Ownership at Work: A Discussion on Designing and Growing Employee Ownership

good afternoon and welcome I'm Maureen Conway a vice president at the Aspen Institute and executive director of the economic opportunities program it's my pleasure to welcome you to today's conversation ownership at work a discussion on designing and growing employee ownership this conversation is part of the economic opportunities program ongoing opportunity in America discussion Series in which we explore the state of Economic Opportunity in the U.S the challenges workers businesses and communities States and ideas for change we're grateful to Prudential Financial Walmart the certina foundation the W.K Kellogg Foundation Bloomberg and MasterCard Center for inclusive growth for their support of this series a special thank you to JPMorgan Chase for their support of our work on job design which has informed today's conversation today's discussion is the third and final event in a series a three-part series the job quality Choice opportunities and challenges and jobs signed in this series of conversations we've been challenging the notion that low quality jobs are inevitable indeed the prevalence of low Quality Employment demands that we think Anew about how to design jobs in 2019 The Brookings Institute reported that 53 million working adults were in low-wage hourly jobs that's roughly one-third of the entire Workforce and Gallup reported that only 44 percent of Americans said that they had a good job defined by satisfaction with the job characteristics that they care most about and that reflects that while earnings are critical to a good job job quality is a function of more than wages and job quality problems impact people Beyond those that are economically struggling we also know that many job quality problems such as low wages discrimination and harassment and unsafe working conditions are disproportionately experienced by women workers of color immigrants and younger workers we need a mind shift about work and job design we need to stop prioritizing labor cost minimization and the maximization of management control in job design choices and start investing in worker productivity and designing jobs that Empower and engage working people we need jobs that both incentivize employee contribution to organizational success and that include workers in the benefits of that success we've been examining some of the decisions that determine the quality of people's jobs as well as the opportunities we have for making different design choices that lead to good jobs where workers and businesses Thrive together in this final conversation in the series today we'll be exploring one of the most significant choices a business can make should they share ownership of the business with their workers research has shown that when employees share in the ownership of the business and when that shared ownership is structured well employee ownership can enhance both business performance and job quality in addition given the high proportion of wealth that is in the form of business assets employee ownership holds potential to contribute to addressing racial and gender wealth gaps and advancing a more Equitable economy but that caveat of when designed well is important though compensation and Company valuation are important ownership is not just a financial transaction on paper it's a culture of Engagement and worker voice that lives in the workplace that opportunity to own part of what you build is resonant in U.S culture and remains a popular idea in 2019 researchers at the Rutgers Institute for the study of employee ownership and profit sharing reported that in a nationally representative survey 72 percent of Republicans and 74 percent of Democrats responded that they would rather work for an employee-owned company than for shareholders or for the government so how do we translate that shared aspiration and that broad-based support into action what role can government play in encouraging more business owners to build employee ownership into their companies what are the financing information and technical assistance gaps that need to be addressed how do these needs vary across forms of ownership and different types of companies how can philanthropy support learning and innovation in this space we have some great experts joining us today to tackle those questions and more I'll introduce them in just a moment a quick note that while today's discussion concludes our series it's just the beginning of our discussion of employee ownership we'll be transitioning to employee ownership's moment conversations to advance policy and practice which will be taking a deeper dive into different forms of employee ownership so watch this space for more conversations and we'll be starting that one on November 17th with democratizing work the roles opportunities and challenges of work or cooperatives in the US okay now a quick review of our technology for those joining us remotely all attendees are muted we welcome your questions please use the Q a button at the bottom of your screen to submit an upvote we also love it when you share your prospective ideas experiences please use the chat function to do that and share your resources and thoughts on the topic of employee ownership we also appreciate your feedback please take a moment to respond to the feedback survey at the end of this session we encourage you to tweet about this conversation our hashtag is talk opportunity if you have technical issues please message Us in the chat or email us at eop.program aspeninstitute.org this event is being recorded and will be shared via email and posted on our website closed captions are also available please click the CC button at the bottom of your screen if you'd like to activate them um okay so today's structure is a little bit different we kind of have a twofer so we're going to begin with a conversation with Gina Shafer founder and CEO of a few cool hardware stores and Frank Lindsey employee owner and manager well Tacoma Ace Hardware a few cool hardware stores recently began the transition to becoming an employee-owned company and Jane and Frank will help us ground our conversation today in sort of that experience also if you want to learn more about the story of a few cool hardware stores uh Gina recently released her book recovery Hardware which personally I found to be a very engaging and uplifting read about the opportunities for a business that's really built on trust in people and commitment to community to make a difference um a second quick plug my colleagues Matt Helmer and Yuri Chang recently released a profit profile of Gina and a few cool hardware stores focusing on this employee ownership transition so we have some additional resources there um following the conversation with Gina and Frank we'll talk with Jen Briggs contract CEO chair and chair of the employee ownership Commission of Colorado State Todd Leverett co-founder apis and Heritage Capital partners and Jean Warford program officer at the W.K Kellogg Foundation toward the close of our session we'll be joined by U.S senator Chris Van Holland of Maryland who will share some of his thoughts on the potential for employee ownership we have BIOS with all of these people on our website they are amazing you should check it out uh but I'm not going to say more about them now because now it is my great pleasure to welcome Alana Samuels who will be moderating today's discussion Alana's senior economics correspondent at Time Magazine where she writes about topics including work housing consumer spending and the supply chain she was previously a staff writer at the Atlantic and correspondent in both New York and Los Angeles for the LA Times Alana thank you so much for being here and let me turn it over to you thanks Maureen and thanks to all the panelists for being here I'm really excited to have this discussion today um as someone who writes about economics and work in particular it can be really depressing sometimes um you know with an economy focused on efficiency and productivity you hear a lot about jobs getting worse and you know I first started writing about this in the aftermath of the Great Recession and all these people were saying to me you know these jobs aren't what they used to be and I think since then it's just gone downhill but there are also some examples of where that's not the case and I think a lot of times employee-owned businesses are are a great exception um I wrote two stories I'm just gonna put them in the chat um they were a long time ago but um one of the kind of most fun stories I ever did was I went to King Arthur Flower which as people may or may not know as an employee-owned business and uh you know it's a it's a flower place there's it's a bakery there's lots of yummy treats or lots of wonderful things about uh visiting but my favorite part was wearing the call center because you typically think of call centers as kind of not very fun places and this King Arthur call center was just everyone was so happy that um you know I started to kind of really think about why is that and I think a lot of it had to do with the way that King Arthur is structured um you know obviously there are challenges too from the time I wrote These articles a lot of the places that were employee owned are no longer or they went out of business um so I'm excited to talk about kind of the promises and perils as well um but I am excited to Just Launch into this the first discussion um with Gina and Frank um so Gina let's start with you um I know your company is called a few cool hardware stores but I think you have more than a few now tell me a little bit about your business and why you kind of started thinking about employee ownership sure I also want to say that we chose a few cool when we had three and then it stuck it became one of those nicknames that we couldn't get rid of and so we we realized that our math is bad um we actually visited New Belgium brewery and my husband and I in 2018 and we were so excited to talk to the employee owners there and and hear more about the structure um that we tucked in the back of our minds and thought maybe this is something for the future and then if you you fast forward really during 2020 and 2021 there was so much unrest in our my office sits on 14th Street where a lot of the protests in Washington DC occurred and we started thinking about how as a company we could be part of a solution and even if it was a small part what would that be um thought back to New Belgium and decided that perhaps employee ownership would be the way that we could affect some change for the folks that work with us and so that was really the beginning of all that and just out of curiosity before that you know when your stores