Welcome to the Owner to Owner podcast. We just wanna have a quick check in with Matt from the Vermont Employee Ownership Center and share his thoughts on the upcoming June 1st. V E O C. Conference. It's a excellent state conference. For those of you not familiar with it, Matt, if you could just introduce yourself and then share a little bit about the upcoming conference that you're excited about. Yeah, so I'm Matt Crop. I'm the executive director of the Vermont Play Ownership Center, and this is our 21st year doing a, a Vermont Employee Ownership conference. And the first year to be doing it without Adon Jameson on staff who retired this this year. So we're kind of, you know, it's, it's a big moment for the organization. You know, I think there's a few things this year that I'm particularly excited about. Our keynote or Derek Peebles. We, uh, myself and my coworker Ryan, saw him speak at the, um, Vermont Businesses for Social Responsibility Conference last year. And, uh, you know, really advocated for employee ownership as part of, you know, really what, what does it look like to build a. You know, sustainable and vibrant local economy. So really interested to hear what he has to say. And then, you know, it's a, it's a one day event with a lot of great, you know, great different content that includes, you know, kind of introductions for folks who are new to employee ownership and are exploring employee ownership as a potential exit path for their business, both on the ESOP and the worker co-op side. So there's good content there and there's gonna be a number of great culture tracks, including, you know, Jesse will. You'll, you'll be doing some, some stuff on return to work and, and recruiting, onboarding, and, you know, workforce development, which is also exciting. We do some more of technical stuff like, you know, kind of hot topics for ESOPs for the folks who are, you know, needing to really be up to speed on what are the latest developments legally and, and otherwise. So there's really kind of something for, you know, a. Wide variety of different audiences at at the conference. And it's also just a great gathering of the employee ownership community in the state of Vermont, right? We have a lot of folks come, you know, who have different perspectives come from different industries. And one of the things that, you know, we definitely missed when we were remote as much as we tried to. You know, kind of recreate it and find opportunities to do it. It's just that mixing goal of folks sitting at lunch tables and learning about what each other's companies are doing and all of that kind of building of relationships that can carry far beyond the conference throughout the year. That's great. That's great. Yeah, I think of the, been several times over the years and really enjoy, it's a highlight for me, having attended, you know, the ESOP association and being a big advocate for the N C O, I think it's on, on that. Quality level. So it's great if some of the listeners for the Owner to Owner podcast are curious and want to check out the conference. And then with the, uh, engagement level, I think what I've always enjoyed is there's a variety of different speaker styles, but it's always a lot of fun and there's plenty of social time. The venue is absolutely beautiful. So you can go, you can make new connections, you can renew old acquaintances, have some fun, do some learning. So definitely appreciate that. And part of this intro is we're gonna run episode 29 of the Owner to Owner podcast to try to amplify the the V E O C and all state centers that are making some great progress nationally. And it's the interview with Steve Sorkin, with E O X, Matt from the V E O C, and Michael Palmieri from the O E O C. So gonna run that again. So again, good luck with the conference. I know it's gonna be excellent. I look forward to seeing you there. Thank you so much. All right. Thanks to listeners, the Owner Owner podcast. We appreciate it. This is Jesse Tyler. Thank you. Welcome to the Owner to Owner podcast with your host, Jesse Tyler, part of the EO Podcast Network. Welcome to the Owner to Owner podcast on the EO Podcast Network. It's great to have you with us. I'm Jesse Tyler. I work for Hypotherm, an almost 55 year old global manufacturing technology company with almost 2000 owners strong globally. I focus on employee experience, ownership and culture, participatory decision making milestones. And a main feature is onboarding. I was excited to onboard eight new coworkers this morning, and later this week I'll spend two days for cultural immersion, a deep dive into culture ethics, cutting with our plasma and more with 20 new coworkers. So a lot of fun here on the week that we're recording this personal passion is learning the stories and the experiences of employee ownership. How it impacts individuals, how it impacts communities. And so we're gonna dig into this a little bit today with a broader reach where in sessions and recordings. Up till this one, this episode, it's always been me as an employee owner, and. Interviewing other employee owners to bring the peer voices, particularly the rank and file, the makers, the doers, the fixers, bringing their voices into the national conversation and bringing their wisdom and eloquence into the conversation about the personal experience. Today is a little bit of, we're gonna branch out a little bit on owner to owner, and we're gonna focus on the state centers and their impact. And instead of my giving a long introduction and preamble to why they're so critical, we have three really important voices for state centers and we're gonna have them share a little bit more about that. So our guests today, we have Steve Tokin, the executive Director of the Employee Ownership Expansion Network. Have Matt Crop, the executive director of the Vermont Employee Ownership Center, and Mike Pa, who does the programming assistant at the Ohio EO Center as well. So I'd like to do is, that's about enough, Adam, the rest of the time I'll ask some open questions. I'll keep our conversation moving, but it's really about the voices of the state centers going forward. So Matt, if you could introduce yourself. Share a little bit about yourself and a little bit about the Vermont EO Center, and we'll work our way around and then jump into some questions. Great. Yeah, thanks for having me. So I've worked for the Vermont Employee Ownership Center for eight years now. I've joined the team in 2014, and we were fairly small crew, two part-time people. Then our funding has gotten a little bit better. We've gradually grown. And Don Jameson, who is the executive director, when I was hired as. Step back to working two afternoons a week. I'm now the executive director, so I've gone the, the full, uh, the full, done many different things with the organization over time. So our organization was Model is the second employee ownership center in the country. We were modeled after, very explicitly after the Ohio Employee Ownership Center, John Log, who is their founder and provided a bunch of mentorship to Don and some of the other folks when the Vermont Center was created in 2001 and. So we were found in 2001, began operations in early 2002. So we're seeing this year's kind of our 20th anniversary of operations. Over that time, we have gone through different phases. Early on, we were somewhat affiliated with the university, the University of Vermont, similar to Ohio. Ultimately, the group, the board, made the decision to to more move in an independent non-profit direction. We had some early funding through some like earmarks from our congressional delegation and some funding from companies that. It's kind of shifted to some more sustainable basis, getting some state funding through our state's Agency of Commerce, as well as having an annual conference that is the center of our recruitment of sponsors, which provides the other big chunk of funding. And then there's bits and pieces that come up or down grants and fee for service income