“Treat employees like they make a difference and they will.” Jim Goodnight, CEO SAS
Why consider employee ownership?
Think about the first time you applied for a job or interviewed someone for a job. The conversation probably did not include a discussion of who owned the company. For public companies, this is not surprising, because employees may know what it means for the company’s stock to be owned by the public. At privately-held companies, though, the question of who owns the company may be more important. Ownership could affect whether the company is going to be sold, and to whom, and with what consequences. It could affect whether operations are going to be moved to a different facility or country. It could also affect employee culture and benefits. In a company owned by a few investors, or family members or founders, there will almost always be an ownership transition, and that transition can create anxiety, disruption and cultural changes.
Craft brewers who care about providing innovative benefits, competitive compensation, and tools for employee engagement might consider employee ownership as a part of a strategy to achieve these goals. Employee ownership provides a way for the current owners to sell their shares and also to create a unique employee benefit whose value is tied directly to the success of the business.
There is a growing number of examples of craft breweries currently using employee ownership for both ownership transition and employee benefits. Deschutes, Harpoon, Left Hand and Odell – to name just a few – have all become wholly or partially employee-owned. New Belgium was 100% employee-owned when it was sold to Kirin-owned Lion Little World Beverages last year.
Employee ownership of companies enjoys unusual bipartisan support. This may be because most of us work at companies, and we care about whether those companies are successful. We want to be part of that success, and we want to have enough money saved so that we can retire comfortably from those companies. Employee ownership gives employees both the responsibility and the potential reward that business owners have always had. Ownership can lead to financial benefits, but with it comes an obligation to work hard, make good decisions, and stay focused on how the business can run at its best.
Because companies have to be owned by someone, most owners think carefully about who would own their companies if they could not. There is compelling evidence that broader-based employee ownership, including through ESOPs, is correlated to higher sales growth, higher sales per worker than in companies without employee ownership, and longer survival rates.