Five Big Ideas for Employee Ownership

but let's come on in and uh and close out the day I think we had some really interesting conversations um uh I you know I've just been thinking today as I've been listening to how people talk to think you know that it's it's been so interesting think thinking about employee ownership this past couple days and sort of in terms of purpose and what are we trying to accomplish how does the world look different for employee ownership and it's been really interesting hearing people's um discussions of that and even talking about like let's start with purpose in mind and think about sort of strategy and and policy with respect to how we want things to be different how we want to close the racial wealth Gap how we want to close the wealth Gap in general how we want to think about improving people's lives and livelihoods how we want to have um more uh participation in Civic life and in our communities as well as in our business businesses so really interesting thinking about sort of the the broader purpose um and on the flip side there's also been a lot of really like devils in the details kind of conversations and how do we not get distracted by too many details and figure out which are the right right details to focus on and move um so just uh personally have a lot to reflect on from all of this conversation and I'm really excited to now H have our five final speakers come up and share sort of some of their big ideas and Reflections on employee ownership so what I'm going to do um I'm just going to say all five in the order that is in my agenda so that's the order that I'm going to ask them to talk um and I'll introduce them and they can uh turn the mic over to each other as they're done so so you know you guys got to listen so you know when you come up so first um we're very happy to have uh Christine carella former senior policy adviser to deputy mayor of New York City an economic development consultant and Aspen Institute job quality fellow glad you're with us Christine um after Christine we'll have Jason weiner president Jason weiner member Colorado employee ownership Commission Executive fellow Rucker Institute for the study of employee ownership and profit sharing you notice how we claim them all and make their titles immensely longer um after after Jason we have will mman former National Labor Relations Board chair senior fellow Ruckers Institute for the study of employee ownership and profit sharing I thought there was also some NYU thing there too but you know may maybe we abbreviated um uh after Wilma Evan Edwards chief executive officer project equity and uh last but certainly not least uh Chris Griswald policy director American Compass so those are our five uh closeout speakers excited to hear from all of them and Christine let's start with you excellent thanks so much Moren and it's such a joy to be with so many collaborators and to see so many familiar faces really proud to advance this agenda alongside all of you um I come to this work having spent over nine years in economic development in the city of New York uh everything from really estate investment to our minority and women-owned business program um my last role advancing Community wealth building and employee ownership in the DeBlasio Administration over the last two years I've worked to advise a number of Municipal leaders across the country um City over 60 city leaders from Maine to Alaska Indiana Florida Arkansas Oklahoma in between many political Stripes um and needless to say so many of them are looking to alternatives to win or take all economics right the big amazon deals coming to their communities the attempts to look like Silicon Valley and so for them the the big idea of employee ownership is not a hard sell the question they ask is so what is the toolkit how do I bring that to my community and I'll be honest that was the same question I had and we spent a lot of time building the plane as we were flying it in New York City Hall and so um you know very proud of the many Investments we've made in in City centers and State Centers but I think there's a big opport opportunity for us to tap cities as the place to catalyze employee ownership and I want to talk a little bit about what that might look like I want to start by taking a page from the affordable housing field um what's been developed in communities the Partnerships between municipalities States and the federal government over the last 50 years um believe me I know housing is in a bit of a crisis at this moment but those policy lovers stand and they offer us some opportunities take first uh the opportunity of firsttime home buyers assistance think about that for employee ownership how might we capitalize workers to buy into the places where they work things like employee um unemployment insurance you know in New York we've been working to support entrepreneurs and building business plans it's a smaller version of unemployment insurance but what might that look like as a capital tool to allow Buy in right so that we don't ask folks to deduct Employee Stock purchase plans from their wages um or membership buy in for co-ops Michigan has legislation that reduces the individual income tax burden for individuals who invest in companies this is for everyone non- accredited investors um how might we think about that tool um state income uh deductions to incentivized employee ownership in cities real estate is our biggest lever how might we use real estate incentives to and property tax abatements to incentivize employee ownership or to reward the good actors and employee owned businesses that are in our communities thinking about sector approaches you know what Regulatory and Licensing tools give local government say in business operations and how might we inform businesses or incentivize businesses to convert to employee ownership um in New York and and a huge Testament to the ESOP Community we've been able to move