and other things that feed into kind of how we fund ourselves as we get the word out and support folks in the transition to employee ownership. Nice. Nice. You set a nice bar for Steve to go next and introducing the Expansion Network and sharing a little bit of insight for our listeners. Yeah, thanks for having me today. I appreciate it. Employee Ownership Expansion Network was started as an idea inside of the National Center for Employee Ownership and C E O and really started as a result of the two gentlemen and their organizations that you have on with me today. N C E O recognized that Ohio and Vermont had a high count for employee ownership, specifically esop, so. More ESOPs per capita than most other states. And they said, wow, if those two states are doing that, we should probably look at trying to create more of them. If our mission in the N C O is to support and create new employee owned companies, maybe we should look at that model. So that started as an idea inside of N C O Forward. Fast forward, we can talk about that if you need, want to get into detailed, but fast forward almost four years, six years later, here we are now, we have 12 state centers for employee ownership. That have been started by this idea, which became an actual nonprofit organization called the Employee Ownership Expansion Network, or E O X. And so there's 12 state centers to add to the eight that were already there when we started this venture in 2009. So we're at a network of 20 state centers for employee ownership across the country. All doing a lot of the same things, but some of them doing other individual things like Michael, Michael will tell you. That's great. Michael, if you wanna introduce yourself, then we'll go back through and just get a little bit more into the why and some of the insights that you wanna share. Michael, your intro, please. Yeah, sure. So again, thanks for, uh, creating the space for us to talk about what US state centers are doing. So again, I'm Mike Palmer. I'm with the Ohio Employee Ownership Center, and I've been working with the center now for about four years. Uh, originally from New Jersey. I loved employee ownership so much that I wanted to continue my education and get a PhD in it. And, uh, as Mac alluded to the Ohio employee ownership centers based within Kent State University, so I made the trek out from Jersey to Ohio, started my courses and immediately got involved in the center. And so today I helped do coordination of some of our education and training programs along with some research. And what the center does is very similar to like, Uh, Steve alluded to what a lot of other centers do. I think the one way in which the Ohio Center may stand out is we do a lot of education and training within the state of Ohio for employee owned companies, but we do a lot of the same advocacy work. We're also funded by some state dollars and grants, sponsorships, and I will say one thing that we ended up continuing doing, the V E O C kind of went out and. Did that independent non-profit status we're very much embedded within Kent State still, and we're housed within the political science department because of our founder, John Loge, who set up the center, was himself the chair of the political science department at the time. And so we're still housing here and often have graduate students or even undergraduate students working with us on a part-time basis. So it's one of the things we're really proud of is we're both inward university facing and also outward facing the business community and employee owned companies. That's great. That's great. In, in my experience as an employee owner for coming up on 16 years is the Vermont Center. I just thought everybody had. A neighboring center nearby. When I was starting, I was like, this is a really cool part of our ownership. We got these state centers and then, so it didn't take long to realize that there were lonely few as Matt and uh, Steve actually all of you alluded to in your intros. So Hypertherm though were the biggest ESOP by far in New England with 2000 Global, probably around the 50. 50 ish range of a hundred percent employee-owned nationally. Our ownership team has a warm long history of knowing that and knowing the team and everything else. So we have that proximity. So let's just pause that. You are at an employee ownership conference, or you're wearing a t-shirt about your state center and somebody says, I don't know. What's the deal with that? Why are they important? So away from your, we'll come back to your founding and your stories cause that's what this conversation's about. But early on, for our listeners who maybe live in some thoses remaining states where they don't have easy access to a state center, what is the deal with state centers? Why are they so important to eo? I want to keep my own opinion and fanfare out of it. I'll just let you guys speak for yourself. So Matt, why is the state center in Vermont. So important. How does it impact ownership? Yeah, and I think there are a few kind of key impacts. The thing I would start with is creating the pipeline for new opportunities for employee ownership. There's a lot of our work is going out, connecting with folks in the business advising world, connecting with folks in the economic development world, policy world, and trying to reach business owners who are considering, what are they gonna do with their business. In the future, right when they retire or as part of their estate plan, or they just wanna move on to do something else. Or maybe they still wanna be in the company. But, so we, our job is to make sure that they have a clear and accurate understanding of what the employee ownership option is for their company. And so that when they think, okay, am I gonna liquidate, am I gonna sell an outsider? Am I gonna sell the managers or should I do an ESOP or a worker co-op, or a similar type structure that they're looking at the me, the, the menu of options with clear eyes, because in. In the absence of the kind of work that we do generally, you know, it's something that maybe you might have heard of through a peer or something, but you, but it, there are a lot of misconceptions and there's a lot of just lack of awareness in general that would folks wouldn't even consider doing employee ownership. So I think that kind of question of where do new employee owned companies come from? State centers play a vital role in making sure that's on the table. And then, although to a lesser extent I think, than Ohio does, we also, part of our mission is to try to have the existing employee own owned world be successful, right? That have, we want those companies to grow and bring on more employee owners and deepen the impact that employee ownership has on communities, on families. On personal economic security and everything else that goes along with it. And so that's something where, you know, with our annual conference and some kind of peer networking and other things that we help facilitate to really try to make sure that those companies that are employee owned have, have opportunities on a fairly localized basis to build relationships, learn from each other, and access the, the maximum benefit of of the employee ownership. Of employee ownership that comes from that higher productivity, that higher employee engagement if you do it right, super. Super. Steve, you wanna follow on? I think I'll let Mike go and then I'll just, I'll take it from the other end of, let the two long-term state centers go. Let me talk a little bit about what the difference is that way Mike could share with that. So I'll let you go first, Mike. All right, thanks Steve. Yeah, PI, piggybacking on what Matt was talking about, we view ourselves with a maybe a three-legged stool approach. Matt really dug into one of the first, which is outreach to the existing kind of business world, right? Business owners thinking of what to do with their company as a kind of exit planning strategy or. What have you, right? There's just not enough