232: EO A-ha Moments Volume I.

Since 2021, we've been collecting EO A-ha Moments from every guest of this podcast and the Owner to Owner podcast with Jesse Tyler. The EO A-ha Moments usually represent the first time our guests knew that EO could be transformative, so we've decided to compile them and share them in early 2023. Today we feature Chris Fredericks, Tracy Till, Doug Schukar, Vince Kruse, Ivette Torres, and Jennifer Briggs.

Listen to this episode on Soundcloud or subscribe on Google or iApple Podcasts.

The ESOP Podcast is licensed under a CC BY-NC-ND Creative Commons License.

The body of this episode originally aired on March 30, 2021 as Epsiode144: EO A-ha Moments Volume I.

Episode 232 Transcript

[00:00:00] Bret Keisling: Since the fall of 2021, we've started almost every episode of the EO/ESOP Podcast with our guests, sharing their EO. A-ha Moment. On the Owner to Owner podcast, host Jesse Tyler concludes his episodes with his guests sharing their EO A-ha Moment as well. I find all of the EO A-Ha Moments interesting and powerful for they represent usually the first time the various guests began to understand employee ownership in a whole different way.

[00:00:27] Over the next number of weeks, we're going to be sharing a lot of these EO A-ha Moments from both this podcast and the Owner to Owner podcast. And we're going to kick it off with volume one, which we originally aired almost two years ago, in March of 2021.

[00:00:40] I hope you enjoy the EO A-ha Moments and I'd love for you to reach out and share with me your EO A-ha Moment. You'll hear contact information at the end of the episode. I hope you enjoy.

[00:00:51] Bitsy McCann: Welcome to The EO Podcast, where we amplify and celebrate all forms of employee ownership.

Bret Keisling: Hello, my friends. Thank you for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. In September, 2020 on Episode 101 of the ESOP Mini-cast I shared my EO "A-ha Moment." I described it as that moment where I realized holy moly employee ownership isn't just good, it has the potential to be transformative.

Bret Keisling: When we released that episode, I asked folks on social media to share their A-ha Moments, and I was overwhelmed with the responses. It was interesting and they were fun. Since that time, every guest we've had on the podcast, and we've had some great ones, have shared their A-ha Moments. So today I'm going to bring you six of those A-ha Moments.

Bret Keisling: Now, in the interest of time, I'm only going to use a sentence or two to introduce each of the guests and I'll tell you which episode their full interview and conversations appeared on. I hope you'll check out the full interviews at www.ESOPpodcast.com. And by the way, every episode on our website comes with a transcription of that episode. So for the longer episodes, you can scroll through the transcript or use a search function.

Bret Keisling: I'm going to start things off with my own A-ha Moment. Now, one of the hallmarks, one of the most important parts of employee ownership is creating wealth. And a couple of the examples you'll hear coming up, talk about seeing that wealth as being their A-ha Moments. But for me, long before I saw any actual wealth, I saw potential.

Bret Keisling: In 2009, I became the president and CEO of an employee owned company; about $20 million in revenue and about 50 employees. We had a kickoff meeting that summer, but it was our first company meeting in October of 2009 and we're really kind of talking about the ESOP and digging down a little bit. It's new to everybody, myself included for the most part.

Bret Keisling: This company sold and serviced commercial laundry equipment, not just for laundromats, but this really huge equipment that might do mega hotels and that sort of thing. One of our employees was a really talented service technician, blue collar guy, really, really smart, really, really talented and midway through the meeting, he raises his hand and he says, I think we should give our Christmas bonuses back to the company, put the money into the company. We'll make it out on the ESOP in the end.

Bret Keisling: That was my A-ha Moment. When this guy was willing to stand up and offer to give up a Christmas bonus, I just thought, wow, I've never seen anything like that, any employee in any context before, this is special. It was my A-ha Moment. Now, before I get to the others, I do want to explain a couple of things really, really quick. It wasn't a good idea. First, if you're going to set up an ESOP or convert to employee ownership, that is a benefit. If you take away another benefit, you're diminishing everything about it. Secondarily, and I was in the room when he made this suggestion, nobody knew he was going to suggest giving back Christmas bonuses. I bet his wife didn't know. It would have been hugely unpopular. And the third thing, and it's okay if you laugh at this, I happen to be Jewish. There is no way in heck, I'm going to be the CEO of a company and cancel Christmas, not going to happen!

