ESOP owners know that they have created a corporate culture that is the ultimate form of employee engagement. They are giving real ownership to the people who help to make the company successful, and the opportunity to reap the rewards and the results of all that hard work. When you tie in this reward that is extremely performance-based, then all of a sudden you get that pull towards action and good decision-making for the whole company.
But how do you get optimum results once you’ve started your ESOP? Here is a list of five things you can do to ensure you’re getting the most out of your decision to embrace the ESOP model:
Educate Your New Employee Owners
The fact is, becoming an employee owner is not the same as becoming an employee. When you become an employee owner, you accept a position that can really make a difference – not only for yourself, but also for your peers, for the business, and for the community. It takes time to understand the ESOP. Making sure to educate your new employee owners on their new opportunities AND responsibilities will lay a strong foundation for future success.
Make Sure the Right Team is in Place
With an ESOP, there are more administrative functions involved to track each person’s stock, annual audits have to take place, and annual stock certificates need to be compiled for each employee-owner. This can’t be overstated enough: a new owner of an ESOP model needs to make sure they have an A-list HR Director right out of the gates. The person leading your HR department has to be supportive of the ESOP and they have to be willing to take on a whole new level of communication.
Lose the Ego
A healthy ESOP has a leader who is willing to admit mistakes and is not afraid to admit to failure. Most importantly, they learn from mistakes and failures. An effective ESOP leader has no need for an ego…but has high self-esteem.
Be a Good 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…but they can be heard.
Spread the Word
At our PFSbrands headquarters, we fly a flag outside the office, one that we put up during our 20th anniversary celebration, demonstrating that we are extremely proud of being 100% employee owned. It’s printed on all our materials and has become a part of our company brand. We want to inspire those who are truly interested in helping this country and helping others to become more successful to embrace the ESOP model.
The most successful ESOPs have implemented these five lessons. Without these key attributes, the owner, and the employee owners, are going to struggle with the ESOP model. I strongly believe that the ESOP transaction, and the work we did right after implementing the model, will impact the lives of our employee owners and their families for many generations to come.