awareness about employee ownership. And another piece of what we do is that kind of programming, right? So we say it time and time again. It's one thing that your company is whatever portion, employee owned, but if you don't mix that with a kind of high participatory, engaging workplace, you're not gonna be able to achieve all those great things that we hear about what employee owned companies do. And so we really focus on, once companies become employee owned, Really learning how to develop and build up that kind of ownership culture that we hear so much about. And then finally, weekly ourselves doing research, but on the research end, practical research that's usable and even collating the existing research that's out there. There's so much information, whether you be a business owner, an existing employee owned company, or just an employee owner. About employee ownership can get overwhelming. And so we see ourselves as both kind of conducting that research but also putting it together in a way that's digestible, understandable, can make sense for whatever situation you are in. So that's kinda how we see ourselves in terms of the three little or big buckets that we kind of work. Awesome. Before, uh, before Steve asked for cleanup here, quick personal share, I met Michael leaving the NCO conference. I wasn't able to fit in the. Minivan with friends from Praxis. And so I had to get a cab to catch my flight and another minivan pulled up. So I went into the lobby and yelled as loud as I could. I gotta pay for, let's think like owners, I gotta pay for a cab who wants a ride? And Michael raised his hand. And by the time we got in the cab, I knew what he did and why it was important. So I'm gonna put you on the spot in just a few sentences. I, I, I recognized who you were once we shook hands, but in just a few sentences, you had the state centers. You had me already thinking about doing this episode, so two or three sentences, what's the deal with state centers? I think state centers are that integral piece that brings in the business community, that brings in existing employee owned companies, and I would even say representatives and public officials who need to know about what employee ownership's capable of to allow a great thing that's. Not known about as much as it should be to be known. Yeah. We went right to amplification and by the time we got in in the cab I was sold. Steve, can you add your comments please? Yeah, I think when we look at employee ownership, both Mike and Matt have said the same thing, and that is the outreach in education. And there's a study done by one of President Biden's economic and now President Biden's. Economic assistance, that's the wrong word. But he did a study, they asked him, why isn't there more employee ownership? That was the title of the study and the study, and the answer was lack of education on the subject, and that was pure and simple. Second one was access to capital and employee ownership not being known. The way it's been sold for all those years is what I used to do for a living, which was I was an ESOP professional for 23 years. I thought I was sharing my passion for employee ownership when I sat across the table from business owners and advisors, but ultimately they thought I was selling a product. So we say that employee ownership centers, or centers for employee ownership are a safe place for anybody in the community to come learn about employee ownership and not be sold a product, even though we all know that. 99% of the people in the industry are still passionate about it, and they're not trying to sell a product up front. Eventually, they want you to become a client. So this is a way for anybody in the community, whether it be a business owner and an advisor, public official, to come learn about employee ownership. The second piece, With the center, just like both of them said, is the connection to those technical as assistance resources. So we'll bring you in, give you the information. You may not be ready for technical assistance, but when you are, you can come back and we're gonna find out what kind of technical assistance you need and then, uh, connect you with those resources that we all know in either esop service providers, worker cooperatives, employee ownership trusts, have those all available. That's how I would summarize. The state centers now to talk about the state centers that we're creating. Probably a difference, a difference between Matt and Mike, and that is in the early days, you don't have capacity to do a lot of things, and so we have to focus on the main mission, which is outreach and education and connection and technical resources. So we have made a commitment at E O X that as long as we're involved with the state centers, until they really get their feet on the ground, that connection to the ownership community is left to those that are doing it already, which is the ESOP association and N C E O. And I know Mike and Matt also lean on them for though that education, this is local education. So for now, our state centers are focused on just that outreach and education, not on providing services to current employee-owned companies, but that could change down the road. I could see that we're already seeing some states like a Minnesota and a North Carolina and a Georgia saying, oh, we'd really like to have a community, a local community. It's great that we have a national organization. We have regional meetings, but could we just do a. Get together, we can talk about that. But that's a little bit maybe what we're doing, not necessarily the education, but maybe creating that community. That's great. We'll come back to that in a little bit. So I want, I want to ask you the big hard question for why ownership hasn't taken off and then with a, giving you an empowering follow of, of my advice to this community is in the sense of how, what do you see if you had to pick one thing out of all of your different tools and toolkits and experiences, and then what I wanna do is shift us to some of your personal. Few points of and experiences interacting with employee owners. Steve, to start with you, the big hard question, friends at consultant groups, thet, nco, we're all the O podcast network. The point of this podcast is to amplify and hopefully business owners here, their workers, others here, their peers, and inspires ownership. We're all leaning into the same thing. So the big difficult question, what's getting in the way and what can be done more of an action. What's something, the advice of Steve Tokin and all of your. Quarter Center experience, how do we break through? How can we elevate EO and get more people aware and onboard my goal in life before I. Stop working is to make employee ownership hit the mainstream. And I don't know when I'll feel like it has hit mainstream America, but every organization that's doing this has a little piece of that action. And it's really about that outreach. And I'll always go back to the outreach and education. We try to do outreach and education through state centers. We try to do it through employee owners or through business owners. If there's an action item, the more we talk about employee ownership as either business owners, state centers, or employees, the more that we can talk about it with anybody and everybody that we meet, even sitting next to you on a plane, what do you do instead of, I'm sure you do this, Jesse, instead of I'm a, I work at a, I work at Hypotherm. I'm an employee owner. Should be the wor, it should be the answer. I'm an employee owner at. Where I'm an owner at wherever I work. Yeah. That starts a conversation with every single person. What do you mean you're an owner? Especially the younger you are. The younger you are and you're not a gray-haired 56 year old person like me, that's Oh yeah, of course. You could be an owner. If I'm 28 years old and I tell someone, I'm an owner, that starts a conversation and they can start to talk about employee ownership. So for me it's about getting into