legislation to get engineering and Professional Services firms to be eligible as esops it had previously been unallowed in their certification we issued guidance and worked in the weeds of Contracting so that eligible co-ops could be certified as minority or women-owned businesses in the city of New York and worked really hard to get contracts we were in the process of certifying the two largest worker co-ops in the country as minority and women-owned businesses unlocking that opportunity um where businesses May close or be in non-compliance might there be a right to First refusal for workers like the tenant movement has worked to build tenant opportunity to purchase and last week $20 billion of investment was announced in green sectors from here in DC to local communities that's going to be transforming the built environment in every single Community you know what is our green strategy for building ownership all of the businesses that are going to be delivering those Services certainly we have to think about finance and the finance tools of policy makers we need new agencies secondary markets to free up capital for employee ownership um Aspen's been working to help build a secondary Market in cdfis um there's a venture called scale link that's been doing that work what is that mean for giving us the capital we know we need in communities to scale up employee ownership Colorado and Maryland have municiple bonds for business lending really exciting um we actually have been trying to do that in New York City again this is non- capital municipal bonds it's a really big deal maybe you're not as excited about Bond markets as I am but um uh we spoke to the bond issuers I was on the phone with Jeff they thought this was a whole new category of bonds they were really excited about it um and what I want to say from the public perspective about Finance is that we need to rethink our Capital stack and so to use another city metaphor I want to think about a bike lane you know we often use our Public Finance uh to build a bike lane to protect Park cars and oncoming traffic and not people um and similarly most of our Public Finance for uh catalyzing business has been protecting Banks and asset holders and not workers or employee owned companies and so as I offer you know the billions of dollars we should be thinking about employee ownership we also need to really rethink the guard rails and put workers and businesses first in that Capital Arrangement um and there's some amazing examples of integrated capital I again want to look to affordable housing um the woo Administration in Boston has put renters first um governance whereby renters make decisions and have aggregated $47 Million worth of capital around that including from traditional lenders so I'll just say like the affordable housing movement over the last 50 years has perfected policy tools in place we too need to think about the policy tools that can unlock employee ownership and I believe ownership is is of interest to so many Municipal leaders cities are ready to build if we can offer them the new Municipal toolkit for employee ownership I hope you'll work with me for for that thanks [Applause] good afternoon everyone I'm here to tell you a story about My adoptive home state in Colorado uh by way of introduction my name is Jason I'm the founding partner of Jason Wier PC we're a boutique law and business consulting firm focused on broad-based ownership cooperatives regenerative finance and general counsel for hundreds of clients a year I'm also the founding commissioner of the employee ownership commission and the inaugural chair of the same today I'd like to tell you a story of genuine collaboration Innovative leadership commitment inclusive representation and Community empowerment that has set Colorado as a national beacon in the realm of employee ownership in recent years Colorado has embarked on a pioneering Journey one that has redefined the landscape of business ownership and participation across the state the journey began with stalwart Role Models such as Namaste solar new Belgian brewing and the inspiration of the the center for Community wealth building which caught the attention of then Congressman Jared polus who served my district I along with community and Business Leaders began advising now Governor polus about employee ownership in 2013 we shared a vision of a more Equitable sustainable um and resilient economy through promotion of all employee ownership models it's a vision that recognize the invaluable role of our local Workforce and keeping business ownership local as the keys to success and business longevity this spoke directly to Governor Po's own business experience marked by building growing and exiting several successful e-commerce businesses all of which he tells us had some form of employee or Equity ownership in 2019 following months of briefings meetings with cabinet members and Community Coalition advocacy Governor polus within the first 100 days in fact on the 100th day at an employee on grocery store in Colorado Springs signed an executive order that created the Colorado employee ownership commission and charged us to promote the employee ownership across the state reduce barriers and obstacles to employee ownership and create a Cadre of Professional Services and a support ecosystem to help Colorado companies Thrive and become employee owned with the leadership and guidance of the employee ownership commission and the key support of our office of Economic Development and international trade we've created created and now administer several Innovative programs they not only focus on conversions but Encompass comprehensive support through education Financial incentives and community building the introduction of the Colorado employee ownership tax credit in 2021 is a first in the nation initiative uh which has subsequently been expanded to provide more than $50 million in tax credits for businesses converting