Been There; Done That. Does It Have to Be?

The following article originally ran as the President’s Page column in the February 2015 issue of the ESOP Report, the newsletter of The ESOP Association.

Human nature is often an enemy of enthusiasm. By this statement I mean it is normal for a mature ESOP company to react with a ‘been there, done that,’ attitude when pondering how to keep the enthusiasm for employee ownership vibrant among the company employees.

In recent years, when I visit ESOP companies, I often find myself talking to company executives, ESOP committee members, or HR professionals of a company that has had an ESOP for 10, 15, 20, 25, or even more years.

Often, here is the story I hear:

“Well, when we finally put the ESOP in place, needless to say, we were somewhat focused on the details of being sure we met the law and regulations. We were somewhat surprised how creating the ESOP tapped our resources, both money and time wise.

We had our ESOP advisors, and felt that they could keep us posted on all we needed to know.

We told the employees we had an ESOP, but most just scratched their heads, wondering what kind of scheme had been cooked up, as no one was seeing any extra money in her or his pocket.

In sum, we were what one might say a “sleepy” ESOP, assuming that employees would be excited about being owners, and would want to do more and be better.

After some employees left vested, and others saw that the person did get real value, interest seemed to perk up, and we could sense the employees wanted to be more attuned to what this ESOP and their role in being a beneficial owner meant.

So in about year five or so, we began to have employees exposed to other men and women like them at Association Chapter meetings, the national Annual Conference, and the Foundation’s Employee Owner Retreat, for example.

Top level executives, and average pay employees saw the AACE entries, heard about winners of AACE, ESOP Company of the Year, Employee Owner of the Year, attended the Annual Awards Banquet. Some employees became the ‘champions’ for making sure others in the company knew we were special, and everyone would benefit the better if we maximized the human side of ESOPs as a company.

So we entered AACE. We put in applications for awards with our Chapter and thus nationally. We created an ESOP communications committee; we made sure average pay employees were at meetings, networking with others in ESOP companies, and going to break out sessions about ownership culture and the human side of ESOPs.

But after five years or more of going, going, entering, entering, it sort of became old hat all of this intangible ‘love’ of being ESOP.

We need a revival so to speak. We are a good company, don’t get me wrong; but we just wonder if all of this ‘going, participating, entering’ stuff is worth it as we have been down that road, and we do not regret it; but the enthusiasm is gone.”

Well, after hearing this story, I do not jump up and down preaching that persistence is the key to an ESOP company maximizing their ownership structure; persistence is in keeping the enthusiasm alive. But the truth is each company, for many different reasons — growth, or new employees, or new business initiatives — needs to be engaged with the ESOP community year in and year out.

Accepting that the ‘old’ stuff has no more intrinsic value can diminish the subjective impact that being employee-owned has on a better performing company, with a more dedicated, and a more experienced work force, that builds wealth for all.

So, exposing ESOP people to the various tactics used to build a good company, learning about new tactics not used before, is a major way to end ennui that can arise in a mature ESOP company.

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