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It’s been said that it’s difficult to run a successful business in Maine. There are tax issues, regulation issues, and workforce issues. It can be even tougher in the rural sections of the state Yet many business leaders are making it work.

Larry Barker, the President and CEO at Machias Savings Bank has a unique perspective on building a business in Maine, and what it takes to survive and grow a company.

People from all over seek out his business advice, and we have him on today’s episode! So don’t miss out…find out what to do when a new competitor enters your space, how to differentiate yourself from others in your industry, and why becoming a “purpose driven business” can make all the difference.

Rich: Our next guest grew up in Downeast, Maine. His connection to Machias Savings Bank, the fifth largest bank in Maine, with a footprint spanning Portland to Caribou, goes back to his early days of raking blueberries for the bank’s former CEO. Now holding the title of president and CEO, he officially began his career at the bank in 1991 in the collections department, moving on to a business banking role in 1998. He was promoted to senior vice president of business banking in 2008 and then to president in 2011, followed by CEO a year later. Personifying the legacy and spirit of Machias Savings Bank, he has a passion for community impact. He has served on boards for organizations, including the Sunrise County Economic Council, the Washington Hancock Community Agency and Washington Academy. He is currently a member of the Maine Bankers Association Executive Committee and the Federal Reserve Bank of Boston Community Depository Institute’s Advisory Council. That must be a really long acronym, I’m thinking.

Larry: CDIAC.

Rich: The acronym needs an acronym. He earned his bachelor’s degree in business administration from the University of Maine at Machias and proudly resides in Washington County with his wife and five children. We’re very excited to have with us today, Larry Barker. Larry, welcome to the show.

Larry: Good morning. Thank you. Great to be here.

Yury: We are excited. Thank you very much for coming. Mr. Barker, I wanted to start with the very first question, and I wanted to know, how did you get started at Machias Savings Bank?

Larry: Yes, that’s a great story. Rich mentioned raking blueberries, so would be in the summers of ’90 and ’91, I was juggling a lot of balls, going to school part time. I was working as a night clerk at a motel. I was working at Helen’s restaurant. And so come August, I was also raking blueberries for Ed Hennessey, who would be the former president and CEO at Machias Savings Bank. So just a quick story, I would show up at the field at about seven o’clock, and Ed would holler across the field. He would say, “Barker, where you been?” And I said, of course, I said, “I’ve been working.” “What? You’ve been working?” “Yeah. Well, I just finished the night shift at the motel from 10:00 to 6:00.” Now, it’s not as bad as it sounds because there was a cot outback, and when there weren’t guests coming and going, you could get some sleep.

Larry: So about one o’clock in the afternoon, I’d gather up my rake and my buckets and I’d be headed for the car again. And here he comes again, “Barker, where you going? Already? You leaving already?” And my answer would be, “I’m going to work.” And, “What do you mean you’re going to work?” Well, I was headed to Helen’s for the 2:00 to 9:00 shift and then I’d go to the motel and then I’d go to the blueberry field again. So I did this for a couple of weeks. And I think that caught Ed’s attention, and I think he sense some level of ambition there that he was interested in. And so he approached me on the field one day, he said, “If you ever need a job, come see me.” And that was August of 1991. I went to see him, started at the bank October of 1991 and the rest is history. It’s been a great ride.

Yury: Wow. That is incredible story. Thank you for sharing this.

Rich: That’s a lot harder than I’ve ever worked in my entire life, I’ll tell you right now.

Yury: I’m sweating already just by listening to it.

Rich: Larry, it’s been said that it’s difficult to grow a business in Maine. Do you agree or disagree and why?

Larry: Yeah. That’s a great question. I think it is. I think it is difficult. To put that in perspective, I think it’s more difficult than it is in a lot of other states or regions. And at the 30,000 foot level, one of the fundamental issues that we have in Maine is that our state isn’t growing. Now that’s bit of an exaggeration because our state is growing a little bit.

