Journey to an ESOP & Beyond
ESOPs are gaining traction. In the "Journey to an ESOP & Beyond” podcast, Doeren Mayhew's Jason Miller and Makenzie Wirth explain the process of the ESOP transaction and address ESOPs from a business owner's perspective. They illuminate the simplicity of ESOPs and debunk common misconceptions that ESOPs are immensely costly and complicated.
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Journey to an ESOP & Beyond
EP17 - Interview with Steve Baker on Financial Literacy
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In this episode, Jason Miller speaks with Steve Baker of The Great Game of Business about the critical role of financial literacy in building successful employee ownership and ESOP cultures. They explore why ownership alone does not automatically create an ownership mindset and why education is essential for helping employees understand how businesses actually work. Steve shares practical insights on how organizations can strengthen engagement, accountability, and performance by teaching teams to think and act like owners through a deeper understanding of financials and business performance. The conversation highlights a key takeaway for ESOP companies and leadership teams: financial literacy is the foundation that connects employee ownership to real behavioral change and long-term business success.
Interview with Steve Baker on Financial Literacy
Episode Summary
In this episode, Jason Miller speaks with Steve Baker of The Great Game of Business about the critical role of financial literacy in building successful employee ownership and ESOP cultures. They explore why ownership alone does not automatically create an ownership mindset and why education is essential for helping employees understand how businesses work. Steve shares practical insights on how organizations can strengthen engagement, accountability, and performance by teaching teams to think and act like owners through a deeper understanding of financials and business performance. The conversation highlights a key takeaway for ESOP companies and leadership teams: financial literacy is the foundation that connects employee ownership to real behavioral change and long-term business success.
Key Topics Covered
- Why ownership does not automatically create an ownership mindset
- The role of financial literacy in ESOP success and employee engagement
- Transparency vs. true understanding in business financials
- How leaders can build belief, buy-in, and execution through education
- Practical “baby steps” companies can take to build financial literacy
Transcript
Editorial note: This transcript has been lightly edited for clarity and readability while preserving the original meaning of the conversation.
Financial Literacy Month & the Real Gap in Ownership
Jason Miller: Welcome back, everyone, to the Journey to an ESOP & Beyond podcast. I’m your host today, Jason Miller. As you know, we seek to make all things related to employee stock ownership plans both accessible and understandable.
This month is Financial Literacy Month. Mackenzie Wirth and I touched on that last week in our last episode. During that conversation, we also discussed how owners and businesses can become more financially literate and what impact that would have on their companies. That naturally led me to think about Steve Baker at The Great Game of Business, who is here with us today.
We spend a lot of time in the ESOP world talking about alignment—aligning incentives, aligning outcomes, and creating ownership. And those things matter. They are powerful. But there is a quiet assumption underneath all of that that we have been peeling back. We tend to believe that once people become owners, they will naturally start thinking and acting like owners. But that is not always what happens, because ownership does not automatically create understanding.
Introducing the Real Problem: Ownership vs. Understanding
Jason Miller: And if people do not understand how value is created inside a business—what drives it, what erodes it, and how their role connects to it—then they are left trying to interpret something they cannot fully see. So today, we wanted to explore that gap from the top down. From where you are sitting as a founder, owner, leader, or executive—what does it look like when employees not only have ownership but understand the game that they are part of? And what happens when companies try to move in that direction but only go halfway? And I'm not equipped to answer that—but Steve, I believe, has some great insight there. So, Steve Baker, welcome back to the Journey to an ESOP & Beyond podcast.
Steve Baker on Financial Literacy Inside The Great Game of Business
Steve Baker: Well, thank you, Jason. It is great to be here. For listeners who may not know us, The Great Game of Business is one of 11 companies in the SRC Holdings family. That is where our ESOP resides, at the holdings level. We are about 2,000 people and roughly $750 million in sales. We are also the only company in the group that does not actually make anything.
So, when you ask what we are doing around financial literacy—especially during Financial Literacy Month—you would expect us to be primarily outward-facing. And we are. We spend a lot of time helping the broader world of employee ownership and organizations that are trying to do business differently. But honestly, we are also very focused inward. We have had to face the reality that we need to double down on our own financial literacy, like we ask other organizations to do every day.
