Beyster Institute

Sid Scott

Taking an Employee-Owned Company to the Next Level

By Steven R. Fischer

For those of us who have spent our careers promoting employee ownership, terms like "open book management" have become talismans. Often neglected in ESOP participant education, financial literacy and information sharing discussions, however, is an entirely separate and vital approach to creating a high-performing employee-owned company – leadership development and succession planning. The experience of BL Companies, Inc., a 230+ person, multi-office, 100 percent ESOP-owned, diversified architecture, engineering, environmental and land surveying firm headquartered in Connecticut provides valuable insight into how fully investing in developing the skills of senior managers, mid-level managers and other employee owners can dramatically improve company performance and culture.

All employee-owned companies must pay attention to succession planning. Without it, as the first generation of senior executives who took over running the business after the departure of the founder and the sale to the ESOP begin to near retirement age, the company can face a crisis of leadership. BL Companies has elected to face this challenge head-on by devoting substantial resources to developing the business, management, leadership and strategic skills of its full employee owner team and by likewise developing those skills in its management – from which the next generation of leaders will emerge.

BL's Leadership Development Program is a multi-tiered, multi-year program that provides leadership skills for all employee owners based on their role, career path and potential. All employee owners participate in a two-day Leadership Development Foundations Program that focuses on communications skills and helps them understand their own style of leadership. A second program – the Leadership Development Essentials Program – follows that is intended for BL's current and future leaders. The Essentials Program, building on the Foundations Program, goes into much greater depth about people understanding themselves as leaders, enhancing their skills in leading others and understanding and learning skills for building their teams and thinking through who are their likely successors and what kind of development each person needs.

All of the programs have been designed by BL's senior team and Praxis Consulting Group, a Philadelphia-based firm that specializes in organizational dynamics and has been involved with ESOP companies for decades. Senior leader involvement and support during and after the programs has been an essential component of the long-term success of the programs.

The Essentials Program is an intense classroom and application-based experience, which has so far brought together about 25 of BL's managers – from discipline leads and senior management to senior project managers – throughout the company's major professional areas and offices. The Essentials Program has been an astonishing success, helping senior managers "up their game" and new managers begin the path to leadership. In the process, the participants have forged new and deeper working relationships with their fellow "participants" and a clear and energized view of BL as an employee-owned company. Many of the participants have begun to realize, for the first time, that they can truly become the company's future leaders and that BL is willing to invest in their leadership development to create a sustainable entity.

The Essentials Program includes five three-day sessions over a 12-month period. Following the days of "classroom" study and exercises, follow-up sessions are held to reinforce leadership concepts and practices. Participants are also assigned to four-person "application groups," intentionally designed to reach across disciplines and geographic locations and to foster application of the skills and sharing of their experiences.

The culmination of the Essentials Program is the selection of an in-depth strategic project, approved by the discipline director and the company's president, followed by the participant's research, analysis and presentation of the project to the company's board of directors. The strategic project must be of importance to the development of BL, whether it be the opening of a new office, the potential expansion of offered professional services, other business opportunities, the development of an enhanced safety program or the creation of a new employee orientation program.

All of the research, analysis and writing is done on the participant's own time. The breadth, depth and creativity of the strategic projects has been remarkable, and the cohesion created in the process was invaluable. The bar for performance was set very high, and people rose to the challenge. Participants truly became peers, and the business development opportunities spawned by these new working relationships have been most rewarding.

In the process, BL has also identified several senior people who have the capability to be the next executive leaders. They have participated in an extensive executive assessment process and individual coaching. They are being given challenge assignments to prepare them, over several years, to step into executive roles in the company.

The Leadership Development Program at BL has helped identify emerging leaders at various levels and has honed all of the employee owners' skill sets. The result has been a more energized, cohesive and dynamic cadre of managers, who feel a greater connection to the enterprise and each other and an entire workforce that has been trained in foundational communication skills. By making the investment of time and money to the development of leadership skills, the program makes tangible the employee-ownership concept of everyone being an essential part of the company. The investment has paid off for everyone.

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Steven R. Fischer, mentor associate, Beyster Institute

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