were still growing what had you thought uh your kind of exit strategy would be you know people had asked me I started the business in 20 2003 and people started asking me almost immediately what my succession would be and honestly I had no idea um I was very I was young I was just growing the business I hadn't really thought about what I was going to do or when it would end um so we thought of all the traditional things eventually selling it to a private owner selling it to private Equity um selling it to employees you know one specifically for example or a group of them um and then when we when we realized that the ESOP was a really good option for us that became the fourth or fifth and Final Solution that's great so Frank tell me um how you heard about this idea um what Gina was thinking of and what your reaction was um so the first time I actually heard about it was when I actually got promoted into management was the same day or the first meeting was the same time that we first uh discovered that the ESOP was forming and Gina was uh selling it to us as the other employees and um I think my initial reaction was more um confusion I guess of what exactly a ESOP is because it's not something you hear about every day so it was just I wasn't quite sure what it was and I was curious about what um what more and what that means to to us as employees now that um you know Gina is is exiting and selling it to us um and it as I'm going into it more it's it's meaning more it's it's giving me more um I guess incentive that the the company's investing in me and so I'm realizing that I'm being invested in um because usually you know we invest in a company with our money our time and don't always see a return on that um right away whereas uh with this ESOP you know seeing that return and that investment um you know we got our first uh evaluation and you know being able to see that number really uh really puts it in perspective how long have you been with a company in in its entirety uh in the entirely I've been with a few cohorts for about two and a half years now Okay so you're you shot right up to management yeah yeah yeah yeah I fit right in with the culture and um you know I think I just had some good ideas and uh they they saw saw my words so yeah so Gina tell tell us where things stand now um you know it's obviously a process um but where are you now it is so the day that we announced we had about 165 teammates that automatically became owners and that's a rolling entry so every time someone reaches a year and a thousand hours they are invited or welcomed into the ownership uh Team I think the the challenges that we have now really is just educating all of the worker owners on what that means and then all the new hires on what it can mean I I don't think I realized the the depth of the confusion when we first started and so to be completely honest we're a year in and I'm still making sure that I can talk about it appropriately and that I can say it so that it makes sense um it's it's if it's in effect a qualified retirement plan but that sounds kind of boring I mean that doesn't really that doesn't I I don't and Frank can back me up or tell me that I'm wrong but it doesn't convey the excitement that particularly a young person or a person growing in their career can feel when they come to their to their job yeah it's interesting because um you know we think about employee ownership there's obviously a financial side but I think a lot of it is about employee ownership so how do you how do you kind of translate that hey this is kind of a retirement plan to hey you're also a part of the decision making of this company yeah so there's there's definitely a distinctive difference between management and ownership so we're still working on the language because it doesn't automatically mean that everybody becomes a manager right away or a boss or necessarily that the decision-making treat changes I think for us once we got to that first valuation which happens once a year in an Esa I think that's when it really sunk in oh wow this is tangible there's money involved um that I will one leave on the table if I if I leave and two can really make bigger if I participate more in the growth of the company so everyone from you know the brand new Associates on up have an opportunity to increase that bucket I think that's probably seeing that numbers probably made the biggest difference yeah Frankie mentioned you know you saw the evaluation and that kind of helped make things real for you talk a little bit more about that and what what that kind of made real seeing that number yeah so um with it it was a lot of you know as Gina was saying it's a glorified retirement plan when we first heard about it you don't really know how that number uh that valuation comes up and that you know the the employees definitely on the uh you know associate level they they don't quite understand like this this is all the you know it's a our company is going into that valuation it's not just and so putting that tangible number on it has really uh helped me explain it to my staff and even new people coming in going hey you know yes you're not going to be in management but your what you do in your paint department in your electronics department that goes directly into our value our profit everything that we do day in and day out of our daily operations that ends up increasing our valuation or decreasing it if we have a bad year but what work we put in comes back to us after we you know as we put it in so it it is nice to see that number and actually go you know we had an increase in paint sales last year look this is the new valuation this is what we have like I can show you that your work is working and you are actually getting um you know you're getting a return on that work you put in besides just your normal paycheck and salary when you say valuation I mean what is what are the employees seeing exactly is it why are of profits or kind of kind of going to their retirement accounts so it's a little hard to it's complicated to explain but there's basically like the the when we created the ESOP we allocated a number of shares to that ESOP and then the valuation the profit from the company is proportionally assigned to each of those shares which is then I'm probably screwing this up and somebody on the call could probably explain it better than me then proportionally allocated to the worker owners based on how much they they make so um and that that will change every year this year might have been a little bit bigger because we had allocated a bucket of shares and so that remains to be seen but um I'm more than happy to send out more information or make that make more sense if it didn't there but that's the gist of it so Frank if the idea is kind of um the better we do the better you do at your job kind of the more we all benefit do you think that has changed you know co-workers attitudes or the people who report to you their attitudes or kind of how they think about work or is it still you know so far away from a lot of people that it's kind of hard to really picture it I guess um I think my Approach with it because I kind of like to already run the store with a more of a mindset of um you know you I you have a responsibility and accountability of your your position so I I want them to make those those decisions like to think a little bit outside the box and not just have me tell you how to do it and I think that um a good example is one of my uh my paint coordinator he he before he you know was really great at his job but he wasn't thinking outside of his department when it came to us becoming owners um he started thinking about how can we improve the rest of the store because he now realizes that that's coming back to him and so he comes to me and says hey I I know I don't work in the the lawn and garden section but I've noticed this can we do this so getting people to kind of think a little bit outside the box and bring it to us so that way we can you know I you know help him out and actually listen to them I think that is a big thing with this employee ownership is we're all owners together so we're all going to listen to each other in a way to try to make our company Better Together yeah that's a really great example um well Gina it's it's probably hard to tell because of the pandemic and just the economy right now but you do have all these studies that suggest that employee-owned businesses do a little better than than non-employee owned have you seen any kind of impact on the bottom line or or I guess just tangible results from employees like like Frank was talking about yeah I think it's probably it's probably too soon to say whether or not they're going to be lasting changes but we did have an increase in the first year which was really exciting for that first evaluation um we traditionally have a lower turnover than well a much lower turnover than average retail locations and I think that that's probably been pretty consistent over the last year as well so I think again one year it's not really fair for me to say that everything's been great because it's one year but I I think that we are going to follow in the path of seeing the improvements because we've made the change yeah um well so Gina looking back if you're if you're talking to other business owners who are thinking of making a similar change are there things you wish you had done differently or things that you think everyone really needs to know if they're gonna if they're gonna do this about forming an ESOP you mean yeah yeah yeah so um one it's not cheap and it takes a while so it's really just it's really good to ask a lot of questions in advance we employees don't put any money in that's usually some that's a misperception everyone thinks that if you're selling it to your team that they're writing you a check that is not the case at all so I would say um we had all of our financials locked down my husband was very good he's our CFO very good about making sure that everything is done to the letter and I you want to make sure that that's the case if you're going to form a Esa find a great Consulting partner and trustee there's a whole team that you put together that includes intern attorneys and those folks um and then recognize the fact that there are costs involved and then the emotional piece is probably the piece that I I I knew I knew to ask I knew that it was probably going to be a challenge but I don't I wish that I had known more in advance perhaps how to present what it is uh the pros and cons thinking about what some of the negative feedback might be uh but I would recommend that anybody in a succession planning process consider forming a Nissan Frank what about you um anything you wish you had known