ESOP companies are special and unique. Employee ownership creates a culture of employees that are actively involved in the business on all levels. Employee owners can and do participate fully in every aspect of company management and growth. Engagement in this type of company is rivaled and helps ESOPs out perform other types of companies. Because of this ESOPs require a distinct type of leader, with distinct characteristics.

Five Traits of an Effective ESOP Leader

Low Ego, High Self Esteem

A healthy ESOP leader is willing to admit mistakes and is not afraid to admit to failure. Most importantly, they learn from mistakes and failure. An effective ESOP leader has no need for an ego, but has high self-esteem. A confident, competent leader will be best and this type of leadership will foster and encourage the best aspects of ESOP culture.

Master Communicator

A great public speaker has a huge advantage – but it’s not just about giving speeches – it’s about communicating with employee owners. Employee owners want to understand how things are going with their company (their ESOP) and they deserve to know. An executive that can communicate openly in many forms will lead the team the most effectively. Communicating the vision of the company frequently is most beneficial.


In a successful ESOP, turnover is low and typical long term employees tend to be more averse to change. It is important for ESOPs to keep evolving and growing. It’s vital to have a leader that can enforce a vision of growth and innovation. ESOPs must continue to evolve and change to meet market demands like any other company.

Faithful Listener

Feedback is crucial in soliciting employee owners’ thoughts and ideas. The best leaders of ESOPs are active and authentic when listening to their peers. Not all ideas can be implemented; however they can be heard. Great leaders know how to beseech feedback and actually enjoy doing it.

Take Action

Making decisions and executing effectively is necessary for a successful ESOP leader. While an ESOP is made up of many employee owners, leaders still need to be able and willing to make decisions, especially the tough ones. The top leaders will decide when they need to listen to all points of view, when they need to solicit limited feedback, and when they need to make decisions on their own. An ESOP does not provide every employee owner an entitlement to be involved in every decision. Great leaders will make the best decisions possible for executing a plan.

Talented or not, the best ESOP leaders encase these five characteristics. Without these key attributes a leader is destined for failure in an ESOP environment. It takes a leader just as special and unique as the ESOP itself.

4 thoughts on “The ESOP Leader – What It Takes to Lead an Employee Owned Company”

  • Great summary of 5 Things it takes to be a Great leader. I agree that leadership of ESOPs is different, but these 5 things are a terrific list for anybody who wants to be a great leader. I am passionate about ESOPs and particularly interested in finding a way to raise awareness of EOS (Entrepreneurial Operating System) amongst them because I know that a great Business Operating System, along with great Leadership will create great success for employee owners. If you ideas for me on how to raise awareness of EOS in the ESOP community, I’m all ears.

    • Jerry, we’ve incorporated many practices of EOS as well as other great operating systems and processes from the best thought leaders around the world. We’re so passionate about creating great cultures and helping others that we’ve created GRITT Business Coaching ( to help spread the word to ESOPs and other business leaders that want to improve employee engagement. As you know, this leads to better profitability and more success. Reach out to Patrick Carpenter at if you’d like to learn more. Thanks for the comments.

  • Hey there! This post couldn’t be written any better! Reading this post reminds me of my old room mate! He always kept talking about this. I will forward this write-up to him. Fairly certain he will have a good read. Thanks for sharing!

Comments are closed.