Bret Keisling: So, the idea itself, and I think this is important, the idea itself, wasn't a good idea. The A-ha Moment for me was the spirit behind it, the passion behind it, the desire to do whatever it takes to build his business. That was my A-ha Moment.

Bret Keisling: Now, I'm not alone in seeing the potential. Chris Fredricks is the CEO of TVF, an employee owned company, and Empowered Ventures, which is an employee owned acquisition and holding company. Chris appeared on Episode 139 of the podcast, and he also saw the potential.

Bret Keisling: Do you have an EO A-ha Moment?

Chris Fredericks: Yeah, definitely. So for me it was 2010. I was the CFO of Top Value Fabrics at the time. And I had been asked by the founder and owner to help him figure out his succession planning for the company. And I had heard of employee ownership and ESOPs at some point before that, but I didn't know much about them. And even at that point, it's not necessarily what immediately came to mind. But the way it transpired, I was handed a large stack of envelopes and like manila envelopes and papers and stuff that the former president of the company had accumulated as he had worked on succession planning options. And I just started digging through this pile of papers and one of the manila envelopes was labeled ESOP. I dug into it and I thought, this is interesting. And just the way it worked out, the paperwork included some contact information, which is for a person who worked for the accounting firm that we worked with and I ended up calling him up and learning more about ESOPs. And from that, it was pretty quickly I realized with a lot of excitement that this was probably, you know, the solution for Dick Hanzel the seller potential seller.

Chris Fredericks: But for me personally, it was a huge "A-ha" because I had always had a really big interest in working for a great place to work and being part of something special and big. And I felt like I was still finding -- looking for that, you know, in my career. And I very quickly, when I read that I got very excited because I thought, you know, this could be something I could get really excited about. So lucky for me Dick Hanzel was also interested and supportive and that basically led us down the path to where we are today.

Bret Keisling: That is excellent. And what I like Chris is it's not just what you saw it do for Dick, but it was what you recognized as the own, your own potential on your own career path and where you want it to be. That's very powerful. I love that.

Chris Fredericks: Yeah. Thank you.

Bret Keisling: Next up is someone who's had two A-ha Moments. The first when she heard about ESOPs the second, when she saw the actual wealth being created and distributed.

Bret Keisling: Tracy Till was our guest on Episode 138 of the podcast. She's a co-founder and former co-CEO of Butler/Till an amazing employee owned marketing firm. She's an advisor for Certified EO and she's on the board of directors of EOX. She's also the national co-chair of marketing at the Private Directors Association® and Tracy serves on private company boards of directors as well.

Tracy Till: I've had several. The first one I had was when my business partner said she wanted to retire in a planful, mindful way and came in and said, let's let's plan our retirement. And our CEO said you could private sell, you could merger and acquisition type sell, or there's this thing called an ESOP. That was an A-ha Moment. The other one was really recently. One of the gentlemen I had worked in my career for -- with alongside with for years, joined us at Butler/Till at one point. And he actually retired recently with a sizable, and I won't share the number, but a sizeable number of stock value in addition to his 401k, that enabled him to be a stay-at-home dad. That's an A-ha Moment for me!

Bret Keisling: Can I ask, when you say stay at home dad -- my children are in their twenties being a stay at home dad would not be impressive -- but he's relatively young with a sizable retirement?

Tracy Till: No, he just married a young girl --

Bret Keisling: Oh, right!

Tracy Till: -- woman later in life.

Bret Keisling: You are not alone for a lot of people -- and what I love we see throughout the employee owned companies -- is it is getting the money. And for some people it's, like your colleague, he got the money, but for everybody else to see that somebody got that. You've shared an "A-ha Moment" that a lot of people understand.

Tracy Till: Yeah. You know, and that, and it's not so much about the greediness of money, you know, the greenery of money, if you will. But it's what it enables you to do at a pace or in a timeframe that probably most people never would have considered. So, it's a huge blessing.

