Bret Keisling looks at how EO is essentially absent from the public debate, and shares differences between EO and actual movements, in the first of a multi-part series from Sept 2020.
You can hear the original September 22, 2020 release of this podcast in Episode 118: Where is EO? Pt 1. The Problem.
Episode 145 Transcript
Bret Keisling: 00:00 In the fall of 2020, we presented a multi-part series of podcast episodes under the title "Where is EO?" There are three episodes in our primary EO/ESOP Podcast and another in our Friday Mini-cast. You can find all of these episodes at www.ESOPpodcast.com.
Bret Keisling: 00:15 Let me explain what I mean by "where is EO?" By lots of important metrics, EO is thriving! Conferences have had record-setting attendance, even when they've gone virtual during the pandemic. Established practitioners' pipelines are full and there are new employee owned companies being created all the time. Similarly, there are established and newer EO organizations that are doing tremendous and exciting new things and we've been talking about them on our podcasts.
Bret Keisling: 00:48 Despite all of the very positive signs, the reality is that employee ownership is not a movement in this country and many of us, including me, passionately hope to turn it into one.
Bret Keisling: 01:00 Over the course of the previous episodes, I've explored various themes. For example, our lack of consumer identity, lack of B2B among EO companies working with each other, and our essential political absence. One example to the political state is imagine how things would be different if there was a League of EO Voters?
Bret Keisling: 01:23 The series got interrupted in the fall for the best of reasons. We've had amazing guests for months representing EO businesses, organizations, and themselves. But with almost every guest, when we stop recording the podcast episode, we end up talking off-mic about how we can all work together to grow employee ownership.
Bret Keisling: 01:44 I don't have any answers, but I do have ideas and questions and words of encouragement. At some point in the next few months, I'll wrap up the "Where is EO" series in a future podcast, hopefully with some guests. What I'm going to bring you today is the first in the series from last fall, where I lay out what I see as the problem. It's Episode 118 if you look in our archives. My hope is that you will think about how employee ownership can become a movement.
Bret Keisling: 02:12 And then I really hope that you'll reach out to me with your thoughts, comments, and suggestions. If nothing else, I'd be thrilled. If you'd send me an email or a DM saying, you'd like to help turn EO into a movement. You'll hear my contact information at the end of the episode,
Bitsy McCann: Welcome to The EO Podcast, where we amplify and celebrate all forms of employee ownership.
Bret Keisling: Hello, my friends, thank you for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. As you heard in the opening of the podcast, our mission is to amplify and celebrate all forms of employee ownership and there is, in fact, much to celebrate. If you set aside the last six months of historic turbulence, interest, activity, and very importantly, transactions seem to be robust. My practitioner friends in the ESOP world report that the pace of transactions is beginning to move forward. As the consensus has grown on how to address legal valuation and trustee issues related to the pandemic. EO organizations and the practitioners and the EO community have done what appears to be a marvelous job, transitioning to virtual conferences and training while we all wait to be able to meet in person once again.
Bret Keisling: There've been a few instances where ESOPs and employee ownership have turned up in the public context. These instances have been rightly celebrated by the EO community. To that end. I've covered them on my podcasts. By the way, usually when I reference a previous episode, I give you the episode number so that you can find it in our archives. Today. I'm going to be talking about things I discussed on numerous episodes, so rather than taking the time to identify which episodes they come from, I'll simply ask you to visit www.theESOPpodcast.com where you'll find our 200 plus archive episodes.
Bret Keisling: During his 1968 presidential run, Robert Kennedy famously paraphrased George Bernard Shaw when Kennedy said, quote, "Some see things as they are and ask why. I dream things that never were and ask why not," unquote. I've thought about this quote often in the last year, as I've surveyed the state of employee ownership in the United States.
Bret Keisling: Some months ago, President Trump honored long haul truckers for being essential workers during the pandemic. One of the truckers honored was Stephen Richardson, a great employee owner at Big G Express. When Mr. Richardson had the chance to make remarks, he began with how meaningful and important it was to him to be an employee owner. We rightly celebrated how cool it was for employee ownership to make an appearance at a White House ceremony with the President in attendance. I want to stress again, and it's true with all of the examples I'll mention: This is really cool. It's historic. It's also fun to see something you love receive such a positive reference by an excited and grateful employee owner. Mr. Richardson knows what we know.
