CHAPTER 1 MAKING A MOUNTAIN
When I entered college in 1967, the Vietnam War was raging and America’s youth were outraged. On a sunny October day, I joined a hundred thousand others at the Lincoln Memorial in Washington, DC, for the largest antiwar protest to date. Many of US marched on to the Pentagon, which was ringed with soldiers bearing rifles. We put flowers in the barrels. Occasionally, a soldier would throw down his rifle and join the cheering crowd.
Meanwhile, the back-to-the-land movement was picking up steam. Young people were moving to rural America to learn the skills of self-sufficiency and to invent a future different from the one we were raised to expect. I never finished college because the insistent pull of this current drew me in hook, line, and sinker.
This migration became my higher education. Stewart Brand’s Whole Earth Catalog was my primary textbook for learning and skill-building.1 In its pages, and in the rural outbacks of Vermont, Northern California, Oregon, and British Columbia, I inadvertently found a path to a fulfilling career that began by making crude houses and fixing dilapidated ones. In those days, I was more at home in America’s agrarian past than in mainstream society’s present.
In 1973, I started a woodworking company with two partners in upstate New York. Several years later, one of them, Mitchell Posin, left with me for Martha’s Vineyard, an island off the south coast of Massachusetts. We went there planning to build a house, make some money, and head back to Vermont in six months. A year later, we were still toiling away on this handmade house, and the money was gone. But the results were reasonably good, and others asked us to make houses for them. Several years later, we were still at it. An older friend and mentor of mine appreciated our work. One day, while we were showing him a house in progress, he said, “Beautiful, beautiful work . . . just splendid.” And then, “Are you making any money?”
“No,” I chuckled, “we seem to lose money on every project we do.”
“Well, Abrams,” he said, “You’ve got a unique idea. Subsidized housing for the rich.”
That bombshell inspired me to learn about business—what it is, how you do it, and what it can mean for our communities and our world (and how to make subsidized housing for those who need it!).
I was twenty-seven years old when my friend Lee delivered that blunt assessment. My passion for business grew. In 1978, we were lucky to have a client who said, “You have to make a profit on this house, but I’m not willing to pay more than I should. So, I’m going to teach you how to make a profit.” He did. I shuffled paper, created systems, hired a bookkeeper, and gave the same respect to my spreadsheets as I did to my chisels. I learned that business is a craft just like making a staircase. My partner Mitchell left to become a farmer, and the company became a sole proprietorship.
The only real job I’ve ever had for more than six months was at South Mountain Company.2 There, I learned from books, targeted classwork, and a network of peers about carpentry and woodworking, design, high-performance building, and renewable energy. I hired and managed staf, conducted sales, guided clients, and drew up estimates and contracts. I dove all the way into my studies and read extensively about small-business practice, mission-driven business, and the philosophy of a triple bottom line, a term that would not exist until business writer John Elkington invented it in 1994.3
I learned to do these things entirely by the seat of my pants, mostly in a half-baked way—just well enough to know how to attract others who could do them better than I.
I learned about affordable housing—how to fund it, how to make it, and how to make it better. I cultivated the skills of community activism—how to facilitate meetings and processes to make social change. I applied my learning to our work at South Mountain and shared it with other companies and communities.
In 1986, South Mountain Company (SMCo) was thirteen years old with a dozen employees. Two of those employees who had been with me the longest, Steve Sinnett and Pete Ives, came to talk to me. “We don’t want to take the usual path of moving on and starting our own businesses,” they said. “We want to stay and make our careers here. But we need more of a stake than an hourly wage.” I could easily have made my two friends minor partners, but it occurred to US that if we did our job well, this situation would manifest over and over in the years to come. The three of US wanted to imagine a structure that would consistently welcome new partners into ownership.
We did not have to imagine. Early investigations revealed the worker co-op. At the time there were few, but those we found were inspiring. A hinge point was my embrace of the idea of converting from a sole proprietorship to a worker co-op. For a while I was unhinged—alternately frightened and excited by our deliberations. I had the power and the greatest financial and emotional investment; therefore, I had the most to lose. Sometimes, during those sessions, it felt like I was tugging on the reins of a runaway horse. I was concerned that my customary freedom to act solo might be constrained by shared ownership. What if the thing I’ve built with painstaking care and love evolves into something I no longer like? But the potential for shared responsibility and ownership to provide new freedom for me and new potential for the company was a potent mix that drove me forward.
We hired Peter Pitegoff, an attorney at the Industrial Cooperatives Association, now known as the ICA Group, to advise us. On January 1, 1987, we reorganized as a worker co-op. Over time, it became clear that my fears were unfounded—I came to love it more. Today, nearly four decades later, SMCo is an integrated architecture, building, and solar energy company with a highly democratic workplace thriving under second-generation leadership.