Transparency Without Understanding
Steve Baker: Costs are up, and revenues are being pushed down due to the uncertainty we are all facing right now. What is interesting is going inward and helping our own companies, not only training up new people but also keeping the spirit alive. It is not just about growth and adding people. We also feel margin compression. Well, guess what? In a normal month, we might be looking at a 5% profitability in remanufacturing. That is $0.05 on the dollar. And that is already tight. Now start compressing that, and it gets even harder. So yeah, we are focused on that because at SRC, we win. We find a win.
Teaching People the Game of Business
Jason Miller: What does that look like day-to-day?
Steve Baker: There is the transparency part, right? They open the books and show people the numbers. But do they understand it, and what are they going to do with it? That is where the real magic lies. I hear people say that they do a version of this, and I challenge that. You are not really tapping people at all if they do not understand the language. The real strength is making your people smarter. Ownership must be taught. We must teach people how money works.
Belief Drives Buy-In, Buy-In Drives Execution
Steve Baker: The thing I was going to say is that belief is where it begins. If I do not believe it, I will not buy in. If I do not buy in, I will not commit. If I do not commit, I will not execute. You are always creating belief, trust, and respect. And the more you grow, the more you dilute that understanding unless you constantly teach.
“Get Rich Slow” & Financial Literacy
Steve Baker: Try to talk to somebody about “get rich slow.” That is what ESOPs really are. Warren Buffett did not get rich quickly. It is buy and hold. That is the lesson. We want to be practical, but we still like the idea that there might be a big win someday. But we are getting rich slowly, and that is the point.
Where Companies Fall Short
Steve Baker: I think a lot of it comes down to courage. Entrepreneurs are often not financially trained. They were technicians or idea people, and now they are trying to unleash entrepreneurship in everyone else. The key difference is financial literacy. That is what separates the haves and have-nots.
Courage Required to Share Financial Truth
Steve Baker: Where people fall is courage. They think, “I’m giving the company away, but I better not teach them too much.” That is the fear. But why not transfer knowledge the same way you transfer ownership? Make it gradual. Make it teachable. Make it intentional. Where people fall is courage. They think, “I am giving the company away, but I'd better not teach them too much.” That is the fear. But why not transfer knowledge the same way you transfer ownership? Make it gradual. Make it teachable. Make it intentional.
ESOP as Gradual Transfer of Knowledge
Steve Baker: Think of ESOPs as a gradual transfer of ownership. So, why not treat knowledge the same way? Financial transparency and education should also be transferred step by step.
Baby Steps into Financial Literacy
Steve Baker: I think baby steps are the right way to go. We created a 90-day quick start that includes the dollar exercise—walking a dollar through the income statement—and then mini-games—small 90-day experiments inside departments.
Mini-Games & Practical Implementation
Steve Baker: You identify a problem, assign ownership, and track improvement. People realize, “I didn’t know that mattered.” And that is the power of mini games.
Support, Community, & Free Resources
Steve Baker: If someone wants to try it, we will even look at it for free before launch. Most problems happen in design, not execution. We want people to succeed in getting started.
Conferences, Community & Shared Learning
Steve Baker: Our conference happens every September, and people come from all over the world to share stories. That is where you see transformation.
Ownership + Understanding = Real Impact
Jason Miller: Ownership is powerful, but incomplete without understanding. ESOPs align incentives, but understanding creates behavior. Do our people have ownership, or do they understand what they are part of? Ownership tells people they matter, but understanding shows them how.
Final Takeaways
- Ownership without understanding does not create behavior change
- Financial literacy is the bridge to real engagement
- Transparency must pair with education
- Leadership requires courage and consistency
- Baby steps are the most effective way to begin
Resources & Next Steps
- Explore additional Journey to an ESOP & Beyond episodes
- Connect with the team at www.JourneyToAnESOP.com
- Connect with https://www.greatgame.com
Listen to the Episode
🎧 Journey to an ESOP & Beyond
