As the President's pick to head the Small Business Administration, Karen Mills could transform the agency's approach to funding
President Barack Obama's Dream Team is packed with so many high-caliber picks, it might be easy to overlook Karen Gordon Mills, his choice to head up the Small Business Administration. But she is no exception.
Mills, 55, shares some hometown connections with Obama. Her parents are Melvin J. and Ellen R. Gordon, who own some 80% of the Chicago-based candy-maker Tootsie Roll Industries (TR), of which they are chief executive officer and president, respectively. Also like President Obama, Mills is an alumna of Harvard University, with a B.A. in economics and an MBA. She counts as her business school classmates and friends such luminaries as Orit Gadiesh, chairman of Bain & Co., and Ann M. Fudge, a director at General Electric (GE) and former chairman and CEO of Young & Rubicam Brands, ranked by Forbes and Fortune among the most powerful and influential women in the U.S. Karen Mills' husband, Barry, is president of Bowdoin College.
Recognizing the Diverse Needs of Small Businesses
What will the SBA under Mills' direction look like? Those who know her say she will balance a financier's background with extensive hands-on experience using government to promote small business needs. And she is likely to do so in a nonpartisan fashion. She's also likely to focus particularly on the needs of women-owned small businesses and to help foster a more global role for American entrepreneurs. "I have worked with Karen over the years and she is an exceptionally capable individual who always has the interests of our nation's small businesses in mind," says Senator Olympia Snowe (R-Me.), ranking member of the Senate Committee on Small Business & Entrepreneurship, who recommended Mills for the post. Snowe says she hopes President Obama will make the administratorship a cabinet-level position.
Mills, who has not yet been confirmed, was unable to comment when reached by telephone. But in an October 2008 interviewwith BusinessWeek SmallBiz, Mills discussed the need for the SBA to develop an approach to funding that recognizes the varying financial needs of different types of small businesses. Mills says what is currently missing is "a strategy that puts small business at the center, that differentiates between the high-impact, high-growth small businesses who have these needs for more long-term equity capital vs. the Main Street businesses which today need reinstatement of their short-term credit."
Mills is currently president of private equity firm MMP Group in Brunswick, Me., and in 1999 co-founded New York-based private equity firm Solera Capital, which has raised $250 million. She was also chief operating officer of leveraged buyout firm E.S. Jacobs & Co., where she worked from 1983 to 1993, and she has consulting experience both in Europe and the U.S. with McKinsey & Co. She has been a product manager for General Foods and serves as a director of numerous companies, including Arrow Electronics (ARW) and Scotts Miracle-Gro (SMG).
Research on Regional Clusters
Observers see Mills' experience co-founding Solera with two women partners as an indication that she will be an advocate for the nation's women-owned small businesses. Among the investments the fund has made are women-owned small businesses such as Latina Media Ventures and natural food producer Annie's. "I think she will serve very well in regard to women," says Maine Governor John Baldacci. In recent years, the SBA has been much criticized for failing to meet its quota of ensuring that at least 5% of government contracts go to women-owned small companies.
Research Mills conducted for the Brookings Institution on economic business clusters in Maine, along with her personal lobbying efforts, helped convince the Maine legislature to pass a $50 million research and development bond to spur innovation by small businesses. "I have watched [Karen] operate in farms and factories and sawmills, with boat-builders and everywhere else with comfort and ease," says Baldacci. "I have not seen her be anything but comfortable navigating the halls of Maine legislature." Mills was also chair of Baldacci's Council on Competitiveness & the Economy.
Mills' work has piqued interest beyond Maine. "Her ideas about clusters are interesting and look at different ways to finance [small] businesses," says Susan Eckerly, vice-president for federal public policy at the National Federation of Independent Business in Washington. The research, which focuses on the impact that highly innovative firms—in particular the state's boat builders—can have on regions, suggests that businesses that trade outside of a given locale can have a greater impact than small businesses that trade only locally, by bringing in more money and attracting other businesses. This in turn allows such businesses to compete better globally, her paper argues.
Mills certainly hinted at that same idea when she accepted the nomination in December 2008 when she said: "America's spirit of entrepreneurship is one of our greatest assets, as we compete in the global economy." That's true now more than ever before.