RSM McGladrey ESOP Blog

Exciting News!

2011-06-24T13:03:49-04:00

Hi again,

I know I have been absent from this blog for some time.

I wanted to share the good news that has kept me busy the past few months. I am very excited about the acquisition of McGladrey’s Human Capital Services division by Pension Specialists, Inc. I have attached a copy of the press release announcing this acquisition. This does include my ESOP team.

The combined company's new name, Verisight, means "truthful insight" and is consistent with the firm's commitment to be a trusted client partner driven by our core values of honesty and integrity.

This is one of those win-win situations:

• This transaction is very positive for our ESOP team employees, our clients and business model as it provides focus on the retirement services business while maintaining the superior service our clients have come to expect.
• The key personnel who have been servicing our clients will remain the same.
• Verisight and McGladrey will maintain a strategic relationship after the transaction. In fact, the ESOP team will remain in the same office and will continue to serve McGladrey clients.

I just wanted to share this exciting news. Have a great weekend!

Download Verisight_Press_Release

Capitalism Through ESOPs

2011-06-14T15:39:05-04:00

There is a growing debate on capitalism and what it will look like in the future. Most people would welcome the chance to build a significant amount of wealth for themselves and their families. The challenge is that the entry into capitalism requires an ever increasing amount of investment, that the vast majority of Americans do not have nor can they get access to it.

The world is not fair and that will not change. ESOPs are a vehicle that can allow the average american worker a shot at building wealth, pride, and create a bit of leveling in our wealth distribution. Chris Mackin gives a wonderful narrative about this in The Nation.

ESOPs are not perfect, but they are a viable alternative to the future structure of capitalism.

Flickr photo by boetter

The Power of Goals

2011-05-24T09:47:10-04:00

It has been proven over and over that putting goals in writing increases the chances of success. It is a HUGE first step, but it is not the magic bullet to success. There are several key drivers that many organizations fail to implement that increase the chances of reaching the goals that have been written. Organizations that utilize and practice these drivers increase their goal realization significantly. They are as follows:

1. Involvement in setting the goals

2. Commitment to peers to achieve the goals

3. Regular progress reports

4. Emotional attachment to the goals

When people are involved in the creation of the goals they have a deeper understanding of the why and how of the goals. It reduces the noise that is typical of top down goal setting and moves the organization to action much quicker.

Commitment to goals done in front of peers can be uncomfortable, but it raises the stakes of meeting the goals. No one likes to let down their team.

Out of sight, out of mind. Without regular reporting and updates organziations will never achieve a rhythmic cadence for people to follow. Repetition leads to a change in habits.

If goal setting is done in a sterile, here we go again manner, do not be surprised that the organization looks like a zombie movie. The human nature is driven by emotion and far too many organizations forget this fundamental fact.

Finally, if the organization's leaders do not buy into these drivers, then do not expect improved organizational performance. Simply put - walk the talk.

Flickr photo by Cheryl Gebhart

The Blind Organization

2011-05-10T12:07:43-04:00

The failure of companies to provide a vision for the organization leads to employees that feel blind. They go through the motions with half hearted efforts that lead to apathy and poor results. If the company does not know where it is headed, then how can any organization expect the employees to know where they are going.

In many cases this vision comes from the top leader or leadership group. The vision statement is announced and everyone is expected to buy into the vision that has been handed to them. It may sound good, but it typically means very little to the employees.

A better method for creating vision is getting input from all employees and providing a process that is not controlled or manipulated by the leaders of the company. Leaders need to be involved, but giving up control of the process is key. If the employees of the company are the true creators of the vision, then the chances of the vision actually meaning something increase dramatically.

As humans, we want to be a part of something bigger. Something that has meaning and adds value to our lives and those around us. Understanding how we fit into the bigger picture of life and organizations gives meaning to what we do.

Creating a vision that has meaning is a great way to open the eyes of all employees to the true potential of the organization and how they can help make it happen.

Flickr photo by lupinehorror

Ownership Balance In An ESOP

2011-04-28T07:49:25-04:00

One of the elements that employee owners in an ESOP must come to grips with is the short term vs. long term views of business. Educating employee owners on how the company balances these two views should be a priority and a regular activity.

The company may have great products, strong market penetration and high profits today, but maintaining this status typically requires investments in new products or services. These investments can be funded by internal cash flow or outside debt. Either way, these new ventures will diminish stock value in the short term with the hope that greater value will be created long term.

The timing of these new ventures in conjunction with when employee owners decide to leave the company can create an uncomfortable situation. Specifically, in a new growth cycle, the employee owner will receive a lower stock value for their ownership balance and may feel they are getting the short end of the stick.

To avoid these situations companies need to invest the time and effort in educating the employees on how a new venture will impact stock value and how the company has to look out for the welfare of employee owners today, as well as those five, 10, 20 or more years down the road. Educating employee owners gives them the information to make a better decision on when to the leave the company if they want the highest value they can get.

This is a balancing act that every ESOP company and every employee owner should become skilled at.

Flickr photo by Hotdog Photography

Is Your Work A Choice?

2011-03-24T07:00:00-04:00

For most employees, work is not a choice. It is a forced action. This is one of the biggest obstacles to creating a productive and engaging work culture.

The requirements of money, family and benefits push people to a forced action versus a conscious choice of fulfillment at work. What were the real reasons you chose your current occupation? Chances are high that life fulfillment was not a priority at the start.

Once the routine of pay, benefits and work schedules have set in, the question of "why do I do this" sets in. This internal conflict keeps employees from being engaged and productive. It is not easy for a company culture to overcome this internal conflict and that is why many companies give up on culture.

Those companies that create a culture that allow employees the slightest chance of finding a sense of fulfillment perform well. Those that allow fulfillment to flourish blow the doors off performance. What culture will your company choose?

Flickr photo by H.R. Hatfield

Changes In The Employee Ownership World

2011-03-15T08:28:48-04:00

In every realm there comes a time of transition, change, and celebration. This April, Corey Rosen the founder and Executive Director of the National Center for Employee Ownership (NCEO) will take a new role within the NCEO. He will step down as Executive Director and become a senior staff member. The new Executive Director will be Loren Rodgers, a long time supporter of employee ownership and a current staff member of the NCEO.

For over the past 30 years Corey has researched the impact of employee ownership and has advised thousands of individuals in their quest of employee ownership and being the best. Corey's impact is both deep and wide within the employee ownership world.

To honor Corey's work, Bill Marshall the CEO of Phelps County Bank in Rolla, MO, initiated ROOF - Rosen Ownership Opportunities Fund. It is a fund created to honor the work of Corey Rosen and support the future of employee ownership. It is not an endowment - it is a one time event. A collaboration of employee ownership organizations are members of the advisory committee that will help give direction on the best way to use these funds to support employee ownership.

I encourage you to go to the ROOF website and watch/listen to the Bill Marshall video and the story behind the ROOF fund. The website gives more detail on the what, why, and how of the ROOF fund, as well as those who have shown their support already.

Responding to Acquisition Offers in ESOP Companies

2011-02-21T20:40:09-05:00

I was honored to contribute to this new Issue Brief available from the NCEO – Responding to Acquisition Offers in ESOP Companies