EP30 - Challenges For Mature ESOP Companies

This episode addresses effort the challenges and applicable solutions for a mature ESOP company. Diana Clark and Jason Miller provide insight into including preservation of ESOP knowledge in the organization contemplating changes to leadership.  Other items we discuss include how to look ahead at areas that need to be thought about not only as a mature ESOP but also preparing ahead of time for these issues.  The discussion includes best practices that should be thought about post ESOP issues.  ESOP companies should be focused on the long-term sustainability as companies build out infrastructure the can produce solid results like employee engagement.  Ultimately, it takes work and ongoing focus to stay on top of this just like other areas of the business. 

Transcript

[0:09] Hey everybody this is the journey to an ESOP and Beyond podcast we're very excited to come to you today and just go over some things I think are super valuable the title today of our of our podcast is challenges. For mature ESOP companies and a lot of what we're going to talk about came directly out of our September and CEO conference where our group attended and we were. Uh speakers at the conference and so today we're going to do that me and Jason Miller and Diana Clark are going to do that together collaboratively. Um real quick as we introduce Jason Miller and Diana you've seen her you've seen both of them on the podcast um before but I want to make sure that as we start, you kind of know who they are and and but we are all in the same you know group The ESOP group under Berman Hopkins so with that Diana why don't you kind of give us a quick intro and then we'll get to Json.

[0:57] Hi well thanks for having me back it's always good to be here today and talk about esops um for those of you that haven't met our entire ESOP team I'm Diana Clark and I work. On the side of Birmingham Hopkins in an operational role I come from an ESOP organization where I was the head of HR and served in the leadership role um for over 10 years and my company um. Was acquired in 2022 and it was at that point where I realized that I wanted to give back to the ESOP community and really continue my my journey to an ESOP and Beyond and help others in their transition.

[1:32] Cool all right Mr Miller.

[1:35] Thank you Phil for having me back I'm I'm somewhat surprised that I got the invitation to come back but I guess I have to have it being part of the team so uh Jason Miller um my history my background is from Commercial Banking uh most recent years working within an ESOP group for a National Bank and and leading that practice uh and moving here to Birmingham Hopkins in uh capacity to help support uh new new esops new ESOP formations uh and then working with ESOP companies through challenges of All Phases of their life cycle.

[2:10] Cool so so what's cool about this podcast is we go as we go deeper into a lot of the way the podcast is going to change is that we we're we're we're doing a lot more collaboration with hey this is what we're seeing and this is what I'm seeing and I think as a group as we've grown and what's happening is we are we are seeing a lot more collectively from an experiential standpoint we want to share that you know on the podcast the other thing I will say just in case you're wondering and I know you probably are. Um I already kind of interviewed Jason and Diana so I already know their favorite movies Jason's is Lord of the Rings. Diana is 007 anything 007 um and here's so here Lord of the Rings meets 007 so here you go um should be a really really. Uh interesting uh in in I guess confrontation not a confrontation but a interaction between those 2, very very famous movie lines but so here we are. Um thank you guys for joining us before we jump into the topic and get deeper into it um I just want to kind of like say journey to an esop.com go to our website if you have questions check us out there's all of our topics are there.

[3:16] Um it's a really efficient way to get some answers on things that you might be wondering um the the podcast itself it's titled journey to an ESOP and Beyond because it's all about. All the things that go into you know creating an ESOP and then things after the ESOP the Beyond stuff that's really important so we're kind of. As we did this in 2024 we tried to kind of bring both of these types of things together. Um this is going to be a good example where we're going to we're going to go back and forth on things that I think are pre-op and also post-op even though the title is challenges as it relates to matrice Ops these are things that ESOP, companies that are going to become esops should be thinking about as we go.

[3:55] So let's jump in so real quick I wanted to start with this like you guys did a presentation at the conference um and it was. Really really good and it was right at the end it was really well attended from that perspective but what was it so what was the title of your presentation.

[4:12] So the title of our presentation was called preserving ESOP knowledge. During times of transition and so 1 of the things that we are seeing more and more of with Advanced or mature esap plans is organizations that are experiencing like a change in leadership. So we've got some senior leaders that are perhaps retiring or transitioning out of their jobs. And we're seeing this you know this younger Workforce and this new generation of leaders kind of coming up through the rank and file that are you know kind of broadening their job skills um but 1 of the deficits that I think we're seeing prior to this conference was that we're seeing these changes in leadership happen and companies aren't preparing for them so for example if we have somebody that.