Bret Keisling: Without taking anything away from the excitement of that moment, here's what didn't happen in Washington that day. There's no reason to think employee ownership was even mentioned in the Oval Office or even in any of the offices of the president's advisors. It didn't lead to an "aha moment" where we changed the minds of policy makers. And at the risk of being cynical ESOPs were probably not even mentioned or thought of at the Department of Labor that day, except most likely in the enforcement division.
Bret Keisling: Here's another example: Earlier this summer, Senator Ron Johnson of Wisconsin introduced a bill that apparently aims to expand employee ownership, specifically. ESOPs. Again, the ESOP community acknowledged and celebrated the passage of the bill. And that includes me. I did two mini-casts this summer on Senator Johnson's bill. The first by myself, where I talked generally about the bill and the following week friend of the podcast, Jen Krieger from Weaver in Houston, Texas joined me and we did essentially a fiduciary/valuation advisor dissection of the bill.
Bret Keisling: Similar to Mr. Richardson speaking at the White House ceremony, we appropriately celebrated that pro-ESOP legislation has been introduced and I stand by that. It's great. Here's the reality. It's not a good bill. It's written with such vague language that ESOP trustees and lawyers would be hard pressed to figure out how to take advantage of the bill if it became law. It's also worth pointing out that the bill was introduced during the summer of an election year with absolutely no co-sponsors and candidly 0% - zilch - no way that this bill would ever become law. As I mentioned, Senator Johnson is from Wisconsin. He's up for reelection and Wisconsin is one of those states with a robust employee ownership community. It makes perfect sense why Senator Johnson would introduce pro-ESOP legislation and pro-employee ownership legislation, and it's appropriate that he'd be recognized for doing so, but chances of success: none.
Bret Keisling: Representative Alexandria Ocasio-Cortez introduced a bill in the house this summer that is pro-employee ownership. No co-sponsors and again, seemingly zero path to actually getting passed or enacted into law. In the case of AOC's bill, I didn't even notice much attention of it, even in the EO community. So both bills were enacted, but let me again, share what didn't happen. There was not a clarion call from EO organizations to rally employee owners, to flood our elected officials with email or letters in support of the legislation or in support of employee ownership generally.
Bret Keisling: So again, with both pieces of this legislation, we feel good. Hey, we're making progress! But it's not really progress. There's nothing concrete that's going to come of it.
Bret Keisling: Let's turn back. If I may, to Robert Kennedy's quote and let's ask why not. This is as turbulent a time in our country's history that we've ever seen and certainly the most turbulent absent an active war. America is in a struggle to define itself one way or the other. And the results of this election will influence our path for the next generation or two. Bluntly, employee ownership is missing from the discussion. We're absent. To be fair, a number of issues of great importance are not related or only tangentially related to employee ownership. The latest landmine to detonate is the battle over a Supreme Court nominee. And although the Supreme Court certainly could have an impact on employee ownership, the nomination itself is out of our realm. But there are so many critical issues that are not just important to EO, but are right in our wheelhouse.
Bret Keisling: There's probably nothing more relevant to employee ownership than the current discussions on economic injustice, wealth inequality, and racial and gender income disparities. It's not just that these issues are important to employee ownership, but employee ownership should be, and can be, part of the actual solution. We know this factually. There's data. In a recent mini-cast, I talked about the Curriculum Library for Employee Ownership at Rutgers. You can find the data there and it's open to the public.
Bret Keisling: Other issues raised during the political season are squarely addressed by employee ownership. Fact: Employee owned companies are significantly more likely to keep jobs in their communities rather than outsourcing them overseas. Fact: Employee owned companies greatly impact their communities. It's no secret that more engaged employee owners in their companies become an important part of their communities' tax base. Fact: Data shows that an economic downturns like we're going through right now, employee owned companies are less likely by far to cut staff, do layoffs, that sort of thing. The very premise of employee ownership -- we're in this together -- holds up very well in times of crisis.
Bret Keisling: Here's the problem. Employee ownership as a potential movement is absolutely missing from the discussion. It's not that we're losing any argument or policy debate about employee ownership -- there is none.
Bret Keisling: Please don't misunderstand me. Again, I stress there a lot of great things going on in employee ownership. A lot of passionate advocates who are helping to foster an environment where we make incremental advances for employee ownership. But we're not a movement. We're a vast network of independent advocates, organizations, practitioners, and most importantly, employee owners who have not found a way to coalesce into a movement.