Yury: Incrementally, right.

Larry: Yeah. No, the stats are really eye opening. From 2010 to 2018, the population in the State of Maine grew cumulatively 0.8%, less than 1% in going on a decade. So if you’re running a business in Maine and your customers are Maine residents, the pie isn’t getting any bigger. And if you have competition, how do you get more than your fair share of the pie? That’s a difficult proposition. So if you’re in a state, by contrast, that’s growing, then you get some growth by default, and you can hang up a shingle and you’re going to have some customers. Well, in Maine, you got to be really good to grow your business. You’ve got to be really sharp. You’ve got to have, what I like to call, extreme differentiation.

Yury: Mr. Barker, are there specific challenges to growing a business in rural areas of Maine compared to Portland or other populous areas?

Larry: That’s a great question too. But before I go there, let me add one more piece, is the cost of doing business in the state of Maine is significantly … Maine ranks eighth in the nation in terms of cost of doing business.

Rich: What are some of those costs? Can you share with us?

Larry: Well, that’s a great question. That’s measured by labor, which includes benefits. So health insurance is one of the 300-pound gorillas, electricity, and the tax burden, of course. Maine’s tax burden ranks third in the nation, which is not an area where we want to be excelling either. But so to move on to your question, Yury, how is that comparatively in rural Maine? Well, you can basically take my first comments around the state isn’t growing population wise and multiply it times 10, in terms of the challenge to run a business. Most of our rural regions … so every county north of Cumberland County lost working age population over that same time period, anywhere from negative 3% to negative 9%. So to a great extent, north of Cumberland County, the rest of the state is shrinking population wise.

Larry: So I mentioned 0.8% cumulative growth. Most of that is in Southern Maine. Central Maine up to Bangor, holding their own, doing okay. The coast is doing okay. Hancock County, doing okay. Most of the other regions in Maine are losing people.

Rich: Why do you think that is? I mean, people still seek out Maine. They have this romantic idea of Maine. What’s been going on or what needs to change?

Larry: Yeah. Part of it in rural Maine is the loss of youth, and I think directly attributed to lack of opportunity. And so that’s one of the things that we need to work on, is keeping our youth in Maine. And that’s a big part of that problem, Rich.

Rich: I’m thinking of Stephen King’s book The Dome, and maybe that might be some sort of solution to keep them here. No. No, terrible idea. So I know, Larry, that people often seek out your business development advice. What are some of the most common problems that business owners and leaders are struggling with in the state?

Larry: Yeah, so top of the list, hands down, number one is workforce right now. So I was with a logger not long ago in Northern Maine. He has three trucks sitting because he can’t find anybody to drive those trucks, but it’s not just him. Everybody you talked to, from one end of the state to the other, is a challenge. Now Deanna Sherman, the CEO of Dead River Company, was quoted in the Lewiston Sun Journal recently. And she said, based on current trends in Maine, working age population, by 2025, Deanna said, Maine is going to find itself short 158,000 workers necessary to fill open positions, skilled workers necessary to fill open positions if these trends continue. So this is a problem now. It’s going to get worse if we don’t do something about it.

Yury: So the next question I wanted to ask you now. we’re talking a lot about the challenges, but we also know that the Mainers, they’re hardworking, they’re not afraid of challenges. And for those listeners who are actually continuing to grow their businesses and not afraid to start their businesses, what would be your advice how to stay competitive and how to differentiate yourself from the competition, whether it’s our personal example with Machias Savings Bank or just in general?

Larry: Yeah, yeah. So, Yury, I would say really having a great understanding of the value that you bring to the table. What is your niche? Are you a low cost provider? Are you a provider of great service and you charge a premium for that? So to me, it’s having a great understanding of the value that you add. Now, obviously, one of the ways you get that understanding is to be really close to your customers and be communicating and building, having very strong relationships with your customers on an ongoing basis. And that’s critical to understanding what it is that’s going to differentiate you.