[4:59] You know his butt in an executive level position like a CFO who's you know retiring after 15 or 20 years and that individual is kind of taking all of that ESOP knowledge with sound that that companies are starting to feel kind of that immediate need of you know what's next how are we going to kind of retain that knowledge and how are we going to, prepare for that transition so when Jason and I were collaborating on you know what is it that our ESOP Community here is a lot of and perhaps there's some new topics that we could introduce.

[5:31] This was something that had come up over and over again and as Jason being the head of our succession planning team on the ESOP side and myself working in an operational role with the background in um succession planning and helping companies plan for that we really kind of married our skills together and said hey let's talk about this in a way that brings attention to it um and helps and helps organizations and even like your administrative committee really get your arms around it and talk to you know take this back and talk to your leadership about you know preparing for some of these transitions so whether you're preparing for it in in the fact that you've got somebody that's retiring or you have some unexpected you know turnover I I call that contingency planning when you have like a subject matter expert who you know maybe wears 3 or 4 hats and you lose that person in a role then you know what is that deficit that it leaves in a company and how can we prepare prepare for those um things when they happen because they do happen quite often.

[6:35] AwesomeJason on your side um I know Diana kind of you guys both repaired the the presentation together what was your where were you leaning on that presentation. So my my view as we were talking Diana has you know practical in in the trenches experience with that that whole life cycle of of of her her company's Esau. And seeing that happen and for for me in working with ESOP companies as a banker afterward I got to experience. Uh each of those individual years multiple times from from from different companies perspectivesand.

[7:13] The everyone focuses on their own plan their own company their own strategy and these uh the the conferences are a great place for them to come together and kind of hear what what's coming next and then how did we get here and my perspective through that lens of secession planning is in each aspect where where are you today and then looking ahead through the lens of of an ESOP or we are an ESOP and then what what's next and in our our phases what are we likely to encounter. And then uh I I've had the the experience of seeing things that go wrong and things that go right and companies that do things extraordinarily well or have great foresight. Or great Insight from the communityuh and I think as we were we were talking about this Diana you can correct me if I'm wrong. We were like okay so the the ESOP itself. Is almost like it it's its own person its own person as an employee right if you want to think of it as an employee and how does it get cared for and then what are the the things that we need to put into managing the ESOP and to caring for the ESOP so that it thrives and I think it gets boiled down to a lot of financial components because we we concentrate on share price and we know the share price reveals and how important that is because it's a retirement plan it's a financial benefit.

[8:39] But the the nuts and bolts of the the tools available within the ESOP structure like the administrative committee. How do you keep it going and who's doing that work.

[8:50] Um and 1 of the things that I thought was neat and during our conversations that came up that we shared about. Is you can broaden the the burden across multiple people within the company, to care for different aspects of the ESOP so that it's not critical and it doesn't hinge on 1 role. So if that 1 person who has assumed all of the the administrative responsibility for the ESOP has a a tragedy or a break in service or decides they don't want to work there anymore that these up can still be cared for and if you just kind of pursue that line of thought and say oh well if that happened to us who would need to handle that uh who would need to handle the the filings and then who who does that piece who interacts with our TPA um and is there a way that we can. Uh get more engagement from a broader selection of employees that aren't currently functioning as a controller or CFO or ahead of HR that's that next layer of leadership that next generation and Leadership that we can start putting on committees or administrative committee or selection committee uh and get them involved so that they learn to care for the ESOP regardless of what's happening with the company around it.

[10:11] No I I think Jason to your point too I think 1 of the the benefits and talking points of our session was really to just raise awareness around the topic in and of itself because you know we know that people are most valuable um asset in any company right we we put a lot of time and effort into developing and cultivating really good talent. But then you know 1 of our talking points was ESOP is such a niche that when we do have you know when we do have a transition we can't necessarily just go to the outside and expect to onboard Talent or those that have like what we call like that ESOP skill set you know we we can hire benefit managers we we can train people to do tasks that are involved in the ESOP workflow but it takes a long time to to hire the right talent and then cultivate them and then train them on some of those pieces so I think you know. To to Counterpoint our discussion today too I think just raising Awareness on on um esops are a niche and they can be really vulnerable when when we lose the right Talent.

