E21: Why Local Politics Matter for Your Business Growth | Mont McClendon
As a business owner, do you know how local politics shape your bottom line?
In this episode, learn why understanding policy, advocacy, and tax incentives is essential to growing and protecting your business.
We’ll also dive into how delegating key tasks to the right people can free you up to focus on high-impact growth areas, and why investing in your community can have long-term payoffs for your business. Join us as we explore all the ways local governance and smart strategy can work in your favor!
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Kellen Ketchersid
Kellen is a co-founder of Stag Business Coaching, business strategist, and a systems thinker. He leverages his extensive experience in biotech and consulting to empower entrepreneurs to navigate complex challenges with strategic growth solutions.
Albert Gillispie
Albert is a serial entrepreneur, business efficiency expert and co-founder of Stag Business Coaching who has founded several multimillion-dollar companies. With expertise in optimizing operations and innovative systems, he mentors business leaders who want to unlock their business’s full potential.
Mont McClendon is an AV-rated lawyer and a Life Fellow in the Texas Bar Foundation with an extensive background in real estate and business litigation and transactions. He received a juris doctorate from the University of Texas School of Law in 1996, and practiced law alongside his father, Jack McClendon, in the McClendon Law Firm for 20 years. He also is an active member within the Lubbock community, having served on numerous volunteer boards. He runs marathons from time to time, but is not as fast as Josh Leyva.
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EPISODE 21 TRANSCRIPTION
How Politics Can Impact Your Business
[00:00:00] Albert Gillispie: As a business owner, do politics matter? Should you care? Should you be involved? Today's guest would argue that you should. We go over practical pieces of advice on what you can do as a business owner and business leader to get involved in your local politics to help grow your business, reduce liability, prevent issues, and shape the future of your community and business. I think you'll get a lot out of it. He's a brilliant guy and fascinating to listen to. Mont McClendon, the CEO of McDougal Companies. Welcome to the Business Growth Masterclass, where business growth is made simple. Listen as we discuss best practices to streamline your operations, increase your profits, and ultimately create healthier, more stable, and more valuable companies. Here we go.
[00:01:00] Albert Gillispie: Welcome to the podcast, the COO and General Counsel for the McDougal Companies, the Principal of Title One, and Partner at the McClendon Law Firm, Mr. Mont McClendon.
[00:01:18] Mont McClendon: If you said Mr. McClendon, I would have referred you to my father.
[00:01:22] Albert Gillispie: Montgomery, welcome to the podcast, man.
[00:01:24] Mont McClendon: Thanks for having me.
[00:01:25] Albert Gillispie: I'm glad to be here. I've been excited about this one. I affectionately refer to you as the most interesting man.
[00:01:32] Mont McClendon: Less facial hair, sure.
[00:01:34] Albert Gillispie: Less facial hair for sure. But you're an onion with so many layers. One of them—Mr. Marathon—tell me about that. For our listeners, Mont is running a marathon in all 50 states. What state are you on? How many more do you have left?
Pursuing a Marathon in Every State
[00:01:59] Mont McClendon: So I have run a marathon in 48 states. I've run more than 48 marathons because I've repeated Chicago; Chicago is awesome. I paused because there's a club you can join, the 50 States Marathon Club, and as I got close to the end, I decided it was time to pay attention to it. Recently, I learned that the marathon I ran in Rhode Island doesn't count because it was marked short. So, I had scheduled my last two marathons, but I’ll be squeezing a marathon in Rhode Island back into that schedule before I finish in January of next year.
[00:02:35] Albert Gillispie: Okay, and the finale is Hawaii. I've always had so many questions. Were you a runner growing up? Where did this come from?
[00:02:45] Mont McClendon: No, like most people, running was the punishment we did in other sports. The longest runs in my athletic career, which ended in high school, were training runs before and after wrestling practice—getting out there and doing whatever miles they required. So, no, it wasn’t a thing. I’d always done gym work, especially after starting my career, trying to keep my body and mind healthy. I spent a lot of years going to the gym and doing all that, had some friends who had run long distances, and my girlfriend (now my wife) had run a marathon. I had a buddy who had just finished a marathon, and I was 37. He said, "You should get out and run," and I thought, "Well, that's a terrible thing to do." So, I went out and ran a mile around Higginbotham Park here in Lubbock, and I thought I was going to die. It was terrible.
[00:03:42] Albert Gillispie: When was this?
From Reluctant Runner to Marathon Maniac
[00:03:43] Mont McClendon: This was in 2009. And that made me mad because I thought I was in shape, but I wasn’t in endurance shape. So that turned into, "Let's train for a 5K," then a 10K, then a half, and then my personality took over. Now, 49 marathons later, I'm closing in on finishing up my states.
[00:04:10] Albert Gillispie: Okay. When did you start? Cause this always blows my mind. When did you start the 50-state journey? Cause it hasn't been that long.
[00:04:17] Mont McClendon: No, no. So I ran my first marathon in Austin in 2010, and for several years, it was running with a group of folks here in town—a really good runners' community in West Texas. Running with people from a wide variety of backgrounds, and some of them were really fast, I thought, "Well, I should try to get fast. Let’s do the Boston thing or whatever." But I’m not built for that. The skinny guy in wind shorts up front is the one built for that. But I did find out that I had durability and endurance. I spent five years running one or two a year, trying to run them quickly. My fastest marathon was my third marathon, and it's been downhill ever since.
