Lesson 43: Resilience
You can go running for multiple reasons. You might enjoy the exercise. You could reduce anxiety by moving your body. You might run in a group to make new friends. I go for runs to build resilience because it gives me the strength to go the distance
Businesses require resilience to keep going. One of the reasons I am excited about skill trade education is because of the resilience of the industry. While I have no idea what will truly happen, I have reason to believe acquiring a trade school is a solid investment because 1) pricing power will expand over the next decade as more people turn to vocational training rather than traditional higher education, 2) the cost per student will decrease with innovations in edtech and 3) the rising demand for skilled labor to support and maintain infrastructure development will create jobs for graduates with vocational certificates.
Resilient businesses have strong cash flows in hard times. When you have resilience on a run, you keep up your pace even when your body starts to tire. I was on a run yesterday through my neighborhood in Atlanta. Around mile 4, I started negotiating with myself: “Maybe I should take the shortcut home… I should walk for a little while… I should run longer next time and cut this run short.” Resilience does not mean I was not getting tired; it means I had the ability to perform under pressure. I am looking for a resilient business that performs under pressure.
CEOs (and those interested in becoming CEOs) must understand what happens to a business under pressure. One of the metrics to understand is “breakeven.” A. J. Wasserstein and his colleagues at Yale School of Management wrote, “A Primer on Breakeven Analysis” to describe what breakeven means for a business. Breakeven is the point at which a business makes zero profit, which is important because it allows you to quantify your decisions as an operator. It is as important as knowing your mile pace as a runner.
As I mentioned, there are several opportunities for skilled trade education to show resilience in the coming years. Knowing the breakeven point of a business informs the minimum student enrollment and minimum revenue generated to cover the expenses of the school. As the economy rises and falls, it will take resilience for the business to perform despite factors we cannot control.
Kim Lew, CEO of Columbia Investment Management Company, said, “Sometimes you have to be brave about investing in things when it doesn’t look like a smart time to do it.” While it may look smart to invest in cryptocurrency or artificial intelligence right now, I choose to invest in people development. People are the most resilient asset for a business.
My vision is to leverage my influence as a Black business leader to pursue economic justice. After the U.S. decided to invest $1.2 trillion in infrastructure through the Infrastructure Investment and Jobs Act, I saw an opportunity for economic justice to make progress. This level of investment will create jobs for the students graduating from our trade school over the next decade. Ultimately, they will find economic mobility by doing the jobs these infrastructure projects urgently need. The market needs vocational training, and this will give the trade school industry and its students the resilience to go the distance.
Resilience is Lesson 43. Next week, I will share Lesson 44: Generosity.