[11:21] And I think that that's the clear risk and a couple couple Vantage points of questions I was going to kind of kick into it's like obviously you're talking to an audience. Of of mostly these are ESOP companies right so they're they're sitting there thinking about their own issues. Um so I want to talk a little bit about some of their comments to this issue of like preserving the information or preserving the knowledge base of the esops. Um some of the natural changes in leadership with succession. And then kind of into that idea of like mitigating that risk so we're just talking about business risk when you get down to it you lose somebody that has a specific knowledge in your business.

[11:58] And then now you got to replace it or go through the trough of of difficulty of just trying to figure out how to make things happen. 1 of the things I know you've done a lot of or looking at doing more of is this train the trainer type of. Program which is really a directly a mitigate of the risk of losing that so talk a little bit about and you guys decide who wants to talk about like the the audience's reaction to that or some of the questions that they had around this concept. Are these types of things where we're trying to preserve the knowledge base.

[12:30] Yeah well I you know Jason I would say that the audience's reaction there was a lot of head nods you know this yeah this was you know as you mentioned this was the last day of of the ESOP conference and it it was well attended but I think in general I think you know there's there's so much commonality. On the topic that there was a lot of head a lot of head nods a lot of you know a lot of individuals in our audience were wearing multiple hats and so 1 of the things you know 1 of the takeaways from our time together was how can you prepare um.

[13:04] For for a transition and we created what we called a workflow based on the acronym Ace you know so it was like a Cess knowledge gather the information and then make this a a company process um we wanted to provide the foundation in helping employers create their own kind of ESOP operations manual. And our time at the conference didn't allow for us to get into you know a 3 or 4 our discussion on creating an operation manual but this is really kind of the precursor to that. And identifying areas and threats W within your esap workflow that we need to. Kind of backfill so when we talk about you know what are the takeaways um 1 of the takeaways was. Really tapping into the esot community and other resources that we want you know our our ESOP Community to know that is available to them and so you know those resources are are found with the nceo organization they're found in um.

[14:11] Other services that are provided through through us you know if if you have turnover in your HR team and you have to get somebody up to speed we want to help. Train those people and what those workflow processes look like we want them to know that the tpa's are also very helpful in those processes and that there's um you know the trustee can help. With that information as well so there's a lot of I think creating awareness too on like what are your resources when and what are your options if you find yourself um having to backfill um esap knowledge. You know 1 1 1 thing that sticks out to my mind is like just literally training the people to read the plan document. And understand the plan document like just talking specifically like they're they're required as an internal person to have specific knowledge of the Esau.

[15:02] It's like reading a tax return who's going to do it right it's it's complicated it's got a lot of legal language. Um and again like that's something that's very tangible that you can kind of say all right where do we start like a brand new person's coming aboard where do you start with this.

[15:19] Yeah and you know think back to those that that those that are listening that have a mature ESOP you think back to your own startup. And from day 1 when you got the plan document for the first time and you actually were going through it and reading it how do you apply the legally language to the everyday rules you know to the rules and questions that employees have. On plan participation and investing and eligibility so we have to you know if that knowledge leaves our organization we have to replace it and so oftentimes you know we can be a kind of a backfill and and helping um new individuals that are being onboarded into those roles we can help them get them up to speed a little quicker.

[16:03] Your your prospective Jason like when you because you've seen a lot of ESOP companies in your career. Is it more the norm that companies just kind of take this issue and say all right well we'll just figure it out later or like because it does definitely seems something like systematic or systemic here that where you have this problem where companies are not like embracing the the diversity of everybody knowing how this thing works it's like hey here let's give it to HR. And let's move on what do you what do you see. You know that that's such a great question and I'll tell you why so I'll start with the good news and it's something that Diana mentioned right so the good news is.

[16:43] There you can put documented processes in place and you can create tools like an operations manual. To to help alleviate any challenges that would come up.

