Trend Report: Employee Ownership as an Innovative Model
December 16, 2019
Converting a business to an employee stock ownership plan (ESOP) model is a growing trend with nearly 6,624 ESOPs and 14.2 million participants nationwide, according to the National Center for Employee Ownership. It’s a trend we are proud to embrace and celebrate here at Graham Company and a move that embodies our commitment to our people. Becoming an ESOP ensures we continue to operate under the values that have served our clients so well for more than half a century.
We recently facilitated a discussion about employee ownership as an innovative model during Philadelphia’s B. PHL Innovation Fest. The roundtable setting enabled us to interact directly with other professionals in the community and address their questions about the ESOP model, how it works and how we’ve shifted our culture at Graham to empower employees and inspire innovation.
In an industry with significant consolidation, CEO Bill Graham chose to convert Graham Company to an ESOP model in 2017 to ensure the business continued to thrive. We’re now 100% employee-owned, giving every employee a meaningful, long-term ownership stake in the company. Beyond stock benefits, this move has improved our culture, created a sense of ownership among employees and enabled us to make the business the best it can be for our clients.
We weren’t quite sure how our historically strong culture would change as a result of the ESOP, but we did know we needed to make a concerted effort to ensure every employee would feel empowered to take advantage of their new ownership stake. From there, we slowly started to see “pockets of change” appear in different departments and on different teams as employees took ownership to improve their pieces of the business. This collaboration has made our culture even stronger as employees feel more dedicated to the success of the company and that they are all working toward the same goal.
Make no mistake – converting to an ESOP model won’t “fix” the culture of a company. But for those that already have a strong culture like we do, the ESOP will enhance it and provide exponential improvements in results and success.
As part of this transition to an ESOP, we launched an innovation team and tasked them with creating efficiencies and enhancements across all departments. If any employee discovers an issue or anything they believe could work better, we encourage them to bring it to the innovation team. In just a short time, the team has successfully promoted change and the exchange of ideas throughout our company. Employees are now empowered to come forward with new ideas and concepts that will contribute to our shared success.
This culture also requires all employees – not just executives or senior managers – to hold each other accountable. One thing we discovered as we started our ESOP journey is that not every employee was trained in various types of soft skills, so we’re working to roll out training modules for all of our staff members. We’ll cover topics like accountability, feedback, responsiveness, effective meetings and more: everything that will help them “think like an owner.”
As we approach our three-year anniversary as an ESOP, being employee-owned has made Graham a stronger company that is prepared for growth and success for all of our employee owners.
Philadelphia, PA, 19102