at the beginning or ways that you found have been successful to kind of you know if other companies are thinking about doing this how to present it to your employees um so I guess in the future um a little better way next time for us would be just having um as Gina was saying kind of that like emotional side and that you know what what what does it mean to us you know now that we're owners just kind of uh having a little cheat sheet something to kind of break down all that little information and the things that um you know kind of get lost on the Wayside because there is a lot of information that comes out when we first started the ESOP and so it's a lot to go through and you know everyone's skill levels are different when it comes to you know either Finance or business management so not everyone you know knows what they're looking at so I guess having better you know just better communication on cheat sheets would be something but um as far as like I think people should move towards the direction of esops um I have a entrepreneurial Spirit I've been you know always looking into you know investing in myself in the long term and this this is a good middle ground where I can have a career and an investment at the same time yeah that's great um Gina when you were kind of thinking of doing this were there other models um similar models that you were thinking of pursuing um and and do you kind of think think back longingly on some of those or was this kind of the clear model for you it became clear fairly quickly we we um researched doing a work or cooperative um which would have been an option for us but I think for our size I think it probably makes sense that we went with the ESOP um that was probably the other option that we really looked at most closely we did talk about saying if there were five employees for example who were interested in buying would we sell it to a contingent of folks and that just it didn't seem Equitable to us we wanted to be as Equitable as possible so This Is It ultimately shook out that this was the best that's great yeah um well I want to give each of you just um a moment to have if there's anything else that you want to add or add or to bring up um uh and this time we had together about esops or or your experience um doing this I'd love to I'd love to hear Frank why don't you go first um I think like with the experience that we're having now it's a learning experience and we're working towards figuring it out and everyone you know has a lot of these questions but um I I I'm very hopeful and excited for like where we're gonna go with this um I can't wait till uh we start making more decisions as a whole on the company and uh you know looking into uh continuing and expanding a few cool Hardware so I you know I can't wait for to get into those decision making and help with that great um and one another thing I want to ask you do you think consumer or your customers know and understand and does that change anything for them um yes I do um our so Tacoma Park is a very nice uh area I don't know if you uh are familiar with in DC but um our neighborhood is is really close and they're actually really happy um we have a co-op around the corner so that they like these type of businesses and they were very happy for us when they saw that you know we became employee owners um we I have customers that you know one one reason or another from before they stopped shopping at us but they saw we were employee owned and they came into the store again and uh I was able to convince them to stay with us because you know like I was I was telling that hey everything's different now like we're the same same company but we have a bunch of new owners and we're gonna you know make this better for you that's great um yeah Gina anything else you want to add um maybe words of advice for for other people considering this or just kind of Reflections before we have to move on to the next panel yeah I mean I think my my words of advice are you know somebody wants to talk about the challenges or the excitement uh to call me I'm more than happy to talk about it but reflect thinking about the nuances and what kind of the path that I've gone through um we are talking about a lot of hourly wage employees so my average uh of the of the 160 my average teammate um who is now my co-o co-owner is an hourly wage employee those issues the issues that go along with that are not solved by creating the csop meaning if we can't as a system or a country figure out how to continue to raise those wages or in you know we try it we have a bit of an up and out like learn a lot so you can go on to a higher paid job somewhere else if we don't have one for you if we can't figure out those things just layering on an ESOP is not the solution that's not gonna that's not going to solve those problems for us so I think for me it's sharpening my pencil and figuring out how we continue to chip away at both raising wages better at work environment um more opportunities for our team and then layered on is this oh by the way I'm also an owner in this business or I have to leave and go where I can get all of those things so that my daily my daily needs are met so I think I mean I knew that but now that we've now that we've formed the ESOP I can really move into thinking about that a little more professionally yeah well don't tell yourself short it's not it's not everything but it's certainly uh I think a big tool that that businesses can use should they should they have that option thank you um well Gina Schaefer Frank Lindsay thank you so much for for talking about your experience um I really appreciate it um and I'd like to call the other panelists back um so we can kind of go into a little bit more um I guess more of a 10 000 uh foot or Twenty Thousand thirty thousand foot view of um of employee ownership um so Todd Jennifer and Jean um thanks for thanks for being here um let's just do a little bit of introductions and kind of have you each talk about how you came into the space so Jean we'll start with you um tell us a little bit about WK Kellogg and its work on employee ownership and why this is something that's that's important good afternoon thank you um Alana we're really um honored to be here today to talk about this work um and really excited about the work that um Gina is doing um the Kellogg WK Kellogg Foundation we're known for our early childhood work you know that really is where our sweet spot is and so what we really are trying to focus on is to make sure that every child thrives and in order for that to happen families and communities have to thrive as well and so when we embarked on this journey early of looking at you know how can we help move the needle for families um and children living in poverty you know family Economic Security then became really uh more increased role within the foundation and so our work began to look at you know where are the opportunities that exist for wealth building for um these families and so you know we have the questions but we were really unclear about what some of the answers were to this and so we teamed up with Rutgers and had them do one of the first ever studies around out um employee ownership to say really what um does this work does it work for low to moderate income uh families you know workers and the answer was yes you know they see ins uh instances where it does you know they're doing continued research to to sort of drill down and see you know how these models impact and the particular impact on um black and brown people and so that's really started our journey um along looking at um employee ownership and then once we had some of the answers to those questions then we knew a direction that we needed to move uh to begin to move in and so we started holding conversations with you know some of the leading intermediaries you know Aspen um democracy at work project Equity um and CEO the national Center for employee ownership we started having conversations with them about you know what is happening in this field and is it is there a possibility to grow this um we also knew combined with that was the silver tsunami that's coming right that we all know that there's going to be this great transfer of wealth and businesses and that you know a lot of the second and third generation um children um don't want to take over the business they pursuing other careers and so um we begin to also then look at what happens if these businesses go away what will happen to the jobs in the community to real estate in the community what will happen to families and children then and so we began our journey we embarked our journey with each one of them sort of taking on a really big portion of the work where they were looking at you know how do we educate uh business owners how do we educate municipalities how do we then now put together new tools uh for employee ownership so that we can demystify the process so that it doesn't you know right now we have lawyers and accountants who like didn't even understand what it took to make it happen and so of course when business owners were coming in the the obvious way was just sell the private Equity that you know you get your money you'll be out you know um but what we know is is that sometimes when that happens we don't get the results that we believe should be intended um for the well-being of communities and so um we were like well then what we need to do also is we need to put together something for um lawyers and accountants let's demystify for them we have organizations who are actually now developing culturally competent curriculums to share with uh business black and brown business owners to say this is what it looks like um we know and you know we know that there are several variations of this where we can do worker cooperatives or esops you know um we support both but we have a direct preference toward um esops for the very reason that Gina talked about is is that it doesn't require employees to actually have to make the financial commitment but what it does is that it has as an owner for them to make a work ethic commitment and a commitment to see the organization Thrive make profits and survive and so you know we looked at you know we looked at Publix Publix has cashiers that have retirement funds of over a million dollars so we're like okay this is a model that we can sort of wrap our arms around and you know one of the things that we know that we're battling as we try and help these families feel you know uh build their own family and generational wealth is is that today 56 percent of Americans over half of Americans don't have a thousand dollars uh to meet an emergency need you know and if anybody who listen knows everything today when it when it breaks down when it stopped