#397 - Wiley Curran - Co-Founder @ CPC - Building A Perpetual Holding Company Of Lower Middle Market Businesses

Summary

POWERS Podcast #397 Summary

Guest: Wiley Curran, Co-Founder @ CPC
Host: Chris Powers
Date: October 28, 2025
Theme: Building a Perpetual Holding Company of Lower Middle Market Businesses

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Episode Overview

This episode features an in-depth conversation between Chris Powers and Wiley Curran, Co-Founder of CPC, a perpetual family holding company based in the Midwest. CPC specializes in acquiring one lower middle market business per year ($80–$120 million enterprise value), with the intent to own indefinitely and focus on long-term, multi-generational value creation. Wiley shares the origin story, the guiding principles (“the five key battles”), cultural philosophy, incentive structures, processes for sourcing and diligence, and his vision for CPC’s future.

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Key Discussion Points & Insights

1. CPC’s Origin, Philosophy, and Structure

• Legacy & Foundation:
  The company roots go back to the family’s chemicals business acquired by Wiley’s father in the 1970s, who performed a KKR-style LBO before such deals were mainstream. After years of perseverance and eventual exit, the family set out to build a diversified holding company.

• Intentional Buy-and-Hold Model:
  Around 2010, Wiley and his sisters decided, “we wanted to go out and buy one business a year for 10 years, with the idea of creating a stable of earnings generating businesses for the benefit of the family, capitalize them really strongly and ask management teams to think long term.” (09:45)

• Perpetual Ownership Mantra:
  CPC believes selling a great business should be market-driven, not timing-driven. They look to own businesses "forever":

  “It was a lightbulb moment for us, in the sense that a great business—an exit should be market driven, not timing driven…We further doubled down on this strategy of buying businesses for a truly indefinite time.” (11:16)

• Structure:
  CPC is comprised of firm operations (compliance, capital), an investment team (deal sourcing), and the 'Excellence Group,' providing project-based operational support to portfolio companies in their five battles.

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2. The Five Key Battles

Wiley emphasizes the five fundamental business “battles” that CPC expects every company to master:

• People: Talent and culture, including attracting/replacing leadership over time.
• Systems and Processes: Stable and scalable business operations.
• Execution: Disciplined, persistent delivery on plans.
• Product Leadership: Continuously improving and leading in the product or service line.
• Customer Intimacy: Deep, data-driven understanding of why customers buy, churn, and continue, and tailored resource investment.

“When teams were able to consistently win the various challenges they would get in these five areas, you didn’t even need to look at the financials—you knew you were going to get a great outcome.” (18:40)

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3. Emphasis on Customer Intimacy & Journey

• Beyond Surface Satisfaction:
  CPC pushes management to measure and deeply understand customer personas, mapping every touchpoint (drawing on cases like California Closets):

  “Breaking it down in a measured way at the important forks in the road is the start… what your end market looks like in a data-driven way…and then invest resources into the product leadership side to make each persona happy.” (27:42)

• Practical Application:
  Each company’s customer journey and satisfaction (NPS, retention, churn analysis) inform which resources to invest and where, over the long haul.

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4. Talent and Incentives in a Perpetual Model

• Long-Term Perspective:
  Unlike private equity, management’s wealth creation is driven by long-term recurring cash flows and equity accumulation, not quick flips.

  “We look at wealth creation as a stream of cash, not buy for one and sell for two.” (37:50)

• Flexible Ownership for Leaders:
  New management can earn performance-based units each year, vesting over time. Executives accumulate real equity and receive true distributions—liquidity is provided as needed, with equity typically repurchased or retained on retirement, depending on circumstances.

  “You aren’t earning into shares that only are worth something if we decide we’re going to sell. They’re worth something if you decide you want to sell.” (41:59)

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5. Sourcing and Buying Process

• Disciplined Sourcing:
  CPC reviews ~300 deals a year, gets serious on 4–5, and intends to close on just one per year. Almost exclusively works through small and medium-sized banks rather than proprietary search.

  “We see about 300 opportunities a year. We get serious about four to five…for one reason or the other, our interest wanes. And we end up buying one.” (47:12)

• Simplicity in Transactions:
  Offers are all-cash, no financing contingencies, minimal structure:

  “Our offer is going to look different because of its simplicity.” (55:52)

• No ‘100-Day Plan’ After Closing:
  Focus on building trust first, not rushing change:

  “The first not-to-do is don’t come with a hundred day plan...let’s pursue trust and relationship first.” (56:14)

  New companies onboard via the “Foundations” process—a deliberate ramp-in focused on expectations, board meetings, KPIs, and relationship-building.

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6. Culture, Board Meetings, and Internal Engagement

• Culture of Patience, Not Deal Churn:
  The team is still expected to deploy capital prudently, but “not getting a deal done” if it’s not right is okay, reflecting long time horizons and family office discipline.

• Board Meetings:
  Meetings are thematic and staggered—virtual deep-dives for team members, in-person board meetings focused on strategic themes, and a three-pronged annual cycle (strategy, planning, results).

• Excellence Group & Engagement Managers:
  CPC’s operational support group works project-by-project, QB’d by engagement managers (a unique title Wiley calls out), and focuses on both revenue growth and defensive improvements.

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7. Approach to AI and Modernization

• Pragmatic Experimentation:
  CPC instructed each company to run “five experiments with AI,” aiming to dispel fear and encourage learning, with the insight that AI is more about supporting growth than reducing headcount.

  “It may let you grow 10% on the same 100 people…Requires experimentation. Play with it—it’s going to leave you behind if you don’t.” (75:43)

• Current Reality:
  Large companies further ahead in AI adoption; in lower middle market, experimentation is still the norm.

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8. Vision for the Future (2040 and Beyond)

• Enduring Impact:
  Wiley wants CPC to one day own more than 10,000 employees, all “crushing the five key battles.” The long-term ambition is not just financial, but to create a durable model others can follow.

  “In 2040, the model won’t be new anymore. More people are going to look like this, but we will have an engine that can find the next great business to buy…we’re buying businesses to keep them. Have you ever washed a rental car?” (79:34, 80:56)

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Notable Quotes & Memorable Moments

• On Long-Term Ownership:

  “Have you ever washed a rental car, right? …When you own something, you vacuum it, you wash it, you wax it…If it’s a rental, we all know what happens, right? It was very clear that we wanted to buy businesses and hold them.” —Wiley (13:12, [80:56])

• On the Five Battles:

  “People, systems and process, execution, product leadership, customer intimacy…when you do those well, you don’t even need to look at the financials.” (18:40, 21:44)

• On Cultural Fit and Patience:

  “Add-ons are hard…you’re merging people’s brains…and you’re asking two cultures to have an arranged marriage…Some people have been competing against each other for a while and they’re still upset. It’s not simple.” (21:46)

• On Management Incentives:

  “You’re not earning shares that are only worth something if we decide we’re going to sell. They’re worth something if you want to sell.” (41:59)

• On Advice and Legacy:

  “If you do [the five key battles] well, the financials will take care of themselves…Hopefully in 15 years we have a team at the Holdco that can take it another 100 years.” (79:13, 81:54)

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Timestamps for Key Segments

| Timestamp | Segment | |------------|----------------------------------------------| | 03:13 | Leadership transition & restructuring | | 08:50 | CPC origin story & legacy | | 14:30 | Shift to perpetual holding strategy | | 17:07 | Five key battles framework introduction | | 24:09 | Deep dive on customer intimacy | | 31:16 | Internal structure: Firm Ops, Investment, Excellence | | 35:11 | Engagement manager role & project process | | 37:10 | Management incentives in hold-forever model | | 45:20 | Why just one acquisition per year | | 47:12 | Sourcing strategy: banks vs. proprietary | | 54:08 | What makes CPC’s offer unique | | 56:09 | First 100 days: Trust over action | | 59:40 | Diligence: what really matters | | 69:32 | Board meetings & CEO summit design | | 74:45 | AI experimentation vs. media hype | | 79:19 | Wiley’s vision for 2040 |

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Final Reflection

Wiley Curran’s conversation is a masterclass in patient, principled business building. CPC’s approach—buying and holding great businesses, focusing on people and customer-centricity, and supporting management with real, actionable resources—offers a powerful alternative to traditional PE and fund models. The episode delivers wisdom on alignment, incentives, culture, and long-term thinking, relevant not just to investors but to anyone interested in sustainable business.

