Bret Keisling is joined by Certified EO’s CEO and co-founder Thomas Dudley who describes how the Directory of Employee-Owned Companies came about, the work involved in maintaining it, and its value for B2B, EO consumers, and even those looking to work for an EO company. This is an excerpt from a previous full podcast.
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Mini-cast 125 Transcript
Bret Keisling: 00:03 Welcome to the ESOP Mini-cast. Thank you so much for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. Earlier this week on our primary EO/ESOP podcast, on Episode 142, my guest was Thomas Dudley, CEO, and co-founder of Certified EO. It's a great episode and if you haven't checked it out, I hope you do.
Bret Keisling: 00:34 This past week, it seems social media is abuzz about Certified EO's Directory of Employee-Owned Companies in the United States. Employee Ownership News featured a story this week on the directory, and I've seen it pop up on a number of social media posts. In the full length episode, Thomas talked about the directory along with a lot of other great topics, including how Certified EO came about what certification means and he also shared an EO "A-ha moment" and how he found himself becoming a passionate advocate for employee ownership.
Bret Keisling: 01:08 It occurred to me that Certified EO's directory is worthy of its very own episode. So I'm bringing you the directory related excerpt from that full conversation. This is an exciting and important guide that will help develop B2B employee owned relationships, allow consumers to look for employee owned companies to do business with, and for those who would like to work for an employee owned company, although there's no job postings or that sort of thing, you have a list of employee owned companies divided by industry and geography. So if working for an employee owned company is important to you, you now have an important aid in your search.
Bret Keisling: 01:45 At the end of this episode, I'm going to share a discount code exclusive to podcast listeners to get a $25 discount off your registration at the NCEO virtual annual conference to be held this April. My thanks again to Thomas Dudley for coming on the podcast. I'm delighted that Certified EO has given me and others so much to talk about. Here's my conversation about the EO directory with Thomas Dudley.
Bret Keisling: 02:14 The directory is very exciting. We had talked about that previously. I love what you're trying to do with that. And yeah, my interest as a consumer, I'm not really doing B2B, you know, at this point in my life. So my interest is on the consumer side, but it would be really cool if employee owned companies were in the habit of saying 10% of our purchases or contracts are going to be with other employee owned companies. You know, there are so many industries, HVAC, construction, all of the inter -- you know, better than I, the makeup of your, your members. And it's a very important directory for that B2B that you're talking about. I hope it's a resource that is utilized.
Thomas Dudley: 03:01 Yeah. The directory is -- I'm so excited about the directory. It was, as we talked about, it was very core to my "A-ha moment" and what drew me into this space. It was something that [Certified EO co-founder] Kramer [Sharp] and I originally, like day one, we sat down and it was really more focused on that sort of like directory visibility piece.
Thomas Dudley: 03:17 The challenge is, it's just a tremendous amount of work. Like we could not, the two of us just doing that, it would not have been possible. But it's always been something we've been thinking about. And so for the past four and a half, five years, basically before, even before our launch, we've been thinking about how to build this directory and how to compile this of employee owned companies.
Thomas Dudley: 03:35 But there are some major challenges. If you go download the department of labor 5,500 data, which has often talked about, first of all, if you download that, open it up and sorted by size, the first company on that list is Walmart, right? Biggest company in America with an ESOP. That's not what we're doing. And that's not what the, that's not what the true believers, the people listening to this podcast, the people who are at the conferences, that's not what people are so excited about. That's not, what's going to transform the American economy for the better, right? That's kind of the, the problem in many ways.
Thomas Dudley: 04:05 And so what you need to do, and you hit the nail on the head, is you need to go through that list and weed out the companies that maybe don't meet the standard of 30% broad based ownership, but that's not a publicly available piece of information. It's the ownership of a private business. It's very private. And so one thing we've been doing is basically going through and figuring that out. As we've been talking to companies, as we've been doing our certification, as we've been watching the news, is tagging them.
Thomas Dudley: 04:32 The other thing we've been doing is aggregating all these lists. Each year, the Department of Labor releases a completely independent file. So we've stapled all those together, shuffled all those together. Sometimes companies file multiple 5500s. You have to weed those out. The DoL tries to, but you know, they don't always do a great job. So we have to weed those out. We have to add in all the other companies, the trusts, the co-ops, the stock based plans that that would never show up in that list.