Why did my two friends want to stay? And how is this relevant to the choices that face so many small businesses?
I think they sensed that they could continue to grow the cultural seeds that had been planted in rich soil—rewarding work, deep collaboration, exceptional quality, long-term service, comradery, friendship, community engagement, and shared equity—and that they didn’t need to try to re-create that elsewhere.
SMCo has delivered on its promise—people have stayed and fashioned successful careers. Between 2010 and 2022, nine employee-owners retired after long SMCo careers, during which they accumulated financial equity. (Their average length of employment was thirty-two years.) Another longtime cohort replaced those employee-owners and has assumed the mantle of current leadership. A dedicated, passionate group of younger employee-owners is beginning to form the core of future third-generation leadership.
A key part of building South Mountain’s ownership culture was our progression from my full operational leadership to distributed collaborative and democratic management. That path began in 2003 and 2004, when I took two six-month sabbaticals to write a book and see how the company would fare. Before I left, we did intensive planning to devise a management system for my absence. The plan was a flop. Nothing catastrophic happened; it just didn’t work, and people were unhappy. Morale tanked. When I returned, we spent another six months analyzing what had gone wrong, planning anew, and I left again. This time, there was traction. It was the beginning of true shared management at SMCo.
An important element of building the ownership culture at South Mountain has been the policy of hiring “future owners” as opposed to just hiring employees. Skills can be taught; character cannot. The development of this concept has led to a thorough and deliberate hiring process that acknowledges that newly employed people may want to stay with the company for their entire careers. It’s important that the process “gets the right people on the bus,” as author Jim Collins said in his book Good to Great.4
The arc of the SMCo adventure—from its countercultural roots to worker co-op transition to next-generation leadership—continues and strengthens. It has not been a journey without struggle and stress. In his book Decolonizing Wealth, Edgar Villanueva says, “The role for leaders is to create a safe space for vulnerability by sharing their own trauma and grief and by modeling listening, compassion, and empathy. These developments are part of the shift toward enabling people to bring their full selves to work.”5
I only fully learned this essential truth late in my career, thirty-five years after SMCo began. I regret that it took me so long. I thought I needed to model competence and optimism and protect my colleagues from distress. But sharing the burden is equally important, and I underestimated the degree to which others would rise up and engage when faced with major difficulties.
Until 2008.
TESTING THE SOUL OF SOUTH MOUNTAIN
The economic crash of 2008 was a shock to the system that shook our company to the core. For years, every SMCo employee had come to work each day with productive work to do. Now, a deluge of crushing cancellations and postponements untethered US from the comfort we had known. It became a year of trials and tribulations. But difficulty and opportunity mingle; at times, it is hard to distinguish one from the other. The author Andre Gide relates the experience of a trip he took into the Belgian Congo in 1925:
My party had been pushing ahead at a fast pace for a number of days, and one morning when we were ready to set out, my native bearers, who carried the food and equipment, were found sitting about without any preparations made for starting the day. Upon being questioned, they said, quite simply, that they had been traveling so fast that they had gotten ahead of their souls and were going to stay quietly in camp for the day for their souls to catch up with them. So, they came to a complete stop.6
At SMCo, we did not have the luxury of coming to a complete stop, but we needed to make time “for our souls to catch up with us” during this period of reckoning.
Along with considering how to rebuild our vanished work backlog, it was our moment to tackle the unthinkable: What happens when the day comes that there is not enough work for all? The examination had surprising results.
There were five important components of the inquiry that ensued:
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■ contending with the likelihood of work shortages;
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■ communicating with employees consistently and transparently;
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■ evaluating the state of the company;
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■ thinking differently about our work: type, location, and mission satisfaction; and
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■ conscious, proactive marketing and messaging.
Deep, heartfelt discussions led to a company policy stipulating that if there was not enough work to provide full-time employment for all individuals in the company, management will enact the following measures, in this order:
- Implement voluntary temporary rolling furloughs.
- Employ people to do speculative (income deferred) work.
- Employ people to do non-income-producing work (just to keep them working).
- Strategically reduce hours worked.
- Reduce wages across the board by a percentage.
- Implement involuntary temporary rolling furloughs.
The thrilling part was that never during these difficult discussions did the word “layoffs” come up. That would have been a simple solution, but nobody suggested it.