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For those who want an authentic look at what building a multi-generational holding company really looks like—challenges, philosophy, tactics, and mindset—this is essential listening.

Transcript

[Wiley Corinne]

We buy one business a year at CPC 80 to 120 million of purchase price and we buy businesses to keep them and to make them better in the five key battles. And we believe that if you do that, the financial results are going to occur, but also you are going to attract better and better and better talent. If you're going to own a business forever, you better be darn confident that you can attract better people over time because people retire, people move on, people, you know, move and people are messy. But that's okay. We love it.

[Podcast Host]

All right, today's episode was classic. I had my great friend Wiley Corinne on that is running cpc, which is a perpetual family holding company out of the Midwest. And they basically buy lower middle market companies between 80 and $120 million of enterprise value with a really long term mindset. He talks about why they've chosen to just buy one company a year, their culture and how they've thought about winning in business and the five key battles that it takes and basically how they've kind of built this company over years. That that family now owns over 14 of the best operating companies in the country and has a really cool strategy. When you think of doing all this, you know there's a lot going on. And so today's sponsor, Juniper Square, is the fund operations partner to more than 2000 private market GPS worldwide. Their unified platform connects software, data and fund administration services to help firms scale faster, streamline operations and enhance the investor experience. Juniper Square's technology brings LPs and GPS together and powers everything from fundraising and onboarding to treasury reporting and business intelligence. Today, more than 40,000 funds, 650,000 LP accounts and 1 trillion in LP capital are managed through Juniper Square. To learn more, please visit junipersquare.com enjoy the show.

[Chris]

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[Wiley Corinne]

It's always good to run a search to just get aligned on like what we're looking for. Because if you run a search, that means you got to put together the job description. It means you got to get everybody on the same page of like what we're looking for. That's going to get us from point A to point B. And I mean, we had some really interesting candidates. I remember. But you know, at the end of the day, the business needed a leader focused on customer centricity. And it was just. Yeah, it was a no brainer. It was fun. I mean, there's some dark moments when you're restructuring like that and you're pitching a fundamentally different playbook than you've run. You know, the business, the business was growing very rapidly, but the profitability was going down. That's not supposed to happen.

[Chris]

Yeah.

[Wiley Corinne]

And so everyone's like, why? Why is this happening? It's like, well, it's pretty simple. You are adding more GNA than you are margin.

[Chris]

Yep.

[Wiley Corinne]

And so your percentages are getting all jacked up. It's because that look, had I not spent three or four years in Dallas.

[Chris]

Yeah.

[Wiley Corinne]

And like absorbed Southwest Airlines, this is when the culture was driving huge profits.

[Chris]

Southwest.

[Wiley Corinne]

No, I was just living in Dallas and, and through smu, we'd go see, you know, you'd go on like a visit to Southwest and listen to people speak and you could just absorb it.

[Chris]

Yeah.

[Wiley Corinne]

And it's right when I got back.

[Chris]

So did you see it immediately or did it take a few board meetings, a few quarters, or was it pretty obvious as soon as you started looking at airshare?

[Wiley Corinne]

It was not obvious. Right. It was. We knew we had operational complexities when we, when we invested in the company. Yeah. And we knew that we had. But we knew we had a set of customers. You know, plus 40 on an NPS is really good. Okay.

[Chris]

Is it?

[Wiley Corinne]

Yeah.

[Chris]

You know, 100.

[Wiley Corinne]

NPS goes plus 100 to minus 100.

[Chris]

Okay.

[Wiley Corinne]

Right. And so.

[Chris]

Okay, you know, if you're plus 40.

[Wiley Corinne]

Like that's pretty strong, especially for a business that hadn't really measured it. And hustle equaled satisfaction. And you know, there was, there was a lot of happy customers because the fundamental value proposition aligned with what the customer needed so well that it allowed you a lot of grace. Now carry that forward to like, okay, if we're Going to move the needle. And a plus 75 plus 65 customer renews at 2x the rate. Well, how are we going to get there? And it's like, you know, turndowns. When you call airshare and you can't get an airplane, that's disappointing, right? That customer pays a lot of money for that access. If you can't deliver it, that hurts. I don't care how great your pilots are. I don't care how great the scheduling is. If you don't have access, that hurts. And so we started to see a lot of airplane availability on Thursdays. Okay, Monday, Tuesday, Wednesday, Thursday, busy days at airshare. Friday, Saturday, Sunday. Dead. Really? You got a bunch of airplanes sitting in cities. It's like, what's going on? It's like, well, you know, we've got crew scheduling. You know, at one point they were, you know, we weren't to an 8 and 6, 8 on, 6 off environment yet. We were. We had a lot of different schedules, a lot of different fleet types, a lot of complexity. So to schedule a trip, you needed to figure out, like this Rubik's Cube, right? For simp. For. For a simple trip, I want to roll from Fort Worth to Denver and back for a game on Saturday. Number one reason is crew combinations.

[Chris]

What's that?

[Wiley Corinne]

Means that you're a pilot and I'm a co pilot. We're both available, ready to go in Fort Worth, ready to. Ready to fly their trip. Cause we know the airplanes are available, but it's the crew combinations. Cause you need two pilots to fly type rated in the right airplane. So if you go attack that issue, that is the leading indicator of customer success is pilots. We're in the pilot game. High, high, high safety standards, high personality standards, right? These are the forefront of customer service for us. Right? They get the most airtime with the customer, more than John, more than any salesperson, more than any scheduling representative, anything like that. These are the tip of the spear. And so when you increase their satisfaction, they perform better when you increase their availability. Right? So it was a big unlock. It took a little while to figure out. But once we kind of laid it out, it was clear as day that it was like, you know, this is gonna be the route to success for the business. And by the way, you make a lot more money doing it because you can fill more trips, you can make the customer happier effectively on a leaner balance sheet. And you take that and invest it into marketing and keep growing. And that's what we did. That's what John did, right?

[Chris]

Airshare has been a phenomenal story.

[Wiley Corinne]

Yeah, it's been amazing to watch.

[Chris]

Okay, we dived right into it. So now we're going to pause for a second. So a lot of today's conversation. I love talking business with you. You have a very unique lens of how you think about things. So I think the best way to start would be what is CPC today? But to understand what CP is, CPC is today, I would like you to give us a little bit of the story of how we got here.

[Wiley Corinne]

Yeah, no, it's, it's a, it is a, it's an amazing, it's an amazing story and just a little bit of an ode to you guys. Thank you for having me on. This is amazing. Love Powers, the predecessor in the fort, like, love it all. Big listener. So thank you for that.

[Chris]

Thank you.

[Wiley Corinne]

So, legacy cpc, we gotta. The family got started really in the chemicals business. And my late father Pat, he did like an old school KKR style LBO in the mid-70s, before LBOs were even a real thing. And he bought this business and it was not always up and to the right. And he just had this dedicated, clear, clear vision of what the gel coat market was going to be.

[Chris]

Okay.

[Wiley Corinne]

And he gutted it out, perseverance to the max. And they eventually combined the business that he bought, he sold off a few divisions, bought a few other small businesses to create the capacity, and then they formed a JV with Total and the business took off and eventually Total bought us out. And we over time had established, he and his partners had established C3 Capital, which would provide junior capital, mezzanine capital to lower middle market buyouts. Right? And think of a very transactional model. They had three SBIC funds. But in effect this, this capital base was designed to fill the void between what the bank would lend you and what equity would provide you. Right? And it was a success. They invested in 80 or 90 businesses over 20 years. And then along the way, the family started collecting a variety of different investment assets, interest and funds, interests in businesses, interests in real estate. I mean, if you had intellect and energy and passion for what you're doing, odds are we were going to dive in with you. And I'll tell you, the array of stuff that we had when I came back from living in Texas was it was wide and vast and we were coming off the sale of the chemicals business. So effectively we had a collection of business assets at Korean companies. This is before Korean companies really got started. And, and C3 capital. And we, my three sisters and I Basically got together and we wanted to go out and buy one business a year for 10 years. And with the idea of we want to create a stable of earnings generating businesses for the benefit of the family, capitalize them really strongly and ask management teams to think long term, right? There's a wonderful bottled water story that I won't name the brand, but it's a colored bottle and there's a private equity group that had bought it. They had, you know, put a bunch of money into enhancing the technology. This is a hundred year old brand that people love. And they were, you know, they came in with this beautiful fund book that's like, hey, we're raising our next fund. We bought this business, we sold it. We got one and a half turns of multiple arb. And the question was like, guys like, why would you ever sell that business? People are going to drink that water into eternity. It is an amazing brand with a better team and better technology and an even longer and wider Runway than when you started. And it's just, it was a light bulb moment for us in the sense that like a great business, an exit should be market driven, not timing driven. And in that case, it was all about raising money, et cetera. And so we further doubled down on this strategy of buying businesses for a truly indefinite time. Like we buy them to keep them. And when you. I love to say that, I love the saying, you know, have you ever washed a rental car, right? Because when you own something, you know, you vacuum it, you'll wash it, you'll wax it, your kids will do what they're gonna do to it, but you'll treat it like it's yours, right?