Larry: And I mentioned extreme differentiation, look at Machias Savings Bank, for example. I mean, how did we become a $1.5 billion company over the last … when I started the bank in 1991, we had $160 million in assets. So we had a couple of locations in Washington County. And so if you’re going to grow, we needed to have extreme differentiation. We didn’t need to be a little bit better. We needed to be a lot better. We needed to make really quick decisions. We needed to invest in building relationships with our customers. We needed to be an incredible place to work. And so that’s a culture that we’ve had in place for years. Even in our industry today there’s so much noise, there’s so much new competition. And so, look, we don’t think we’ve arrived. We’re doing just what I said earlier. We’re staying really close to our customers. We’re trying to make sure we know exactly what they value in Machias Savings Bank, and that’s the great thing about new competition is it takes your game to the next level.

Rich: So I’m just curious about this because you’re president and CEO. You have, I don’t know the size of Machias Savings Bank, but several hundred people work for you.

Larry: 290.

Rich: 290 people. How are you actually, Larry, staying in touch with your customers? I mean, you must have so many other responsibilities. So I mean, for me it’s a little bit easier. There’s seven of us at Flyte, right? So I can call up almost anybody and they know who I am. But what are you doing personally, or is that something where you just have to delegate it when you get to a certain size?

Larry: I think it’s a great question, Rich. And it’s, again, been part of the culture at our bank for as long as I’ve been with the company, that the CEO is active with our customer base on the street, pounding the pavement, elbow to elbow with our teams, and really involved in that relationship building effort. So for the past several years, I’ve been on the road every Thursday, Friday. Well, I shouldn’t say for the past several years. When I was a business banker, I was on the road every Thursday, Friday. So I’ve been doing this routine for going on 20 years. And so what am I doing? I’m out spending time with our employees and our customers. And it’s always a balancing act and it’s always a challenge and it’s always asking myself, what’s my greatest contribution to the organization? And so you will tweak that a little bit from year to year, but what could be more important than spending time with employees and customers?

Rich: Sounds good.

Yury: I think the other thing we can add to it. We are running pretty strong program on customer experience. We are interviewing up to 20 … we are collecting up to 2,500 surveys responses every quarter. We are differentiating. We have different segments for what we’re learning, how we’re learning and why are we learning it. So we’re combining our efforts from the front line to the presidents, top to bottom, bottom to top.

Rich: Well, it makes a lot of sense because one of the things at Flyte that I really in the last few months have put on as a focus is customer attention. And really just having my team, who’s worked with somebody, like, “Hey, it’s been a year since we’ve done anything,” or, “It’s been three years since you redesigned your website,” or, “It’s been two months since we tried this new thing and these are the results.” And just from that, I had Ryan, our creative director, reach out to some clients, and he said, “Out of the 10 phone calls I make, and I hate sales, four people said, ‘Hey, can we talk about doing some new work?'”

Rich: So I mean, I think just having those touch points and not forgetting that these people have a choice of who they’re going to do business with does make a big difference. I think sometimes, as business owners, salespeople, we get really addicted to the hunt, right, to getting that new client. But really what we need to be focusing on is how can we support the growth of all of our clients that we already have. They’re going to go out and advertise for us anyway. So.

Larry: Yeah, I agree with you 100%, Rich. No question in my mind, our best business development opportunity is to take really good care of our existing customers. If we do that, the phone will keep ringing and we’ll keep growing.

Rich: Absolutely. Larry, we definitely talked about the competitive environment here, differentiating yourself, but a lot of times we suddenly find ourselves with a new competitor in our space. How do you address that, or how do you recommend when people are coming in and seeking your advice? What do you do when a new competitor suddenly shows up out of nowhere?