the mainstream and the only way we can do that is to talk about it. That's great. Uh, quick share from Yes, I do that and I, I think it's great you're encouraging others. Lead with ownership. When we have acquired a few companies, we acquired the first of two water jet companies. It was based in Minnesota, and I went out to do consumable sales, lead the team. And so I was back on the phones again, having long background in sales and marketing and new business development. And I quickly figured out that if I led with ownership, I could get through any blocker. There was. And it was amazing. Yeah. Employee owner calling. What? What do you mean employee owner? What? Tell me more about that. And then it was, it was a fun way because you're talking to the owner of their small business and it was a way to pierce through any kind of context or otherwise. So yeah, always lead with ownership. Buy employee ownership. Talk employee ownership. Eat employee ownership. So yeah, you've got me import. Thanks for that, Steve. Michael, what are your thoughts on the big question? Elevating ownership. Yeah, I mean it's, it's hard to disagree with what Steve just said there. If people, if one of the biggest barriers is that people are unaware, then it circles you back to outreach and education. I will say my take on it, and I'm sure it's colored by the fact that we're. Based here at Kent State University is when I imagine the world that we're in now where a lot of business advisors just don't know about it, and so they themselves are the ones who sometimes need to be educated on it so that when their client or a business owner comes to them, they can say, Hey, this is an option. I kind of look upstream and say, one way we can really start to build up this knowledge is through education programs for students. We're here at Kent State University. I look around, there's a great business school. There's political science classes, there's sociologists, there's individuals studying human relations within companies. And for all those employee ownership, maybe not a full class, but there could certainly be a week or two on how employee ownership fits together with really important themes that students get excited about. And I think there's some great work already. I know. Rutgers is doing that at the Institute for the study of employee ownership and profit sharing. We are trying to do that, so we've, we are teaching our first course this fall on workplace democracy and employee ownership. It's just for political science students, but we're hoping to expand it. And the Barister Institute out in San Diego I know has a full, I forget Steve. Matt maybe, you know, but I think there's maybe four. Courses that they now have for both business advisors who are already working on ESOPs or wanna learn more about them. And so I think when we talk education, there can be different ways that you can attain that. It could be that kind of outreach to existing business owners, to existing advisors. But here at the O E O C, we've been thinking even further upstream, right? The next generation, right? The students who are there, and it's a small sample size. My class isn't huge, but I will say not one of these students who have been thinking about big questions about economic inequality or workplace participation or, right. Any of those big questions heard about employee ownership, and once they did, they're like, Really excited about it. So if we could just replicate this right throughout universities, I think that is another long term, right? It's not gonna happen overnight, but a long term way to, to kind of reach that mainstreaming of employee ownership. That's great. We actually talk about it in our STEM program, so we'll talk to middle school students about it. Cause we also have to get them some context or I feel. That we have to give them some context of why they have so much access, so much trust, and why people are so many different resources from all spans of the company are gonna come because it might set an unrealistic expectation for STEM program through our internship program. So we will talk to seventh graders about employee ownership and they get the bug right away. They can tell something's different and it's fun talking to other ESOPs with STEM and particularly with internships. Like by the end of the first day, they're like, this is. I want more of this. This is the kind of place I want to go. So it's fun to, to reach into the classrooms. Matt, the big question for you with expanding ownership, so I'll first just echo and say a lot of what the other two gens have uh mentioned are around education and outreach awareness or vitally important, and that's a lot. We put a lot of work into that, but I'll also tag the other side. What I see is the other half of the new equation, which is, which is financial resources. It costs a decent amount of money to even assess whether seriously, and putting a ESOP into place makes sense. It's gonna cost you 150, $200,000. At least to get one set up. And for bigger companies, that can be more, which is even with when you've done the assessment and everything else, it's like it might be worth it for tax reasons on other reasons, but it's still a pretty big pill to swallow for folks, especially on the small, smaller business side. So that can feel like a barrier. And then there's the sort of financing itself, and there is a decent number of large. Financial institutions that do have ESOP practices, right? It's not like it's a totally unknown thing, but it's also something where when you're a business owner thinking about, okay, you know, do I want to do this? I think a key question for us in the field is how do we engage in this ecosystem building financial ecosystem building such that it's easier for them to say yes. Tax incentives are one piece of that, but also kind of sources of friendlier patient capital that can make it, make the A deal look different or also really vital. And so I think of one example here in Vermont where, and the owners were public about it and came to the seminar so I can talk about it, but they went down, they had a big food distribution company, several hundred employees. They really went down the rabbit hole. Seriously considering an esop, an attorney did a feasibility study and it ended up where they were 65. They needed to, they would've. Needed to hold a significant portion of the sale price of the company as a seller's note that would be stretch out over 20 years. And they had Reinhardt Foods, a major national food distribute distributor come in and say, we'll buy you and we'll have you fully out in three years. And at the end of the day that like needing to have big chunk of the value of the business be slowly paid out and not fully paid out until they were 85. They were, when we were talking, when we kind of debriefed afterwards, they were like, if we had started this 10 years earlier. And that again, is that sort of a bit of that educational piece. Right. One, get people. Thinking about this before they're at retirement age, 20 years being done at 75, we probably would've said yes in the absence of that being out in three years was a pretty big determinant there. And so I think there's, I've been starting to see some players out there with some private equity type approaches. There's one that can kind of bite off chunks of what would be seller financing, but there's a certain kind of seller who really wants to do this. It fits with their values, it fits with their vision for the company. And there they can be flexible. And there's a certain pipeline of companies each year that are owned by folks like that, that are the baseline of, those are the sort of easy win ESOPs. And then there's the folks who are being more hard-nosed or they have. Competing obligations with family or partners who are all trying to figure out what are we gonna do with the company And having the, a stronger financing environment for encouraging this, the, these kinds of transitions will make it easier for