[Chris]

Yeah.

[Wiley Corinne]

And if it's a rental, we've all been to Disney, right? I mean, and we know what happens, right? And so it's was very clear that, that we wanted to buy businesses and hold them. And then we started, over time we, we went out, we bought businesses at Koran companies, we bought businesses in the automotive, aftermarket, marketing. We bought a marketing agency with another family, an education business, a telematics business, precision manufacturing a few different ways, telecom infrastructure, maintenance and repair, aviation, all different types of things, right? And we like to think of ourselves as generalists where we can understand the microeconomics of a business and then the fixed assets and fixed costs and personnel needed to support those microeconomics, right? And if you know it, being a generalist leads you to acquire simple businesses, right? You can't get into ponds that are so complex that you need unbelievably tenured domain expertise to survive. And so fast forward 10 years, we had bought 14 businesses. We had had some.

[Chris]

What year did this start?

[Wiley Corinne]

2010.

[Chris]

So you got back to Kansas in 2010 after two fun years in Dallas?

[Wiley Corinne]

Yeah, yeah, two plus. Yeah. And so, and it was great. It was unbelievable. But we went, we basically, we didn't put any debt on our businesses. We would effectively borrow debt at the holding company every once in a while, certain circumstances we would borrow money at the individual operating businesses. We would simply say, look, management teams like we've given you a lot of capital and we want you to go deploy it into growing this business in the right long term way. And this is before we'd really formalized a unique strategy across everybody and we saw some really great results with that. And when you are focused on the customer and just have this flexibility to, to really think like an owner, our incentive system really emphasizes, you know, profits from the business and distributing those profits and redeploying them when there's an opportunity. Not add on acquisition obsessed. And so we go down the, we go down the road here we come up for air in 2010, which was always the plan as, as a family. And we, we had achieved a really nice financial result. But more importantly, the family took to this idea of creating, you know, of supporting and you know, it wasn't us creating, it was our management creating them. But we had backed and supported and owned some really some businesses that were unbelievable places to work and to develop personally, financially and professionally for these, for all different contributors in these businesses. A little over 3,000 employees at that point. And we saw some really interesting characteristics of this long term philosophy. Right. And it's not rocket science by the way. I mean coming from Kansas City, you have the shadow of Koch Industries, you have the shadow of Berkshire Hathaway. And it's like, okay, buy businesses. Ask the management team to, to, to, you know, think with long term in mind around the fundamentals of the business. That's not, that's not rocket science.

[Chris]

And one quick question. When you're looking at a business and you're underwriting it, is part of what you're underwriting also asking the current team in place, what would you do under this structure? Or do y' all come in kind of with what you want to see happen? Or do you like, let's just say you love the business but you talked to the leadership team and they were like, we don't really have much more ideas for how to grow this thing. Does that make this a non qualified business?

[Wiley Corinne]

No, A business that is going to have a hard time growing can still be a great cash business. Yep. You have to be disciplined and honestly, you have to have realistic expectations coming in. A lot of people get in trouble when management thinks they can't grow, yet ownership does, or vice versa. Right. Alignment is super critical. So we come up for air in 2020. Right. And we start to realize that we want to employ as many people under this long term investment horizon mentality as we possibly can and create great places to work. Because if you love what you do every day, you're a better soccer coach, you're a better spouse, you're a better parent, you're a better friend and neighbor and coworker. If you love what you do when you go to work. And so we think that that's super important to our society in general. No matter where you fit politically, if you love what you do every day, you're going to be a better human being. And so we also understood that in 2020, we had a pretty, this is before COVID We had a pretty big strategic decision to make. Like we needed to ramp our holding company capabilities. There's definitely a need for some internal resources. We would be better off buying slightly different, slightly bigger businesses because if we had an internal resource set, we could support them in a better way. Not earth shatteringly big, but there was a reason to go a little bit upmarket. And so we got together with the C3 capital team and they had had a really good track record in this mezzanine market. But their DNA was built as business owners. Right. I mean, these are sister groups, all share an office. We, you know, when we buy a business, those people are so smart over there. We'd say, hey, do you want to invest a little bit? No, we're not taking a fee or a carry or anything, but just come in and be a partner. And so we did that quite a lot and we realized that we all have the same mentality. And so we actually ended up combining the two groups, the Koran companies team, the C3 capital team, and that is what CPC is. And as we were doing that, we had sort of the Apollo 13 moment where you pour it all out on the table and you're like, okay, what does this do and what does that do? And looked at all of our investment data points, right. And started to think about our experiences and what went well and what didn't go well. And think of it as like the top quartile of financial outcomes and the bottom quartile of financial outcomes. What Were the, what were the, what were the patterns? And it just jumped off the page, which is when teams, when teams were able to consistently win the various challenges that they would get in these five areas and the financials would, you don't even need to look at the financials. You knew you were going to get a great outcome. And that was people, systems, processes, execution, product leadership, customer intimacy. Right. So people, systems and process, execution, product leadership, customer intimacy. And when you do those well, and those are never fully won and never fully lost, right. It applies to, you know, Apple and it applies to, you know, an apple orchard, right. Big business and small business, those will, you will face those no matter what. And so when you think about what businesses we're looking for and what we ask our teams to do and deploy our capital, we're asking them to do those things well. Right. And so we don't start with a financial target on the page, we start with a set of available resources to invest. Right. Coming out of a business, our businesses are unlevered. So, you know, you have a lot of flexibility. Sometimes a company needs to invest in its own moat and we're not going to grow profit, but we're going to grow the durability of it. Sometimes we know that, like in the case of Airshare, enhanced customer intimacy is going to lead to a happier customer and it's going to lead to financial growth because less people are going to leave. And so we, we, we built CPC around the five key battles. We brought in a set of internal resources to help our businesses be excellent in those areas. And you know, today, just in CPC alone, you know, we buy one business.

[Chris]

A year, is it still one business a year?

[Wiley Corinne]

Still one business a year. We'll support add ons as we need to, but we're not add on obsessed. Add ons are hard. They're really hard. And so we want add ons to be well, because you're merging people's brains and you're asking two cultures to have an arranged marriage. Some people didn't have upside in it. Some people have been competing in this world against this Company A is purchased by company B and they've been competing in the market for a while and they're still upset. Right. And it's not simple. And you're asking this arranged marriage to happen. So there's personnel risk, there's market risk, there's financial risk. And when A, we found that when a acquisition like our headwear business Imperial purchased Puka, the industrial logic was very, very sound because, you know, Puka has excellent market share in areas where Imperial doesn't, and they have capabilities that Imperial doesn't, and Imperial has vice versa. And so in general, the brands fit together really, really nicely. And I think that the teams have really embraced each other because of that logic. But yeah, we buy one business a year at CPC, you know, 80 to 120 million of purchase price and we buy businesses to keep them and to make them better in the five key battles and to, you know, we believe that if you do that, the financial results are going to occur, but also you are going to attract better and better and better talent. If you're going to own a business forever, you better be darn confident that you can attract better people over time because people retire, people move on, people, you know, move and all those things.

[Chris]

People are messy.

[Wiley Corinne]

People, people are messy. But that's okay. We love it.

