Small-Business Advocate, Big-Company Resume

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Small-Business Advocate, Big-Company Resume

By James M. Pethokoukis
U.S. News & World Report
May 29, 2006

Does the White House have another "Brownie" problem brewing? That's how some critics view President Bush's choice of ServiceMaster executive Steven Preston as the next director of the Small Business Administration. Recall that after Hurricane Katrina, Bush got slammed when the public learned that the director of the Federal Emergency Management Agency, Michael Brown, had a resume seemingly mismatched for the job--including a stint as rules enforcer for the International Arabian Horse Association. Preston's nomination last month also spurred misgivings. "We don't need another unqualified SBA administrator," Lloyd Chapman, president of the American Small Business League and frequent Bush critic, said then.

Now at first take, Preston may appear an unconventional choice. He comes from a big home-services company (ServiceMaster owns Merry Maids, Terminix, and TruGreen ChemLawn) with $3 billion in sales and 39,000 employees. And he has never started a small business himself. Yet he could be running an agency devoted to entrepreneurs. "He doesn't come from small business, and he's never owned a small business," says Harry Alford, president of the National Black Chamber of Commerce.

Sen. John Kerry, the Massachusetts Democrat who is the ranking minority member of the Small Business and Entrepreneurship Committee, cited concerns about Preston's apparent lack of small-business background, plus complaints that ServiceMaster plays rough with the many small businesses it deals with. "I don't have answers to these questions yet," Kerry says. "He needs to be vetted."

The White House responds that it has already done that and, says spokesperson Erin Healy, found a "results-oriented executive who has improved customer service, employee satisfaction, and operation efficiency at his company." Preston, 45, was ServiceMaster's former chief financial officer and also worked as an investment banker at Lehman Brothers.

With a resume like that, Preston certainly seems a creature of big business or Wall Street. Yet ServiceMaster is no corporate monolith. The company has a network of more than 4,000 small-business franchisees, making Preston a great fit for the SBA job, says former CEO Bill Pollard. "Those franchisees are all small business, so Steve understands what they need, especially in the way of financing." The National Federation of Independent Business calls Preston "a great choice."

In the late 1980s, Preston was an early investor in and adviser to Boston's Harpoon Brewery, now one of the nation's largest craft breweries. Cofounder Dan Kenery calls him "a really intense and smart guy and a good businessman who knows how to focus on the right things." Kenery jokes that he and Preston spent a lot of time doing "market research" together--drinking beer, that is.

By all accounts, Preston did a solid job at ServiceMaster. "Preston is a no-nonsense, by-the-book sort," says Alex Paris, an analyst at Barrington Research.

Some small-business advocates wonder whether Preston can do anything to make the SBA a priority within an administration that has cut the agency's budget by a third since 2001. "It's kind of like the SBA is falling by the wayside," says Paul Hense, head of the nonpartisan National Small Business Association.





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