Larry: Yeah. And as I mentioned earlier, it seems like we have a thousand new competitors in the past few years. So I mean, everybody’s interested in our business, and that’s not unusual. I’m sure every kind … especially in the State of Maine, we’ve talked about how competitive it is. The state isn’t growing population wise. New competition get you out of bed a little bit earlier in the morning, and it really makes you sharper, makes you stronger, makes you better. To me, it’s a matter of approaching that with the right mindset, really understanding what they’re bringing to the table. And again, not getting distracted by the noise and having really tremendous clarity around what your customers appreciate about you. And how are you going to take that to the next level? How are you going to continue to execute that? So new competition shouldn’t slow you down. It should make you better.

Yury: Mr. Barker, for the last few years, we’ve been paying closer attention and focusing on being a purpose-driven business. Can you talk a little bit about it and help our listeners understand, what does it mean and why do you feel it is important?

Larry: It’s a great question, Yury. A 150 years ago, Machias Savings Bank was formed for the purpose of serving our communities. We remain committed to that same purpose today. That’s what we get excited about. That’s the reason we get out of bed in the morning. We want to make a difference in our communities. And so one of the key ingredients to the recipe of success at Machias Savings Bank is being a purpose-driven company. Our employees love it. They appreciate it. They embrace it. They get excited about it. We pay every employee at the bank 20 hours a year to volunteer in the community. We encourage folks to get out there and volunteer, and we’ve seen some great success stories around that. Again, the employees love it.

Larry: You know what? If you want to be successful longterm, in my opinion, you need to be a purpose-driven company. Anybody can squeak out next quarter’s profits, next year’s profits even. But if you’re going to be successful longterm, it’s got to be about more than that. Now, I mean, I always say, if we’re going to maximize the impact we can have for our employees, our customers and our communities, we have to be a high-performing company. So making money is certainly a key part of that equation. And it’s not going to be the same for everybody. So there’s a big thing right now, contributing 1% of top line profits to save the planet. So if that’s your thing, then you want to do that and you want to rally your teams around it. And I think it has to be an organization-wide buy in to whatever your purpose is going to be. But it doesn’t have to be the same for everybody.

Rich: Well, it’s right in line with a book that I just finished, you may know of it, Start With Why by Simon Sinek.

Yury: Simon Sinek.

Larry: He does a much better job explaining it than I do.

Rich: No, I think you did a great job, but it sounds-

Larry: He has a great video on it. You can go to Ted Talks. And in fact, I am a follower of Simon as well. Like I say, I would strongly recommend reading the book or going out and watching his video.

Rich: Yeah. Because you don’t have to have the same why as a another business in your industry. You just got to figure out what your why is, why you get out of bed, and once you do that, I find that your team will really rally around that. And not only that, if you make that really prevalent, then you’re going to attract the right type of employees who are going to take care of the right type of customers for you as well.

Larry: The only caution I would add is that it has to be genuine.

Rich: Yes.

Larry: You can’t put a poster on the wall and say we’re all about this or that and then not walk the talk because that’ll be transparent very quickly.

Rich: Yeah. We had an incident just the other day where we say we’re all about helping our clients grow, and we had an incident where we realized that we had sent out a work agreement that basically doubled the number of pages we were supposed to write without increasing the price. And me and my director of operations talked about it, and I said, “Well, the right thing to do, if we’re really about helping companies grow, is we just eat that cost.” I’m not happy about it, obviously, but I said, “And let the client know.” And she called up the client and said, “Listen, we made this mistake, but we’re going to eat it.” The woman broke down crying. She goes, “I have had the toughest year of my life, and just I never win. And this feels like a win to me.” So you get a customer for life when you do that, but you got to follow your why, and so that helps you make decisions.

Larry: Great investment.

Rich: Yeah. So, anyway. So we talked a lot about different things. I want to come back to the bank because every business is going to have some sort of relationship with their bank. What do you feel is the role of a bank in a business’s growth? Is it just to lend money, provide a line of credit, or should it be more than that? And as a business owner, I’m really curious about your thoughts on this.