[16:54] The other thing is I don't think it's as easy as saying while it feels systemic because so many companies experienced challengesif and as you as you were talking and as Diana was sharing I was thinking back to the interaction from the the folks in in the audience and how varied their stories areuh and if you if you put your mind to, the they're all at different stages whether it's 1 1 year when it's 5 years whether it's 15 years or it's 30 years as as an ESOPand. I I don't think you could point to the 30-year-old Esau and say they have the same problem as every other 30-year-old Esau and they have their own and they have their own culture and they have their own way that they've been managing and leveraging the Esau and I I don't want to say that there's some. There's some blindness there but I think there's some comfort and the culture and in what's been working uh and so they're actively looking for ways to how how do we how do we improve or how this might be something I've never thought about uh 1 of them shared about being an internal trustee so they have an internal trustee committee and so there are a great number of mature esops that have internal trustees uh that are at different stages and I share the story about a client that had a trustee committee internally but didn't feel like their next level of leadership.

[18:18] Have been trained on the responsibility and the liability of being a trustee but their culture for so many years had always been to have that internal so how can they maintain their culture but not risk the the Esau and the answer for them was maybe looking at getting an Institutional trustee for a period of time until that next layer of leadership can can be groomed to take over and then revert back to their company culture of of having an internal trusteeum likewise there's another uh young lady that was there at new to roll and all of the ESOP knowledge had left recently in in a job transition.

[18:59] And yeah I I think she's a little panicked and not knowing where to start even with who who are the professionals and what should I expect from them when I call them with getting these started because the ESOP was and I don't know 10 12 15 years old but it's brand new to her and that we we go back to that that where does the institutional ESOP knowledge reside and that finding a new person for a critical role with ESOP knowledge that's going to fit a culture is like a unicorn and you know the the good news goes back to how how then can you get a process how then can you get a tool it's so that the Gap is is is reduced for that new person enroll but there's nothing that that they they did or didn't do um that you can point to until you encounter it just like with with the internal trustee part um.

[19:55] And there's just infinite iterations within those companies that go ah if I can build a process around this if if I can build a tool around this if I can get more people involved then we don't have this crisis scenario where nothing's getting done around the ESOP because we we don't have someone to to fill that piece while they're learning to do their day job.

[20:17] How how much is it like when we talk about this stuff I kind of my mind goes towards the boring compliance stuff that people are like uh who who wants to do this this is. This is why like on that the office TV show like alright Michael Michael Scott doesn't want to deal with. The HR person right because it's just compliance stuff it's boring what he wants to do is he wants to pull everybody into a staff meeting and talk about some stupid. But the point is is that you know what's exciting to me business-wise is how do you how do I get my culture. In my people really excited about the the value of of what this looks like for them so they can kind of. And I think this is what's on people's minds too like how do I really maximize the value of my of being an ESOP and a lot of this as I as I say it I mean obviously I mean I'm kind of like I know compliance is important especially with esops right so if your guts are not right if your person it don't has the knowledge base then that makes the other part completely not working you would you guys agree with that in terms of like you know it's we gotta focus on this part of it as much as it might be like uh trudging through a swamp.

[21:19] Yeah I I love too that you brought the office in into our conversation today because it really is so for people that love to live in the world of compliance they they love the organization they love the checklists and they love you know kind of meeting those needs but Jason I think 1 of the things we talked quite a bit about was kind of the unintended consequences of you know of of what happens and you know we know how valuable the ESOP tool is for culture and you know company growth and employee engagement but I think you know 1 of our takeaways to was was really to empower the administrative committee you know to work with their leadership and and the key stakeholders in the process and and have it really um be driven from that committee and and to do it and to talk about it at least once a year so make it make it.

[22:11] And have conversations in a way that they are process oriented so if we commit to talking about this 1 time a year we'll have better outcomes and we'll be able to you know rally the troops around the topic. Yeah I I I completely agree with that and I you fill it back to your your point on no 1's to really deal with the compliance piece and the filings and we went through kind of a consequence list of non-compliance um and I think you can look at it from a carrot or stick right so the consequences of not not filing on time. That no 1 want to deal with with the IRS for for non-compliant.

[22:53] Um no 1 want to delay their valuation because they didn't get to their projections in time so that the the share price reveal is is is delayed or there's an issue.