those folks to get to. Yes. And so I think getting folks aware, getting them to the door and then making it so that, that, that path of financing is easier because of these other resources really is the sort of the, the second piece to this that I think if, if can be. If it can be significantly improved, would cause a pretty dramatic increase in the number of these things that go from, I'm curious to, let's do it. That's great For all three of you, your insights, anything before I move you to the personal views on this, anything more you wanna react to each other's conversation or insights that you wanna add? Just give you that opportunity. I would mirror what Matt said about access to capital and technical assistance and the cost in the relation to them. We stayed away from the advocacy piece, but between all the organizations, including the ones on this call and a bunch of other ones, not anything necessarily employees can do, employee owners can do directly, but if we could get the technical assistance and the access to capital to join together, where a state like Iowa or a state like Colorado makes, or Massachusetts I think too, but a state makes. Access to capital or access to technical assistance available by giving grants out to do that, that gets the start. And then the access to capital. So I guess if you're thinking about employee owners, when there is a call to action that says, Hey, there is this bill, or we want you to go, we want you to have a congressperson come to your, to your facility and tell your story, telling your story, whether it's to someone next to you on a plane or when someone calls a call to action says, come to your. Location. We need to tell the story. That's what people can do cuz it is super important after they get done visiting with you as an employee owner. We then can step into action or other organizations can step into action. Okay. Say you heard the story, now let's help you with the advocacy part. Let's help you with the writing of the bills or passing of the bills. That's fantastic. Yeah. I appreciate it. This is why we invited you on, and this is the conversation we're open to have. Michael, what do you have to add and yeah, just tag it on to something that Matt mentioned, his response prior to the. Capital issue is an issue for any company, right? When it's a tough pill to swallow, it just makes employee ownership not look as appealing as another option, let's say. But e even more so with those smaller companies, right? And when we look out at the business landscape in the us. It's easy to forget. Cause we hear so much about these huge companies, right? But over 80% of the small businesses in the US are gonna be 20 or less employees. Right? And so for those companies, this question of having a kind of a bench of good advisors who can get you through the process like. Steve was saying that technical assistance and then also getting the financing right, that $150,000 might look like a lot more to a company of, let's say 15 to 20 employees versus versus a larger company. And yes to everything both Matt and Steve said, and with an exclamation point in that the US is. I don't wanna say different, but that is one of the key kind of pieces of the business landscape is there's a lot of small ones out there. Yeah, for sure. Go ahead and I'll just throw one additional thing on in reaction to Michael's talking about engaging students and engaging business advisors, which is definitely something we've been focusing on and, and increasingly in the number of years. And I think a, a important thing to think about in this context of this work is, is it's a long game and it's a long game in a few ways. Right. One is, we've been at this for 20 years. There's a grand old spreadsheet. We finally moved over to a C R M system recently of every contact that we've ever had with any company in Vermont that's been considering becoming employee-owned. And it's something where oftentimes folks will be in touch and then folks will drop off and they're just not ready. It's a huge life change, and so people are gonna do it when they're gonna do it. And it's not always gonna be driven purely by, oh, this is the time to do it because the market's, in a certain way, it's gonna be time to do it because my wife had a stroke or, or my, my kids are now out of the house and we're ready to do something else with our lives. Right? So it's very connected to the sort of just human realities of the business owners. And so a lot of our work is just once we've made the connection, retaining that connection and building a trusted relationship so that when the time comes. They feel comfortable reaching out to us for a follow up, serious conversation, getting the ball rolling. And I think the student thing is almost on the, in the similar light. And there's some elements too of like priming students to favor working for employee-owned companies, which will make them more successful cuz more human capital going that direction. But I think also just that that sort of getting, if we really acknowledge that this is not a like two, three year process, that this is a decade long transformative process, then getting those folks who are just coming out into the world. Having this as a model that they can aspire to, whether they're looking at a career or whether they're looking at entrepreneurship, you know, then makes our job, again, 10, 20 years down, 30 years down the line, or the jobs of our successors that much easier. And I think that's something that's been in much of the business world where everything kind of runs by the quarter or you're like on it can, there can be a tendency to sort of look at fairly narrow time scales, but I see this, the work that we do in particular is this almost multi-generational. Transformation that that requires stepping back from time to time and appreciating that, that kind of time scale. That's great. Yeah. I'll tell you, just as, uh, talking to other HR teams at other employee owned companies, it's an amazing advantage for hiring in times where people are talking about difficulties in finding talent and everything and the hard reality that very few are willing to. Openly acknowledges it hasn't even gotten hard yet. We're in the uncomfortable phase if we're not into the really hard phase yet. And when you look at our ability as employee-owned companies, hopefully this translates to state centers. As you grow and add staff, it's, it's a very different value proposition to somebody. Ask them to leave something that's secure, whether they like it or not, and join something different. It's, it's a huge difference from a hiring perspective. So I wanted to shift this a little bit for a few minutes to you personally. So I appreciate your being ambassadors for your state centers and the work that you do, Steve, but I wanted this to be about you as individuals. And the question that I ask everybody through onboarding programs, everybody asks on the podcast is, What does ownership mean to you? It's okay that you're not employee owners. That context is, I think by this point for the listeners, irrelevant hearing that you are very passionate about a cause, something that can change the trajectory of communities up through trajectory of our country. So as individuals, starting with Michael, what does employee ownership mean to you? My response is probably being colored by that class that I'm teaching this fall. But when I think of employee ownership today, and I think that sometimes it can change from day to day what ownership means. Ownership. But today on this podcast, in this interview, I think of it as democracy. And I know some people hear democracy and they. Immediately think about participation in the workplace. And surely I do mean that right in the decision making processes within the company. But I think one of the really powerful pieces of employee ownership is that participation in the financial portion of the company, right? I think that for it to be really meaningful for individuals, It's