working it starts at 500 it's like it's 500 right it doesn't matter what it is whether it's the car whether it's the furnace whether it's the air conditioner you know when it's 100 degrees outside and it's not working but that you know so it's like we know that these families have don't have access to that and so the just the fact that they have a retirement fund that sometimes also could act um at some 401ks do for them to be able to like you know take out a loan against for emergency reasons you know hospitalization you know things that unexpected events in their families and so these are the kinds of things and we know that you know closing the racial wealth guy is a really you know big thing that we're facing and how we begin to dismantle that but we believe that employee ownership is a good place to start great so you've been funding a lot of kind of research and resources for this it sounds like have you also funded some um transitions or no so actually you know because we are you know um a philanthropic Foundation you know IRS doesn't really allow us to you know support businesses uh for-profit businesses but what we do is is that we support organizations that are providing the um technical assistance to help businesses understand what this process is all about what it will take is their business you know perhaps a good um candidate uh for ESOP but we also on our program related and mission-driven investment side and I think you know Todd might talk a little bit about this is is that you know we help through uh those kinds of program related loans and Investments so we that's directly how we support this work great well um Todd Jean mentioned you um I know you come from the more Finance side of this um tell us a little bit about apis and how how you fit into this world wonderful thank you Alana thank you to Maureen and the ASP Institute team for allowing me to be here my name is Todd Leverett I'm co-founder and co-managing partner of apis and Heritage Capital Partners we're a mission driven and and yet market-facing investment firm and we're currently sponsoring our first fund Legacy fund one which thanks to organizations like the Kellogg foundation and their their pri investment uh recently closed out our fund at just shy 60 million dollars and Legacy fund one uh is what we see as our reimagining of of capitalism and Entrepreneurship in this country using the tools of employee ownership uh with a specific uh focus on those places those communities and those people that need it the most so using these tools of employee ownership to directly address the racial wealth Gap is at the core of who apis the heritage is and Legacy fund one of what it is um so so you know what does all that mean in Context uh you know like a traditional you know investment firm private Equity mezzanine debt firm we find really great small and medium-sized businesses that have you know long histories of success and what we do is we convert those companies over to 100 employee owned using our our meds debt product um and we focus on doing that with companies that have large uh bipop workforces so we won't uh convert a company to employee ownership that doesn't have at least a third of their Workforce being by pop and across our portfolio at least 40 percent of the workers across the portfolio um uh will be by pop uh to date we've made two Investments a landscaping firm in El Paso Texas and uh wet utility company in Denver Colorado representing uh 200 workers and about 200 families and and to date about 80 percent of the workers across our portfolio are bipod so we have those floors but what we're seeing and what we anticipate is that the vast majority of workers in our portfolio will be bipod so you know what are we doing we're allowing these these workers as as Gino was referring to as you referring to Gene was referring to uh the opportunity to build well Health an opportunity to have a a retirement and and Escape generational poverty by doing by leaving their families every day working hard and contributing to the growth and success of the of the companies that they work for which we think is is just how it should be um the the other side of the story like I said we're we're Market facing and that that we believe that you know the returns that we can have on our investments can be competitive um with you know other mezzanine debt products in the open market and we really believe in the business case for employee ownership as well which you mentioned through some statistics that show that employee-owned firms grow faster um they have lower turnover rates they have better margins higher productivity and their workers are are their lives are better off in in a lot of ways if you do it the right way if you do it the right way and if you structure it the right way so really excited to be on the panel with so many folks who I respect so much I've known Gene since I I first I was a a baby in the employee ownership World um and you know my my theme is my stories I met Jean so I'm never going to fail because I met G and I know Gene um and excited to be on with everybody here today and share more about what we do and and how more of it can happen in the United States great um and Jen um so you come from New Belgium which as Gina mentioned is the inspiration to a lot of people in this world tell us about um Your Role at New Belgium and kind of what you're doing now in the in the employee ownership space yeah and you know thank you for having me here this is always just fantastic to get to talk about this and I think it's so important to have more awareness which I'll get to in a little bit with the Colorado commission but what I did at New Belgium is I was the VP of organizational development in HR and you know it informs a lot of what we did there on what how to do a well-run company because what I believe is that a really good company has a a strong financial engine meaning it's well capitalized good cash flow profitable but then it also has a really strong social engine where people can come to work with dignity and um in the employee ownership context a lot of people have much higher business literacy they can contribute at a far different level than what um some other business Concepts allow them to do and so it just creates um a really Dynamic work environment for people that changes things in a lot of ways but simply plugging in an ESOP or a co-op or any other form of capital sharing doesn't do that it's a management system issue it's how people how leaders lead the company it's my definition of culture is it's the pattern of attitudes and actions of a given community and so leadership shapes those attitudes and actions and I believe proximity to ownership also does as well too so we have abstract ownership it's really hard to make that kind of visceral connection but when we have a strong proximity to ownership which employee ownership is probably the most proximate that we can we can get it's really powerful and so a lot of people probably know that New Belgium uh sold so they sold to a international company and I think what was interesting to me is there was a lot of criticism around that sale and I've seen some of that also with Clif Bar recently but I think it brings to our attention the difference between labor income and capital income um and getting people more people access to Capital Income is really what this is talking about and I think Gina said it so articulately earlier is labor income is one problem capital income is another problem and they're both really important and they're different um so hopefully a lot of esops and some of the research shows this the esops are both they're working on solving both of them they tend to pay a little bit higher um one of the tools I love the Aspen Institute has is that a cost turnover calculator is you know companies that don't invest in their workforces experience a lot of turnover and that's really expensive you're just watching really talented people and a lot of Knowledge walk out the door and so having these Management Systems in place is incredibly important um yeah so it's it's informed a lot of the way I think about business and the work that we do now um you know going forward and you said so now just so people know you're with the state of Colorado um working on on kind of yeah so I also work for the vicer institute in supporting uh ESOP companies but I think what we're doing now in the context that I'm really excited about is uh in 2019 Governor polis formed the commission for uh employee ownership it sits in the State uh under the office of Economic Development and international trade and I think that's really important is in the state of Colorado we see it as uh one tool for more economic vitality um and so that's really important and the way it's structured is it's also um sits as almost appeared to the state SBA and so the way the state has a lot of things organized is there's a lot of interaction and influence between them so they're not stuck in these different silos so that's really important so in 2019 uh Governor polis formed the employee ownership commission I'm now I'm the second chair of the Colorado commission uh so um that's exciting and what we've done is um formed the Colorado office for employee ownership so the state of Colorado has a staffed office with people who focus on employee ownership we have programming um uh we have programming and so I'm just making sure that I want to put this in the chat so people can see it um but for companies to come learn with each other peer groups and things like that but I think probably more hopefully impactfully is creating a durable system for employee ownership uh in the state of Colorado so we have a Colorado employee ownership Grant that's offered through the state of Colorado that can help companies offset some of the expenses and then there's also a tax credit that can offer up to 25 000 up to a hundred thousand dollars to help companies transition to either Cooperative or ESOP and Gina mentioned this earlier but it can be quite expensive to become an ESOP in particular and even for a co-op you have a lot of expenses and so helping companies get through that hurdle to get to that and of course there's ongoing costs to support these companies and to make sure they're running well but that hurdle of that transaction hurdle I think has grown quite a bit over the 10 years and so the state of Colorado has invested to help people get through that so I think it's really exciting what we're doing and then recently we just released the ownership Readiness report so the state of Colorado partnered with it um exit planning Institute and it really brought forward um how little business planners business owners are planning for their transition