to employee ownership it underscores our commitment to reducing the fin Financial barriers associated with conversion we pair that with a a cash collateral support program and we've established several peer networking groups to further exemplify the holistic and wraparound approach necessary to fostering an environment and culture where employee owned businesses can Thrive Colorado is also the first state in the country to codify the substantive characteristics of employee ownership in a way that is form agnostic Paving the way for companies that meet a rigorous legal standard to gain access to important benefits recognition and more we've made these tax credits available for stag conversions that happen over time as well as for co-ops and other holding companies that are growing through inorganic acquisition activity since the Inception of these initiatives we've witnessed a remarkable surge in employee ownership conversions from a modest trend of 1 to three per year we've seen a dramatic increase to 63 companies converting since 2021 this is not just a number it represents a significant shift in our economic fabric promoting higher wages job security and more engaged Workforce while ensuring business owners have a viable succession plan and a means to attract and retain key Talent with six and 10 business owners in the United States planning to retire or sell their business within the next decade and a stark realization that only a small fraction of businesses are passed on to the next generation or sold Colorado faced an imminent need to act Colorado is also home to several cutting Ed sectors in transition outdoor recreation cannabis Aerospace Tech and now natural medicine healing we recognize the potential for employee ownership to fill this void and provide an important anchor for Community stability providing an Avenue for business continuity while safeguarding the livelihoods of our Workforce we also realize the power and potential of getting companies into a broad employee ownership tent which then makes it easier for them to uplevel their employee ownership plan in the future the impacts of our efforts have been profound the majority of applicants for our tax credit program are from rural Colorado highlighting the far-reaching benefits of the policy additionally through our grant program we facilitated 21 convert employee ownership conversions predominantly through worker cooperatives Distributing significant funds to these transitions which otherwise struggle to access the necessary Capital we're partnering with the minority business office to ensure access and relevance to disinvested communities and communities of color we're also partnering with our sdc's and the local SBA offices to ensure up-to-date information disseminated through their broad networks employee and broad-based ownership has been my life's work over the past 15 years and the majority of time I've been a lawyer the journey in Colorado towards becoming a leader and employee ownership is a testament to the power of vision imagination collaboration and action we continue to build on our accomplishments but we invite others to point to critique and build on our model for economic Innovation and social Equity this is led by guided and centers on the impact that this work has on communities and through the businesses that are revitalized through uh the the power of ownership I want to thank you for your attendance at this event and um look forward to continuing into the evening will M invite you up thank you thank you and a pleasure to be here and thank you for the opportunity um I guess by way of a big idea what I'd like to do is revive a big idea from a century or so ago and that's the idea of industrial democracy so about 10 years ago I heard a labor historian give a talk about Labor during the first world war and he said the big idea at that time was Industrial democracy which was said to be the answer to the labor question massive unemployment massive uh inequality labor unrest um political agitation but what industrial democracy meant had many different meetings meanings so to some uh and some new National unions it meant worker ownership uh disregarding the wage system and workers owning uh the the factories and the means of production uh to some unions the beginning uh of the American Federation of Labor it meant collective bargaining to employers it meant other things welfare capitalism Works councils different kind of profit sharing plans ultimately in the 1930s our nation adopted collective bargaining as our answer to uh industrial democracy and it worked for a while that's how I spent most of my career working for two International labor organizations and then spending nearly 14 years as a member of thetion Labor Relations Board but since then I've had the opportunity to learn a lot more things uh and through the my good friends at ruter I got exposed to the wide variety of forms of worker ownership I picked up on on Jason's phrase um form agnostic um and so I'm probably the the biggest dilatant in worker ownership in this room because I've had this little touches of different things uh the variety that I've learned about at ruter uh the um Cooperative platforms that have uh sprung up and particularly with the gig economy um and um David Ralph and his uh local have interesting form of a purpose trust for healthcare institution I don't know the details of these and I'm not here to argue for one form or another I'm I am form agnostic but what I think is most exciting about what's going on particularly in in the uh way of our intersecting crisis uh and the crisis of democracy uh is the experimentation again with Old forms of industrial democracy different forms of worker ownership um I've uh had the privilege for the last few years of being involved with um ownership works I think you heard from Anna Lisa earlier and I'll just tell you a little anecdote so I got called by the New York Times