Larry: It should be so much more than that. At the end of the day, you want to have a relationship with your banker that extends well beyond a transaction. And so as a business owner, you want a banker that believes in you. You want a banker that understands your business, the complexity of your business, what you’re doing and why. You want a banker that, when you hit a bump in the road, isn’t going to show you to the door. A banker that’s going to show you to the conference room, roll his or her sleeves up and work with you to get through that challenge.

Larry: And relationship building is really important. It’s one of our culture standards. We practice it. We live it. We train it. And so absolutely critical piece of the equation. So my answer to your question’s, you want way more than the low cost provider who is only showing up to make a sale. You want a relationship, and the relationship with your banker is one of your key relationships that you need to run a business.

Rich: That’s good advice. Thank you.

Yury: Mr. Barker, you were talking about the workforce challenges in Maine. How does it impact Machias Savings Bank?

Larry: Great question, Yuri. It impacts us from the standpoint that it impacts our customers, and anything that impacts our customers obviously impacts us. I will say, from a talent standpoint … well, let me share a stat with you. Last year we had 849 applications for 40 open positions. Less than 6% of the people that applied for job at Machias Savings Bank last year got a job. It’s easier to get into Harvard. So-

Rich: Not for me, but okay.

Larry: We have invested heavily and we have had a very deliberate effort for a long time around being an incredible place to work. And there’s a bunch of different pieces to that. One of the most important that we hear from our employees is we have what we call a family first philosophy. So if your child has a little league game this afternoon, not only are we going to encourage you to be there, we’re going to pay you to be there. We pay every employee at the bank two extra vacation days on an annual basis so they can be at those events. So family first philosophy is a critical piece to that puzzle.

Larry: We are very deliberate about listening to our employees. We have all kinds of different avenues by which we solicit feedback from our employees. And again, don’t waste your time asking for that feedback if you’re not going to act on it. We act on it. We formed a training department at the bank last year, because the past three years in a row, our employees have said, “We need better training.” So you got to listen. You got to act on it. And then being a purpose-driven company, those are a few of the ingredients that go into being a great place to work.

Larry: But Machias Savings Bank has been in the top five large employers, as ranked by Best Places, the last four years in a row. One of the best banks to work for in the nation, as ranked by American Banker Magazine for several years. We’ve been the top 10 two out of the last four years in that ranking. We don’t do it for the banner. We do it because we want our employees to take that survey. We want to really dig into that feedback and make changes based on that advice. So we have developed a reputation as being a great place to work. So long answer to a short question, which is in terms of our ability to have great talent coming into Machias Savings Bank, it’s not affecting us. We haven’t hit that wall yet.

Rich: That’s good to know. Now before we ask you the question that we ask every guest here, I just want to know … I’m sure our listeners may have noticed, I refer to you as Larry and Yury refers to you as Mr. Barker. He’s got a lot of respect for you, and I know a lot of your team does. So in fact, he mentioned before we started recording that you were the one who kind of turned him on to meditation. So before we ask our final question that we ask everybody, I want to just know, are there any leadership or life tips that you want to impart to Yury, Cody, myself, and our listeners out there?

Larry: That’s a big one.

Rich: What’s your most important one?

Larry: Boy, what’s popping into my head right now, Rich, is treat everybody with respect. Everybody. Treat everybody with respect, including yourself. Take care of yourself. I would say, I’ve been at Machias Savings Bank for 28 years. For the first 25 years, I didn’t do a very good job taking care of myself. And we had a conversation offline earlier about I’m 51 years old now. That plan isn’t working for me anymore. I have to take care of myself. And so invest in yourself every day. I don’t care how old you are, if you’re just starting your career. Again, if I had to go back and do it over again, I would invest in myself on a daily basis. And what do I mean by that? Take time for yourself. Take time for reading. Take time for personal growth and development. Take time for exercise. Again, I picked up exercise a couple of years ago.