and so um one of the stats that's in the report is it's almost 80 percent of companies are planning for an internal transition but that's to family or an existing partner and so they're not really employee ownership of any form isn't really on the menu and that's something that we really want to get is connect with attorneys accountants professional service providers so that when somebody starts contemplating their exit they are getting advice and this is on the menu and maybe employee ownership isn't right for that company but it should at least be part of the discussion um and you know sometimes we should say no but sometimes we should say yes but we can't even have the conversation well that's one thing I think that's very interesting is that um a lot of people don't know about this and there are a lot of different formats and forms so Todd you said when done right this can work well I want to ask you and Jen and Jean you can weigh in as well but what are the models that you think about when you think this can be done right obviously it differs between different companies but are there certain models that you know you've seen have have really good um results with employee ownership yeah and I'll I'll break that window right down into two pieces and I'll be brief one when done right no matter what kind of form legal structure or structure of employee ownership means when you are uh engaging the workers as people when you're engaging the workers as owners um when you're getting their input when you're when you're really treating workers like worker owners or or worker owners are empowered to be worker owners is how it's done right and we talk about the the benefits the business benefits uh let alone the social benefits of doing that that's whatever form you're doing that you know in the ESOP world we always say in ESOP structure without um uh ownership culture is you really just get another cool retirement plan it's like a 401k oh you got a secondary retirement plan it's when you invest in that culture is when it makes a difference so that's kind of the first win done the right way the second one done the right way kind of goes I think to what you're leading to some of the different forms of employee ownership and so there's there's a broad world of but but at risk of oversimplification I'll briefly say you know you can think about it in terms of cooperatives being you know one of the the first party the oldest form of employee ownership and cooperatives are really um you know value driven businesses that at their core are serving the needs or specific need or a broad set of needs for their workers and the community so really it's about you know the corporate is about who the company exists for and that's typically the workers in the community and so usually you know workers are voting on on a one worker one vote basis um on decisions in the business not necessarily all decisions but you know kind of can vary and then um you know workers are able to participate in the success of failure in the business that's the co-op model and usually you'll see that in smaller and smaller sort of sort of businesses right and I think Gina referred to they looked at and said you know for the size of business ESOP made a little bit more sense um on the uh one thing I'll say is at the core of the Cooperative model are the uh the DNA or the seven Rochdale principles I'm not going to go into them but if you've never read them before go read them and imagine a world where every business and not just business but Society kind of operated off these principles is really interesting um the second form and the most common form that you see in the US is the ESOP the Employee Stock ownership plan which was set up in 1994 with the employee retirement income Security Act better known as erisa which some of you may know is the legislation that set the 401K so employee ownership using esops in this country is the same age is as old as the 401K but you know a lot lesser known we always say the Lesser well-known lesser cool cousin of the 401K um and esops are really illegal in a tax structure that enable you know third-party outside financing of employee ownership so you don't need to utilize you know worker Capital um to create the ownership structure and provide some of the most tremendous tax benefits um to employee-owned companies uh to companies that you've ever seen out there that really give employ way own business is a a market advantage over their peers that aren't employee owned because you got to engage employees and get these really cool tax benefits and then finally you have the elts which are the most common form in the UK and that stands for employee ownership trusts and they're now becoming more common in the U.S and essentially what enables to do as a Founder to set a Perpetual forever purpose to a company whether that's the purpose of this company is to always serve the workers and provide them with income or to always take care of the environment and owner can set that in place and even when the owner is gone that company will exist with that purpose and you have organizations like a common trust with us Zoe slag and Derek Roswell who are trying to scale that and create an investment model around that in the in the U.S so like Patagonia recently became an eot and there's a lot of conversation around that but that's that's kind of the the world and there's more but that's the the general world of employee ownership I'm glad you brought up Patagonia because um I had the opportunity to visit them a few years ago and even before this you know that you could tell the culture there was just this kind of employees really have a voice but you know I think you mentioned kind of in making sure the culture is there the employee ownership culture is there but I think you know as Gina mentioned when you're just kind of talking about oh this is a cool retirement benefit it's really hard to build that culture if it's not already there um Jen maybe you can talk a little bit about your experience at New Belgium and if there are ways that you found building this this culture um around employee ownership um really worked yeah I think you know first and foremost um something I've added in all the time is um it really does have to have a good sense of trust because one of the things I think the most successful employee ownership cultures have regardless of what they are if it's you know some kind of shared Equity Co-op ESOP is people have to be able to trust each other and have that place of dignity because the minute that happens you can't have tension and one of the great things about companies that have open cultures where people are business literate is you can debate issues and you can have dialectic where you're building on an idea and to be able to have those conversations mean that people have to argue you have to have a very responsibility Centric culture where you're taking on this idea or you're taking on this challenge or this problem and you're able to figure it out um in a different way so it's not the c-suite or some strategist rolling something down to people it's people saying we have a business problem there's something there's an idea there's an entrepreneurial something that we can do and we're going to to chew on this and we're gonna figure it out and you have to be able to disagree with each other so I think sometimes when we talk about culture people think about parties and perks and you know all this kind of fun stuff and in the New Belgium con context everybody would be like oh you got a trip to Belgium and you got a bike and those things were all true and um it was about being able to disagree with each other that I think really made it special um that problems were rolled out we do once a year strategy sessions with all staff where each one of us in the leadership team would actually come up with the what's the one thing that keeps us up at night and we'd ask people to help us solve for that you know what are these things that you know if you've been in that leadership position a lot of times you don't sleep because you're just trying to solve these problems and when you can bring them into that so um it's that Dynamic blend of Rights and responsibilities is you keep those in balance and you grow them and nurture them and build knowledge and so people can be in the seat of um a stockholder if you will although it isn't a trust it's a beneficial shareholder but they can wear that hat which is sometimes different than your employee hat and sometimes you might advocate for things that actually you wouldn't advocate for an employee but you might as a shareholder and it's fun to put those attention and to solve for it um it's it's a really Dynamic experience and I think we got that right on in a lot of the years yeah that's really interesting well I remember with um I think I went to a it was a worker Co-op that was a brewing Brewery and they had a lot of employee feedback and some of the feedback was great you know they figured out how to make an outdoor patio to accommodate more people but then you also had new employees coming in and every time the new employees would come in and they'd be asked for their feedback they'd say let's dispense the ketchup in a new way and every time the older employees heard that they're like oh not the ketchup again um so I think it's hard to you know balance hearing what hearing from everybody and also so you know being efficient um Gene you know you've studied a lot of tools that are available and in a lot of um examples of this I don't know if you've run across any tools or kind of ways of of creating this culture that you found really inspiring but I think I think both Jen and um Todd covered a lot of it you know and I think really at the core of it all is is that it's um and you know it's not unlike any other well-run company or organization you know when the employees are treated with dignity and respect when they're giving a voice um and you know as we know in a lot of the work you know they oftentimes have the answers and the solutions to a lot of things that you know we try and figure out in a little bubble and so you know from all of the conversations that we've had across all the different models that always surfaces as one of the most important things and that when that doesn't happen then the organizations or the businesses begin to run into trouble yeah that makes sense um well Todd I want to go back to you and talk a little bit about private Equity because I think um when a lot of people hear the term private Equity it can sometimes erase a red flag um and as someone who used to work for the LA Times which was owned by Tribune for those of you who don't know there's a whole lawsuit um when Tribune I