Thomas Dudley: 04:53 And then also the data quality of that is, in my opinion, is a little suspect. So like the industry data is 50%, 70% good, but you still have 30 to 50% wrong. And so we've been going through and recoding the industry variables, right?
Thomas Dudley: 05:06 And the headquarters, if you, if you look in that you get a state, so you don't, you only get where the headquarters is, but if you're a business and you want to do business with another company, right, you want to procure, like you said, HVAC or janitorial services from them., for example, it doesn't matter if they're headquartered in Massachusetts, right? If you're in Vermont and they have an office in Vermont that works. So we need to add all that office location. And so it's this tremendous amount of effort, and it's been in the back burner, but last year with COVID actually, and in the shutdown, we took that opportunity, that slow time, to start really making a push of putting this directory out there.
Thomas Dudley: 05:43 We thought about the consumer side initially. We thought that was a good place to start. And the nice thing is to chunk down the work a little bit. So in September we launched something we were calling "Shop EO." Which some people might've seen it. It was this -- the premise was, okay, if I'm a consumer in California, what businesses could I shop at?
Thomas Dudley: 06:00 And when we launched that and we got really positive feedback, but the most common thing people said from our members was like, hey, we want to find other companies, right? We want to find businesses we could do business with. Not even to just earmark 10% of our spending, just to be a good citizen of the community. It's we fundamentally believe we will get a better experience with an employee owned business, right? We will get better service quality for the price. Like this is the best possible opportunity for us. We just can't find these companies right now. It's just invisible.
Thomas Dudley: 06:29 And so we got that feedback and we were, over the winter, we were like, okay, maybe it's time, maybe we go for it. And so we just decided, all right, let's -- I mean, there's never a great time, let's just go for it. And so we were like, just went back, use the downtime over the holidays to do a lot more data coding. Launched, relaunched, Shop EO as a directory, a full directory of every employee owned business in America couple of weeks ago.
Thomas Dudley: 06:51 The data coding is still in progress. It's never going to stop, right? We're thinking, okay, we're going to take on that burden of always looking in the news to find the new companies and adding them. We're going to figure out when people sell their ESOP become non-employee owned, right. We're going to, when someone opens a new office, we'll add that. So it's never going to stop, but we are still working through that backlog a bit.
Thomas Dudley: 07:12 And so if anyone listening to this, if you go to that directory and you're expecting to see a company, and they're not there, let us know because maybe they're employees, you know, maybe we're missing them. If you see a company that you don't think is employee owned, let us know that too, because maybe we're wrong there. If the states, the industries, any sort of help people want to give us, that's great. And we are getting our members. They're helping us. We're getting a lot of people now that we've launched this up saying, hey, what about this? What about that? We're obviously coding this on an ongoing, I mean, every day, every week, doing all sorts of work there.
Thomas Dudley: 07:39 But that's the ultimate goal is the, the potential for the community from having an easy place to go, where you can find every business you can easily browse by, well, what sort of services do they offer? Can we -- we're looking for someone to provide some services to us. Or, hey, maybe let's just look, let's just go on and check out our state, see who, we have a category that's professional and business services, something like that, so you can just go see who provides businesses to -- who provides professional services, who provides businesses like cleaning services that you can, you can just see who's there.
Bret Keisling: 08:10 I'd like you to trumpet just once again, because I hadn't thought about it when I thought of the directory, what a great way to find an employee owned company that's hiring! There have been several podcasts guests that we've had in the past. Larry Filipski of Once Again Nut Butter that I think is one of your members. Mike Shuey, who is a great employee owner who was with Restek. Both of them did job searches. And the number one criteria was working for an ESOP or an employee owned company. So I love, it's not that there are job postings as I understand it, but you can see who's in your industry or in your geography if working in an employee owned company is important to you.
Thomas Dudley: 08:53 That's right. Yeah. That'd be a whole other different use, right? You could be consumer doing this. You could be a business looking for partners looking for procurement. You could also be a job seeker. And that's another reason we decided to go for it with the directory is you can go on there and like you said, you can select an industry, so select your industry, and you can select your state. And that's one of the reasons we feel like it's worth it to code all the office locations. A company might be headquartered in DC, right? If you live in California and they have an office there, work there, right? So that's why we're going through all that work is, hopefully, we can help people become employee owners.