[00:05:00] Mont McClendon: But about five or six years into that, around 2016, I read an article in a journal about how if you're not trying to win or run really fast, there's really no physical limitation on needing to only run one or two a year. If you've built up the endurance and durability, you could do more than that. So I thought, "Okay, let’s do more than that. I'll run three in three months, and if I'm going to do that, I might as well travel around." So I ran three in three months, got to join Marathon Maniacs, which is the club for people who run marathons a lot.
[00:05:37] Albert Gillispie: Who are maniacs.
[00:05:38] Mont McClendon: Yeah, and, well, a lot of very experienced marathoners. Then I got my membership, and it was a bronze membership, and I thought, "Bronze? What is this? Bronze?" I did some research and figured out that I could run six in six months and be a silver member, or I could run nine in a year and be an Iridium member. And Iridium sounded way cooler than bronze. So I ran nine marathons in a year shortly after that, and since then, it's been anywhere from five to nine a year.
Tips on Building Endurance and Avoiding Injury
[00:06:09] Mont McClendon: Okay. With the exception of the almost two years I took off for a non-running leg-related injury.
[00:06:17] Albert Gillispie: Tearing the ACL, skiing like a 16-year-old. You might as well. I mean, you got to use your body, right? Now, before we get off the running thing, how do you build durability? That’s one thing—I’ve run one marathon. It was like couch to marathon in five months, which is dumb, but it’s hard. It’s hard on your body. So, how do you build in that durability? I always hear people that run forever, their knees are terrible. How do you avoid that?
[00:06:51] Mont McClendon: Well, the easy answer to that is to avoid the mistake most people make as they get into it. Most people’s experience of running is, you know, recess or the sort of free running you do as a child or the purpose-driven running you do in an athletic career. You’re running for a different purpose in that regard. Most people think, "Well, if I’m running, I need to be panting, I need my heart pounding." But, it’s just physics. To double the speed, you square the energy, and everything hits harder the faster you go.
[00:07:31] Albert Gillispie: Right.
[00:07:32] Mont McClendon: So, if your intention is not to score the touchdown, win Red Rover, or whatever, but to run a long distance, you probably need to slow down. If you can’t hold a conversation while you’re running, you’re running too fast for the majority of your miles. About 70 percent of your running should be below 70 percent of your max heart rate. Lots of ways to square that, but the real answer to building endurance is to do it a lot. The way you build the durability to do it a lot is to not tear yourself up doing it. So, slow down. You’re not going to win. The skinny guy in wind shorts is going to win.
[00:08:18] Albert Gillispie: I know. I know. It’s some of the vanity—times and things like that. It’s 26.2 miles. It’s an inherent challenge, right?
[00:08:29] Mont McClendon: Right. So let that be the challenge. And then get to a place where you can, if you enjoy it, if there are ancillary benefits to doing it, it doesn't have to be running, it could be cycling, it could be walking, it could be whatever it is. If there are ancillary benefits to doing it, you got to commit to doing it in a way that you’re going to get the most of those benefits.
[00:08:49] Mont McClendon: And that’s by doing it and continuing to do it. But, you know, if there’s an element of it, of wanting to face a challenge—and 26.2 miles is a challenge—let that be the challenge. Right. Fine. And you can beat your last time, or you can not beat your last time. But, you know, the thing about a marathon in particular is it’s so dependent on the day. And most people who do the couch-to-5K to half-marathon to marathon thing put so much on the day, not realizing that it’s a random day on the calendar, usually in the fall. And, you know, maybe they’ve got a cold. Maybe it’s cold. Maybe it’s really hot. Maybe you’re traveling and you didn’t eat the things you normally eat.
[00:09:26] Mont McClendon: Oh yeah. Oh yeah. There’s so many variables. So if you’re going to pin it all on one day, there’s lots of ways to get tripped up. And also it’s really hard. I’ve never been to the end of a marathon and thought, "That was a completely sensible thing to do," but I’ve also never finished one and thought, "That’s my last one."
Choosing the Right College and Career Path
[00:09:53] Albert Gillispie: All right. Marathon maniac. New title. Okay. You mentioned how your personality took over, and you do have a unique personality. Maybe, maybe, maybe some personality flaws mixed in there.
[00:10:09] Mont McClendon: Charitable. I appreciate that.
[00:10:10] Albert Gillispie: And, and one of them is your Alma mater, UT.
[00:10:16] Mont McClendon: Yes.
[00:10:17] Albert Gillispie: That’s, it's a part of your personality.
[00:10:19] Mont McClendon: I am a Longhorn. I can’t help it.
[00:10:22] Albert Gillispie: Okay, so what made you choose UT? What was that story? Did your entire family go there? What's the story there? Because you're from Lubbock.
[00:10:31] Mont McClendon: Yeah, I'm from, born and raised in Lubbock, West Texas kid. My parents weren't, but I am. So a couple of ways to answer that. One, the easy answer is if I count up the degrees from the University of Texas in my immediate family going up two generations and down one, easily surpass a dozen. Right. So a lot of us have gone. I was the youngest of five children in my family. Just in my sibling group, I think we have six degrees from the University of Texas. I was the youngest of five, four of us went to UT.
[00:11:03] Mont McClendon: The other way to say it was, I think my parents, because they weren't from West Texas and had both gone to UT—my dad, undergrad and law school; my mom, undergrad and part of her master's program—they came from a different part of the state. They were mindful of the benefits of seeing, being exposed, and mingling with people from all over the state. And I think they thought the chances of any of us ending up in Lubbock were increased if we left Lubbock for a while. And they were right, right.