don't remember the exact but um the people who bought Tribune used the ESOP to try to maneuver some stock thing and there's a big lawsuit and people were very unhappy about it um so how can private what role does Private Equity can in private Equity play in esops and who's making sure that it that it isn't you know playing a role that makes employees or the owners unhappy so so we it's it's we always this little courting line where we put the we put the equity back in private Equity but but really you know from a from a a um you know just like a lot of things the the question of who gets the benefit is really at at the core so whether we're talking about publicly traded companies whether we're talking about private Equity it's a question of who's creating the value every day and who's able to to see that value every day and we talk about all the time you know entrepreneurship in its purest form so to speak is supposed to be about risk and reward right you're sharing the risk you're sharing the reward and what we talked about for a long time is that workers have always shared in all the risk all of the downside falls on workers backs as it does with owners I think the pandemic has just made that more clear than ever but that upside is is not oftentimes not there and so when we talk about traditional private you know from a from a operating structure we do what private Equity is supposed to do you find really good high quality businesses you go in you work with those small businesses help them grow help them help well what they're supposed to do help them be sustainable help them build strong balance sheets and help create stronger businesses and the question is once you've created that stronger business and you've created that that difference between where it was and where it is now who gets the capture who gets the capture who created that and who did that it's our belief that when we go on the firms it's the workers it's the it's the managers it's the leadership because you can still have there's still structure in these firms that are the ones who've done that um and that if you reward them you know reward them properly what they were deserve they will they will continue to do that so you know the term extractive in the world of financing comes out of a lot so a lot of times when we're looking at our product it's typically a private Equity mezzanine debt product is it extractive is it extractive and we believe that when you're looking at a company that's been creating uh value for 30 40 years um and that has made it through ups and downs and has resilience we're not going to fool ourselves into believing that the five years are with the firm we created some you know we turned it around the company had already turned itself around 10 times and it's surviving and when you I think the real question is look at what's the return profile how much is coming out of the company and going to folks who aren't associated with the company or going to the folks who who contributed the capital and how much is going to the folks who are on the ground so at its core I don't think it's an inherently bad but that's where you have to dig in and kind of look under the sheets and see where's the value going and who's not getting it and who's getting it yeah it's interesting because um effect he says it's not inherently bad so you know I think the uh Twisted still deciding that right because one of the things that we really don't understand about it is is that is that it's not really a true form of employee ownership when we have private Equity involved and that you know one of the things is that private Equity um does what it was designed to do right to use other people's money to make profits for their investors and so when that happens regardless of the business structure I think that sometimes there is some collateral damage that happens and so that's the part that you know as we begin to see these Partnerships happen we don't know how to really sort of like adjust for that right uh because that's not really the desired outcome that we want want to have yeah I think maybe in in the kind of um process of making a company or helping a company kind of get on its feed or be where it needs to be there may be some drawbacks um or cuts that have to happen or changes that have to happen um that maybe at the at the end of the day will benefit that will benefit the people who are still around but maybe not um the people who aren't there anymore obviously um and yeah I don't know you look like you have a response to that no and I and I'll say that and that goes to in in exactly what Gene is saying when you have the recognizing that that there are so many stakeholders to a business right not just the workers not just the owners but the community around it and somebody asked us an amazing question the other days like you're teaching workers to think like owners but what if you teach workers to think like bad owners right and now they're making decisions that are not benefiting the community around them they're causing environmental harm they're causing environmental damage and nobody had ever put it to us that way we just you kind of assume you get this democratic system in these companies with these workers and they're going to be they're going to be better and what we think the answer is that you're more likely to get better Community outcomes when the owners of the business ultimately are also the folks who work there but you're you're right there's no guarantee that uh worker owners will always do the right thing but you try to help guide them guide them in that process and then I think with our investment strategy it's not a model of and you're right a traditional private that could come in and start you know cutting heads risks as they call them reduction in forces um and kind of our core model is not to go in and lay people off that's not creating value that's just that's just kind of that's not really creating value just laying folks off but how can we really help that team grow and help those companies grow so our our first company when we came in they had about 114 people and you know six months later seven months later they're at 155 and that's what employee ownership done right um Can can do and Gene you're right referring to what it looks like when it's not doing right is another side yeah uh well for thinking about esops in particular um I can see how there can be some skepticism I think as as Frank maybe said it's it's a it's a kind of um shiny retirement plan and I think a lot of time when you say retirement plan people kind of shrug um but you know I think on the other hand it is a way for um employees to get involved but Jen I'm wondering if you could just talk about when you are at New Belgium were there drawbacks to the ESOP model that you saw and do you think there are other models that would have worked better for New Belgium or do you think ESOP was kind of the right the right fit see you know for us at that time ESOP was a right fit um for the things that we were doing and um you know the challenge and I think Todd's alluding to this too is no matter what your capital structure is you still have values and you still have a business plan you still have a strategy and so you know making sure that um you know if your Marketplace is coming to is starting to Plateau then people need to be aware of that because that can really change like how you perceive debt um the this doesn't solve for more macro economic issues um like consolidation in the industry and that's happening in the Brewing industry of where there's issues with distribution tiers and access to materials and so there's still a whole host of small business macro economic issues that exists outside of this that I think for us as advocates we also need to advocate for that um what are the things um for New Belgium and also one of my co-commissioners on the state of Colorado commissioner Carrie siggins both of the case studies of the companies that we worked for we didn't become ESOP in like a flip of a switch so initially and this is also for governor polis businesses they started out as like gain sharing or synthetic Equity programs and then grew into becoming an ESOP and so I think there's for certain companies there's more of a road map into becoming more employee owned over time and then that way you can evaluate the different steps and where you're at and the economy where you're at in the marketplace to be able to make those decisions more precisely and so I think for a New Belgium switching from the 100 ESOP to becoming more part of a global company was more a necessity of the broader economy not necessarily a reflection of the ESOP and so business is complex the economy is complex and there's a lot of forces that are affecting us outside of that I think the one thing is for a company become an esopper Co-op they need to be a strong company it's not somebody a very skeptical person about esops recently questioned me and felt like esops were a way for owners just to get Equity out of the company and then let it fail well that company shouldn't be an ESOP um that's not how this works and so I think there is some skepticism that is fair but it also it puts a good pressure on all of us in this industry to make sure or all of this in this movement if I can call it that to make sure these companies are well-round companies and to support them and make sure they have the tools and make sure that people have an awareness that there's there's a much bigger system impacting American businesses Beyond just this and so there's a lot of problems to solve here and I think we can be part of part of doing it one company that I work for now I'm on their board I really love it because they're kind of following more of a holding company model so they have cash and so they're actually going to start buying other companies other small companies and I'm that's one of the things I'm really interested in the future is if we can see more of those whole code models where their esops are acquiring other companies and bringing them in fighting some of those economic tensions of purchasing power access to Capital and things that you just can't get as a small business no matter ESOP or not and so I'm hoping that area of this will continue to evolve and see more parent company hold code models helping other companies come into this where they might not be able to do it on their own yeah that's interesting point I mean I think um you often hear about esops or worker co-ops as much smaller businesses and one thing I've always thought about is you know I used to live in San Francisco Silicon Valley you hear so frequently in Tech when employee joins a company they just get shares and the longer they're there the