[Chris]

So, okay, we're going to start breaking this down a little bit. Um, what, okay, let's, let's take customer intimacy because it would be easy for me to sit here and go, of course you want to make your customers happy. Doesn't every business want to do that? So one, maybe let's just dig a little deeper in how y' all think about it may be different from the market, but then maybe also through your framework of if we could only own these businesses for five years, it makes us in incapable of achieving X. But because we have an infinite horizon, we can do these things.

[Wiley Corinne]

Things. Yeah. I mean, let's start with kind of how we think about customer intimacy, right? And so it is in a measured way and it's, it, it is knowledge of end market, and then it's knowledge of why people arrive to take your value proposition and why they stay. Right. And then also why they don't choose to come to you. It's just as important to understand why someone says no as it is why someone says or why, why somebody says yes. All, you know, come buy a hat from you, right? Or, or select your brand. And there's a, there's an amazing Harvard case on California Closets that goes into this and they map this journey. Right? And I, I, I love this analogy because everybody has a closet, right? And everybody thinks they can organize it. But California closets, they're selling an organizational experience, right? Where they arrive, they take you through the different ways they could do it, the process. They're gonna take you through all of these things and they map the journey very, very tightly from the second you see a California closets advertisement to the first time you Call to the first time a rep comes out to your house, the installation process, the big unveiling, the follow up, like they're in this, they're in the business of keeping your closet clean after they leave. And it's super powerful, but it's only measured or it only occurs because of this tight, tight measurement of the journey and satisfaction along the journey. Net promoter score at these different forks in the road. And most importantly, when someone drops out of the journey, they like triple down and understand why someone dropped out. And when you have that knowledge, which by the way, a lot of our businesses, they know the customer through gut. They know the customer because they've been doing business with these people for 20 years. And by the way, it's super valuable a customer that will give you the honest feedback and that 20 year customer will generally do that. But they'll also give you breaks in a lot of ways because they've been doing business with you for 20 years. And they can call Chris and get what they need or they can call Wiley, or they can call John or whatever, you know. But I'll tell you, like the, that intimacy piece, really breaking it down in a measured way in the important forks in the road is the start. And then understanding what your end market looks like in a data driven way and establishing these Personas. Let's take somebody that comes to Imperial, okay, that goes in a pro shop or buys an Imperial hat online. There's different types of Imperial users. There's people that love the brand, there's people that love the sizing, there's people that love maybe the color selection, there's people that this is just what they're given at their pro shop, but they're all a little different. And so understanding what those different Personas are in a data driven way so that we can take this set of information and then invest resources into the product leadership side to make each of those Personas happy. You know, by the way, there's a couple of Personas that very distinctly don't buy from us. Like my wife, my wife has a hard time wearing an Imperial hat because of sizing. She loves the brand. Who doesn't love a hundred year old wholesome brand, right?

[Chris]

Imperial is such a great brand.

[Wiley Corinne]

It's the best and it has the best team in the business and the puka team's the same way. But it's like there are Personas that don't select from us, okay? So we lay all these out and then we can react to them and we can invest resource into them. And it's only when you have a long term vision, you have the resources available to you. Right. That you can go attack this in a very front footed manner. Right. And so sort of think about customer intimacy. You have your end markets and your Personas. Right. And then you have the customer journey. And those two big angles bring you enough to really have a data driven approach to customer intimacy that it's not about like you know, moving satisfaction 1 point up on the NPS. But at the end of the day it kind of is because you have to measure intimacy and satisfaction. If you have a happy customer, odds are you're not going to fail. Right. You can stub your toe in a lot of different ways, but it is, it is really core to what we do. And we put a lot of emphasis on understanding that normally we buy a business, it's that, it's that knowing the customer through gut and that's perfect. It's a great place to start. But we can expand on that and we challenge our teams to do it. We have our chief information officer at cpc Dennis. Dennis comes from a customer experience background, specifically in restaurants, which is a hard place to delineate yourself. And he, he, he is the, a lot of the tip of the spear in terms of measuring our customer satisfaction. At our businesses we typically outsource the measurement. There's people that do it, do it on an a la carte basis. But I'm really proud of like our from to in terms of how we think about the customer over time. And what's really amazing is if you deliver that data set of customer intimacy to a great team, the ideas as to how to improve it are significantly needle moving and usually they're not as expensive as you think because they get right to the point of customer satisfaction. There's less guesswork. Right. So it's a simpler solve.

[Chris]

And does CPC do the work or do you push that down at the company level and say we want you all to figure out the data or is that kind of y' all's specialty.

[Wiley Corinne]

Hot topic, but I would say had.

[Chris]

A microphone in your boardroom.

[Wiley Corinne]

I would say that it's a little of both. It depends on the distinct capabilities of the business.

[Chris]

Yeah.

[Wiley Corinne]

And where they are on their journey.

[Chris]

Yeah.

[Wiley Corinne]

Right. There are businesses that, that have a full time customer experience personnel. Right. We have a customer customer experience leader at Airshare, we don't have that at Imperial. Right. So it's done a little bit by committee. And so CPC is there, the holding company resources are there to help lead that initiative, deliver it back to the management team and say, guys, where do you want to go with it? Okay, how does this play into the strategy? Business makes X amount of money per year. We have this amount to reinvest into the business. That could be a really high priority. If we're at a plus 85 NPS, but a plus 10 employee net promoter score, maybe that's the answer. So we help bring the data to the teams and then collectively make a decision. A lot of times they say, well, what do you think? But a lot of times they have great ideas and they're ready to go.

[Chris]

Okay, so you have 14 different companies, 14 different CEOs. How is CPC structured? So what is the business of CPC? We'll get into buying new deals, but you got 14 that you got.

[Wiley Corinne]

So 14 is between CPC, which is new and it has 4Y companies, has 10. Right. CPC is a, is a compliant business, all of that. And so, you know, we, we have our collection of businesses over here. Yeah, right. Different CEOs, different. I just wanted to clarify that. Yeah.

[Chris]

Okay. And then. But what does it look like even at Koran or cpc, we can take cpc. What's happening at CPC day to day.

[Wiley Corinne]

At the holding company. Yeah. Well, so our business, we have basically three legs to the stool that support cpc.

[Chris]

Okay.

[Wiley Corinne]

We have our firm operations team. They, they go out and execute and deliver results in all things. Compliance, credit, capital in and out of the business, all things that you need to make the business flourish. From a support perspective, you should think of the important plumbing that comes into the business as firm ops. We have our investment team which is searching for new businesses to buy and a set of associates that support the investment team. And then the bulk of the payroll is in the excellence group.

[Chris]

Yeah.

[Wiley Corinne]

Which is there to support the, the, our management teams in the five key battles. Right. And so our, generally mid summer, our businesses meet not together, but everybody has a board meeting. And we understand where we're trying to get to in each of the five key battles and also what resources might be available to invest into either making our business more defensible, growing it. And all the five key battles are always accretive to either of those things. Right. And so coming out of that meeting, there's a set of action items of what we want to do strategically. And normally that's when the excellence team is starting to get pulled in. And so you can think of our calendar as like summer to summer. Right. And they're saying, look, we're going to go on a big a customer Journey exercise like we were just talking about, or they're going to go on a big value stream mapping exercise like Imperial's sales have increased dramatically on generally the same amount of inventory. And it's because of some excellent work we've done with systems and information, but also in an operational way and mapping operational processes through value stream mapping and trying to get less people to have their hands in certain processes for speed. Right. We can turn inventory faster. And so coming out of that meeting, there's usually a set of action items. Teams are pulling the Excellence Group in or the Excellence Group is saying, hey, you know, we heard this, this is something that we could do. And then we go to work, go to work and kind of deploy the team on a schedule of projects. But the most important thing to understand about the Excellence Group is that they are project based in nature. We don't charge for it, you know, like, hey, I'm gonna, I'm gonna charge this much. You're not looking for projects, I'm not looking for billable hours. Right. But what I am looking for is an open mind to saying, hey, we have this team here and we're all on the same side. We're all owned by cpc. Like, you know, there's a, whether you need analytical support, whether you need somebody to help you map a process or select an ERP system or choose an employee satisfaction vendor to collect the data, like the Excellence Group will help with that.

[Chris]

Okay, I, I want to pick on one title that you had on CPC's website. That, and maybe they're part of the Excellence Group. I'd never seen that title on another company's website. Engagement Manager. Yeah, and then there was a senior engagement. What is an Engagement Manager?