not enough to just have a little bit of say on how the workplace may be run on day-to-day or to be able to give input, but to actually have a piece of that company and to benefit when it benefits as well is for me, the defining feature of employee ownership. And I like to think of that financial piece as democracy and action, right? That, that we all have something we can contribute here, both in our voice, but I guess to be a little bit blind also in our pocket, right? And that. For me it is. What's so exciting is you can bring those two pieces together. Thank you for that, Michael. Steve, what does employee ownership mean to you? Mike took my answer. I come from the finance background. It's what I used to do for a living is to create the participant statements. I got the joy of going out to probably over a hundred different ESOP own companies over my career. And hand out statements to participants and explain to them how to read them. When I think of employee ownership having never been a true, well, I was a true employee owner in an ESOP that really didn't talk about an esop, but I think the financial piece was there too. So I'll stay away from the democracy at work because I think that's super important, but you're asking my own personal opinion. It does come down to financial, seeing the faces of people as I handed out statements and seeing them year after year, seeing them. Once when a company was sold in the final distribution and being able to write those checks think that is an important piece of ownership. And when people ask me this question, I always think of something I saw three, four years ago when I started trying to communicate employee ownership. And there's a gentleman by the name of Yuen Kaufman, he's the founder of the Kansas City Royals. He started the Kaufman Foundation in Kansas City. They're a supporter of one of our state centers and have been a, you know, vital. Part of that state center. He was interviewed on a local cable channel once, I don't know what year, but it was still black and white. And she asked him what his keys to success in business and he said, there's three keys to success. First of all, treat others like you wanna be treated yourself. He said, secondly, Those that create the profits should share in the profits. And the third was those that work for you should have equity in the place in which they work. And I continue to go back that if you have equity in the place that you work, you share in the profits, whether that's an ESOP with the stock inside of a retirement trust, whether it's a worker cooperative and sharing the, sharing the profits and employee ownership trust or simply a profit sharing plan. I think that's all to me, ownership. And it changes, ownership changes the mentality of how I go to this place that I spend more time at, probably than I spend at my house. I hate to say it comes down to financial, but I think having a piece of that, having a piece of the pie or having a piece of the rock it, it does come down to that for me. That's great. Matt, you can build on or take it in a new path. What does ownership mean to you? Yeah, I think I'll do some of both. I think one, for me, one of the key pieces to it is almost the, the idea of stewardship, right? Is that you have one kind of relationship when you're hired to do something, right? When you're renting something, when you don't have a long-term commitment to an economic relationship, right? And you behave in certain ways. That makes sense for that kind of relationship. But that also can cause problems. And I think what employee ownership does is it takes one of the key relationships that we have in our lives where, as Steve was saying, we spend a huge portion of our life energy driving and it says, okay, this is not theirs. This is mine. Right? Or this is ours. And I think that there's, from a just almost human, a human level thing, it's a more humane way to exist. Like with each other and be rowing together, right? Rather than feeling like you're adrift, bouncing from job to job, trying to figure out the best way to find security on your own. You're able to be part of a community of folks who are trying to do it together. So I think that there's this kind of subjective human element to it. I think the sort of financial security part is huge, and I think it offers probably one of the best alternatives in terms of attempts to how do we create. Economic security for people in our society, right? We have to a certain extent, others. Social security is providing the very basic floor to, okay, you retire. If you work, there's gonna be some money to make it. So you know, you can maybe eek buy, right? And then we expect every people to save up and be able to cover the rest of that. And, and then, and ownership has always been kind of a piece of that in America. And for many people it's really, and policy and everything else has really driven home ownership. But as we see the sort of housing crisis exacerbate, I think we're seeing after a couple of generations the limits of that as actually a sustainable core mechanism for building and wealth and economic security for people, right? Because it's sort of something where you pull the ladder up behind you in a way as housing prices go up, you build your wealth, but then the next generation has. Bigger problems there. Whereas I think sort of the employee ownership of firms is, I think perhaps like a better model for that, in that it's less of a zero sum game, right? Than they're not making any more land or that sort of thing. Whereas if we can continue building the economy in, in a whole variety of ways, there can be more and more opportunities for ownership and wealth building that that doesn't cause that kind of conflict. So I see employee ownership as from a society, kind of society level as really one of the great models for offering. A sustainable way of creating security, economic security, high participation, meaning in work and even from, and then for communities, it's something where, you know, it, those people who own the place also tend to be embedded in the communities where they are. They're gonna contribute in different ways. And I see that in terms of the, even when we talk to folks in economic development, other things, you know, alright, if you're gonna throw tax incentives at a company, if you want to throw it at somewhere, that's gonna turn around and move to another state as soon as the tax incentives are better. Or do you want to sort of invest your community resources in building companies where the folks all have their kids in school and. Have a commitment to the place that they're at. And there's, and it's gonna be a different calculus, right? So the jobs get, are sticky. The companies sort of become institutions that contribute to building the communities in which they're in, rather than seeing them as things to siphon wealth out of, or human capital or other things. And I think that that's, I've been a bit long-winded here, but I think the, the core for me is, it's this, it's really sort of a powerful system that offers. Ways of bringing people in and making people stewards of larger parts of their lives and then they otherwise have the opportunity to be in other kinds of systems. And I think it's something that if we can drive it forward, we'll improve the place that we call home. That's great. That's great. Yeah, if it helps you from employee owner perspective, and the way I talked about it this morning with our new hires, and I'll talk about it in more depth later in the week with the longer program, is it's really three, three legs of the stool, three pillars. It's a retirement and ESOP accounts can certainly be worth a lot more than 401k. Without getting too far into it, but it's absolutely retirement, whatever age you are, your net worth changes when you start receiving shares, and that can include our 20 year olds that are receiving shares downstairs that are machine operators. So your net worth changes in the long term game. The second