[23:03] Um But the the the carrot aspect if you want to in invert it is going back to getting people in in engaged and involved. Across the organization because everyone is motivated by the common cause of if the company is better off that it proves out in the share price appreciation we're all participating inand communicating that down layer right from instead of going well if we don't comply and then we've got penalties and we have some other unintended consequences but if we have a culture of Engagement. And we're able to communicate that then it gets everyone rowing in the same direction and unlocks the power of of what a new South is all about in my opinion. Diane would you agreeyeah I agree with that and you know 1 of the unintended consequences that we talked about in our session was you know how do employees. Interpret.

[24:00] Turnover in an organization and if somebody in the esap seat or seats is moving on from their job that that creates um kind of a lack of of social engagement you know it creates a lack of um confidence then in those that are managing the ESOP you know we conditioned employees that each and every year they're going to get this statement. And my employees would always walk into my office in January right around W2 season and say hey are we you know are we on schedule to get our esap statements. In Q3 of this year and you know I shake my head so when we lose a valuable team member. An employees have an awareness that they may not get their ESOP statements on time too you know they they lose confidence in us and so we want to be sure to um.

[24:52] To give them that reinforcement that we are operating effectively as as a leadership team we've got some processes in place that that if we do lose some esap knowledge we're doing some contingency planning the company's doing succession planning and we're really preparing for if and when we we have a transition. I think that's that's really important because the consequences sometimes we don't even think about it but then they're in the middle of itand so the person that you that asked a question she's brand new. To the company she goes to this conference right to probably get some institutional knowledge on esops and the reality is it's like a fire hose right it's going to take time and you can't just learn it like that so.

[25:35] You know I know and I know even for us too we've had new companies come in as new clients that a brand new leadership team like they don't know anything about esops and it's like you know you're going through this you know this process what's the best like advice for that person who's sitting in the seat like they're brand new to that um as far as.

[25:54] You know what first off you know if they had 12 months 24 months you know in the next 2 to 4 years what should they focus on. To get that knowledge to be up to speed so they can do their job well I would imagine that's overwhelming to be hired into something like this you're like oh man now what do I do.

[26:15] So how would you guys answer that I see the delay Diana so I'll take it I'll take a stab at that first and then you you can you can correct course for me if if I'm off um I I think a lot of it I think the focus really has to concentrate first on company culture for that new person involvedandthe the board helps then the rest of the management team those 2 pieces help set that stage for that new individual. And and bear the responsibility to to say here here's our culture here's why we hired you or here's why we moved you into this role.

[26:54] And you're obviously capable because we we hired you for the role but now we need to put culture first and culture.

[27:03] Is what you. It's almost likefarming and and kind of cultivating culture right that that element of if if we focus on. And then we apply the job role then we start looking at how do we utilize the ESOP what do we need to do for the ESOP from the ESOP by the ESOP uh that allows us to keep doing whatever it is that we do for manufacturer for construction company how do we do it our way and then how do we get out of the wayuh so thatand that that's going to be administrative. That that just by Nature we have to do these things to keep it healthy we we have to do these items to stay in compliance and we're not doing them as an add-on if we look at it as an additional burden we have to look at it as this is what preserves our culture to allow us to perform how we've always performed and set the stage for the next part of our our future and our expansion and our growth and to honor the promise of the ESOP to the employeesum and I think culture first wraps underneath of it all of the tedium that could be considered TDM if you look at it individually like I have to do this I have to do this I have to do this I have to do this because it it gives an overall perspective.

[28:23] Yeah no I like that Jason and I think I think to the tone of our conversation and our Workshop we you know culture really drives so many um different moving Parts in in an ESOP and So for anybody that that's new to an organization whether you know you're an employee and you're part of the rank and file or you're in a leadership role or you are you know directly working with with the ESOP in ESOP operations it's really I think the company's responsibility to take an interest in how you're on boarding each you know each and every 1 of those roles and and for somebody that's coming on board. That's going to be managing the ESOP or working closely with with those moving pieces and parts you know maybe it's HR maybe somebody in accounting or somebody in a leadership role I think we want to be mindful of hiring individuals that share what I would like to call you know what is your company's ESOP DNA you know we want to be hiring individuals that are coming into our organizations that.