[Wiley Corinne]

No, it's a great question. So when you pull the team off the shelf, that's an engagement. Our team is going to engage with you and you're going to engage with us. And we're going to, we have a project charter, right. And we have a set of things that we want to get done because then the Excellence Group's going to depart and that team is responsible for whatever change or whatever transformational thing that we may have helped you install in your business. And it's the teams to run with it, not cpc. You know, we're not going to stay there forever.

[Chris]

Right.

[Wiley Corinne]

And so an engagement there, there is a person who is Q being, let's use selecting a vendor for an EMPS project. Right. That person's going to drive and QB this so that we're not, you know, having it be somebody's like side hustle at the business. And so you, you get a temporary resource. Right. And so we have a set of unbelievable domain expertises in terms of leadership at CPC holding company. And then we have a support staff that supports them. Those engagement leaders are inside the support staff and they're helping drive these project initiatives.

[Chris]

Got it.

[Wiley Corinne]

You know, I would say that our, our initiatives and engagements that we do are just as much for defense in terms of, you know, improving the employee experience, improving the cash flow of the business in terms of, you know, we need less capital employed. Like it's just as much as defense as it is for growth.

[Chris]

Yep.

[Wiley Corinne]

Yeah.

[Chris]

So, okay. You hold perpetually or indefinitely which comes with its own set of incentives, especially at the CEO level executives.

[Wiley Corinne]

Yeah.

[Chris]

In the private equity model, we all get our B units or C units.

[Wiley Corinne]

Whatever they're called, going to OR D2, five units. Right.

[Chris]

And we're out in five years. We kind of have a clear path for how to get rich in five years. When you're holding something forever, it's different. So I can back into this question a few different ways. Maybe we'll just start here is like when typically you're buying a company, you're probably buying a family owned operation already. Do you buy from private equity?

[Wiley Corinne]

Yeah.

[Chris]

Okay.

[Wiley Corinne]

Yeah, absolutely.

[Chris]

Are you typically having to redo all incentive day one or do the incentives in place kind of work? How do you think about that?

[Wiley Corinne]

So we look at wealth creation as a stream of cash, not buy, buy for one and sell for two.

[Chris]

Okay.

[Wiley Corinne]

Right. And so in general, we want to find leaders that share that mentality.

[Chris]

Okay.

[Wiley Corinne]

But we also understand that like life is expensive and there are certain times in life where you may want to take some capital off the table. So fundamentally we want to establish programs where people have the right balance of cash versus equity accumulation. And generally you're making a choice to keep your equity if you want. Right. And so let's just assume we start with a business where no one wanted to roll anything and management started with no equity in the business.

[Chris]

Okay. You would do a deal like that?

[Wiley Corinne]

Yeah.

[Chris]

Okay.

[Wiley Corinne]

Yeah, yeah. We're comfortable buying 100% of the business. It doesn't, it, you know, we would write a term sheet for to buy 100% of a business and tell the selling family, why don't you wait 30 days into diligence, understand who we are, understand where we may want to go, and then you tell us if you want to roll or not. And you know, there's probably a max to that just for a variety of reasons, but if you want to stay on the train, great. And if not, that's okay too. Like we're going to get comfortable as if you're departing and that's important to us. And so we would design a plan for management were they effective, where they effectively earn into a performance based unit that is issued at kind of, we issue them every year, little chunks of units. Then at three years from now they're projected to be worth this much. Right. And so it's very similar to a public company but just simplified greatly. But our, you know, we start issuing these units, they have a three year time vest in a minimum performance to them which is generally at plan. Everybody is, these are not unrealistic goals. And at the end of that three years they own the shares. You know, there, there is, we make sure there's enough cash to pay any tax, etc. But you start accumulating ownership in the business and the business has a yield to it because remember, there's no debt on the business. So you start to feel the power of these distributions very quickly. And across our businesses we have many, many executives that have earned into ownership stakes in the business, elected to, we play the bank. So if you want to cash out, you know, people have a wedding, people have college, people have reasons that they need liquidity in their life and it's totally understandable. But there's also executives that have built equity in our businesses that has a real yield. And when they retire, sometimes it's a sensitive conversation because we need that equity back for the next, for the next executive team member and they want to keep it. There's no better feeling and no more measurable kind of demonstration of that the system has worked and that the business is headed in a great trajectory than when an executive is retiring and they're like, I want to keep 100% of my stock. Yeah. Because I love where this business is going and I know that the team is better today than it was yesterday.

[Chris]

Okay, well, let's just go a step further. What has to happen is it usually. How do you structure that? Like you have to buy it out the day of departure. We'll buy it out over a timeline. Or is it case by case or.

[Wiley Corinne]

It'S case by case? Yeah, it is. And it's in it. And it probably varies by level. And it. And it in general, I think that you always want that optionality because you do you need those, those equity shares back for the next.

[Chris]

And they probably understand that going into it.

[Wiley Corinne]

Totally.

[Podcast Host]

Yeah.

[Chris]

Total like, yeah.

[Wiley Corinne]

And also there's. There could be it like, you know, our. Our CEO at Imperial retired this year, and Todd did an absolutely masterful job building the culture of that business around the 5KBS. And the thing that he and we are most proud of is we went from a minus 22 employee net promoter score to a plus 30 pretty darn quick. And it was amazing to see. And Todd in general wants to stay an owner of the business. Right. And so he. How it works mechanically is he will become an owner and have the same minority rights as any of our partners do. Right. So the selling family of Imperial kept a small piece. They also rolled a little equity up into the mothership, and so they have liquidity rights along the way as well. And it's. Every couple years you have the opportunity to sell your shares. We have all of our businesses valued every year, and that sort of multiple of trailing EBITDA carries through the year, and then it's revalued at the end of the following year. So there's a really good mechanism to achieve fair value. But at the end of the day, like, you're not earning into shares that only are worth something if we decide we're going to sell. They're worth something if you decide you want to sell. So it sounds complicated, but it is relatively simple. You aren't into ownership, and generally when you depart, we're probably gonna buy back shares for the next person. But dependent on certain circumstances, we want people to be an owner for as long as they want to be.

[Chris]

And earning into ownership, even across 14 businesses, is typically measured by increasing cash flow.

[Wiley Corinne]

Yeah, I mean, so you. So equity per. So this is. It's a great question. We think of, you know, we think of return with two very important dynamics. There is the appreciation of the stock, and then there is the current return of cash coming out of the business. And those two combined to equate to what we call an equity performance target. If I have a business worth $10, it distributes $1 a year for five years and grows from $10 to $12. Well, I got $5 of distributions, and I had $2 of appreciation, right?

[Chris]

Yep.

[Wiley Corinne]

So I had a seven. So I got back a $7 on my. Or $17 on my $10 investment. All right.

[Chris]

One of the most impressive things you've said that you've stuck to since 2010 is like, we just buy one business a year. You didn't buy 10 and then go, let's start buying 10 a year. We didn't buy two a year. You've like, since we talked about this a year ago, you're like, we just buy one business a year.

[Wiley Corinne]

Yeah.

[Chris]

One why you have a lot of scale now. You're growing. You've got probably a lot more capacity. Is that a forever thing or is that just like that's where we're at or is there more science to this?

[Wiley Corinne]

Well, so the early science was that when we started Carancos and we understood like we had some capital coming in and then we were going to buy a business and there's going to be certain cash coming out of those businesses. It basically we need to invest 7% of the balance sheet a year into, you know, our businesses. Right. Or a new business to keep the compounding effect going. Right. Owning businesses is a wonderful way to compound wealth over time. Right. And so this 7% rule has guided an investment kind of size allocation. And it basically comes down to what the balance sheet can afford. The earnings coming into the business. And what we have targeted is buy one business. But now we're buying slightly larger businesses. We used to buy 20 and 30 and $40 million businesses. Now we're buying $80 million businesses and up. And so we love the idea of diversity. And so buying one business a year seeking diversity is a goal of ours. But we also, I would say like we don't want to buy so many businesses that it just diversifies us into smithereens and we can't support them the right way. Um, it's hard to own and speak a bunch of different languages. Sure. That's why everybody, you know, it's the language of the 5 KBs that that when it comes down to it.

