You’ve sold your company to an ESOP. Now what? The way in which you launch your company’s ESOP can have lasting effects on the success of the ESOP and the buy-in and dedication of the employees. It is even beneficial to complete relaunches annually. The launch and subsequent relaunches should occur in a similar sequence every time.
Over the next several weeks, we will be completing a series of blog articles on how to correctly launch and relaunch your company’s employee stock ownership plan. This will require some strategic planning, which should not be confused with a business plan. The major fundamental difference between the two is a business plan is about short to mid-term goals and strategic goals are about long-term goals for the company’s success.
During times of change, senior leaders play a key role as an executive sponsor. According to Prosci’s, Best Practices in Change Management – 2018 Edition, the greatest contributor to a successful change initiative is “active and visible executive sponsorship”.
An executive sponsor is typically a C-Suite leader who oversees a business unit and is responsible for meeting project deadlines. They oversee projects and keep them aligned with the organization's strategy and direction.
During an ESOP implementation and ongoing support and buy-in, the role of the executive sponsor sets the tone for how employee-ownership is embraced in the organization.
Building an ownership culture begins with defining and communicating organizational purpose and values, tying them to your performance management process, and rewarding employees for their contributions. Building a People Strategy around your ideal culture will generate change.
Part 2 of a 3-part series
Numerous ESOP companies have an ESOP Communications Committee which focuses on providing proactive educational materials for fellow employee-owners to ensure everyone’s understanding of this unique, nontraditional benefit called employee ownership. I would like to highlight a few key factors that each committee must plan for in order to be effective in its role.
“Live your values. If you don’t know what they are, go find out.” -Art Barter
When an organization develops a culture based on a strongly held and widely shared set of beliefs that are supported by the business strategy, amazing things happen. Based on an extensive study, employee ownership increases sales 2.3 to 2.4% per year over what would have been expected without an ESOP (Employee Stock Option Plan), reports the National Center for Employee Ownership (NCEO).
It takes a concerted effort – in time, energy, and resources – to keep good employees. One method that gets results is to establish a mentorship program. It might not be easy because you’ll need buy-in at all levels of your company, but it’ll be well worth the effort. With the potential for five generations in your workforce, a program that matches new employees with company veterans can pay huge long-term dividends.
ESOP communication committees are critical for ESOP companies to move forward with an ownership culture for participants. These committee members do more than just plan company cookouts and celebrate Employee Ownership Month through games. They focus on providing proactive and educational materials for ESOP participants to ensure all participants become advocates for this unique nontraditional benefit. I have been asked numerous times during roundtable discussions and in conversations with a variety of ESOP companies, “How can I create an impactful ESOP Communication Committee?”
You can’t think about your workforce without thinking about millennials. They are, quite literally, the future of your workforce. But connecting with millennials can be imposing to older generations. How do you reach them? Why do they seem so elusive? Why are the recruiting techniques that have been tried and true not working anymore?