Public vs Private Cap for career paths
Career paths–Public Companies vs Private Cap Ownership: Series 1
I get this question often, and there are many misconceptions about the best choice for a career path.
Before I get into the weeds here, let me make it clear that there are pros and cons to both pathways. In this article, Series 1, I will cover Public companies. Upcoming Series 2, will cover Private Cap companies. My career has given me vast experience in both public and private ownership. Make no mistake, that some private cap companies can also be very large, and they would also fall into the category of consolidator size despite not being public, with many similar styles of management structure and policies. So, for comparative purposes here in Series 1, we will refer to public and large private cap companies as “consolidators” and in Series 2, I will qualify private cap companies as sub 50-point locations.
Based on my extensive experience coast to coast, I’ll filter through the noise, so that you can be informed with more information, as you work through your career path choices.
* First the good stuff:
Let me give you some highlights on what the consolidators get right.
1.) There is no question that the scale and the gravity of data/information they have on hand at any moment, gives the consolidators an edge on how to react to market conditions. Generally, they do the correct thing in handling/responding to short term trends.
2.) They are highly capitalized, and they do a great job with facilities and equipment needs. I have not seen a consolidator that hasn’t done a great job in supporting the needs of employees–they excel in support and equipment.
3.) Legal support: The consolidators do a great job in getting out front on legal issues and prevention–a tremendous advantage. Many lessons to be learned from their policies which will be useful for your entire career.
4.) The consolidators provide a wealth of internal information to mid-level management, which is essentially a “paid for education” during your tenure–there’s no way to express the “value” from the plethora of data and management principles you’ll see, and that will serve you well for a lifetime.
5.) This next item is an intangible that most people never talk about or understand–working in a public company will introduce you to major players across industries and other high-quality people that can be part of your ongoing future–there’s simply no price tag for this type of exposure.
6.) Most consolidators have a wide-spread geographical scale, and this provides tremendous opportunity to move/transfer around the country as your career builds.
7.) Due to the scale of the consolidators, they get cutting-edge products through vendors first, and this gives them a competitive edge. The exposure to these vendors and products will give you a leg up on others throughout your career.
8.) Because the public and large companies attract some of the highest quality talent, you will be rubbing shoulders with people who automatically up your game and make you better. It’s a priceless experience being in this environment.
9.) Here’s a true surprise: In a large company or public organization, as long as you perform at a reasonable level, you will enjoy a certain level of anonymity, and if you perform at a high level you will also be given unlimited opportunities–so be careful what you ask for.
10.) Employee Benefits: The consolidators are always competitive in employee benefits which are carefully and closely monitored. I have never seen a deficit in benefits with any of the consolidators.
11.) Training: for the inexperienced, or even the experienced associate, you will receive tremendous support, and yes sometimes it will seem redundant or overboard training, but you will learn with great depth in the consolidator companies.
12.) Relationships with manufacturers: the consolidators are highly favored by the manufacturers. Because they are highly capitalized and have the strongest footprints in markets, it makes it easier for the manufacturers to work with those relationships. While franchise law prohibits favoritism, there is no doubt that the consolidators need less help in the overall scheme of things, and this adds value to relationships. Further, the consolidators see retail trends in multiple markets that can be of real help to the manufacturers in trend analysis. The value of good relations with manufacturers is very positive for all associates even down to non-management personnel. Good relationships equals strength, stability and continuous growth.
* Now the concerns
1.) If you require a more personal feel, or a relationship with the owner that you work for you, you’re not going to get that with a consolidator. Due to sheer size, even the most magnetic leadership at the TOP, will only be able to deliver a generalized message and in some cases canned speeches. There are only so many hours in a day, and a customized experience for the associates is simply not going to happen. Instead, you will have to rely on policy and simply believe in it.
2.) Because of size and geographical locations, the home office will be reliant on their Market Presidents, and they may vary greatly in quality–it is what it is. Generally, the right things will still be done as mandated from the home office, but the local market leadership/filter can cause a different result in some cases. An entire Market is no better than the leader who runs it.
3.) The consolidators can be highly competitive internally, and some people just don’t care for that type of environment. This applies mainly to middle management up, and it’s just part of the deal. Navigating those relationships is possible, and in most cases you will simply outlast those people.
4.) Consolidators are cruise ships, not speed boats, decisions can take longer, and it can get very frustrating to get things done–however this seems to vary greatly by company. Getting things done outside the box can be a mind-numbing experience, yet sheer size dictates most of that process.
5.) Powerful personalities can dominate entire Regions or Divisions–those leaders have both strong ego’s and extreme pressure on them. Home office leadership may not have the time, or the inclination to change out these personalities, and that can be a very debilitating experience for all those under that management cycle.
6.) The consolidators will push a lot of information and meetings your way–this is a part of the deal, and you may need to learn how to do “mass deletes” in your email inbox to survive. I always said, if it’s truly important enough, the phone will ring!
7.) Policy changes, or as I called them flavor of the week–can be maddening. I learned that you will simply outlive 90% of new agendas/policies by doing absolutely nothing, because it will simply be superseded by another policy or a new Executive, or they will forget about the policy they issued in the first place…
So, how do I rate the consolidators overall? My answer depends on you and what you desire. If you want to learn a lot quickly, get paid well while getting a Harvard education, and learn how to scale a business, then it’s for you. My experience in the Hendrick Automotive Group which is private but huge, was outstanding overall and it was a truly professionally run company. Further, my experiences in the public companies were predominantly positive and very good to me. I had a tremendous run with Sonic and felt empowered to make decisions while running a huge region for them.
You will meet some unique personalities, but that’s true in private cap as well–but remember, that if you perform well, you do have a level of anonymity to enjoy, because the management generally have to go where the problems are..
So, what does all this mean to you if you are pursuing a career–my advice is the sooner you get into a company that qualifies as a consolidator, the more you will learn to advance quickly through the business world whether you stay with them long term or not. Invaluable lessons for life will accompany you wherever you go, and whatever you do.
The pros and cons of Private cap and Series 2 next week–don’t miss it.
all the best,
Bruce Daugherty