[00:11:48] Mont McClendon: So my brother and I both ended up back in Lubbock very happily. Both of us returned really happily to be here. And I think part of the joy of being back was having been away and experienced something different. I guess the last way to answer that question is that in a lot of ways, Austin, when I went and UT in particular, when I went, is very analogous to what Texas Tech is now.
[00:12:14] Mont McClendon: Right, so the entrance requirements were roughly similar back then to what it is to get into Tech now. The experience you're going to have as a student, as far as what your peer group is like, was very similar. I mean, the plurality of kids at Texas Tech now are not West Texas kids. You're not going there to meet the nicest person from Kermit or Dalhart. You're likely to have a roommate from the Metroplex, Houston, San Antonio, or wherever. You're going to meet kids from all over the state at Texas Tech, the way UT was back in the early nineties. It was a great way to meet kids from all over.
[00:12:57] Mont McClendon: And then, ultimately, regardless of how you might feel about our sports teams or fan base, it's a good education. I mean, it's a really good school, particularly in specific programs. I mentioned I was the youngest of four through that program, and they taught me all the tricks of the trade to get through. I graduated undergrad in three years, wasn't ready to come home, so I stayed in Austin for law school.
[00:13:22] Albert Gillispie: Law school, law school. That’s where I was getting—I was like, whoa. And so your undergrad was?
[00:13:28] Mont McClendon: I got a degree in government with a minor in economics.
[00:13:32] Albert Gillispie: Okay, in three years, and then straight into UT law school?
[00:13:38] Mont McClendon: Yes.
[00:13:38] Albert Gillispie: So, where did you start? Beginning of the law career, what’d you do after that?
[00:13:45] Mont McClendon: Well, I was always someone who did better if I was busy. So, I worked during undergrad at several jobs. For a while, I thought elected leadership was really appealing. I worked as a Senate page for a while, to see how the sausage was made. I worked in the home office of a U.S. Senator in Austin doing constituent services, enough exposure to realize I loved the policy side but didn’t find the campaigning and such very appealing.
The Start of a Career in Law and Business
[00:14:26] Mont McClendon: It just doesn't appeal to me. I like the wonky stuff. I'm not a great shaker of hands, I suppose. Law school was always kind of in the cards for me. They weren’t really hiring political scientists when I was getting out, and it was the early nineties, not the greatest economy. I finished undergraduate relatively quickly, always expecting to get a graduate degree in law. As the son of a lawyer, I don't know that I really thought it through beyond that. I liked what he did. I liked the concept of practicing law, showing up and trying cases, those sorts of things.
[00:15:09] Mont McClendon: My first jobs in law were clerking for a firm that did bad faith insurance defense. I had no intentions of coming back to Lubbock. I was working toward a job in the appellate division of one of the prosecutorial offices in Austin. Then Dad called. My father, who practiced law here in Lubbock since 1965, called and said he needed some help at home with the business. I thought, how do you pass up a chance to practice law with your dad? So that’s what brought me back to Lubbock.
[00:15:42] Albert Gillispie: That’s what brought you back. I knew your brother was at least trained in law, pretty heavily.
[00:15:52] Mont McClendon: My brother is. I’ve got a brother who’s a lawyer, who serves as a state district judge, and a sister who is a lawyer with a career in the public sector. She worked at Health and Human Services after working in the General Counsel's office at Texas Tech, after a brief stint in private practice. She really got to understand the interface of law and healthcare and networks, did some consulting outside of that. The funny thing is that all three of us with law degrees practiced law for a time, but none of us practice law day to day now.
[00:16:28] Albert Gillispie: What a family of high achievers. Geez. Okay, so this is a business podcast, and people might be wondering why we have the lawyer on with the running shoes.
[00:16:45] Albert Gillispie: Yeah. Yep. On the mic. You're also a entrepreneur. And, you know, have started and grown several businesses. And so, so maybe, maybe give a high level view of what is your career look like today? Because you mentioned you're not practicing law day to day. And so what does your day to day look like now?
[00:17:06] Mont McClendon: Yeah. So I'll say that we don't practice law day to day in probably the common conception of what that looks like. I'm not spending my time in a firm consulting with clients. My career in the law involved practicing with my dad for 20 years. By the time I joined his practice, it had concentrated around business and real estate, transactions, and litigation.
Transition from Practicing Law to Business Leadership
[00:17:29] Mont McClendon: So, you know, dealing with dirt and money, right? Most of our practice was with people in the business space. Although I handled all kinds of things—adoptions, divorces, and some criminal matters when I was asked to. But most of my practice involved business people making meaningful decisions as they interacted with the law, whether it was a transaction or a litigation issue.
[00:18:01] Mont McClendon: I loved that part of the practice because I got to see and get under the hood of many different kinds of businesses. The biggest bulk of my work was real estate-related. My biggest client—never the majority of my time in private practice but still significant—was a local real estate firm here in town. I grew to love and respect them as people.
[00:18:29] Mont McClendon: Eight years ago, they needed another executive in their company. And we mentioned McDougal Companies at the top, so it's no surprise it's them. Delbert, who founded that company, was my dad's client for 50 years.
[00:18:52] Mont McClendon: Mark, who runs that company now, was also a client. When they asked me to come over and join, I thought, why not? It was such a difference going from clients coming to you with a problem or solution they needed to effectuate, to a role where I could ask, “What do you want to do?” It was a really fun and nice change of pace after 20 years practicing law.
[00:19:30] Albert Gillispie: Yeah.
