There are 2,860 miles between Des Moines, Iowa and Cancun, Mexico. This distance is great enough that you don’t expect to run into anyone you know, much less several of them. Yet, while vacationing in Cancun with my family I ran into coworkers, students at my daughter’s school and someone who lived about a half mile from us (even though we didn’t know it until then). So much for anonymity. But, it is a great reminder of the importance of the Golden Rule:
Do unto others as you would have them do unto you.
Business owners that have sold all or part of their company to Employee Stock Ownership Plans understand this well. They recognize that many of the things that are important to them are also important to their employees.
Business owners are generally looking for a return in excess of what they could make as a salary working elsewhere. Employees also appreciate the upside potential that comes with ownership – a return on their sweat equity. They want the ability to see their wealth increase by more than just their salary as a result of their efforts. They want the knowledge that if things go well they can retire more comfortably than they could on their savings alone.
Whether it is an entrepreneur that starts a company or an employee that gains an ownership stake through an ESOP, pride comes through ownership. For many employees, ownership signifies much more than a job—it signifies a long-term relationship. Ownership changes the conversation to:
It is not them, it is us.
Many businesses formed because the founder had a better way of doing things. Innovation can be a growth engine that propels the business to success. Many employees also have ideas of how to innovate, whether that be product, process or market. As a company owner, employees are encouraged to innovate to generate success on behalf of the company and themselves.
As I was reminded in Cancun, it’s a small world and you better act like the whole world is watching. Companies with ESOPs understand this. In fact, they are counting on it.
In addition to blogging here, I also tweet regularly about topics of interest to ESOPs. Click to follow me on Twitter- @jlripperger.
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