is really the job quality, the. And job security. Does it feel like, does a bad day at an employee-owned company feel not so bad as a prior experience? Do the good deal, good days feel better? Are you able to lend your voice and make a difference to make it better, make it profitable, make it safe? And then the third, which is. Really what I am excited about and even more excited after 15 years of talking about it, is what's the daily experience? I do take people that have had often very painful prior work experiences, not felt heard, not feel valued, not felt safe, and help them through what can take them a while. To appreciate the daily experience in a healthier workplace. So if that gives you anything else, when you talk to people, that's why I've settled on those three. We usually ask for your EO aha moment. This is something that Brett Keasling on the, uh, employee ownership podcast always asks. I'm gonna shift us slightly for this audience. You are three passionate, highly involved, many years of service, PhD in the works. You are all in. What hooked you? I'm gonna what Got you this employee ownership bug. What was that? Is there a moment you can think of where you're like, uhoh, I might do this for the rest of my life? Cause it appears that's the message I'm hearing from all of you. It's Michael. What, what, what hooked you? What got you on this EO train? Well, uh, thanks Jesse. I remember you asking me this, maybe not the same question, but something similar when we were riding in that van together and I'm not sure what I said then, but. For me, I, I always look back to, I was in graduate school back in New York and finding my way through and studying a lot of these topics about wealth inequality. A lot of the things that Matt touched on, how do you build wealth in America today? And I didn't really have, there was a lot of solutions, but none that I saw were either one practical. Politically or really sat well with a diverse kind of audience, right? Regardless where you stand, where's an idea that kind of sinks in and people agree on. And I was just in this class where there was a professor who mentioned it in a couple of seminars. That was it. It passed by and I just started Googling, digging, right? Finding the N C E O, finding the O E O C, continuing down that rabbit hole. And it, so it was really just in that class where I had this aha moment and then once, Visiting some of the Center's websites and these other national support organizations' websites and realizing, oh, this isn't a pie in the sky thing. This is, there's millions of people who are employee owners and just continue to run with it since, and now punish myself doing a PhD. That's how much I love it, so I really do love it. I really do. That's great. That's great. Is it for people driving, listening to this or listening on a lunch break? I think your tone and inflection gives you away as. Thoroughly genuine and totally hooked, so I appreciate it. Matt, what, what was that moment many years ago where you were hooked and you knew it? What's that moment you look back on? I honestly think it was, it was related to the Vermont Employee Ownership Center, so I, I came into this obliquely by becoming, I graduated from college in the, into the teeth of the job market of the 2008 financial crisis, and I read some article. About credit unions, which were customer owned banks, which was my entre into thinking about, oh, there's more ownership structures than investor owned and nonprofit, right? There's this whole universe out there. And so that was kind of, and I was, I looked around to figure out how do I learn more about this? And there were. Aren't exactly a lot of academic programs. I, uh, and I wasn't aware of what was going on in Kent State where I could like actually sink my teeth into this and find out more. But one thing there was was the Vermont Employee Ownership Conference. And so I sent an email. I saw there was a track on a track for newcomers, and so I sent an email to Don Jameson and I was like, Hey, I'm just finished up being a student. I'm, we're working part-time, have very little money, but I would love to attend and learn more about this thing. And so he graciously, as a non, as a post student, gave me a $25 student discount ticket and. Went for the day and I think 2009 as an early 20 something and just drank it all in. Learned about a whole bunch of things I had never heard of before. It's okay. Knew like worker cooperatives were a thing cuz I knew about cooperatives from credit unions, but what's an esop? All right. And so, you know, I kind of, while doing other things was in, in the orbit from that and it really, that provided a really interesting, interesting set of ideas and a track for me. That's great. That's great. Thanks for sharing the story. Steve, what about for you? What hooked you on in ownership? A few years ago it was not a. Single moment. It built up after I started working on ESOPs in the law as a law firm, legal assistant, and then later as a third party administrator starting to get to know them. But I was behind the scenes. It wasn't until I actually started to get involved with the Minnesota Dakotas chapter of the ESOP Association, and I got to do what was called Eggs and ESOPs, and they turned into other forms of it. But what it is is to go out and actually see an employee ownership com company in person. Ah, sometimes they were connected with. Legislative visits when I went out and started visiting the companies, and I didn't have a chance to talk with the employees one-on-one, but just seeing what they did and how passionate they were about this thing called employee ownership, the more I did those that led into my career, which was actually then going out and handing out the statement. So that interaction with the employees and the passion that they brought just, you know, continued to hook me over and over again. I think if you, if I think of one aha moment that made me do something different, it was standing in front of participants, maybe in year two or three of doing this very young, might have been the second time I did it with the same group of employees and someone raised their hand after I was talking about how great this was. Someone raised their hand, a young man, and he in his, probably in his thirties, raised his hand and he said, how does this help me pay for my effing truck? I don't know why you think this is so good. And it was at that moment that I realized. That, yes, retirement and account balances and all of the financial pieces that I didn't know a whole lot about yet, but I knew and I had heard about that. It's not necessarily all about that for every single person when I'm standing in front of them. So that's, that changed my trajectory as I started to talk to people about, What employee ownership meant. Yes. I realize you'd probably, some of, you'd probably like to have that as a bonus this year instead of here, but this is why it's important Outside of that, the lack of getting that bonus look at it a different way. So yeah. That's great. I think that brings a nice example, nice light to one of the challenges from a culture perspective is people getting used to it is it is a long-term game, and I think one of the bigger challenges in this moment, in this strange moment in history is that it's a lot of people. Aren't thinking, aren't able to think long term. And here we have this incredible wealth building opportunity and potentially job security and job quality, but it's hard to sell a long term game. We talk about, you know, said the seven year smile as an informal, I picked it up somewhere, I think at a conference where 6, 7, 8 years. Some of those, those ESOP balances can really magnify the significance of it. But how do you do that? At a point right now where our machine operators and our assemblers, our warehouse, are terrified of a fuel truck in front of their apartment or their house because of what the accelerated costs are. And so it's a very short term world. And we're still