Alton Bathrick and his trademark bow tie have been rousting about between Milwaukee’s corporate corner offices for the past two years, quietly building support for The Milwaukee Collaborative.
As Bathrick sees it, minority-owned businesses in Milwaukee face a fundamental obstacle from the outset, because many do not have access to capital to build capacity and expand their companies. Essentially, minority entrepreneurs often are left out of the "good old boy network."
Bathrick, a retired former vice president of Robert W. Baird & Co. Inc., and his son, Gib Bathrick, have acquired The Hide House on Milwaukee’s south side.
Quite simply, The Milwaukee Collaborative model intends to bring minority-owned businesses and entrepreneurs together with medium-sized companies to launch joint ventures to procure contracts from large corporations. The joint ventures will be based at The Hide House, a former tannery.
"More than anything, The Milwaukee Collaborative is a connecting mechanism," Bathrick said.
Bathrick recently revealed his plans for The Milwaukee Collaborative to Small Business Times executive editor Steve Jagler. The following are excerpts from that interview.
SBT: Could you explain how you expect The Milwaukee Collaborative works?
Bathrick: "The Milwaukee Collaborative is a strategy to strengthen neighborhoods by creating economic activity. It includes wealth creation, the expansion of inner city businesses, a job creation strategy and this is where it’s unique, it’s incorporated into an effort to revitalize a specific neighborhood, by revitalizing buildings, creating tenants within the buildings that are neighborhood-friendly.
"The Milwaukee Collaborative has three types of participants. The first participants are major corporations, both local and national, that support diversity. The second participant is either a minority entrepreneur or an existing minority-owned business. The third participant is the mentor investor. In general, we define that as a medium-sized company or larger that provides goods and services to the Fortune 500 companies in America. If the mentor investor is located in the suburbs, it requires he or she to move an identifiable component of their business, including people and equipment, to a central city neighborhood and provide technical assistance to a minority entrepreneur or a minority-owned business and provide financial assistance which could amount to up to 49 percent investment in an MBE (minority business enterprise)."
SBT: What’s the incentive for the mentor investor, the medium-sized company?
Bathrick: "The incentive for the mentor investor is that they will be able to, in partnership with the minority business, expand the amount of business they’re doing with the Fortune 500 companies. Our effort with The Milwaukee Collaborative is to link those three participants we talked about so that it’s attractive for the mentor investor to help a minority business grow and reach scale.
SBT: And these joint ventures would be located at The Hide House?
Bathrick: "We want basically to redevelop that facility – roughly six buildings on five and half acres, with a quarter of a million square feet. We want it to be used by neighborhood-friendly tenants to strengthen the neighborhood."
SBT: The minority-owned businesses or entrepreneurs .,. You have one so far, and that would be Think Innovative Media, right?
Bathrick: "Yes. And a number that are talking to us. We met with two today that we think are potential participants. We’re working with a law firm in town that is helping on both sides of the equation, on the MBEs and the mentor investors."
SBT: Can you tell me who that law firm is?
Bathrick: "Sure. It’s Reinhart (Reinhart, Boerner, Van Deuren S.C.). They have a minority business strategy within the firm. They are working with us, and we’d like to work with anybody in town that understands the collaborative."
SBT: What kind of feedback are you getting from the larger corporations, the Fortune 500 companies?
Bathrick: "We had talked to a lot of corporations, both locally and nationally, and they’re all supportive. All we have to do is connect the businesses, the mentor investor and the minority businesses."
SBT: Of the larger corporations you’ve been talking to, I understand one of them is Johnson Controls Inc.
Bathrick: "They are either the leader or one of the leaders in the country that understands that diversity is a good business strategy. Their chief executive officer, John Barth, is now chairman of the National Minority Suppliers Development Council, and what they’ve learned is understanding diversity and learning how to help support minority enterprise has been a methodology for them to increase sales. The companies they work with are focused on diversity as a good business strategy."
SBT: Are there any other large corporations in town that you’ve talked to?
Bathrick: "Miller Brewing Co. and Harley-Davidson Inc. are active. And we have to prove ourselves, too. There are some companies that are aware of what we’re doing. We have to help develop some strong MBEs, and it make take us some time to do that. It took longer to become part of the overall Milwaukee community than I thought. I think one of the advantages of The Milwaukee Collaborative is that through the Federal Reserve Conference in March and the Business Roundtable, we’re becoming a national connector. We’re connecting Milwaukee with some of the national leaders in this area.
"We’re also connecting some of the Milwaukee initiatives. For example, not totally unrelated, we just hosted the announcement of a new center at the University of Wisconsin, which is the Center on Business & Poverty. We’re convinced that one of the things they’ll do is focus a lot of their energies on Milwaukee.
"In Milwaukee, the larger corporations, we need them to embrace diversity, if they haven’t, to understand that diversity is a good business strategy. We need them to embrace the National Minority Suppliers Development Council. We need the purchasing functions at all levels within Milwaukee’s corporations to be more strategic and not so much functioning as commodity brokers. We need purchasing people to understand that they can get good execution in a partnership. I think, if we can get purchasing agents to do that, that would be extremely helpful."
SBT: What about recruitment of minority-owned businesses?
Bathrick: "We need to identify talented MBEs. There’s an interest in identifying high-level and upper-management minorities and women and linking them with mentor investors. At the same time, we have to make sure that we don’t neglect the existing MBEs in town that have skills, and they may not be of scale and may not have a lot of financial resources and may need some mentoring in order to get to the next level. We just need to identify capacity and skills. And I think we’ve figured out how to do that."
SBT: Would there be any governmental role in this?
Bathrick: "We’re talking to the state. We’re talking to the city. The governmental role involves potential financing for some of these businesses. The Milwaukee Economic Development Corporation has an interest in helping fund and grow central city businesses."
SBT: Part of this is patterned after the Boston Business Collaborative, isn’t it?
Bathrick: "Thirty major companies in Boston are actually mentoring minority businesses there. The model, in my opinion, has one flaw in that they can only mentor one company at a time. And I’m convinced, that in some cases, the medium-sized company that is still in touch with its entrepreneurial roots is a better mentor than some of the larger corporations. We’ve tried to take models from all over the country and refine them and make them better, and it’s interesting that the Business Roundtable has now included us as their 21st coalition member. What we have to do now is make the model work. We’re going to have some successes, and we’re going to have some failures."
SBT: In the long run, this project won’t just be limited to The Hide House, will it?
Bathrick: "Once we get our feet on the ground and things are going, we’d like to be a model for other parts of Milwaukee. We happen to be on the south side, and we’d like to find someone that might like to duplicate what we’re doing on the north side. All of contacts, all of our resources, all of our experience will be made available."
SBT: What is the role of Alton Enterprises LLC, the company led by your son, Gib Bathrick?
Bathrick: "In our model, Alton Enterprises takes a small fee for developing strategy, for developing connections. We might administer it as a not-for-profit. If it’s a 1 percent fee, those dollars all will be dedicated to making the neighborhood smaller, continuing to revitalize the buildings. If there’s an opportunity to help fund daycare, to help fund charter schools … Those revenues will be dedicated to helping the neighborhood. This is the first national strategy where there’s a funding mechanism in it, so when a corporation supports our minority businesses, they’re actually helping to rebuild neighborhoods."
June 25, 2004, Small Business Times, Milwaukee, WI