[Chris]

Okay, so now we'll go a step further. Okay. So we're going to buy one business here. There's 365 days in a year. Are the majority. Maybe it's a sourcing question, but are a lot of these like businesses you've been talking to for five years already that it's finally time?

[Wiley Corinne]

Yeah.

[Chris]

Is this a sim that just happens to be the lucky. You know, CPC is lucky. How do you find the one business a year?

[Wiley Corinne]

So another hot topic. But we.

[Chris]

I told you I had a mic.

[Wiley Corinne]

No, it's good. We have made the decision that if you have a business that big, you are likely going to have some type of intermediary involved. Yeah. And we love. We'll talk to anybody that wants to talk about the 5KBS. Right. And it's great to get alignment early, but we actually think an I banker is super Healthy it helps you mentally prepare for the emotional decision that that is coming with selling a business. And so we tend not to really put a lot of resource into like a proprietary search. It's a completely different sourcing model. We focus on small and medium sized investment banks where a differentiated buyer like a CPC that is perpetual in nature, that is buying it to keep it, that wants management teams to truly own it beside them and collect the same type of dividends that we collect is different. And so we do work through intermediaries primarily we drop out of auction processes that we know we're just another abbreviated firm title and an IOI and this and that. And it's really simple. When a small or medium sized investment bank we call em a smib that universe. When they'll go to the CPC website and kind of see what we're about and I'll say hey we're super interested in this business. Would you mind if we just had a cup of coffee with the ownership group or the CEO? Like I just want to tell them about CPC because it's going to look a lot different when we inevitably put an offer in. When somebody will give us that access and we promise not to talk about the business. Truly when someone, when someone will give us that access it is, it is normally somebody that we want to work with and a business that we're going to be super aligned with out of the gate. If they're just running a process for highest price and highest price, highest cash, we pay all cash for our businesses so we don't borrow any money. Very simple. And apply it directly on the business. So I don't know from a sourcing perspective we see about 300 opportunities a year. I would say we get serious about four to five times a year about a business and then for one reason or the other our interest wanes because you know we're what was, what was sort of marketed wasn't true. And, and we end up buying one.

[Chris]

Have you bought one this year?

[Wiley Corinne]

We haven't.

[Chris]

You haven't?

[Wiley Corinne]

Yeah.

[Chris]

So we got three months and it's.

[Wiley Corinne]

Probably not going to happen to be done, honestly.

[Chris]

Okay. So that was my, you know, it happens.

[Wiley Corinne]

Yeah.

[Chris]

So would that mean you could do two next year or it's one next year?

[Wiley Corinne]

It could, I mean it could be like beginning. You know, honestly it takes a lot to onboard a group into our system. Yeah. It's very important that we have and we follow this mechanism which we call foundations and foundations is cpc. Foundations is all about building trust and all about establishing this Rolling takeoff between CPC and the operating company. They're not a portfolio company, they're an operating business and they have real needs. They could be seasonal, they could be going through management transition. They just got this bizarre new owner who doesn't have a fund and it's very, very kind of out there. So everyone just needs to chill for a little bit and learn each other but in a deliberate way work to establish trust that working relationship. So we wouldn't buy two businesses on top of each other. We would wait four, five, six months before we did another one. And so yeah it's, you know I hope to buy another business maybe in the first quarter next year and then maybe in the fourth quarter. But you know we, we, we've supported a few add ons this year but we have not bought a new operating business in 25 which is okay.

[Chris]

Is there a reason market just didn't get it this year?

[Wiley Corinne]

I think, I mean coming out of, coming out of the tariffs, the tariff situation. I mean our, our in April was dark. Right. I mean our opening tariff bill was.

[Chris]

This is right as we were in Canada together. So I remember this vividly.

[Wiley Corinne]

Our, our opening, our tariff bill was, was you know, rather large. 30, $40 million. You know like you know the opening, big headline percentages. Right. Obviously everything changed and then we just want to see the like we've been pretty conservative this year and I just want to make sure that like the economy is as stable as, as we're all hoping it is and is all the seemingly statistics are coming out that largely like you know, left pocket, right pocket, we're all feeling good and so we took a pretty hard pause in the middle of the year in terms of our seriousness onto buying new businesses. We've missed a couple kind of in the beginning of the year and then later on in the year. But I'm super proud of our team as to how disciplined we've been this year.

[Chris]

Well, you obviously also have a culture where obviously you're not a fund so you don't have a clock on your to deploy capital. You're probably hiring people that obviously want to get a deal done but they're happy whether they got one done or not, which is a unique cultural aspect. Is there anything you could share there? Like how do you build a culture when not getting deals done is still acceptable? Do they have dual roles? Are there people that are just buying.

[Wiley Corinne]

You know generally the investment team a part of their organizational goals for the year. We wanted to buy a business like we, we have built CPC to be a deployment engine for our shareholders. Right. Like, and it is, it is designed to go search and find businesses. Would it, would it be like in. If we went three years without buying a company? Would be, Would we be happy? No. Yeah, that'd be, that'd be a failure. But everyone understands how important it is to make the right decision when buying a business. It's a very vulnerable time for cpc. You're selling out a lot of money.

[Chris]

Yeah.

[Wiley Corinne]

Right. You're taking risk on a brand new set of people.

[Chris]

Yeah.

[Wiley Corinne]

And so for us, I think that the, the organization will understand that yes, we didn't accomplish our objective, but we also needed to make the right decision for the business. And that happens in life. So you know, we wanted to buy a new business. We're probably not this year. Yeah, there's a few things, there's always a few things kind of percolating. But in calendar 2025, probably not. And that's okay.

[Chris]

People understand you're listening to this and you need a deal done by the end of the year. I've got your guy. You said one thing. You said our offer is going to look different from most of the offers you're going to get. Generally speaking, what is your offer going to look like that is so much different from what's out there in the market? And maybe. I know it's different per deal.

[Wiley Corinne]

Yeah, I mean it'll, first of all, it won't include any role.

[Chris]

You start with. No role.

[Wiley Corinne]

We start with, hey, we're willing to buy 100% and then maybe have your business wait a little while and then if you want to roll because of the industrial logic of your role, you should do it. Forcing people to roll, that's just not going to end well. Right. It's going to be a unique package for management where they will earn into real ownership in the business. We've worked a lot on our management incentive systems over the last year and we think we've really honed in on structuring them to optimize communication simplicity. There is a cash heavier piece of it and which we think aligns with certain portions of management better. It'll be all cash, there'll be no financing contingency and it'll be a relatively simple transaction. I mean again, it's not, it's not rocket science and so many transactions get overstructured and sometimes the letters are so short that the investment bankers are like, what's going on here? Like, like, yeah, no, we're serious about that. So anyway, it's, it does Look a little different because of its simplicity. Yeah.

[Chris]

Okay. Then you talked about maybe we'll call it the first 90 or 100 days. Again you said there's different situations. It could be seasonal, there could be a management change, maybe more. The question is like what are the not to do's that you've learned over 14 businesses in the first hundred days.

[Wiley Corinne]

The, the first not to do is don't come with a hundred day plan.

[Chris]

Okay.

[Wiley Corinne]

That is throw it out the window. Throw it. I mean like the, the, this management team has just gone through a hard process like our, our diligence process. Like we're shelling out real money. Right. And we're, we, we need to verit, trust but verify certain things. And so it's a process, it's quick, it's tried to you know, measure a few times, cut once type of diligence process. But in general it's, it's, you know, selling any business is tiring. It's tiring on both sides. And so we think that coming at a management team with 100 day plan of all the changes we think they should make is a mistake. That happens a lot of time when the vest wearing oxfords come in and they're like, hey, like let's, let's do we think you ought to pursue this? No, no, no, no. Let's, let's pursue trust and relationship first. We do do it in a deliberate way. We like for our management teams to meet some of our other businesses. We like for our, our teams to understand exactly what the excellence group is capable of. We like for them to feel, and this is a little touchy feely, but we like for them to understand that you're out of the sale process now. We've, the checks have cleared, there's no going back. Yeah. And it's okay to be vulnerable and it's okay to show your blemishes and it's okay. And that's super important to working together. There's don't you know, we're not, we're not dressing anything up anymore. It's over. Yeah. And our, our excellence team, and primarily Dennis, David and Caitlin, our chief people officer, our chief operations officer and our chief information officer coined this process called foundations. And it's, it is designed to optimize around a really good rolling first call it four to six months of your interaction with CPC and actually like, you know, as you know, I'm a customer intimacy guru and our customers at CPC are our management teams when you really think about it. And we got the Feedback that, you know, our CEOs are like, look, working with CPC can be magical but it takes a little while to really figure out like the capabilities, the expectations, et cetera. And we don't want to be a black box. Right. And so what the feedback was is build an all encompassing manual, build a document that. Build a document that helps us understand the expectations. What does a board meeting look like? Our board meetings are different. What does tax season look like? More about the five key battles. What are the Excellence Group capabilities? What are my financial reporting expectations? How do I work with the chairman? Like all these different things in one place, one singular place. And it's a long and thick document. It's not meant for a quick cup of coffee on Saturday morning, but it's meant to parcel out. You can delegate it to different parts of the management team and it's just meant to help onboard and we're putting the finishing touches on that right now. So when Opco 5 arrives there will be a, there will be a. We know what foundations looks like. Right. But we also have this CPC guidelines document that is going to help set expectations and map the relationship a little bit.