Bret Keisling: This past spring, I did a couple of podcasts devoted to the Democratic presidential debates. The theme of the podcasts was that all of the Democratic presidential candidates -- and I mean, all of them -- were discussing the issues I mentioned before jobs, economic justice, strengthening communities and so on. The candidates were talking about employee ownership and none of them, not one, not even Bernie Sanders who arguably has done more for employee ownership than any other political leader, none of them mentioned the words "employee ownership."
Bret Keisling: All the time we hear of citizen activists, who've decided to run for public office because of how strongly they feel about their particular issue. By the way, when I say activist, I mean, from any place on the political spectrum. It's not unusual to hear of a teacher or nurse run for office because it's important to them that their view be representative. We hear all the time locally about an issue that becomes so important in a community that an everyday citizen is inspired to run for school board, city council, mayor, et cetera. Certainly in the last few years, we've seen a number of activists, for example with Black Lives Matter, who turned their very strong feelings into successful runs for political office. With the possible exception of Bernie Sanders, can you name any candidate who has ever run on a platform of employee ownership, let alone be successful? I can't think of any.
Bret Keisling: A lot of us, including perhaps you if you listen to this podcast, know in our hearts and our minds, that employee ownership is the greatest thing since sliced bread. But I suspect the bakery industry has more actual clout than we do.
Bret Keisling: Another area that I think is very important to note. There are 10 million employee owners who work for ESOPs in the United States. There are 7 million more who are retired ESOP participants. There are thousands more, significantly less, but thousands more, worker owners at co-ops and collectives. Not only are we out of the political debate, we have zero impact as consumers. Look at the AARP model where just by being over 55 or whatever their age is, you get discounts, you get all sorts of things. Seniors are recognized as a consumer group. Employee owners are not.
Bret Keisling: I believe that the solution to dreaming about employee ownership and asking why not is for us to become an actual movement. Other movements have disparate membership goals and objectives, but they come together whenever possible to further their shared interests. Sometimes a movement can consist of a number of other movements. For example, within the very broad civil rights movement, there are numerous and very different constituencies. In the racial justice movement, organizations are as varied as the well-established NAACP and the relatively new Black Lives Matter. Similarly, in the LBGTQ community, there are a number of different organizations and advocates who vary greatly in what they're fighting for, but come together whenever possible. And it's not unusual when there's an issue of importance to people of color and the LBGTQ communities, they come together and work together for the common good. It often seems that the default among many of these movements is that unless your issue directly hurts us, we'll stand with you and we'll fight with you because your battle is our battle.
Bret Keisling: That's what we're missing in employee ownership. We are, as I said, very talented, very passionate, but a very disparate group of advocates and practitioners and employee owners. We need to find a way to channel all of our potential. We need to find a way to bring ourselves into the debate. We need to find a way, not just to foster EO candidates who are running because they're passionate about employee ownership, but we need to find a way to identify what elected officials and candidates support employee ownership, truly support employee ownership, and find a way to help them get elected or reelected. By the way, going back to Senator Johnson and AOC and the bills that they both introduced. And I've said this a million times before. Senator Johnson, pretty conservative Republican AOC identifies as Socialist. Employee ownership is the only issue that bridges the gap between capitalist and socialists, conservatives and liberals. Employee ownership's got something for everyone.
Bret Keisling: I wanted to take the time in this episode to flesh out for you what I think are some of the great things about employee ownership but, more importantly, our real challenges towards becoming a movement.
Bret Keisling: Next week, I'm going to talk some solutions. I'll give you a teaser: I believe the best path to really catching on like EO should is for the creation of a US or North American Congress of employee ownership advocates and organizations that would help us cement the values of employee ownership, but more importantly, find a way to let all of us broadcast our love for employee ownership to elected officials and candidates.
Bret Keisling: So join me next week on The EO/ESOP Podcast as we talk about solutions for some of the issues I've raised today. Take care of yourself and those around you. We're all going through tough times together, and that's how we'll get through them - together. This is Bret Keisling, have a great day.
Bitsy McCann: We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email Bret@KEISOP.com, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling.
Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.
A note on the transcript: This transcript was produced by Temi, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.