Bret Keisling: Doug Schukar appeared on Episode 127 of our podcast. He's the CEO of USA Mortgage. USA Mortgage became an ESOP December 31st, 2017. It had 535 employees at that time. It did $2.5 billion worth of volume in 2019 and at the time we recorded this, in the fall of 2020, USA Mortgage had 900 employees and was on target to do 4.6 to $4.7 billion worth of business.

Bret Keisling: You have been on a path that has gotten better. Is there any moment that you would say, wow, it looked good. This is the moment, "A-ha," where I realized it was incredible.

Doug Schukar: The valuation from last year. When it went up six-fold, nobody expected that. You know, each one of us in the executive team kind of wrote down a number of where we thought it would be. And again, I did that after Procter & Gamble and before mortgage banking, I was in small-scale mergers and acquisitions. So we dealt with a lot of valuations on different organizations and so I've got a pretty strong familiarity with how they're done, but even I was off on my best guess and what I thought the growth of that would be from a numbers standpoint. And then I'm going to be even more excited to see what it does again. I don't think you can have back to back 600% growth type numbers. I'm not even forecasting that, but the statistics this year are equally, if not stronger, equally as strong, if not stronger than last year's numbers, but I can't imagine a growth rate. But these are, these are the A-ha Moments. I think we're in it right now. Just to see these statements for the various employees of the organization.

Bret Keisling: Can you imagine being an employee owner, getting your annual statement and seeing a 600% increase in value in one year? Unimaginable, but absolutely wonderful! So if you're an employee owner at USA Mortgage, having that statement must be your A-ha Moment, right? Seeing all that value, that would be an A-ha Moment. Well, it just so happens that our good friend Vince Kruse is a mortgage broker at USA Mortgage. Vince has appeared on a number of episodes and on Mini-cast Episode 109, he shared his A-ha Moment.

Vince Kruse: How I got to an A-ha Moment, and it really started with a "huh?" moment. It was announced to us that we were becoming owners of the company kind of in surprise at our company kickoff party. And so we all kind of found out at the same time that we just, you know, a few weeks prior had just bought the company from the founder, Doug Schukar. And we were all sitting in a big auditorium, you know, doing the presentation portion of our company party and it was announced to us that we were selling the company and, you know, a lot of concern and nerves kind if went high there. And then when it was announced, you know, it kind of slipped through some of the potential suitors that wanted to buy the company kind of listed off some other big banks out there, but then went to, you know, panned out to us on the video that it was all the employees who had just bought the company!

Vince Kruse: It was really cool, exciting everybody was pumped, but we didn't, none of us knew what that meant. We were just like, wait, do we owe him a bunch of money now? Like, do we have to pay our paycheck back? Like what's going on?

Vince Kruse: So it was a big "huh?" moment for me and I did a deep dive. I, you know how some people like hear something and jump on to Wikipedia. I jumped into any resource I could find, which was very little at the time. There's more now, but not, not a ton more -- your podcast being one of them that really let me get off the ground with that.

Vince Kruse: But my big "A-ha Moment "was after getting into all that going to, I think the first conference was in Kansas City that I had gone to for the Heart of America chapter. And just sitting through some of the classes, some of the sessions learning about like from a completely unrelated to our company standpoint, it wasn't the owner trying to tell us, hey guys, this is cool because of this. Or, you know, somebody else telling us why it was cool. It was just ESOP professionals explaining to us here's what these things mean. And you know, at the kind of entry-level, the 101 course level explanation of this is exciting because of this. This is what this really means. When they tell you that you don't, you're not paying into it. You don't owe any money, you don't invest your own cash into this. It was like, oh... Wow! A-ha!

Vince Kruse: You know, they really did mean this! Like this wasn't just kind of like a cool PR piece to send out and tell the employees to be excited about it so we can tell, you know, future employees, recruiting, whatever else. It's not like some made up thing. Like, yeah... it doesn't really mean anything though. Like, this is real, this is solid. This is, it's a government established program. Like we really did transact. The company was sold from the founder to the ESOP trust. And really learning that and hearing it from a variety of other ESOP related professionals and seeing other people from companies that were also employee owners and all the other stuff that goes on at these conventions, it was really eye-opening. Because it was no longer, you know, the ESOP sandbox that I was aware of was my company. I didn't know of anybody else that had ever said anything about an employee owned thing, any employee owned company. It was literally just, oh.. are we like the first one? You know, what is this?