[Chris]

Okay. Then the inverse question would be prior to close. So we're throwing out the hundred day plan. Love that answer. Besides like Q of E and having good financials during dd, what are the.

[Wiley Corinne]

What what?

[Chris]

Can't you miss it like you've bought 14 companies? Clearly DD on company 15 is going to be a lot sharper, you know, the questions to ask than one.

[Wiley Corinne]

Yeah.

[Chris]

What are the most important things you need to figure out in that window besides the financials being what they say they are and you know, they're. It being a great business.

[Wiley Corinne]

Yeah, I think so. We, we see diligence on two huge streams.

[Chris]

Okay.

[Wiley Corinne]

There's the confirmatory side and there's all the things that you would do in a normal process. Right. And then our, our diligence process is as much about us learning the language in the lens of a management team and how they think about certain issues. And so we could have a valuable meeting on day one of ownership. And so we have this channel that we call the Business Diligence sessions and think of them as like a little mini series, maybe four or five virtual discussions. And we ask a member from CPC to pair up with a member of management and for them to walk the group through how management approaches a certain dynamic in a business. It could be terms of customer contracts, how are we doing it? Right. It could be all of our managerial feedback practices. It could Be things that are specific to that business and industry that we need to understand through management's eyes and mouths. And then there are things that come out of those that we should just verify. Right. And make sure that the business is where management thinks it is. Because, you know, a stumble out of the gate in the core assumptions of the business that are the core of the thesis is not good for anybody. It's not good for management, not good for shareholders, it's not good for the customer. So, you know, really we have all the confirmatory side and then there's like four or five major, major thesis items that we need to go verify that are right. You know, a lot of it comes down to your value proposition to the customer. Are you solving the need that is on the piece of paper? In reality, is your part as complex as as you're billing it to be? Are your delivery standards as good as you claim they are? Does the customer see you in the same way that you're laying out on a piece of paper? And that is an important thing to really have your arms around in diligence.

[Chris]

I don't know if this is too niche of a question. Again, I think everybody at face value that runs a business would say, of course we're meeting the customer expectations, we're profitable and we've been around 20 years. What would be an example of they think they're doing it great, but after meeting CPC and going through your process, they realize like, damn the fact we've been profitable and we haven't really touched the customer at all in the ways we could. What's one where maybe pick on a company individual or an example where like a CEO is so confident that they're meeting customers and you quickly are like, yeah, you're just scratching the surface.

[Wiley Corinne]

Well, let's keep it generic and then we can dive in if you want. I think that it's super important for management teams to understand what true customer lifetime expectations are from a length of time perspective and then also from a profit perspective. And a lot of times when you get into this exercise, teams really haven't understood what the customer lifetime expectancy really is.

[Chris]

Which is why.

[Wiley Corinne]

Well, let's say that you have a. Let's say a customer has an expected lifetime of nine years, meaning that churn is 11% or something like that. Right. But the mistake would be that all profits are, or all customers are equally as profitable.

[Chris]

Got it.

[Wiley Corinne]

And a lot of times when we help a business, we help them getting back to intimacy. Say you have four different types of customers yeah. Generally, if you understand the margin created from delivery and then the friction needed and the fixed costs needed to truly deliver to that customer and the assets needed to support that relationship, all four of those are going to have a different profit by customer. Right. And there is a totally correct school of thought that you should never allocate fixed costs. But there's also, it's an important operational CFO type of mindset which is understanding the different frictions and the different needs that a customer might demand. So let's take Airshare for an example. At Airshare, if you have a customer that has a really complex billing process where every single trip they have to, it's complex to schedule it and it's complex to bill it, and it requires a full time job to bill that customer. And that's customer A and customer B flies the same exact trip 90 times a year. And the billing is so simple, like it's totally automated. Those have a completely different customer lifetime value, right?

[Chris]

Yeah.

[Wiley Corinne]

And so a lot of times management teams are like, wow, okay, I've been pushing on this type of customer over here because the margin dollars are significant. Slightly higher than customer B. Yep. But customer B is simpler. Simpler to deliver. They have a higher customer satisfaction rating. Right. They actually deliver more profit to the bottom than A versus B. I'm not saying that A is a bad customer, but understanding it in a holistic way like that is something that our management teams can actually activate on. They then in turn and pinpoint deploying resources to a certain type of customer and then get more segmented and more just accurate with how they're going about acquiring new business. You know, for, let's say that in our component sourcing business, right. We have really done a lot of key account management practices. We brought in a new leader a little over a year ago now and he has tied key account management to cultural success. And everybody knows exactly how they are contributing in to the satisfaction of that account. And it's really. Jay's done an unbelievable job. But also what he's realized is that certain customers don't fit the power alley of what our supply network can deliver. And by, by making appropriate selections on new business, we can then turn around and have better strategic supply relationships. On the flip side, coming into the business that are, that are just mutually beneficial everywhere. Does that make sense? Yep. And so you know, our, our, our way of, of thinking about, you know, the resources needed to deliver to the customer, they tied all the five key battles really. And then management teams go out and.

[Chris]

Act on that and the five key battles. Just to confirm this is something that y' all just saw patterns, went into a, maybe an off site or it was done over a while and said, we're gonna, we gotta get this into messaging that we can use over and over and over.

[Wiley Corinne]

So. And you know, I, I can't give enough credit to my dad for getting me to where I am, but he always was like, you need to write things down. You're not good enough just to spit it out. And so he start writing this down. And when we started to think about cpc, I collected everybody's notes, cocktail napkins, random emails, all this stuff into the different examples of, of where we saw successes. And then it was pretty dark. It's like, okay, let's talk about where we've gotten our butts kicked, right? And those are painful, but probably more valuable. And we collected all this data, all this data on our successes and our failures. And when you really stacked it up, you just would see the patterns, right? You would see. We had an investment in C3 Capital in a fast food franchise that was not in the fast food business. They were in the people development business. KBP Foods. Just one of the most incredible HR stories you'll ever be around. And they didn't, they didn't sell chicken or tacos. They sell an employee experience that delivers every day for that employee. And oh, by the way, they just happen to make chicken or make tacos and they go to work and it's an unbelievable story. It's a business that you'd like to own forever. It was in one of our funds and it needed to be sold per what we had agreed to with our owners. But yeah, that's a little on that.

[Chris]

Okay, two things. You can either pick one of the two or you can explain both. You did mention we do our board meetings different. Yeah, to some board meetings can just be three hours of just staring at the ceiling. What do you do differently that makes them great? And then I was reading ahead of here and you have 14 companies. You do a CEO summit. I don't know if that's every year.