Thomas Dudley: 09:28 And I think that's really good for the companies as well because building that culture it's, it can be hard work and it can be challenging. Hiring people who already care about this and already see the value and the vision and are already true believers. That's tremendously valuable. That's, that's great. That's going to save you a ton of time and you're going to get someone who appreciates this unique thing that you're offering to folks. And will be a great advocate, a great champion. So from that perspective, I think this is going to be helpful to get those job seekers involved and obviously the job seekers side as well. Now, you hit the nail on the head. We don't have job postings on there. So people, what they do is they would just click through to the company site. So we can see, okay, here's the fifty architecture firms in California you could work at, I'm just making those numbers up, but then you click on the actual companies they're on your radar now, but you'd have to actually find the job postings yourself. Maybe one day we'll be integrated into LinkedIn or something like that. So you just click a checkbox, but, we'll, that's probably, that's more of the future conversation where we're trying to go. That's, that's that's not something for today.
Bret Keisling: 10:29 Thomas, your plate is full and I'm not trying to cause trouble for anybody. [Laughter.] And you actually made it clear that there aren't job postings and it is an opportunity for those who want to do a little more research, and that's what it is. And I suspect that there are going to be other uses for the directory that you haven't necessarily thought of right now that will come to you. It's a huge undertaking.
Bret Keisling: 10:55 I will say that I was very enamored of the Shop EO. I first heard about it, Jennifer Briggs was on a podcast this fall, so I did a Mini-cast about Shop EO and I thought that was great, but I can't quibble with the evolution to this directory. So maybe at the holidays next year, you put up a little something - something for the consumer. But the directory is just a huge undertaking. It's very important. And I appreciate it and I'm sure many of us in EO do.
Thomas Dudley: 11:26 Well, I appreciate that, I appreciate you sharing that. I mean, it's great to know that people are using the things that we're building and that's awesome. And we can see the traffic on the directory as well. It's been definitely a popular thing as we've relaunched that. I think there are a lot of people who are using it and coming back to it kind of like that resource.
Thomas Dudley: 11:41 One thing you said that really struck me and has been one of the best things about doing this is the, just the number of great ideas that are coming through the members and through the community. So we have our evolution, our improvements, and the path we've taken has been heavily influenced by our members, suggesting things and saying, hey, we're having this problem. Can you help us with that? And so the content, for example, internally, the internal communications, the content. We build multiple new handouts a month as part of our content library. So we're always building new stuff and improving old content. And well over half of those ideas come directly from members saying, hey, we're trying to do this. Like I actually just, this morning was working on something about how you explain valuation as a very simple one pager to your employee owners, to help them understand what that looks like and how they can have an impact on the business. In a simple, clear way that makes sense to everyone. And that was a member suggestion. They were like, hey, we, we love the content. They've been a member for over a year, so they've done the basics. And now they're thinking about, okay, what's next? And they just suggested that to us. And then we can take on that work, produce that handout for them. Then we rolled that out as a template to the whole network.
Thomas Dudley: 12:53 So it's our function in many ways is to aggregate these ideas across the different companies, be the super content producer, and then do the customization to get that out in a way that it's very easy for people to leverage.
Thomas Dudley: 13:06 It's the same thing on the other side though. So the directory, we were enamored with Shop EO as well, and we thought this was like the absolute best way to do it. And then we launched it and then our members were like, hey, this is great but what if it were a full directory, right? What if we could use this for all these other purposes? And our members were right! They're often, I mean, they're always right. You know, they always, the ideas they suggest are always incredible. And so we look from the traffic and the directory is already much more popular than Shop EO.
Bret Keisling: 13:31 My thanks again to Thomas Dudley and everybody at Certified EO, who's doing such important and great work.
Bret Keisling: 13:38 Switching gears, the NCEO virtual annual conference will be held April 20th to 21st, 2021 with a virtual pre-conference on April 16th. I saw this week that they have over a thousand people registered and I'm very excited that I'm one of them. If you haven't registered yet, I highly recommend that you do and use the discount code, EOPODCAST25 during your registration and you'll save $25 off the price, exclusive to podcast listeners.
Bret Keisling: 14:07 Next week on our primary podcast, we have Steve Storkan and Jennifer Krieger who will talk about the Texas Center for Employee Ownership and how it came to be.
Bret Keisling: 14:18 Our country's going through a lot together right now. I hope that I think that the light is at the end of the tunnel, but we are going to get through it and we'll get through it together -- which is in the best spirit of employee ownership.
Bret Keisling: 14:32 Thank you so much for listening. This is Bret. Keisling; be well.
Bitsy McCann: 14:40 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, and I'm Bitsy McCann.
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.