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| March 2010 Vermont Employee Thank you to
Co-sponsors: • Atlantic Management Company Supporters: • Blue Ridge ESOP Associates • Cooperative Fund of New England • Crowe Horwath LLC • Fleischer Jacobs Group • Green Mountain Coffee Roasters • Hallam-ICS • Hickok & Boardman Group Benefits and Retirement Solutions • KeyBank • King Arthur Flour Company • Merritt & Merritt & Moulton • Pension Works • Principal Financial Group • Red House Building • Schatz Law Offices |
In the News
 Resource Systems Group Becomes 100% Employee-OwnedResource Systems Group (RSG), headquartered in White River Junction, Vt, became 100% employee-owned when the company's Employee Stock Ownership Plan (ESOP) purchased the remaining outstanding shares from co-founder Thomas Adler. RSG joins the other 100% employee-owned Vermont companies which includes Gardener's Supply, Pizzagalli Construction, King Arthur Flour, Carris Reels, and Chroma Technology to name a few. Grassroots website launched to support WORK Act and Employee Ownership Bank ActThe VEOC, the Ohio Employee Ownership Center, the Massachusetts Office for Employee Involvement and Ownership, and Coastal Enterprises Inc. of Maine have teamed together to launch a new website designed to build support for federal legislation introduced by Vermont Senator Bernie Sanders that would encourage employee ownership in the U.S. The Worker Ownership, Readiness and Knowledge (WORK) Act would create an Office of Employee and Participation within the Department of Labor that would provide education and outreach, training, grants, and technical support for local programs promoting employee ownership and participation. The U.S. Employee Ownership Bank Act would provide loans and loan guarantees to ESOPs and worker-owned cooperatives to purchase a majority interest in the business and to established employee-owned companies to expand operations or to increase or preserve employment. These two bills have the potential to create many more employee-owned businesses in the U.S., potentially creating or saving many jobs. Please visit the site to see how you can help move these two pieces of legislation forward. For Benefit Corporation Legislation makes its way through the Vermont legislatureVermont may become the first state to create a new legal form for companies that want to become designated “for-benefit corporations.” The law would allow companies that have social missions to codify those values in their governing documents. It also would instruct directors to “consider the long-term and short-term interests of the corporation, including the possibility that those interests may be best served by the continued independence of the for-benefit corporation.” The bill has been passed by the Vermont Senate and is now being taken up by the House. Click here to track the status of the bill.
Decisions: What, who, how, when? by Merryn Rutledge What does employee ownership mean in terms of decision making? Certainly employee ownership does not necessarily imply that everyone participates in all decisions. But who are the decision makers? How do you decide who decides? In general terms, answers depend upon many factors, including:
On a little more granular level, I think finding your best fit ways to distribute decision making depends upon everyone’s clear understanding about the following:
Here is an example. In a building restoration company I’ll call Restore, decisions in the outer two rings are made by a small group of veteran owner-managers. They set overall company policy, create and continually adjust business strategy, and set the budget and annual goals. On each construction site, an experienced carpenter heads the site team where local-level decisions are made. As a project supervisor, she/he has the authority and responsibility to clarify which decisions are made by the team and which by individual carpenters. He/she also facilitates group decision making and guides newer employees as they learn to make sound decisions. I believe employees should have as broad a scope of decision making (“span of control”) as is practical for your business to operate efficiently and effectively. In one ESOP company, for instance, the bakery, store, testing and packing departments each make their own hiring decisions. Just as Peter Block suggests in Stewardship (1996), the HR department is a servant of these other departments; it checks references, verifies credentials, processes new hires and runs orientation workshops. In this company, which prizes teamwork, “local” hiring decisions encourage careful team composition. Because lines between strategy, operations and local decisions will be fuzzy, individual decision makers should think carefully about their authority, role and decision making preference before they embark on a decision making process. A decision maker with positional authority — such as the senior manager and department heads at Markers, Inc. and the founders of Restore, Inc. — have the following five choices.
Where there is ambiguity about how a decision will be made, positional leaders should clearly state which of the five choices will govern the upcoming decision. The five choices, in other words, help leaders navigate decisions that do not clearly lie within one of three broad categories of decisions (policy, operations and local). Naturally, your “best fit” decision making system needs to be communicated clearly to all employees. As people are vested and take on more responsibility over time, they need guidance, teaching and support for sound decision making. Finally, since monitoring and adjusting are, as you know, keys for continuous improvement in all business processes, you will need to regularly evaluate your decision making systems and practices. This project is funded by a grant from the U.S. Small Business Administration (SBA). SBA’s funding should not be construed as an endorsement of any products, opinions, or services. All SBA-funded projects are extended to the public on a nondiscriminatory basis. |
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