[Wiley Corinne]

It's not every year. Our CEO summit is designed to A, bring everybody together because there's just a lot of value in that. But B, gets you thinking about your business, asking the hard questions, but also surfacing wins and losses that others have had in the 5kbs that might be able to help you. And we don't do it every year. We typically bring in a resource. I'm a huge fan of the Harvard Business School and we brought in a professor, we've brought in speakers of different types to talk with management. All of our teams, we're thinking about redesigning it a little bit more on topic. Right. Versus more generic. And so it may look a little different in the future. Yeah, but we do it periodically. We think every year is a lot. The board meeting topic, it's a great one. We think it is that results are important. Right. And accountability is important. But we also think it's hard to have your mind in the same room at the same time. Think in terms of looking in the windshield, but also looking in the rearview mirror. So in general, our board meetings are structured as a virtual session, usually a day or two before the board meeting, where the different area leaders within the businesses talk about their results kind of year to date or per that period, and then headwinds or tailwinds to achieving their plan. It's a wonderful opportunity for the non CEO to have the microphone and talk about what's going on in your part of the business. Get accolade, get a little heat, like it's okay. That's part of maturing professionally is to get that microphone. And it's an important facet of our board process. Basically talk about how the business is doing from a results perspective. And then one or two days later the board meets typically with the CEO and maybe one or two other members of management. Sometimes that other member of management is on a rotating basis. Sometimes they join for different parts of the meeting. But this is an opportunity to where the CEO has this kind of surrounding of brain power next to them that is going to help them attack certain areas in the five key battles. Right. And so that second day is in person and it is thematic in nature. So the first day, sorry, the first board meeting of the year, which is a little backward, but it's in the middle of the year, it's in July, and we have a decent look of where the business is going to end up for the year, let's say a range of outcomes. And so we understand kind of what we're starting with from a resource and investment perspective. We do a pretty big strategic diagnosis and understand where we are in the 5kbs and where there are opportunities to invest. We're not asking for the plan yet, we're asking for what do we need and what do we want to invest into. Right. And coming out of that meeting, hopefully we're not like deeply course correcting on strategy, but sometimes you are right, you're affirming your strategy and you're saying, okay, we're going to invest this resource into that initiative or engagement next year or in the years to come in the fall. Board meeting two. Again, first day, how are we doing? And second day is what's the plan for next year?

[Chris]

Yeah.

[Wiley Corinne]

Let's take that strategy affirmation that we put in place at board meeting one, and let's talk about what your PD matrix looks like, what your execution framework looks like next year, as to what we want to get done strategically. That's going to leave us in a great place at the end of that year. And we do have a virtual budget meeting in the end of the year virtually. But board meeting two is in the later fall, lays out the plan. Each of the team members are talking about how they can contribute into the plan and then swing back to the beginning of the calendar year. Let's call it February ish time zone or timeframe. And we're talking about people, we're talking about results, and we're talking about all things comp and making sure that our team is in a great place and what do we need to invest there? So there's kind of a. It's a three pronged year, four board meetings where you just talk about the results. You end up talking about the same things and the same initiatives. We find it can get stale and things don't get done. We like that theme and moving and having a rhythm. And so this is the first year we've actually nudged the businesses all into that same theme.

[Chris]

Really?

[Wiley Corinne]

So everybody's on the same theme. Yeah.

[Chris]

All right. We're going to end on one theme.

[Wiley Corinne]

Sure.

[Chris]

You own 14 different companies. If you're a business owner and you're being told that you're not using AI, you're falling behind as a reality.

[Wiley Corinne]

Yeah.

[Chris]

And we don't have to talk about how it's being used and. But maybe more just paint a picture. As somebody that really owns 14 businesses, what is the reality of what you read in the paper versus what's going on? Is AI infiltrated every company and margins are better than they've ever been. Are there businesses that you have that haven't even touched AI yet? Like, what is the general. I just think what we read is very different from where we're at in most companies.

[Wiley Corinne]

I agree. I would. So our businesses had the challenge this year of just running five experiments. I don't care what experiment it was. It could be booking airline tickets. It doesn't matter. Just let's do some experiments. And I think culturally that has really helped get over some fears. Yeah. And it's, it's not likely to replace and it doesn't create the ability necessarily to shrink your employee footprint from 100 to 80.

[Chris]

Yeah.

[Wiley Corinne]

It may let you grow 10% on the same 100 people. So it will, it will help and support growth in a really great way. But I think if you run experiments and I think what's happening now is businesses are learning how to run experiments and play with it and it soothes the fears a little bit.

[Chris]

Interesting.

[Wiley Corinne]

Big businesses are certainly better at using it than small examples of how it's being used. We are trying to augment the design process at Imperial. So if you think about the number of touches between a design representative and a sales rep to get the Shady Oaks hat created. Right.

[Chris]

Yeah.

[Wiley Corinne]

There's like 10 or 12 touches on average and we can use AI to reduce that. We're not getting rid of the sales representative. Yeah, that's not happening.

[Chris]

They're just gonna be able to sell more.

[Wiley Corinne]

They're, they're. Well, I'm talk, Sorry, I'm talking about the design representative. We're not, we're not, we're, that's not going to replace a design representative. It's going to help make them more accurate and please the customer. Because speed is real in that business. Right. There's a ton of opportunities for it, but it requires experimentation. So what I think you read in the papers now is big businesses have figured out how they're going to use it. Right. And it is going to augment profit because generally you can hold fixed costs the same and you can layer on margin in the smaller end of the market where our businesses generally are. We're having a processing journey right now and it's turning on a lot of light bulbs. I see CPC in the future having a distinct AI capability like as a dream. Right. No plans tomorrow, but I'd love to have somebody, an internal resource that when that CEO comes to us, comes to us and says, I gotta admit I don't know how to use AI, it's perfectly okay and it's most of them and our chief Information officer can help them deeply right now. But what's going on in the papers is the, these earth shattering breakthroughs. Right. But in small businesses right now you're seeing a lot of experimentation. You're, you're doing it with things that may move the needle in terms of growth but aren't going to replace the design representative. They're not going to, they're not going to close the books for you right. AI is 100% only as good as the prompt that you put into it. So it's a lot of work to get it to work well. And I would just encourage everybody to play with it. It's going to leave you behind if you don't play with it. But it's not something to be scared of. It just really isn't.

[Chris]

All right, my final question. You came in in 2010 with what appears, maybe looking back, it was a little more thought through than it was, or maybe it was just a plan. If we sat back here and it's 2025, so you've been doing it 15 years, 2040, and we were sitting here doing an NPS on Wiley. What will have happened over the next 15 years? Because you run a unique business on behalf of your family and other partners. You have a legacy of your father that's deeply embedded.

[Wiley Corinne]

Yeah.

[Chris]

You have a unique capital structure. You have all these kind of unique things that make up Wiley. And maybe you've been asked this, maybe you haven't. How would you know that?

[Wiley Corinne]

You.

[Chris]

You did well 15 years from now.

[Wiley Corinne]

Well, you know, personally, I want to be the best husband, dad and brother and son that I possibly can be.

[Chris]

Okay.

[Wiley Corinne]

Okay. And that's super important to me.

[Chris]

Okay.

[Wiley Corinne]

And there's a lot of ways to do that, but it requires engagement and being present in all facets. So you got to find capacity. Right. And. And I have a set of support in that part of my life that is unparalleled. I'm the luckiest person in the history of the world in that regard. Professionally. I would say that in 2040, I'd love to have across all the businesses, across 10,000 employees, where we're crushing the five key battles. And we have a lot of confidence in our ability to bring in better and better and better talent across the businesses. If you do it well, the financials will take care of themselves. So the shareholders of CPC and Carancos will be happy. And more importantly, in 2040, the model won't be new anymore. More people are going to look like this, but we will have an engine that can find the next great business to buy. And that's what we want to create. We want to create something that can keep growing and where it's like, I'm not going to sell to a strategic and I'm not going to sell the private equity. Who's going to flip it? We're buying businesses to keep them. Right. Go back to the original statement. Have you ever washed a rental car? Right.

[Chris]

I think that's the key line.

[Wiley Corinne]

It is and it's so true because everybody gets it right. And it's like we want to create these environments where teams can go out and pursue market share and pursue technology investment and pursue customer satisfaction in this really, really like fundamentally sound and long term way. And the only way you can do it is if you really plan to own the business forever. You can't put lipstick on a pig with poor customer satisfaction. Sometimes it takes the long route, but you know, it's a great cash flowing business. In that'd be 15 years. Hopefully in 15 years we have a team at the Holdco that can take it another hundred years. Right. And it's, that's, you know, for me that's, that's the signal of success.

[Chris]

Wiley, I've learned a lot from you. I don't know if I'll ever have a business to sell you one day, but I hope maybe I'll have an introduction to make to you. Think about it. Great. And I really appreciate it, Chris.

[Wiley Corinne]

Thank you, man. Appreciate it, appreciate it.