hanging in there at the long-term game. But having welcome to Rupo of incredible new talent this morning. I think most of them came because we've been steady. We have a good reputation. People say It sounds good to work here and the pay and the benefits are good, but there's this other thing with ownership I wanna learn about more. So I appreciate your shares. Before we close, is there, are there any things about the state centers that you did not get to fit in or any closing comments you wanna add before we wrap up? I want to give you the floor. Let's hear from Michael. There was one thing earlier on that I would, I wanted to mention and didn't, but I'd be remiss if I didn't. Now, the same way that the Ohio Center and John Lowe at the time working with Adon to set it up there, we have our own kind of origin story, which was in the early eighties. When John Loge was looking at a lot of manufacturing companies that were shutting down, and he himself learned about this thing called the esop. He met with Corey Rosen at the National Center for Employee Ownership to talk about what Corey was doing, and that wasn't there, obviously at that conversation. But legend has it. That Corey said to John, well, you should go start a, uh, state version of what we're doing at the National Center. And so the reason I bring it up is I think what's so great, and Steve's really helped lead and congeal this kind of network of state centers, is that everyone in the employee ownership world is very giving and collaborative. And I think that our origin stories alone just demonstrate that. But I wanted to throw that one piece in is that we at the ovo O C kind of came out of this, not directly out of the N C O, but out of conversations, and then are able to work V E O C, and now we're all working together with Steve. So I just think it's emblematic of the kind of work that happens. That's great. That's great. It was nice. In one of the sessions at the the fall forum in St. Louis, one of the facilitators asked how many people were considering ESOP or here to do research, and a significant number of hands went up and everybody just beamed. We're breaking through. We're breaking through. Steve, what are your thoughts? Mike said a word that I think resonates with me, and I put my fundraising hat on real quick. When you ask about what people can do, he said, giving each one of these state centers is on a shoestring budget. If we had our way, we'd plug ourselves into a state budget. We'd have it guaranteed for the next 30 years, no matter who is governor, who is in legislature, that they're gonna fund $300,000 or something like that from the state budget, and we can all dream. But right now we're on private. Most of us are on pr. You know, the new ones are private contributions and public, but we wanna get a private public partnership. And we all are going after grants of 10, 15, $20,000 from foundations. And the crowdfunding thing is where I'm going with this. Every dollar helps. And if you live in a state that has a state center, And you get to year end for your year end given, and you're looking to give 25, 50, $200, whatever it is that that contribution that you're trying to do at year end, which a lot of us do state centers, we start crowdfunding at $50 a piece with how many millions of business or employee owners, we can really make a big, huge difference for all of these state centers. So I hate to throw fundraising in the mix cuz nobody likes to talk about it, but that's how we do this. That's how we do the work. It's how Mike and Matt make a living and it's not just putting money in their pocket to sit around and do nothing. I mean, these guys are out there. Beaten the streets every day trying to talk to, I say it's, we'll talk to a chamber of commerce that'll give us two people or 200 people. And I, and we've all been there. We've done some of these at two people at a Chamber of Commerce. But you know what? We reached two people that didn't know about it, so I'll just throw that co crowdfunding in there. Every one of those state centers has a donate now button. Uh, and we would love the support. Uh, EO X has a do donate now as well. If I had to throw it out there, I'd say start with the state centers first. They need the support. Thanks for doing that, Steve. That's great. Yeah, it's great you put it out there. That's the opportunity with, with the podcast, and I think it's important. I think it's an ownership style as everybody does a little bit. It's amazing what you can do to empower and you look at the, we're up to 20 state centers a few years ago. When I started to realize the landscape and how much work there was ahead, it's just the idea to be able to say today in 2022, you know, a lot of it is your fault, so I hope all of three of you are very proud of yourselves. But it's just, it's wonderful to say that there's even that traction for 20 already, but there's more to go small steps in funding. That's how it works. So I appreciate it. Matt, do you wanna add any closing comments before we wrap? I think my closing comment in terms of especially what employee owners can do to support the movement, and I think echoing Steve, Financial stuff. Always helpful. The other thing I would say is there's a lot of employee owners out there who can be, who can help find the company, the next employee-owned companies, right? Folks have networks, they have relatives, they have, they know people who own businesses. They know people who work for businesses where the owner might be thinking of selling. Right. And I think understanding that. It's worthwhile to keep an eye out for those. And if you see them, then you've talked to folks about that, this is a great thing for me, then what? It might be a great thing for them and to, you know, try to get those folks in touch with their local centers. And if there isn't one, but maybe the N C O or other kind of national level players. But we all are doing our best to do outreach. But one of the biggest things is, That is when a peer, someone that you trust, comes to you and says, Hey, have you thought about employee ownership? We yet, so, so many of the serious, really serious cases that we work on come from those moments, and so for employee owners to sort of be out there keeping an eye out and feeding us those, those opportunities when they arise will mean there's gonna be more employee ownership. Yeah, keep, keep amplifying it for sure, because you don't know Steve, talking about the three of you sometimes talking to an audience of two. Once in a while it might be the right two. It sounds like state centers grew out of conversations between two people, then four and then six and eight. And so it goes from there. So I think, I think you've got some great insights to the listening community and I appreciate your sharing some of the background, some of your personal feelings, some of your perspective and advice to move things forward with the ownership. I'm really pleased to have Matt prop, Steve Tokin. And Michael Palmer here on the Owner to Owner Podcast. And for listeners who wanna hear more, Matt and Steve have been on the ESOP podcast with Brett Keasling in prior episodes. You can listen to
[email protected]. And we're hoping to see, uh, Michael Palmieri and potentially Chris Cooper from his organization on the EO Podcast Network going forward, so important voices with the state centers, reach out, learn more, and contact information will be in the show notes. Again, this is Jesse Tyler for the owner to owner of podcast on the EO Podcast Network. Thank you for listening. Thank you for learning. Thank you for buying, working, eating, and thinking and amplifying employee ownership. Take care. We'll talk to you soon. We'd love to hear from you. You can find us on Facebook at EO Podcast Network and on Twitter at ESOP podcast. This podcast has been produced by Brett Kesling for the EO Podcast Network. Original music composed by Max Kesling, branding and Marketing by Bitsy Plus Design. And I'm Bitsy McCann.