[00:19:31] Mont McClendon: So, I get to bring that experience into what we do as a company. As you mentioned, we have other companies, including a title company. McDougal Companies is fairly diversified in what we're involved in, from hospitality with restaurants and hotels, to almost every category of commercial and residential real estate. We’re involved in some way.
[00:19:59] Mont McClendon: It's still varied, so I never exactly know what problem will show up on my desk on any given day, but I know it’ll be interesting and probably align with the experience I bring to the job. That’s been fun.
Local Politics and Why It Matters for Business Owners
[00:20:12] Albert Gillispie: Your political interest has been fascinating to watch, especially at the local level, just helping guide a lot of future plans and growth for Lubbock. This is one thing that, as a business owner and entrepreneur, I never know what to do with—politics. How much should I care? You know, millennials don’t watch the news. We have Twitter and Facebook, or X, whatever. So, speaking to that for business owners—what role do politics play? Obviously, local versus state versus federal varies, but for the average business owner, should they care, and why?
[00:21:14] Mont McClendon: Yes, they should. You gave me the onion analogy, so let’s give you some layers. There are lots of different ways to process that question. At one level, you're familiar with the term working in your business versus working on your business. I would say working in your community versus working on your community, right?
[00:21:20] Mont McClendon: So there’s an element of the answer that’s about governance and policy—what governmental entities that affect your life are doing to impact it. Politics can be such a loaded term, so let's think in terms of governance. I'll just tell you from the top—I'm a small “L” libertarian. Having worked in government, there are so many things I think government ought not do.
[00:22:04] Mont McClendon: Right. But as a smaller libertarian, I understand that, one, that’s informed by the fact that I’m a Texan and, not only that, but a West Texan, right? We can get a lot done on our own out here, and Texas is going to be fine without a lot of layers of government over the top of that. Having traveled around, you know, 48 states, that’s not true everywhere. So there’s a bit of privilege in saying that, but where the ideology of government leaning out as much as possible starts to break down is in morality and municipal issues, right?
[00:22:57] Mont McClendon: You can say you believe government shouldn’t do much, but at some point, that starts to get inconsistent with your moral code regarding what people do to each other or what you do to your body, those sorts of things. And, you know, at the end of the day, on municipal issues, the toilets need to flush, they need to go somewhere, the tap needs to turn on, you need to have roads to just get around, the economy needs a certain amount of infrastructure, and the community needs a certain amount of infrastructure. So you’re going to have to solve those issues, and the way we solve that is municipal government.
[00:23:18] Mont McClendon: So, do you need to pay attention as a business person to what’s going on in policy and governance? Absolutely. Right. I mean, think about it, just locally, in your business. You’re a builder at every level. Tariffs at a federal level can affect your input costs. At a state level, what codes are adopted and what they mean, or what requirements are placed around how you organize and operate your business, or what you pay your staff, are all decisions being made at the state level.
[00:23:41] Mont McClendon: At a local level, you’re going to have to interface with the local government regarding basic building regulations. You’re going to have to pull a permit, get inspections, and meet certain requirements about where you can build and whether you can build. Every layer of regulation is the effectuation of a policy decision at some point.
[00:24:18] Mont McClendon: So what I would say is, as a business person, you need to pay attention to where you’re touching up against governance, right? Because your involvement, your knowledge of that, can keep you from making a bad decision that costs you and might eat all your margin.
[00:24:36] Albert Gillispie: Right?
[00:24:37] Mont McClendon: You know, staying between the lines might be the easiest way, but there might be times when the lines are just in the wrong place. There's a policy decision being effectuated in a particular way that doesn’t make sense for how you think the world ought to be. And you should have the ability to go talk that through with someone.
[00:24:57] Albert Gillispie: Who can effectively make a change.
[00:25:00] Mont McClendon: Yeah, who can make a change. And so you have to be able to advocate for your business at every level. That's when advocacy starts to overlap with politics, right? You can pick an R or D, or you can pick a liberal or conservative stance. But understanding your ideology, the ideology of the person you're talking to, and just the basic job of that person can make the difference between being a helpful voice in advocacy or just a loud clanging gong.
[00:25:37] Albert Gillispie: Yep. There’s definitely, whether you’re going to a PNZ or a city council meeting, people there just to hear their own voice and clang a gong, you know, demand something without understanding the bigger picture.
[00:25:54] Mont McClendon: Or even understanding the decision criteria of the people they’re advocating to. Those of us who spend a lot of time at those hearings, city council, PNZ, ZBA, UDHPC, and the alphabet soup of local governments, have an internal bingo card of bad arguments. I just wait for someone to say, "It’s for the kids," because I know I’ve just covered my center square on the bingo card.
Understanding Policy to Advocate for Your Industry
[00:26:19] Albert Gillispie: The advocacy… I feel like a good understanding of that isn’t taught in school. Meaning, you know, whatever professional organization, I’ll take the apartment association as an example. There’s a lot of policy proposed where no one can know everything.
[00:26:48] Albert Gillispie: No one can know how every industry is going to be affected by a piece of policy. And I think advocacy is about developing relationships with those pushing forward policy, so when a proposed piece of legislation is introduced, you can call and say, "Hey, this is great for us. This is how it's going to help," or "Hey, that's really bad for us." One of the roles of government is to help provide affordable housing, in some form or encourage it. And this is why a new policy might hurt that. Advocacy means developing an understanding, a respect, a relationship with policymakers so you can defend your industry from things that might hurt your ability to deliver goods or services to the public.
[00:27:56] Mont McClendon: Right. The least compelling argument one can make is "because I said so."
[00:28:02] Albert Gillispie: My mom told me that all the time.