more shares they get and then you know the company IPOs or exits and they just get a lot of money and that's really nice and there aren't a whole lot of other industries that have that um I wonder if any of you have seen um kind of worker ownership or employee ownership in really big companies you know not kind of like a Mondragon or um really big companies um have seen it kind of work well and what makes it work in bigger companies yeah uh a lot I appreciate the the the the tech example um and that's kind of one other aspect of employee ownership that's that's a bit different often to get options right you have the options to buy the stock at a certain price and if the price goes up you get to buy it at the old price um but but again this same idea this idea of how do you tie the the success of the company to the to the workers right so the workers are now trying to make the the company successful so options are something that's like you said used commonly in the in the tech World um but when you talk about kind of big companies and somebody in the chat I was scanning mentioned that co-ops can also get quite big so there's a 2 000 person uh Cooperative Home Care Associates based out of the Bronx um that's that's a very large Co-op and does does very well um those Home Care Services um but a lot of Fortune well a lot of Fortune 500 Fortune 100 companies have portions of them that are employee owned through the ESOP the reason why those companies set it up we're we're different but you know take Publix for example eighty percent uh 85 percent owned by its workers um through this structure they're able to instill a lot of this culture and Publix is the oftentimes the number one rated um grocery store chain in the United States um web Industries where one of our advisors work uh uh Michael Corey who's an expert in the field has been employee ownership a long time very large company they have forklift drivers who are there who have a million dollars you kind of gave the example a meringue the moringa the example of the million dollar uh store clerk a million dollars in their retirement account uh driving a forklift so these sort of stores where you have these big companies that are successful the folks who've been there a long time in these employee ownership structures should again if it's done the right way should also be be uh have really bright Financial Futures in front of them and hopefully quality jobs as well yeah well um you know if you think about it um I think there are a lot of examples of this really working out well but I think there's a question in the chat about this being more popular in Europe and I think that's true that there's something maybe about the American ethos that um I I'm Gonna Keep what I made and I'm not going to share it because I made it um Gene I don't know if you've looked at this um kind of internationally um but I'm curious if you have any thoughts as to why might not be as popular here or if there are any ways to kind of get um owners to start thinking about about this model so I don't have any factual data so as I need to say say that this is just for my own perspective is that the way our our society has been set up that this this is how it works right because we know that Mondragon has worked you know worked you know for over a century right and so we look to them for guidance um and understanding you know around how they're making these structures work but we also know that there are lots of cooperatives throughout the South um that are really work really well that are really large and you know are working like well oil machines and so you know I'm sorry I'm sorry I'm gonna go back to that yes okay um I see that Senator Van Hollen has joined us um so we're gonna go over to Marine to introduce him and and we'll Gene will come back to you in a few thanks Alana and um this has been a great conversation so far and uh really uh excited to come back to it but we're really thrilled to have uh Senator Chris Van Hollen from my state of Maryland uh with us today um Senator Van Hollen has represented Maryland in the Senate since 2016. uh before joining the Senate uh Senator Brian Holland with a member of the Maryland state legislature and served in the U.S House of Representatives um he has been a tireless advocate for addressing inequality and building an economy that works for everyone so um Senator we're just delighted to have you with us today thank you so much for joining us and we're excited to hear from you well thank you Maureen and thank you so much for your leadership at the economic opportunities program with Aspen and uh thank you for taking a break and inviting me to say a few words and uh Harry Stein from my my team my staff has been uh on board and listening and participating and he'll continue to do that and provide me me feedback but um I I want to also uh thank and give a shout out to Gina Shafer and Frank Lindsay of a few cool hardware stores which has several employee-owned stores in in Maryland uh where you and I Marine with Maureen live so I want to thank them and all the other uh employee owned businesses and leaders that are joining us uh today and I know the focus is on how to improve job quality so that workers can reach their full potential and get the most uh out of their careers um see survey after survey these days showing you know many workers dissatisfied with where they are we have challenges getting more and more people into the workforce at a time when people are looking for workers and so it really is essential that we re-examine our our models and I firmly believe that employee ownership should be must be a part of a solution and I I I think it's Common Sense also backed up by the data that shows that you know if you want to have an economy that works for everybody and more shared Prosperity you need to make sure that employees can share in the success of the businesses that they're contributing to and that of course in my view makes um for a better opportunity for the workers employees and more successful uh businesses uh certainly uh over the medium and long run and I do think that this is more important than ever we are now you know witnessing decades Decades of a period where we see continued worker productivity that continues to uh increase over time um and yet what I call the great separation where wages have remained relatively flat so um since 1979 and I think many of you I'm sure have seen the chart you see worker productivity increasing by 60 percent over that period of time whereas real hourly wages have increased by only about 15 percent so all that increased worker productivity um is not going primarily uh to the workers yes it's going to investors and stockholders and the bottom line it's it's going to folks who are already at the very top of the income scale and not being shared more fairly with those who are responsible for those uh increases in production so we need to address that and I do think the employee ownership of businesses is a part of it uh we now have about seven thousand uh by our account uh 7 000 businesses the United States that are owned by employees uh one of the biggest names in employee ownership is the supermarket chain Publix which generates 230 000 jobs and is eighty percent owned by current and former employees and so that is a model for how this can be done and if you look at the National Data employees are benefiting I mean again it's intuitive but it is important to have the data to back up that intuition and on a national scale research shows that employee owners have around three times the retirement assets of non-employee owners uh median household wealth is about 92 percent higher for employee owners than non-employee owners and employees with an ownership stake are more likely to stay with the business they work for than those uh who don't um so clearly employees are benefiting in these structures so are the businesses here's a quote from a study on Employee Stock ownership Plans esops by Jared Bernstein who I turn to often for economic analysis and who now serves on President Biden's Council of economic advisors and I'm quoting him ESAT companies and those with employee ownership in general have been shown to be more robust to the business cycle with steadier output and employment than comparable firms without employee owners pretty clear statement and in the same study Bernstein finds that employee owned firms benefit from one lower rates of bankruptcy to lower default rates on their loans and three better performance on sales job growth and productivity his analysis as we say is not just on paper it obviously makes intuitive sense for the reasons I mentioned and which have been underscored which is when employees own the business they have an ongoing stake in the outcome whereas some whereas you have large outside investors who are sometimes focused just on the short term profit not the long-term gain that does not often redown to the benefit of the employees in in the long run so uh this would be a big win for employees uh it's good for business owners and it's good for our economy uh in that it will result in more shared prosperity in my view that means it's also good and healthy for our democracy uh so why aren't there more of these and hopefully um as you uh you know have this discussion today and I know you're planning others in the future and thank you for that um why aren't why aren't there more uh number one many businesses simply don't know about employee ownership so conversations like this are really important um here in in Maryland in fact close by in Montgomery County where I live we have a a big owner of a car dealership who I know very well um he is working to try to transfer his business to employee ownership and he has the resources it's a pretty large car dealership but but he with all his resources uh has been having trouble navigating uh how to do this and and that brings me my second point which is once you get to better awareness um it can be complicated it can be legally complicated Employee Stock ownership plans worker on cooperatives and other employee ownership models each come with regulatory governance tax and legal implications that have to be expertly navigated for lasting success so that's another reason we don't see more right now and third starting a new business or transitioning on an existing business transition it to employee ownership does take Capital uh upfront capital and often usually uh the employees don't have the ability to put up The Upfront Capital uh that's needed and so that Capital needs to come from somewhere else we are working right now in Congress on trying to address that challenge I'm working on it and I'm trying to recruit uh colleagues on a bipartisan basis so