Ultimately, we used each of the six work shortage strategies at one time or another. I will never forget the company meeting at which we announced that we were cutting all wages, across the board, by 20 percent. Several employees came up to me afterward and expressed appreciation, right after their wages were cut by 20 percent! Their gratitude was for a culture of mutual support and the fact that those who earned the most were losing the most. This was a time of workplace community rather than a time of fragmentation and protection of individual self-interests.
Constant communication made these difficult times less so. We used written memos and all-company meetings to express the state-of-the-business in detail. Everyone had opportunities to react. Good information, we learned, is essential, especially in difficult times. The more people know, the less they need to worry about, imagine, or make up. And the more they can contribute to solutions.
We engaged in a rigorous assessment of our strengths and weaknesses and came to two hard-to-swallow conclusions that existed regardless of our economic situation:
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■ some people were in the wrong jobs, and we were unable to find the right jobs for them;
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■ some people were not carrying their weight, and we were unable to sufficiently help them thrive and grow.
Ultimately, we realized that we had to reduce the size of the company even if we didn’t absolutely need to. Five long-time employees (two of them owners) were ushered to retirement or new, more suitable careers with significant assistance and large severances.
We were not pleased with what we had to do, but we were proud of the process that led to it and the way it was conducted. Difficult as it was—wounding, wrenching, and heartbreaking—the risk of complacency was clearly greater than the risk of acting.
Evaluating personnel and taking action to make a leaner and smarter company was a step in the right direction, but we also had to rebuild the company by undertaking several initiatives:
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■ We expanded the breadth of our work by moving into institutional work and accepting several mission-aligned projects off the island (previously, we had been committed to limiting our work to our small island region).
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■ We assumed the risk of financing, building, and selling our first house on speculation, to create work at a time when it was needed.
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■ We created a solar business that would soon become an essential part of SMCo—it extended our mission and balanced our workload.
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■ We corralled our resources and began to build a reserve fund that would be there when the next economic crisis came (which turned out to be something we could not have predicted—a pandemic).
Our ability to successfully tackle this tremendous challenge was a result of the shared-ownership muscle we built in prior years. During the COVID-19 pandemic, we were again able to successfully traverse tough new terrain. Our response to 2008 led to a new maturity that will serve the company well in times of duress in the future, too.
At the end of 2010, we were worn out and smarting but excited and ready for the journey ahead. Our souls had caught up with us. The work rolled in, we rolled with it, and normalcy returned. Looking back, I now know that the crash of 2008 was the second-best thing that ever happened to US (our worker co-op transition was the first). Our response to the crash did more than solve problems. It evolved into an ongoing process of intensive culture-building and constant examination that has made the company stronger.
With the crisis behind US and new company capacity, it became possible to consider major initiatives beyond day-to-day business. Strategic planning and the creation of five-and ten-year plans led US to legacy considerations. I was now the sixty-one-year-old leader. What kind of future could we envision for the company after my tenure?
FROM AVALANCHE SCENARIO TO TRANSITION PLAN
I’m an avid skier, so it’s not unreasonable to ask, “What happens tomorrow if I’m buried in an avalanche today?” So, in 2014, SMCo began to consider long-term continuity by creating our first avalanche scenario. In 2019, after five years of intermittent updates, we completed the design of a leadership transition plan. We gave ourselves three years to conduct intensive capacity-building and preparations for the transition. At the end of 2022, I would be seventy-three years old and ready to move on and yield to the next generation of SMCo leaders.
As we developed our succession plan, we found a particularly compelling model at King Arthur Baking Company, an emblematic Vermont business. In 1999, the first nonfamily CEO, Steve Voigt, was hired. In 2004, the Sands family, which had owned the company for two hundred years, sold it to the employees, and King Arthur became an employee stock ownership plan (ESOP). After Voigt led the company for fifteen years, he retired, and three of his leadership team took over as co-CEOs, an unusual structure.
At South Mountain, we never imagined hiring a new CEO from outside. We had a strong leadership team, but no single person stood out as the obvious next CEO, so the King Arthur model intrigued us. We spoke to the new co-leaders at King Arthur about why they did it that way, what was gained, and how it was working. It seemed like a good fit for us. The five members of our leadership team had complementary skills, characters, and interests. Four of them were department directors, and the chief operating officer at the time, Deirdre Bohan, had been comanaging the company with me ever since my sabbaticals. Her job had been like a co-CEO, but she always maintained that she was not the person to be the sole CEO. But five co-CEOs? That seemed unworkable. The answer became clear: Deirdre should be the CEO in a first-among-equals collaborative arrangement with the leadership team.