Rich: It makes a huge difference in terms of the way you think. You’re just more clear headed if you go to the gym in the morning, I’ve noticed. And certainly you feel a lot better. Maybe not right after the gym, but soon, in general, you feel better.

Larry: You know what? There are so many benefits that extend way beyond the health impact of it. The discipline, the willpower, creating those little habits on a daily basis, and they all add up.

Rich: Yeah. And they become easier with time, certainly.

Yury: What do you think about meditation?

Larry: I love it. I love it. Look, in today’s world, we’re overstimulated on a daily basis. We go home at the end of the day, our heads are spinning. I went to lunch with an executive coach, and this was over a year ago now, who works with Fortune 500 CEOs across the nation. I asked him, I said, “What’s the biggest challenge?” I said, “What’s the biggest struggle that you’re seeing with these CEOs?” He said, “They’re burning out. They’re burning out.” And so you have to take that time. Again, meditation important not only to calm things down, but also just the discipline of doing it right. Again, the willpower that it builds and the discipline that it adds.

Yury: So are you ready for the big question?

Larry: What’s the big question?

Yury: The big question is, if you could change one thing to improve the business ecosystem in the State of Maine, what would it be?

Larry: Okay, so if I could change one thing, I would have the State of Maine growing, and I would have the State of Maine growing 1% on an annual basis, not 1% a decade. And, look, I think it’s very possible, but we have so much … Look, Maine Development Foundation, Educate Maine and the Maine State Chamber put out a document called Making Maine Work. They surveyed a thousand business and professional leaders, and they asked them, “From a business growth and retention standpoint, what are the top assets that the State of Maine has?” And the number one was quality of life.

Larry: And so, look, I want to share a couple of things. You drive into Lincoln and they have a big sign. It says something like this, it says, “They come for the lakes. They stay for the lifestyle.” Now, the same thing could be said for every county in the State of Maine. We have a sense of community spirit that is second to none. We have a quality of life that is incredible.

Larry: Look, let me share one more story. I went to New York City a few months ago, and I went to lunch with a guy that’s been here for 30 years, incredibly successful. Now, let me define that, incredibly successful financially. So every Friday night, he drives four or five hours to his home in the countryside where he spends Saturday and half a day Sunday with his wife and two daughters. Sunday afternoon, he drives back to New York City. He stays in New York City all week. He’s been doing that his entire career. I would not trade places with him. You can’t pay me enough to do that. I am not missing my kids little league games. I’m not missing that dance recital. I’m going onto the Christmas concert. That’s what we have. Look at the landscape in the State of Maine, the lakes, rivers, streams, the ocean, the mountains, the people.

Larry: One of the things that came out in this document also, that Making Maine Work, I believe the second most valued item by these thousand business professional leaders surveys was the quality of the workforce. So although the workforce may not be growing, it’s a great workforce. The strength of character, the work ethic. We talked a little bit about work ethic earlier. So to me, we need several things. We do need to work on getting that cost of business down over the longterm. But what we’re talking about right now far outweighs that. So we need a public, private, deliberate effort coupled with investment to promote the quality of life in the state of Maine. There’s no reason that our state shouldn’t be growing. We are a great place to live, work, and raise a family. And there’s tremendous opportunity to move that needle in the right direction.

Rich: Very cool. Larry, I know we can learn more about Machias Savings Bank at machiassavings.bank, but where should people go if they want to connect with you?

Larry: (207) 461-6162, call me anytime. I’d love to chat.

Rich: Wow, the phone will be ringing off the hook. I hope you have a secretary.

Larry: Look forward to it. That’s my cell phone.

Rich: Oh, that’s your cell phone? All right. Well, we’ll check that out later.

Larry: I’ll be answering that one.

Rich: Awesome. Larry, thank you so much for making time for us today. Really appreciate it.

Larry: Absolutely. Thank you for having me.

Yury: It was a great show. Thank you very much.

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