[00:28:04] Mont McClendon: And not far behind that is, "because it's gonna cost me money." If your audience perceives you as doing just fine, even if it’s not their place to make that judgment, it's not compelling. So, the toolkit of advocating for your position really needs to include an understanding of the ramifications of a policy proposal or the application of an existing policy and what it means—what are the knock-on effects of what you're trying to do? So many policy proposals we see, and I’ll use the multifamily industry as an example, are trying to solve for an obvious problem. We have a supply problem, right?
[00:28:49] Albert Gillispie: And for the listeners, if it’s not common knowledge, the more supply of multifamily or housing, the bigger the supply, the cheaper it is.
[00:29:01] Mont McClendon: Yeah, I’m not going to shock any of your listeners by saying I’m a market capitalist. But let’s use Lubbock as an example, because Lubbock reflects the state as a whole, the nation, and, by extension, most developed economies. We have had policies intended to preserve, protect, or sustain particular paradigms about how we live, which have meant you can build less housing.
[00:29:32] Albert Gillispie: Right.
[00:29:33] Mont McClendon: If we can’t build in certain areas due to factors like blocking a view or failing to meet some transportation criteria, then we end up with less housing. Lubbock, largely due to macroeconomic conditions, has improved its regulatory environment. However, I think folks in HomeBuilders might still want additional changes, and I can’t say they’re wrong. According to the city’s projections on organic growth—just household formation—we’re underbuilt by about 2,000 houses over the last three years. So the median home price in Lubbock has gone up more than the average annual salary of a person living and working here in the same period. The increase in the cost of buying an average house has outpaced what most people earn in a year. That’s a direct consequence of supply and demand.
[00:30:36] Mont McClendon: So, back to where we started, there are many policy considerations related to housing or construction or various sectors trying to solve for a market condition that’s often created by an outdated regulatory regime or one that’s no longer serving its purpose.
[00:31:02] Mont McClendon: Right. Or just an internal merit, a model of the world among policymakers that hasn’t updated to the current circumstances, right? I think everyone listening understands that even if you can’t list the generational aspects of our culture right now, there are some clear differences.
[00:31:28] Albert Gillispie: Right? I even think about development codes, like from the 60s—the number of parking spaces, what setbacks were, and what was in vogue then.
[00:31:42] Mont McClendon: The definition of a family.
[00:31:44] Albert Gillispie: Yeah, it’s changed. So policies need to evolve with current demands. Policies should allow for what people want to a degree. Okay, I want to pivot a little. Maybe it’s no surprise to listeners that I believe the IRS tax code was written to encourage the private sector to provide goods and services for the public. A large portion of it is written as the government saying, “We aren’t equipped to do this effectively. Private sector, we want you to provide housing, healthcare, energy, or other services in specific ways to serve the population,” and it’s incentivized with tax benefits.
[00:32:50] Mont McClendon: Yeah, the tax code at a high level is really about carrots and sticks.
[00:32:57] Albert Gillispie: Yep. You know, what kind of loyalty do you foster with rewards rather than penalties? And how deep is that relationship to get through challenges? I use that illustration, and I also think of the Carnegies and Rockefellers from the turn of the century. They really leveraged government incentives, whether with the railroad or other incentives, to build their organizations. For business owners today, whether it’s the tax code, a city plan, or a government plan, how have you been able to use that in your career?
How Businesses Can Leverage Local Support Programs
[00:33:52] Albert Gillispie: And how would a business owner go about figuring out how to incorporate that with their business?
[00:33:59] Mont McClendon: Yeah. So let’s tie that back to your last question about why you should pay attention and be involved. There's a theme in this podcast: forces at work in the world will affect your business whether you pay attention to them or not. Capital markets are going to value your business in specific ways, like in your conversation with Tanner Noble. There are structures in the law that deal with passing assets when someone dies, as you discussed with Austin Ramsey. These decisions impact your business, regardless of your awareness. So, how do you stay within the lines while operating your business? The easy ways are making decisions about limiting liability—whether by corporate structure, insurance, staying in or out of particular markets or activities. All these decisions relate to understanding where governance impacts your business. But how do you take it further? How do you find that “power up” button? Some of it is resources. And I’m assuming anyone doing well enough to download a podcast can do some basic internet research. Local resources like the Small Business Development Center, Chamber of Commerce, Business Development Office of the City, and LEDA (Lubbock Economic Development Alliance) all focus on helping businesses in West Texas. They’re happy to support you, whether or not the resources are immediately applicable. Depending on your business type, they may or may not apply. But it’s worth having a conversation if you’re considering your next step, especially if you’re looking to punch through your current status quo, grow, or take things in another direction.
[00:36:27] Mont McClendon: There are generally opportunities within the entities I just mentioned to help you think through and maybe help you get through that next step because, you know, a rising tide raises all boats. In West Texas, we're a community that will, generally speaking, reach out to help. We want you to meet certain criteria and follow the rules, right? But we don't mind raising the barn together.
So, there are incentive programs, depending on what you're doing. Grant programs through Lubbock, LEDA, and Market Lubbock; access to affordable credit or capital through the SBA and the Small Business Development Center. Even if it just comes down to marketing, there are arms of the city, county government, and the chamber that can’t wait to be a megaphone for you.
The difference between working in your business and working on your business is like working in your community versus on your community. Be involved in those things, have those conversations, and then you can make an informed decision on whether or not that’s something you want to pursue. There are incentive programs that you can take a good, hard look at and say, “No, thank you,” and that’s a reasonable decision sometimes. But it’s a different mindset than saying no because you never knew.