[29:26] Already have like an employee ownership mindset and we want them to come on board and use their talents and skills to enhance the organization and so I think that really speaks to that culture piece and then I think that if we have strong philosophy in managing our esap operations as more of a strategic tool then we help coach and develop those people into those roles um 1 of the you know 1 of the head nods that we got at our Workshop was how many how many individualscurrently have you know the ESOP.

[30:01] Roles and responsibilities in in their job scorecard and people were like you know we we haven't done enough we haven't drilled down to enough layers to really make sure that we've dotted our eyes and crossed our T's and some of these areas so I think.

[30:16] You know as as we're still talking about the workshop and some of the outcomes there those are some other takeaways too for our for our listeners who are you know kind of preparing for these Transitions and thinking about onboarding. You know new employees any stop companies is there so many opportunities. To really position your ESOP as a catalyst to help you grow the business in a catalyst for employee success, so kind of along those lines too I mean 1 thought I had for people that are thinking about this now is what we're kind of saying some of what we're saying is that a lot of ESOP companies probably don't have enough people that understand the ESOP just in general that's a general statement and my question or thought or comment is if it was a 50 person company if it was a 200 person company if it was a thousand person company. What would you say would be the number of people on let me just call the ESOP committee and we can kind of use that generally speaking too like you ESOP committee could be comprised of individual employees that have ESOP knowledge and have a role and responsibility as it relates to be part of the you know solution to be the knowledge base so 50% 200% thousand person what would you guys say would be a good Target for people to build a good Committee in those types of things.

[31:35] Yeah so I'm going to jump in here somebody just somebody else just asked me this question too at the conference and I think in terms. Of if you have 50 employees or 100 employees you know really start with with you know 2 to 3 persons per you know 50 employee companies so those are kind of the nice makeup for a manageable you know esap team but I think. I think what's more important too is that the people that we are appointing to these teams whether it's a Communications team or it's an administrative committee that they really have um I think the right attitude to serve as ESOP ambassadors because we want these people kind of champing our policies and procedures and being good cultural ambassadors so you know keep that in mind too that we want to be vetting people you know across the organization to be part of these these committees and um.

[32:31] That that we have a good cross representation of that. Yeah you don't want Dwight Schrute there right right right probably not so it's important like who do you choose and I think as you go up I mean it might be at some point.

[32:45] Um diluted to have some like 10 people even if it's a thousand person company because you can only do so many different things part of the other that side of it is like what level of person are they. Higher management higher level management are they mid-level management are they um you know are they rank and file are they down in you know the the warehouse like who do you choose in this committee and that probably is more of a cultural thing but it's also more of a question to I think people might Wonder does it help to have like a represent representation of different departments or people in the company as opposed to just you know keep people like hey here's my key people and whatnot so what do you what are your thoughts along those types of decisions. Yeah I I'm gonna jump in there again too absolutely I think we need to include all of our I think we need to provide opportunities for all of our employee owners to, participate in our esap um committees or you know we call them esap teams or councils um you know whatever whatever the the name. Um of of your organization chooses for for your group of individuals that represent those people so I I'm in favor of including. You know members of the rank and file including those in leadership and management roles that can help guide decisions and also.

[34:04] You know provide some social support to those other employee owners to participate in those in those committee meetingswhat do you think. I'd add I I think um. The engagement is a multiplier and engagement is not dependent on a specific role within a company and you can take an individual who is uh is is actively engaged with the the spirit of the culture of the company and you can take that. And spread it across multiple Avenues within the company itself just by by that Force. Versus if I have this role that has this responsibility with someone who's not as engaged it might not have the same result.

[34:50] Um and that was 1 of the topics I think we we talked about or we meant to talk about Diana I think we we did at least in the collaboration. In the idea that certain things are going to fit so you know filing the IRS forms is going to happen as an accounting function or Finance function of of the organization that doesn't need to be passed to someone in a construction company on on the front line right um but other elements of communications uh or in the administrative committee uh or communicate those elements as other committees that help the Esau. To to function and function well those responsibilities can be distributed to almost anyone practically that's willing to step up and learn about it. And that opens the Avenue for for it to kind of skip over and the putting the additional burden on just leadership. And identified roles because if we we attach the 2 the role and the responsibility. Then if you lose the role and there's change over there then there's an additional Gap versus having it somewhere else so I think that's a a really important thing to consider is it it just doesn't have to attach and I I'd take engagement any day. Over someone that has a specific role to to take that responsibility yeah.