Vince Kruse: And that was really neat was to find out, you know, I sat at a table with a guy that worked at a company up the street from our home office. Okay, cool. So we've made a connection. We've had a kind of a networking group since then of other local, you know, we're there probably within five or six zip code area where we live, where we live and work, of other people that worked for employee owned companies. And it's been really cool to help create that relationship and keep that relationship going just for us to kind of have our own brainstorming, networking kind of situation, where we can talk about what we're doing in October and what we're doing throughout the year.

Bret Keisling: Vince, here's what I love about this. You had that "huh?" moment and it's an important reminder. So many people did, I've been focused on the A-ha Moments. So many people were like, uhh... it sounds interesting. And you took us through that. I love that you did the deep dive, but it was the Heartland of America Chapter of the ESOP Association where you just at that conference, that was the A-ha Moment. And now everything else that you've done, all of the work you're doing as an ambassador at USA Mortgage, all of the work you've done with other companies in St. Louis, coming on the podcast, sharing your story, all of that really does spring from that A-ha Moment. Am I right?

Vince Kruse: Yes, that exactly the origin there for me.

Bret Keisling: Ivette Torres is the conference director for the National Center for Employee Ownership. She appeared on episodes 140 and 141 of our podcast in a two-part episode about NCEO's virtual annual conference that's being held in [April] 2021. The A-ha Moment was part of Episode 140 and Ivette, it's worth noting, prior to going to work for NCEO was an employee owner herself for a period of time.

Bret Keisling: Have you had an A-ha Moment where it was just, this is the best thing since sliced bread?

Ivette Torres: Yeah, definitely. Probably not so much in an employee owner view, just because I think when you're in it, maybe you take it a little bit for granted because everything works very smoothly. You're like, oh yeah, I give my opinion. Everybody, you know, is open to it. We have great staff meetings. It's like a small family. So that part you kind of take for granted. So I didn't really necessarily have an A-ha Moment. But I think for me, our first event -- or my first event, I should say -- in Pittsburgh was an A-ha Moment because it really brought to me like attention that what I'm doing is important. That employee ownership is really important, that it's very special and that it's really going to help our economy move forward. And you know, like you said, it's, it's a very large event. So there's thousands of people, but almost feels like a family reunion because everybody knows each other. And if they don't know each other, they're very welcoming because they have a lot of similarities. So when you look around, it really is like an "A-ha Moment." Like, Oh my God, this is really important. And I'm so glad that I can participate in it and I'm so glad the NCEO is here to bring all these people together. So it really, it really resonated with me.

Bret Keisling: We have one more excerpt for you. So far, two of us have seen the potential of employee ownership as our A-ha Moments. Two others saw the value being created. And two more, it was the community of employee ownership that gave them their A-ha Moments. Our next A-ha Moment will probably surprise you. It surprised Jen Briggs - and she's the one who had it.

Bret Keisling: Jennifer Briggs appeared on Episode 123 of our podcast. She was an employee owner and head of human relations at New Belgium Brewing for a number of years. She's currently an EO consultant and educator. She's the board chair of an ESOP company. She's affiliated with the Beyster Institute, Rutgers University's Institute for the Study of Employee Ownership and Profit Sharing, and GRITT Business [Coaching].

Bret Keisling: Can we take a couple of minutes, and you I understand had two of them, one domestically, one internationally. So if you don't mind, would you share a little bit about your "A-ha Moments" and what really crystallized it for you?

Jennifer Briggs: Well, you'll have to remind me which domestic one I told you about. But my international one, I was already working at New Belgium. So, you know, I had learned so much from them and was, you know, going through the motions and like the good motions. I don't mean that in a bad way, but you know, all the things that we were doing it was really cool. And this company from near Cape Town, South Africa came to visit us because they wanted to do employee ownership where they were at too. And so I took them through the whole day, showed them all the traditions, the artifacts, the practices, the people, you know, the whole, the whole gamut at the brewery spent a fantastic day with them. And then at the end, of course, we were sitting around having a beer and I asked them, I said, what, what one thing, what do you think you guys are going to take away? What'd you learn? And they actually said your dress code. I was like the dress code, you know? And in some ways like immediately my immediate thing was I was a little disappointed, like I've shown you all the work that we do.