[00:38:09] Albert Gillispie: Yes, right. Yeah, there are so many business owners I’ve known that turn their nose up at getting involved in the chamber or things like that, which are kind of pseudo local governance bodies. But let’s pick on the chamber a bit.
[00:38:32] Mont McClendon: They can take it.
[00:38:32] Albert Gillispie: We have a great chamber. It’s won multiple national awards; they do a really good job of connecting you to the business community. Being in West Texas, it’s like a big small town. You go to enough of those events, and you see the same groups of people. Once you get to know them, relationships drive everything.
[00:39:03] Albert Gillispie: And we talked about that, whether it's policy or whatever, that some of those government or pseudo-government agencies can help facilitate that. And that's low-hanging fruit, and it's pretty cheap to get involved in.
[00:39:18] Mont McClendon: Well, even if it's not the chamber, maybe it's a professional association or an industry group. It's something relevant to others in your space, facing or having faced the same problems or presenting enough critical mass for vendors to give you specialized time that you’re not going to get otherwise.
[00:39:44] Albert Gillispie: Yeah.
[00:39:45] Mont McClendon: There may be somebody out there with the solution to your problem that you'll meet at that kind of function. Otherwise, you're just waiting for them to come to your door or for their info to make it through your filter. But if you get out there and engage, have those conversations, and at least understand what people are paying attention to, you've already cleared the first hurdle on being involved in the governance of your business.
[00:40:16] Albert Gillispie: Right?
[00:40:17] Albert Gillispie: So much of that is the continuous, constant, never-ending improvement mindset. Business owners with that mindset, who keep going, eventually win. And yeah, it's no secret that you and I are pretty heavily involved in the apartment association, which is for rental housing.
[00:40:41] Mont McClendon: It was a secret for me, but you just outed me.
[00:40:43] Albert Gillispie: Sorry, outed you.
[00:40:44] Mont McClendon: It's all right.
[00:40:44] Albert Gillispie: You know, which is a professional organization for rental housing in Lubbock and the surrounding area. And you're right. When we can get vendors there who know what we do and what we're trying to do, all of a sudden, they're way more valuable to all of us because they can operate within a certain understanding that limits liability for us and makes them more valuable. They kind of understand our operations and—
[00:41:17] Mont McClendon: Well, and you know, your time is not infinite, right? So there is value in understanding where people's focus and attention is when they're working on a similar problem set or issue.
[00:41:31] Albert Gillispie: Good point.
[00:41:32] Mont McClendon: Even if the most valuable thing you get from paying attention to what they're focused on is learning that they're making a mistake, you know, comparative advantage. But still, if everyone's afraid of a monster in the corner and you don't know there's a corner, and you don't know about the monster, it doesn't mean you're in any less danger.
[00:41:53] Albert Gillispie: Right?
[00:41:54] Mont McClendon: Right. So it’s useful, signaling.
Benefits of Downtown Development for Business Growth
[00:41:58] Albert Gillispie: Would your practical advice for business owners on how the political sphere and local government affect their business be to first start with a professional organization?
[00:42:16] Mont McClendon: I think that is a very good place to start to understand whether and how it affects your business because hopefully they're paying attention. In my experience with the professional associations in town—and I'm trying to think, I can think of a dozen that I’ve been around through my career—they’re paying attention. So I think it’s a great way to get that sort of initial introduction to what's going on at City Hall. It's very hard to make decisions about local elected races based on door hangers and door knockers and ads. This is just not good information. In a community like West Texas, you can meet the person, have a conversation with that person. If you think that person might be the key to helping you solve a problem where you're rubbing up against local governance, regulation, or whatever, then it's worth having that conversation. Or if you think that person might be awful for your business, it's worth meeting that person.
[00:43:29] Albert Gillispie: Yeah, I mean…
[00:43:31] Mont McClendon: They put their name on the ballot. They should be able to understand your issue.
[00:43:35] Albert Gillispie: Well, that’s one thing that’s been highlighted over the last couple of years. So often, I mean, social media is noise—they’re not reading all of that. So if you can have a face-to-face conversation, obviously being cordial and respectful, but explaining issues to a policymaker when you don't agree is valuable because they gain some understanding. Then, if you're respectful and kind, when a policy comes across their desk, you—
[00:44:11] Mont McClendon: Yeah, so the lawyer's creed says we should disagree without being disagreeable.
[00:44:17] Mont McClendon: That's a hard thing to do, but it's a very valuable skill. And I will say, you know, I've already told you, don't say "because I said so." Don't say "because I said so," you know, then I can't go to Hawaii. I think if you start from a place of, "I am trying, my top concern is taking care of the people who have joined me in this business. I've got promises to keep, and it's important to me to keep those promises. If in the course of doing that, I can better take care of myself, take care of my family, build something of use to the community, solve a problem, grow a business, but I'm having this problem."
[00:45:00] Mont McClendon: If you can come to a local elected official or a decision maker at the city or county, or even state level and say, "This is what I'm up against. Here's what I'm trying to do. This is where I'm hanging up. What can be done?"
[00:45:13] Albert Gillispie: And—
[00:45:14] Mont McClendon: If they say, "Well, the ordinance is written this way," then be willing to say, "What would a better ordinance look like?" If you can supply that answer in some way and back it up with the knock-on effects of that or why it should be a different way and why that would solve the problem for more than just me or just you, then that is more compelling. Right? But—
[00:45:40] Albert Gillispie: Sound like an attorney.