economics reporter Lydia Dillis about ownership works and she said to me kind of interested that you would do this because this is private Equity involved uh and you're a known worker advocate so why are you doing this and uh so I gave her the history lesson about worker ownership and my sense that experimentation and exploration is very much needed at this time and that we have a very complex economy so all different forms of um organization and governance models ownership models there's room for all that kind of experimentation I don't know which is going to work but we'll find out um but she said you know the worker ownership people don't think this is real worker ownership and I said you know I'm too old for ideological Purity so um my big idea really is just to experiment with all these different forms of worker ownership coupled with real worker role in governance which I think is is so critical [Applause] [Music] good afternoon uh I'm Evan Edwards uh CEO of project Equity um before I get started here today I want to thank Moren and Matt and the team here at Aspen for the opportunity to be here before you it's a real privilege um so my big idea won't come as a surprise to those of you I've spoken with over the years and you've become familiar with my thoughts in a few words it's time to bring employee ownership to the mainstream to make employee ownership as familiar and as much a part of the business ecosystem m&a strategies and the national vernacular as terms like publicly traded company Union shop and startup we want individuals to Aspire to be employee owners we want business owners to have in mind an EO succession path before one of us practitioners reaches out to them there are a number of paths to mainstream that my organization project Equity is pursuing I'm going to highlight three for you today and I look forward to partnering with folks in this room to drive these efforts forward number one we have to bring employee ownership into the work streams of the professional service providers who engage with business owners that's the CPAs cfps exit planners m&a advisors attorneys we want to move as many of these folks as possible beyond simple awareness of EO to practical and practicable knowledge such that an EO transition or transaction is top of mind when their clients are seeking strategic operating advice or exit paths now I've heard a number of folks over the last two days Express the importance of educating professionals so I know there's agreement on this at project Equity we call this work service provider adoption or Spa to achieve this we're developing educational content to enable business advisors in EO I'm proud to share that our first release exit pro has achieved accreditation from a number of important bodies including the exit planning Institute Epi so now if you're a professional adviser and need to update your certification or seeking continuing education credits you can now do so learning about EO and y'all can check out exit pro at our website project equity. org um and if you've got questions about exit Pro also Stacy raise your hand my colleague Stacy Smith who leads our program work can answer questions about later over a cocktail um so that brings me to the second path to mainstreaming employee ownership and that involves embedding it in higher education this is a longer tale proposition but a very important one especially as relates to younger generations of black brown and other people of color so they understand the wealth building opportunity EO can provide anecdotally we've seen j z so those folks 11 to 26 years of age indicate more interest in and a predisposition to Shared ownership models that prior Generations more often whereas prior Generations more often admired or aspired to be a hero entrepreneur by bringing forward forward employee ownership awareness and understanding to large numbers of both undergraduate and MBA students and through both curriculum and programmatic offerings we can see future Generations who will accept engage promote and pursue EO models in their post-academic lives EO will be a business Norm to them it'll be mainstream I like to think of EO as entrepreneurship to .0 for many folks in particularly communities of color that may lack access to Capital generational wealth or networks to engage traditional entrepreneurship at project Equity through our partnership with Morehouse College and our black employee ownership initiative we're pursuing embedding EO and higher ed our strategy includes engaging other hbcus this year and at least one prominent MBA program with pipeline development for other to follow the third and probably most far-reaching path to mainstreaming employee ownership has our field moving beyond awareness raising to also executing very intentional and strategic marketing and advertising of employee ownership in other words we need to sell EO to the broader public Americans learn about adopt and reference new products Services Brands and business models through marketing and media consider most Americans were not familiar with AI a year ago or crypto four years ago or startups 30 years ago with the support of the K to fund project equity and founding Partners Evergreen Cooperative Nexus Community Partners and IA group were able to launch the EO equals brand campaign now as governing partners of EO equals project Equity with Evergreen Cooperative are working to elevate the EO brand so in service to the EO equals brand campaign project Equity has produced what is to my knowledge the first broadcast ready 30 second commercial advertisement for employee ownership which we plan to air first across digital platforms and then next year linear television when I wrap up my comments shortly and I just got the 30 second notice I'm excited for everyone to go to EO equals. org and take a look at it um we'd appreciate your comments today is the first public display I'd be tempted to say it's the world premiere