Bret Keisling: [Laughter.]

Jennifer Briggs: But what they said was the dress code was showing that everybody had self ownership and that they realized you can't really be an owner of a company until you can be a self leader and a self owner. And so what they saw was this you know, this environment of dignity, this environment of self-leadership this environment of owning people's own performance and being able to own yourself and how you showed up in the world. And to me, that was just a really profound observation. And so that led me as a practitioner at that point to just flip everything on its head. Is, you know, a lot of times we have these we cascade things from the C-suite through a company.

Jennifer Briggs: Really leadership needs to bubble up. And so everything that I was doing to help create this effervescent leadership that came through the people, not at the people, it just, everything I was trying to do was opposite of what convention told you to you at that point.

Jennifer Briggs: So, simple things like performance reviews. People should do their own! Like, it makes no sense to me that it's like this horrible experience that we go through every whatever amount of time. And so people can review themselves and have conversations with people and really take responsibility for their performance. And it can be a good growing experience. And so that's just one small example, but man, I mean, when they said that you can't really be an owner until you can own yourself. And I, and I believe that and it just, it was a big deal for me.

Bret Keisling: -And connecting all the dots. What they honed in on with specificity opened your eyes to just such a broader view. Am I correct Jen, if -- and you are prolific on social media in the best way you share some of your own writings, you share things that you think are relevant, you often share your take -- but something you said, if I've ever noticed a little bit of impatience on your part, it's been when somebody references giving employee owners a sense of ownership.

Jennifer Briggs: Oh yes.

Bret Keisling: And just share about that, because I think your A-ha Moment kind of led to that. Everybody says, "give them a sense of ownership." Why does that tend to make you a little bit crazy?

Jennifer Briggs: Well, it's not ownership. I mean, it's just like you know, Kim at the brewery used to say this, and I think I've heard it from a few other people too. You know, it's like inviting everybody to a steak dinner and then telling them they just have to sit around and smell it. Like it's, you know, hopefully I guess vegetarians would feel differently about that, but you get the idea. I mean, it's just it's just faux it's just a faux thing. You know, where it feels like a marketing and true leadership comes from our soulfulness and comes from, you know, our experiences. And if we're trying to spin ownership, it's not ownership. You either get to own yourself or you don't, you either get to own capital in a company or you don't, you either get part of the growth of a company or you don't. These things are pretty binary. Like there's no sense of it. So yeah, that's a marketing scheme, I think. And we're just trying to help people feel like there's a little something there more, but it's not.

Bret Keisling: That final A-ha Moment is just a perfect sign that employee ownership, like life, it's pretty much in the eye of the beholder. I'd like to thank all of the guests who you heard today for their original episodes and sharing their A-ha Moments that allowed me to bring them to you.

Bret Keisling: We'd love to hear and share your A-ha Moments. Post them on social media and be sure to tag us, you'll find out where we are in just a moment. And if you'd like to share your A-ha Moment on the podcast, please send me an email or a DM on social media. I'd love to do either a quick Zoom call or audio recording and get your A-ha Moment.

Bret Keisling: Although the light is at the end of the tunnel it seems, our country is still going through an awful lot together right now. That's how we'll get through it, together, which is in the best spirit of employee ownership. Thank you so much for listening. This is Bret Keisling. Be well.

[00:26:56] Bitsy McCann: We'd love to hear from you. You can find us on Facebook at EO Podcast Network and on Twitter @ESOPPodcast. This podcast has been produced by Bret Keisling for the EO Podcast Network, original music composed by Max Keisling, branding and marketing by BitsyPlus Design, and I'm Bitsy McCann.

Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.

A note on the transcript: This transcript was produced by Descript, an automated transcription service. While it has been reviewed by The EsOp Podcast, we cannot guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.