[00:45:41] Mont McClendon: But don't believe for a second that—and you almost got here with the lawyer on the last conversation—when we write wills and business plans, we don't etch them in stone or sign them with blood. Ordinances, laws, all of those things, all of those policy considerations are the same way.
[00:46:03] Mont McClendon: They may be changed, right? Up to and including the United States Constitution. Now, the level and degree of effort required to change things increases as you climb the ladder from city to state to federal. The legislative process is a process designed to say no to a lot of things. But you can change a bad statute, you can change a bad ordinance. You can have a conversation with a person at the city whose job is to effectuate a statute or a policy, an ordinance, and say, "I read this differently. Can we talk about maybe there's another way to interpret this?" And maybe you get done what you need to get done.
[00:47:00] Mont McClendon: But you’ve got to be able to have those conversations. And being able to have those conversations, not as a complete stranger and not as a kook voice on the interweb through social media, is invaluable, right? Because you can change your environment when it comes to where your business is bumping up against governance.
[00:47:14] Albert Gillispie: Yep. And speaking of trying to get things done, what are you working on now? What are you trying to get done? What are you excited about right now?
[00:47:24] Mont McClendon: Well, you know, the bulk of my business is in real estate, and it’s been a challenge in commercial real estate lately; the macroeconomic environment has been a challenge. Mark and I—my business partner—work in existing assets, redevelopment, and greenfield development as well. We would really like to see the city continue to grow. We have a greenfield development in the northwest part of town that I think could be a great thing because it is relatively close to some of the things that make Lubbock, Lubbock.
[00:47:58] Mont McClendon: So, you know, the hospitals, the university, downtown, those sorts of things. I'm a big believer in downtown because I've done the math, right? I can tell you that you're already at a value per acre multiple of 2x or 3x in downtown, and that's with downtown in its current state. And you're welcome to have feelings about downtown in its current state, but if you do, what I think those feelings tell you is that there's room for improvement. If we achieve improvement in an already value-dense environment, we get a return on our investment and returns on our tax base and everything else.
[00:48:36] Mont McClendon: The city has added 90-plus million dollars in permissible and group improvements in downtown in the last half decade, and maybe you feel like you haven't seen that yet. But that's 90 million more dollars on the tax base, right? And that's half of a brand new greenfield neighborhood, right? And no additional roads, no additional sewer, no additional water infrastructure—nothing. So we can build, and I think it's nice to have a center, a beating heart of your community, right? I travel around, go to all these states, and I never think, "Man, I cannot wait to get to state X and visit the suburbs."
[00:49:21] Albert Gillispie: Yes.
[00:49:22] Mont McClendon: I want to go to the traditional, historical center of the reason that community is there, and that very often is downtown. I don't love the idea that we would take the historical sort of center of gravity of our community and neglect it.
[00:49:43] Albert Gillispie: Yeah. Right. And it has been.
[00:49:47] Albert Gillispie: You said something I want to rephrase and see if I understood correctly. So when you talk about downtown and developing downtown, because of the density of the projects you'd develop—basically, you're going vertical more than you would elsewhere—to a degree, you aren't having to add more infrastructure in the same way, whether it be roads, sewer lines, or water lines. Those roads are funded by tax dollars, so if we can develop downtown, the taxes that the city will generate from those developments are a better return on investment than all the infrastructure it would take to continue urban sprawl and growing neighborhoods to the south and southwest. It's kind of low-hanging fruit, right?
[00:50:44] Albert Gillispie: That it's just...
[00:50:48] Mont McClendon: Well, you get a different return on your investment, right? And downtown is not a solution for everyone. There are really wonderful communities and neighborhoods all over our city.
[00:51:00] Albert Gillispie: Right.
[00:51:00] Mont McClendon: But the cheapest infrastructure any city will ever have is the infrastructure they already have.
[00:51:10] Albert Gillispie: Yep.
[00:51:10] Mont McClendon: They don’t have to get right of way. They don’t have to engineer it. They don’t have to design it. They just have to care for it.
[00:51:17] Albert Gillispie: Yep.
[00:51:18] Mont McClendon: And so if you can spur investment near existing infrastructure, the return on that investment to the city’s tax base, their general funds, the things they can spend without considerations for particular buckets—fund accounting like we do in government—then you have more money for policing.
[00:51:42] Mont McClendon: You have more money for community investment. You have more money for new infrastructure on the periphery. If I can get a dollar invested downtown, the likelihood is the margin on that dollar for the community's finances at a government level is much greater than a dollar spent turning a cotton field into a neighborhood.
[00:52:05] Albert Gillispie: That's fascinating and takes time to understand. To tell that story, you can't do it in a 30-second ad.
[00:52:13] Mont McClendon: And I'm happy to turn cotton fields into neighborhoods, don't get me wrong. But it's not one or the other, right? There's a place for both in a growing community. But when you emphasize one over the other, or at the cost of the other, then the return on investment needs to be part of that conversation.
[00:52:36] Albert Gillispie: Yeah. And as a citizen of Lubbock, if I'm thinking about the taxes that I'm paying, maybe those wouldn’t go up to the same degree if we went after some of this low-hanging fruit downtown, where we can generate more tax dollars with less expense. Right. That’s business 101.
[00:52:58] Mont McClendon: It’s just math.
Fire Round
[00:53:00] Albert Gillispie: Just math. Okay, I think it’s time for the fire round.
[00:53:04] Mont McClendon: All right.
[00:53:05] Albert Gillispie: Mont, what’s your favorite movie? I don’t know this. This could go anywhere.