that we close those gaps in Awareness close the gaps in expertise and close the gaps in the capital that needs to come to the the table and the goal of our legislation would be to support private investment funds that Finance The Establishment and growth of employee-owned businesses so in brief we would leverage public and private funds to help build out an investment ecosystem in which capital gets deployed for the benefit of employees and our goal is that when a business is up for sale we hope that employee ownership is always at least considered as an option with investment funds that pitch the opportunity and raise the capital and bring the expertise to make it happen I do want to stress here and again the devil is in the details we want to make sure that as we put public money into this we have a structure to ensure that the employees are the end beneficiaries that is the entire goal the entire goal is to move to these kinds of systems to make sure that we have more shared prosperity and that brings with it the other benefits we've mentioned but we we want to make sure that these transactions are structured in that way and we are building safeguards into our proposal uh to do that and I want to thank the folks from Aspen um as well as Todd Leverett and his team from apis and Heritage who are here today we've been Consulting with them among others as we work to uh structure this legislation so uh we're hoping to have something um ready to introduce in the coming weeks months at the latest and uh welcome your input uh in this endeavor because this is one of those key ways in my view to make sure that a rising tide lifts all boats uh not just the Yachts uh and I think that is the fundamental purpose uh behind this this effort and uh I again thank you for the opportunity uh to join you and uh I hope that we um can get this movement um how to build momentum behind the movement here uh that's what we're working to do with your help thank you so much we really appreciate you being here and I think uh your analysis and ideas really aligned with what we've been been talking about in this session so I'm really grateful for your leadership and and elevating this and a bipartisan way and uh in the Senate and and and hope you can move that forward so thank you so much for for joining us and sharing that with us thank you I see someone's asking for the name of the bill we were we're in the process of finalizing the bill it has not been introduced so it does not have a a number or yet a a final name uh but we are working uh to to wrap all that up and again welcome um welcome folks input thank you great and we appreciate hearing about it and sharing information out as things develop absolutely thank you thank you um great well that was uh fantastic and um Alana I just want to sort of bring you and all the panelists back quickly um so we can have some final closing thoughts for this session great um thanks well yeah as Senator Van Halen mentioned um you know this isn't still not very popular I'm still not very prevalent to have employee ownership um in the U.S I think Sheen was going into a little bit of the reasons why that might be but I'm hoping we could go around to each panelist um and just say kind of what they think will take to significantly grow employee ownership and what policy makers um can do to to to help this become more prevalent um so Gene let's start with you um oh thank you um Alana I think that was a great presentation by the senator I think he covered you know the information that some of what I was going to talk about um in terms of why that um I think that that it's not more popular um I think the biggest thing right now is is that you know we have to have I think a couple of levers you know particularly you know one is we um do the education around it um and really helping municipalities understand how this can build and stabilize their own economic development in their states is critical I think the legislation you know but beyond the legislation what happens is is that you know we have to get it into regulatory rules right you know that's the real lever um the legislation without you know enacting the rules um to make it happen um still leaves us sort of like at a stalemate because we have the Main Street employee ownership act and that you know that that passed and was bipartisan but we're still trying to work on getting that into to the regulatory rules so I think that that's going to be a key part also um and then also I think you know the public-private Partnerships are going to keep be key also in terms of helping to you know build capacity for intermediaries um like Aspen democracy at work and then also using funds to help leverage um and support you know private Equity um businesses um like Todd's that you know really have like a mission-driven purpose to really help bipod businesses sorry I forgot to mention this before but if you're tweeting please use the hashtag top top talk opportunity um Jen I know you've been thinking about this from the perspective of Colorado and kind of what states can do so maybe you can tackle this special next yeah I think Colorado specifically I'm so proud of the work that we've done but it's really how it's organized in the state because I think this is you know what we were talking about before too is sometimes we do these programs but they get siled in a particular area they're not fully integrated so if we really want to create a durable system we have to create a durable system um so that includes um you know State legislation things that we could do to overcome barriers um the integration of these legislation with the small business administration um in a very real way so when people get advising from the SBA that they're getting the best information that they can have but I also think the universities and our education systems play a really big role in this you know most those of us that went to MBA school it's very rarely uh taught about and part of that um there's there's a couple programs you know the one that um I worked at UCSD The bister Institute but they're really not teaching inside the school and so I think if we're going to look at this from The Long play is we have to help people again it has to be on the menu of options but it also has to be taught in a way we lose a lot of really talented um talented young professionals to private Equity into banking because frankly you can make a lot of money there um and so until we can figure this out and how it's a bigger part of that and how people can young professionals can see this as a really viable career path um you know I think it's going to continue to lag behind the other options or well there's just so many talented people out there and I'm really excited for the work but we need more of them to be doing the work that we're discussing today and we need more job opportunities for them we needed to escape the non-profit World um into being something that um is is really tangible and helps people with their own financial success so I think the university part is one of the keys here taught as someone with the I'm assuming who has an MBA or Business Degree um any ideas about what can make us more popular or maybe even what you what Drew you as as perhaps a kind of financially minded person to it well Jen said it it's is is it an option is it a pathway pathway is it is it presented to you in a way where where it it can make sense for you where you can do the work but you can also take care of yourself and your and your family you know it's interesting you see a lot of opportunities like this where students can go and do the the impact work um but they kind of they may you know they may not be able to financially support not getting you know not getting a normal salary or kind of taking a cut so you start to see the the industry not be as diverse as it could be so as Jen was saying you need to have the opportunities but also make sure the opportunities can support the the young talent that are coming out of these programs or schools but you know you said it before I did a law degree and a business degree and I didn't hear about this uh employee ownership in a real way until I was working at the center for community-based Enterprise in Detroit that's a non-profit out there so putting it in the schools but then creating the organizations where the folks can go and and and do what I think is is really key um one thing I want to just briefly on the kind of what what is needed I think Senator Van Halen I think Gene um I think everybody on this call has really said it I want people to realize the urgency which all of us on this call and all the organizations that are working for this are working around you know over the next few decades 10 trillion dollars worth of business assets are going to change hands as the Aging baby boomer generation is is is retiring and they want to exit their businesses and we have a once in a generation opportunity to actually change the structured wealth and ownership in this country in a real and meaningful way and it's going to take more than 7 000 ESOP companies it's going to take more than than a few impact funds to get it done we need we need a a nationwide the way everybody is mobilizing around climate we need folks that mobilize around this opportunity in a real way because if we miss it uh the ability to it may not come again in this country so want people to feel that urgency and hopefully that urgency will get folks researching looking and creating things um to deal with this issue great well I think that's a great place to end it um but I just want to thank our panelists Frank Lindsey and Gina Shafer Todd leverette Jennifer Briggs and Jean wordford uh for a really interesting discussion I'm just going to pass it back to Marine for uh some final words yeah thank you Elena this has been a fabulous discussion thanks to all the panelists um and thanks to uh my colleagues Amanda Finn Matt Helmer Adrian Lee Tony muster Victoria Prince and Shelly Stewart for all their work in supporting this event takes a lot of us actually to put these things on um many thanks to our audience what a great audience today super engaged great comments in the chat great questions we could obviously have talked longer about this but I hope you'll continue to watch this space um join us on the 17th for our event on worker co-ops we'll be continuing to talk about opportunities for ownership so thank you all so much please do remember to give us some comments on our feedback survey it's always super helpful to us as we think about designing these events we'd love to hear from you and you can always send us an email at eop.program atheninstitute.org let us know what you think um hope to see you again soon bye everybody