I proposed this at a leadership meeting after discussing the idea with Deirdre. I expected some pushback or resentment from those who might have expected to be one of the co-CEOs, but there was none. Everyone recognized the impracticality of five people sharing CEO responsibilities. Most importantly, everyone had great confidence in Deirdre’s suitability for this position. Over twenty-eight years at South Mountain, as she progressed from bookkeeper to interior designer to COO to comanager, she became a dedicated, skillful, and compassionate leader. Although she never aspired to the CEO position and for years had made it clear she would not be comfortable with it, this time it had become as obvious to her as it was to the rest of US that she was the right choice.
On November 19, 2019, at our annual company-wide Day of Business meeting, we unveiled the transition plan. It was a threshold moment.
By this time, SMCo enjoyed the good fortune of having thirty-five employees who could skillfully design, build, engineer, practice finance, administer, and manage. And while very few of them came to South Mountain with significant leadership expertise, many came with a leadership orientation, and they developed those skills as we conducted a rigorous process of leadership development in preparation for my retirement. Our hiring practices had brought the right people onto the bus.
In December 2022, I retired from the company I founded when I was twenty-three years old. I relinquished ownership and the titles of president and CEO and became founder and president emeritus.
I had only one personal goal for the transition adventure: to leave the company that I deeply love in the best shape it has ever been, ready to go forward. And to leave the people in this company, who I deeply love as well, in a position to succeed.
Max De Pree, the founder of Herman Miller, says in his book Leadership Is an Art, “The first responsibility of a leader is to define reality. The last is to say thank you. In between the two, the leader must become a servant.”7
My last act as leader of South Mountain was to say thank you to everyone in the company from whom I had learned so much. Without their extraordinary commitment and humanity, I would not have been able to be me, and the company would not have been what it had become.
The particulars of the South Mountain leadership transition are detailed in chapter 10.
COMPLETION AND TWO YEARS LATER
Two years later, I can say unequivocally that South Mountain is not the company that I built by the seat of my worn and faded Levi’s; it’s the company that new leadership is guiding into uncharted terrain, using tools, methods, and information barely imaginable a decade or two ago.
People invariably ask me what it feels like to have stepped away from this significant anchor of my identity. Here’s the best way I can explain it: I used to think I had the finest job in the world because I was able to do the work I love in the ways I wished. But for many years, my job was primarily to respond and react, to do what was asked of me, to limit errors to the non-catastrophic, and to carry great responsibility—essentially, to satisfy the expectations of others and to help them thrive. My job was to be an effective servant leader. It was as good as it gets—I loved it every day—but I see it differently from my new perch.
Only now do I have the freedom of a no-expectations work life. A fresh start. I need this freedom in the same way that the new South Mountain leadership needs theirs—they must lead in their way as I have stepped out of the way. I deeply miss the extraordinary people at SMCo as my involvement has diminished, but I do not miss the burden of responsibility. After 50 years, it had become like gravity—I never entirely recognized its presence—but I now emphatically feel its absence. As I write, the first two years of South Mountain without me—and me without South Mountain—have ended. The emotional part is probably more poignant on my side; occasionally, I get homesick. It truly was my second home for half a century.
Meanwhile, fifty years after its inauspicious beginnings, the company endures with its structure strong, its forward motion palpable, and its embedded spirit intact.
In a way, South Mountain’s development was like building a cathedral. Irish business philosopher Charles Handy gives this perspective:
Cathedrals inspire. It is not only their grandeur or splendor, but the thought that they often took more than fifty years to build. Those who designed them, those who first worked on them, knew for certain that they would never see them finished. They knew only that they were creating something glorious which would stand for centuries, long after their own names had been forgotten. They had their own dream of the sublime and of immortality. We may not need any more cathedrals, but we do need cathedral thinkers, people who can think beyond their own lifetimes.8
The cathedral is not literal. The SMCo cathedral is fundamentally different from those that were built in the Middle Ages in a feudal and theocratic society that extracted wealth from the land and human labor and concentrated it in the church. Ours is a cathedral of sharing, kindness, and equity.
I can tell you how the cathedral metaphor evolved for me. Early on, I fell in love with the crafts of building and business, and with the people I practiced with. I wanted that to last. To fulfill its ambitions, South Mountain has become a CommonWealth company that tries to serve stakeholders’ needs in exemplary ways. In return, those people care for the structure and maintain it over time.
The journey goes on, driven by love for the human potential embedded in the enterprise. It took all of fifty years to cross the Five Transitions threshold. You may be able to do it in less time. You may not. It doesn’t really matter. The engagement in the process makes the difference, not how far you get or how long it takes.
Although South Mountain is not the main subject of this book, it is the foundation and will often play a role in this story. It is an example of the kind of enterprise that I celebrate here, and I hope it resonates with you.