[00:53:11] Mont McClendon: Yeah, this could go anywhere. It’s hard to pick a single favorite, right? But the movie I get something out of every time I rewatch it is Princess Bride. It’s just fantastic. Andre the Giant’s in it—what else could you want?
[00:53:25] Albert Gillispie: That doesn’t surprise me. All right, what’s your favorite book?
[00:53:31] Mont McClendon: Does anyone say anything other than the Bible?
[00:53:35] Albert Gillispie: Other than the Bible. I have to preface that sometimes. So let’s use the same criteria.
[00:53:38] Mont McClendon: The book that I can return to time and time again and get something out of every time is Cat’s Cradle by Kurt Vonnegut.
[00:53:47] Albert Gillispie: What?
[00:53:47] Mont McClendon: Cat’s Cradle by Kurt Vonnegut. It’s not a long book.
[00:53:51] Albert Gillispie: I’ve never read that.
[00:53:52] Mont McClendon: It’s got a lot of layers.
[00:53:54] Albert Gillispie: Okay. What genre? What’s it like?
[00:53:58] Mont McClendon: I mean, it’s Kurt Vonnegut, so it’s arguably got a speculative or science fiction aspect to it. But it was written in the middle of the last century and has a bit of that vibe. Unlike Slaughterhouse-Five, it has less of a post-war feel or the industrial themes of Player Piano.
[00:54:18] Albert Gillispie: What’s it about?
[00:54:32] Mont McClendon: Oh, man, it’s—I mean, don’t give it away. It’s Vonnegut, so it’s mainly the absurdity of the characters and the situations. But the essence of the book is a formulation for the crystalline structure of water, right? So, ice. This eccentric scientist, fascinated by how cannonballs are stacked on courthouse lawns, theorizes that water molecules could be arranged in a way that creates a crystalline structure at room temperature.
[00:55:06] Albert Gillispie: Oh my gosh. Okay.
[00:55:07] Mont McClendon: So what does room-temperature ice mean for the world’s water? If it’s uncontrolled, it could mean all water turns to ice.
[00:55:11] Albert Gillispie: Okay, I asked.
[00:55:12] Mont McClendon: It’s not a long book, and it’s funny in a fatalistic, absurdist way.
[00:55:26] Albert Gillispie: Hilarious. I’ll get a copy.
[00:55:27] Mont McClendon: I’ll get you a copy.
[00:55:30] Albert Gillispie: If you could have lunch with one entrepreneur, dead or alive, who would it be?
[00:55:35] Mont McClendon: I’m going to stretch the definition of entrepreneur a bit and say John Law.
[00:55:42] Albert Gillispie: Johnny Law?
[00:55:44] Mont McClendon: John Law. He was an Age of Enlightenment financier who more or less invented the underpinnings of modern central banking and finance.
[00:56:01] Mont McClendon: I picked him partly because that period—when we were creating the modern world, global commerce, money, and all that—is fascinating to me. I mean, we also invented calculus and all those things. But he, in particular, would be fun to sit down with because he was an absolute scoundrel.
[00:56:24] Albert Gillispie: I was going to ask, is he a Rothschild or a Vanderbilt?
[00:56:25] Mont McClendon: No, he made his way into creating the world's first central bank in France through relationships he built while gambling. He lived through a financial bubble and did all the things. Really an interesting guy. So, I would go with Mr. Law.
[00:56:45] Albert Gillispie: Yeah, you are the Dos Equis man. Okay, and last one. You said you didn’t have a good answer on this one, so we'll go with the opposite. What is really the best piece of business advice you've heard that you try to live by?
[00:57:04] Mont McClendon: The best business advice I ever got was: find someone who likes to do what you don’t like to do and pay them to do it. We are an independent, self-reliant community of people in entrepreneurship and in West Texas. There’s a default mindset of, "I’m smart enough; this is not rocket science. I can do this." The question you ought to be asking is, should you be doing that? Am I capable of doing my own taxes? Yes. Should I do my taxes? No, I should not. I should pay my CPA, who I think is a wonderful person and deserves to make a living, to do that because I hate it. Similarly, with a lot of things, I don't need to be doing book entry or many of the tasks in my business that other people will do.
[00:58:02] Mont McClendon: Do it for a reasonable cost much better, much faster, and much happier than I am. So, we can increase the net happiness in our business by letting people who like to do the things you don't like to do handle them. That’s, you know, it's hard to let go.
[00:58:20] Albert Gillispie: It is.
[00:58:20] Mont McClendon: But the opportunity cost of what you can do with that time by not spending it on something you hate and instead focusing on something you love is a pretty big delta.
[00:58:31] Albert Gillispie: Yep, you can make a much bigger impact. Alright, Mont, thank you. Thank you for being a guest. I enjoyed it—I didn’t know where we were going to go with it.
[00:58:41] Mont McClendon: I’m really glad you led me through it.
[00:58:44] Albert Gillispie: You didn’t disappoint. Thank you so much.
[00:58:55] Albert Gillispie: Well, I hope you enjoyed that podcast. I hope you got a lot out of it and enjoyed that conversation. I know I did. If you want more where that came from, go ahead and click subscribe and keep coming back for the next one. And if you're a business owner and feel stuck in your business, unable to work on it to grow to the next level, go to our website, stagcoaching.com, and click in the upper right-hand corner for our free business assessment. In just a few questions and minutes, it can diagnose what's going on in your business, what's going right, what's going wrong, and what you can do about it. It’s free on our website at stagcoaching.com.
[00:59:33] Albert Gillispie: Thank you. We'll see you on the next one.
