How Obama's SBA Chief May Change the Agency

As the President's pick to head the Small Business Administration, Karen Mills could transform the agency's approach to funding

By Jeremy Quittner

If confirmed, Mills will take over an agency that has suffered from neglect during the past eight years. NICHOLAS KAMM/AFP/Getty Images

President Barack Obama's Dream Team is packed with so many high-caliber picks, it might be easy to overlook Karen Gordon Mills, his choice to head up the Small Business Administration. But she is no exception.

Mills, 55, shares some hometown connections with Obama. Her parents are Melvin J. and Ellen R. Gordon, who own some 80% of the Chicago-based candy-maker Tootsie Roll Industries (TR), of which they are chief executive officer and president, respectively. Also like President Obama, Mills is an alumna of Harvard University, with a B.A. in economics and an MBA. She counts as her business school classmates and friends such luminaries as Orit Gadiesh, chairman of Bain & Co., and Ann M. Fudge, a director at General Electric (GE) and former chairman and CEO of Young & Rubicam Brands, ranked by Forbes and Fortune among the most powerful and influential women in the U.S. Karen Mills' husband, Barry, is president of Bowdoin College.

Recognizing the Diverse Needs of Small Businesses

What will the SBA under Mills' direction look like? Those who know her say she will balance a financier's background with extensive hands-on experience using government to promote small business needs. And she is likely to do so in a nonpartisan fashion. She's also likely to focus particularly on the needs of women-owned small businesses and to help foster a more global role for American entrepreneurs. "I have worked with Karen over the years and she is an exceptionally capable individual who always has the interests of our nation's small businesses in mind," says Senator Olympia Snowe (R-Me.), ranking member of the Senate Committee on Small Business & Entrepreneurship, who recommended Mills for the post. Snowe says she hopes President Obama will make the administratorship a cabinet-level position.

Mills, who has not yet been confirmed, was unable to comment when reached by telephone. But in an October 2008 interviewwith BusinessWeek SmallBiz, Mills discussed the need for the SBA to develop an approach to funding that recognizes the varying financial needs of different types of small businesses. Mills says what is currently missing is "a strategy that puts small business at the center, that differentiates between the high-impact, high-growth small businesses who have these needs for more long-term equity capital vs. the Main Street businesses which today need reinstatement of their short-term credit."

Mills is currently president of private equity firm MMP Group in Brunswick, Me., and in 1999 co-founded New York-based private equity firm Solera Capital, which has raised $250 million. She was also chief operating officer of leveraged buyout firm E.S. Jacobs & Co., where she worked from 1983 to 1993, and she has consulting experience both in Europe and the U.S. with McKinsey & Co. She has been a product manager for General Foods and serves as a director of numerous companies, including Arrow Electronics (ARW) and Scotts Miracle-Gro (SMG).