[36:06] As far as engagement goes and this was this came up in my session tooum 1 of the things that I think is helpful for people for companies to do is is to.

[36:16] Um survey and and do engagement surveys that help to kind of figure out like what how effective and we talked a little bit about making that survey a lot more ESOP oriented as opposed to just normal engagement so because it there should be something different in an ESOP company. Then there isn't just a non-ap company and so we're engagement itself I always think about it as hey if my leadership is successful in building a culture that has you know is compelling for people there's going to be engagement but what we're looking at is the tool of employee ownership. And leveraging the tool and then measuring the actual employee ownership engagement so so within that I know like in our session we had somebody like look at like. How often should we do that or what what what are some thoughts or ideas around um having something for at least to to look at the data and say where where do we even stand today and where everybody knows uh actively engaged culture is going to outperform a non-active you know like a disengaged culture right just in general.

[37:16] Yeah yeah I I attended several sessions at the ncu conference and the topic of Employee Engagement surveys came up several times and I think that you know you can be on both sides of the fence with this 1 you can love surveys or or not love surveys but I I encourage especially for a newer ESOP to kind of measure.

[37:41] The workforce I I'd like to say about 6 to 12 months into being an ESOP because 1 of the things that we want to measure really is. Is the employees understanding of what that isap benefit means and their comprehension around it and the other value I think to putting together an engagement survey that's more esap focused also allows like a newer Communications team to determine. How valuable and how impactful the programming that they've been providing to their Workforce has been so it allows that communication team to get some feedback on that program and you know we know that employees, um just like consumers they may not love surveys they don't you know they may not want to click the button or give us feedback but I think it's important that as Leaders um that we we do it and we're systematic about it and then if we're going to do a survey. Also follow up and provide the workforce some feedback on those results so if we're going to if we're going to see the process through full circle. You know let's be systematic about it let's bake in not just general Employee Engagement questions but let's also customize some questions that lets us know how we're doing um as an organization on our esap programming.

[39:02] I think that's good I I would also add to this like I thinkfrom a committee standpoint you can't just and this is me this is my opinion I wouldn't just form a committee and say all right we'll have a good day you know I would basically get hey these are your goals like we want you to accomplish obviously we want the committee to be knowledgeable but we want them to affect change in the organization in a sense and hopefully give them the room to do that and their day and also give them maybe an incentive to do that. From a reward standpoint but things like we want maybe in the first year the committee to really helpbetter educate. Employees on say financial literacy now we have something in the engagement survey to to measure and say hey are they effective at doing that so here's your goals. You know or let them come up with goals and those get kind of shaped by the the leadership and then go out and do it and then every year obviously you're like how effective are they because I think you gotta you gotta challenge people to get stuff done and those things I would say kind of a position Diana you do a lot of this work so those would be things that would be helpful I think to companies to not just have this um you know like weird like hey this is just fun right this is not a fun committee I mean it can be fun we should make it fun but this is a committee that's kind of like important right so how do you how do you use that idea behind you know building and improving the company as a as a wholeyeah well I think I think to your point too.

[40:30] 1 of the things that we want to measure somewhere along the way for. A mature ESOP company so let's say you know 5 to 5 to 10 years post the transaction is that you're going to have a Workforce that falls in this bell curve. So you're going to have new employees and then you're going to have you know employees that have been there for 10 years and have been you know employee owners for 10 years. So they're comprehension on you know plan fundamentals and how. Their roles really impact company performance it's going to be different than the than those new hires that you know have been there from let's say year 1 to you know year 2 3 and 4. And so I think to like the value of that survey allows us to kind of customize and flush out some of the.

[41:16] Um some of the points in the workforce that if we're customizing our programming and we're using our communication team to drive um.