that be a little over the top but this is the first time that this advertisement will be seen and we hope it's seen nationally many many many millions of times go by many many millions of eyes going forward at project Equity we're proud of this work and our other efforts to lift up employee ownership in the National Consciousness through video and audio storytelling data releases and other messaging and we're really excited to bring forward a powerful campaign for EO including one we're calling the new face of entrepreneurs ship um I invite folks in this room your organization and Enterprises to partner with project equity and Evergreen on EO equals and I know all of our practitioners will look forward to no longer hearing the frustrating remark that EO is the best Business Solution I never heard of with that I'll close thank you for your time good afternoon my name is Chris Griswald I'm the policy director at American Compass we're a think tank whose mission is to restore an economic consensus that puts uh workers their families their communities and their Industries back at the center of our economic analysis and policymaking um I was asked to share my one big idea that I'm most energized by when it comes to employee ownership only have five minutes I can only talk about one thing so I figured I better talk about Aristotle will I see your 100y old idea idea I'll raise you 2300 years um Aristotle wrote a lot about how societies work what makes them function or or fail one of his ideas was what he called Civic friendship that's the term he used to describe the sense of Goodwill between a group of people one for another that emerges when that group of people has a sense of shared common purpose uh in a shared project the case of Civic friendship a shared political project a shared Community that's what he thought allowed uh societies to remain whole uh rather than devolve into tribal conflict and warfare um and for Aristotle that experience of a sense of common purpose wasn't some Grand spiritual kind of thing it was very practical you thought the most practical and pragmatic place to experience that sense of mutual inter dependence was in economic life was in the workplace where we in a very pragmatic way encounter uh that we need each other and are needed by one another um I think Civic friendship is a pretty good description of something that America quite conspicuously lacks these days because Civic friendship in the Aristotelian sense only works if people really do believe and feel that they are in fact Partners in a shared economic project not just a unit of production uh that is being deployed for the benefit of someone else fast forward 2300 years to Martin Luther King who said much the same thing there's a great book uh that collects his speeches to the labor movement you should take a look at and if you read it you'll see that he was very insistent that while access to The Ballot Box was extremely vital and necessary was not enough on its own to uh realize the unrealized dream of American democracy the ability to fully participate in the economic life of the nation uh to be enfranchised and to have a voice economically uh was also essential if American democracy was going to survive um Tommy Shelby is a philosopher uh who writes a lot about Martin Luther King um put it this way when you're sharing a society with others you have to share not just in the burden but the benefits of the that common form of life there is no way for you to see yourself as an equal when even your most basic material needs have less weight than others access to $4 million pen houses in New York uh he wrote that a while ago four 4 million won't get you as far as it used to in Manhattan um that's why I love employee ownership so much uh because it doesn't matter just that we solve the pressing economic problems that we're facing like widening equality which a majority of Americans including a strong majority of the working class including a strong plurality of self-identified Republicans I think is a major problem um it's not just important that we solve wage stagnation you know it now takes more weeks of earnings for the average worker uh to afford a middle class uh fam's lifestyle than there are weeks in the year um it's not just that we need to do something about the offshoring of good jobs uh or the issues of financial precarity that face Working Families all of which as you heard these two days are issues that employee ownership can speak to it doesn't matter just that we solve them it matters how we solve them because we're also facing uh another fundamental problem that's come up in the course of these conversations which is that a majority of American workers that really do feel disenfranchised and Powerless in the economy because they are and unless we solve that problem unless that problem is substantially addressed our Franks social fabric will continue to fray and our faith in democracy will continue to decline and our sense of Civic friendship uh will be at risk so that's my big idea um that we remember uh that as we all go back to our respective work in this space that the term ownership doesn't just have a legal sense uh or a financial sense as in the right to share in the profits of a you know profitable Enterprise ownership also has a Civic sense as in a sense of ownership in our shared economic and Civic life um a sense that National Economic life really is a shared project that we are all in together as partners that all of these meanings of the term ownership belong together and then and this is what I get so excited about to take that that that sense back to the Practical work of making this stuff real in policy and the other places we work uh and get get jazzed about just how valuable employee ownership can be as a tool that helps us solve that problem um as one of the ways we might try and enhance a sense of genuine participation as partners in the American economy thank you