.” And risk meetings. And decision functions. And turtle diagrams. But these are real-life working world experiences. Mom and Pop shops handle them every day. Does yours? Can yours?

A very large, well-known medical device company wanted to use the services of an equally well-known, but infinitesimally smaller, flying probe test service. To initiate the “onboarding” process (Mom and Pop owners wouldn’t be caught dead using euphemisms like “onboarding.”), the first hurdle involved signing a nondisclosure agreement. Big Med said it would take six, count ’em six, months for the NDA to transit their legal department. Hurdle indeed. And to the smaller, aspiring Big Med flying probe service supplier, Big Med’s NDA administrator asked of its president, “And how long will your company’s legal department need to review this nondisclosure agreement?” The flying probe service executive replied, nonchalantly, “About 20 minutes.” True story.

Incredulity.

Driven by mindset.

Mom and Pops don’t charge by the word. Nor do they have an inbred need to justify their existence. When you know what to look for in an NDA – and you review three to five of them weekly – it takes 20 minutes. The rest is fluff. Then it’s on to actual work, unencumbered by boilerplate.

Another Large Corporate Customer was referred to a small Mom and Pop facility, looking to inspect hundreds of defective heat exchangers. A major x-ray inspection project. An event, really (actually a crisis). A welding defect had been found in one of the heat exchangers. Their customer, a major OEM (another one of those instantly recognizable names), threatened to reject the entire lot back to the factory. Some 10,000 units needed to be inspected. Now. An impossible task. Clearly, history was hanging in the balance.

But for the expertise, and speed of execution, of Mom and Pop.

The Large Corporate Customer tried their large corporate ways on the small company providing x-ray services. Haggling over price, quantity to be inspected, and delivery. Capability. Talk of free demos to show that x-ray can be done. Lots of cajolery implying, “You don’t realize who you’re dealing with.”

Actually, they do. The Large Company failed to realize who they were dealing with.

Mom and Pop replied that x-ray can be done. The technology works for the application. Do you want your parts inspected or not?

More haggling and annoyance calculated to drag the situation out for a lower price by wearing the small company down.

The small company wasn’t worn down.

Mom and Pop aren’t stupid. No lower price. Take it or leave it. And if they leave it, they leave the solution to their problem.

Three days of pouting silence later, the large corporate customer accepted the price, amid outbursts of righteous indignation. Being big and bureaucratic, they compounded their problems, making the tactical error, whether inadvertent or intentional, of not saying “go,” in the form of a contractual agreement to start work (otherwise known as a purchase order). They also didn’t indicate how they proposed to pay for the work being done.

Auras aren’t enough to kick off projects. So the job is on hold until those inconvenient housekeeping questions are resolved. Tribute must be paid.

Again, Mom and Pops weren’t born yesterday. They know the right answers.
They also have leverage.

Robert Boguski is president of Datest Corp. (datest.com); rboguski@datest.com. His column runs bimonthly.