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The year is coming to a close and the holiday season is almost upon us. From ESOP Builders Inc. we wish you the best of the season and all good things in the coming year, both in business and at home.
12 Successful Strategies for Creating a Participative Environment
- by Perry Phillips, President and Founder of ESOP Builders Inc.
Studies in the United States over the last 40 years have repeatedly identified that an employee share ownership plan (ESOP) with a participation component outperforms one without a participation element.
Participation means that the employees take on the responsibility of their particular job as well as the accountability that goes along with it by participating in decision-making in their sphere of influence within the organization.
Participation is vital to an ESOP. In fact, the same studies have shown that ESOPs without employee participation might be worse than having no ESOP at all. This negative result has been calculated at upwards of 6% of reduced production. ... [More...]
In the Press: Baby Boomer Retirement
- from THE NCEO Employee Ownership Update
Writing in the Detroit Free Press, John Gallagher's article “Silver Tsunami: Retirements put Boomer-owned firms at risk but worker ownership can help” notes that as many as 400,000 jobs in the metro Detroit area could be at risk if baby boomers are not able to find a way for their businesses to continue after they retire.
As an alternative, Gallagher tells the story of Russ Hart, who sold shares in the firm he founded, Arbor Assays, to the employees after the phrase "employee-owned" on a bottle of Harpoon beer got him thinking. He said:
“My son is a pilot, my daughter is an attorney, and neither one of them wanted to take over this business. The other typical option for a company like this is to sell it. And in almost all of the sales of companies like that, we've seen the employees tend to get laid off and the whole atmosphere of the company changes dramatically. We didn't want to see that happen. So the idea of employee ownership seemed like a leap forward.” ... [More...]
Beer Business Comes to a Head With Employee Shares
- from CBC Radio's Ottawa Morning Show
One year after Beau's started offering their employees shares in the company, the move appears to be paying off — but administering the program has been a chore, a founding family member says.
Beau's, based in Vankleek Hill, about 100 kilometres east of Ottawa, was founded in 2006 by Steve Beauchesne and his father. The Beauchesne family have maintained majority control ever since.
In June 2016 the company rolled out an optional employee ownership plan under which a portion of the brewery's privately held shares are transferred to participating employees each year. ... [More...]
Better Than Double Cheese: Employees Get Windfall
- from THE NCEO Employee Ownership Update
Round Table Pizza, a California-based chain of over 440 pizza and, more recently, sports bars, has been both one of the largest pizza restaurant chains and one of the largest employee-owned companies. In 2010, issues with leases led to a Chapter 11 bankruptcy filing, but the company quickly reorganized and paid off the creditors in full ahead of schedule. It closed just 5% of its stores.
The company returned to strong profitability. In September, 2017, the company was sold to Global Franchise Group, which had earlier also bought employee-owned Hot Dog on a Stick. The stock price increased by about 19 times what it was in 2011, leaving many long-time employees with hundreds of thousands of dollars in their ESOP accounts.
All the Canadian ESOP Guidance You Need in One Book
ESOPs in Canada: How to Implement an Employee Share Ownership Plan to Grow and Exit Your Business with Your Legacy Intact is a comprehensive and practical guide to every aspect of designing and implementing an Employee Share Ownership Plan in Canada.
“This is a must read for those business owners thinking about exploring the notion of employee ownership and discovering that “skin in the game” for those on the front lines of leadership is a secret weapon to surpassing your wildest dreams and forecasts! It is magic”
~ Doug Flynn, CEO, Flynn Group of Companies
More information and order details here
Notable Quotables
"To be successful, you have to have your heart in your business, and your business in your heart." -- Thomas Watson, American Industrialist
Upcoming ESOP Events
See ESOP Builders events page for details on upcoming ESOP events.
Canadian ESOP and Ownership Thinking Books
ESOPs in Canada: How to Implement an Employee Share Ownership Plan to Grow and Exit Your Business with Your Legacy Intact (2015) by Perry Phillips and Camille Jensen. Buy this book on Amazon or FriesenPress.
The $10 Trillion Opportunity: Designing Successful Exit Strategies for Middle Market Business Owners: A Guide for Professional Advisors - Canadian Edition (2007) by Perry Phillips and Richard E. Jackim. Buy this book on Amazon.
Dr. Carol Beatty's book, Employee Ownership: The New Source of Competitive Advantage (published by Wiley and Sons 2001 - ISBN 0-471-64641-5). Buy this book on Amazon.
Brad Hams' book, Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit (published by McGraw-Hill 2011- ISBN-10: 0071772456 - ISBN-13: 978-0071772457). Buy this book on Amazon.
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