[41:25] ESOP comprehension which we know impacts company performance right if we have highly engaged employees that's going to impact company for performance which is going to impact their esap benefit so all of you know kind of all this comes full circle and it's really kind of nurturing where you're at in your journey to an ESOP and saying hey these are our you know immediate goals and here's how we want to meet those and then here's our long-term objectives.

[41:54] Yeah I think that 1 of the things I would kind of like as we close get closer to the close of this podcast is. Our approach whether this is not there to say Hey you know we're looking to try to help every company in in the country but our approach in general is and I think this needs to be.

[42:12] Pretty clear I think across the board is people start thinking about how to do this it does make sense to get an advisor like whoever that could be I don't even know who you might choose but get some help and it the cost of an advisor helping you, it's worth the investment only because there especially if they're if they're thinking about it the way we're thinking about it which is look we want that we want to work our way out of every single engagement like we're not there to put ourselves permanently we don't have we don't have the time or the bandwidth to do that what we want to do is get the companies stand on its own be very healthy build these committees and then ultimately they're completely independent of a lot of help but what's happening is really that there's not this is something that's generally not being looked at they're not putting the importance on they have these issues where people leave and then they got to replace them and then they're just scrambling and they never really get what they wanted to get out of the ESOP as a company. And I think that that's our real goal in terms of helping companies think about this so our advice really is whoever you hire hire somebody that knows what they're doing but hire somebody that can get.

[43:14] The company out of that place of of being dependent but having good ideas to become a really solid and and and internally have this type of capability. Yeahso um with that I mean I guess we should be as we think about this from a your perspectives um. Coming to the conference was there anything else that people asked you that was like hey that was like a strange question or did we cover all the the questions that they had.

[43:42] I think you know I think we covered the questions that that came to us I would say that. My takeaway was what was the theme what was the theme of the questions yeah you know and what I love about the and CEO events is that they're always um very you just get so much information there's a lot of collaboration that happens a lot of networking that happens. And there's so many good breakout sessions that as an attendee when you go to all these sessions you have all these takeaways like what do I do first. And you know if we could always get your if we could always help our audience get their heads wrapped around like what do I do first and how do I prioritize that you know we're we're here to help. Umhelp you think through some of that but we're also here to let you know too that there's a lot of really good resources that you can get through the nceo that you can get through some of your other you know e esap um providers and we want to raise awareness about that too and that was 1 of the takeaways in our session is that there's a lot of support to help you through this you don't have to go through it alone.

[44:48] I think that's a good point Jason do you have anything on your side. I would agree and in that everyone's in their own company in their own culture and their own role their own stage and feeling alone Diana I think is is where a lot of folks find themselves because.

[45:06] Not knowing what can be changed or what can be affected by change or what questions to ask.

[45:13] Uh is kind of a dark place to be when you're the 1 that's responsible and so you know please re Reach Out, and be curious stay curious ask questions call call your providers. Call us that's why we're here right um and I'll I'll take the the the session was a success by the 1 CE in the back who who said. I've I've already called my committee and we're meeting on Monday to talk about putting our operations manual in place right so that they can they can start that that path and that's a huge win. Uh just awareness and then taking action on on that awareness and so no 1 here no 1 who's listening is alone uh and there are plenty of folks that that are able and willing to.

[45:57] Yeah I think I think what I would add is we kind of close out it's just obviously those conferences to help build networks of of other ESOP companies so always ask questions of other ESOP companies have been there done that um keep their numbers in your in your cell phone and start building a network of people that can be peer-to-peer super helpful I think that's a. I think sometimes peopleobviously we want you know we want you to get good advice Sometimes some of the people that you talk to at those conferences they've been working on it for 20 something years and they're great resources and and they're free most likely I think so um that's I think that's 1 of the major values of conferences is being able to just ask questions of other companies and see what see what they're thinking so.

[46:43] But but definitely thank you guys for the episode today I think hopefully helpful as we go through some things that are definitely challenges and some things that you can um definitely get ahead of if you're brand new to an ESOP and or building your ESOP now or even if you're in the middle of this and you're not there yet or people are you know like leaving and say hey I'm leaving this next year you hopefully are thinking about like how to build these committees a little stronger.

[47:10] Soall right guys thank you so muchwe'll see you next time all right thank you for for everybody else we'll see you on our next step on this journey to Nissan.