Mini-cast 171 Transcript
[00:00:00] Bret Keisling: 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 I saw on social media that Certified EO has announced it's reached 400 members.
[00:00:21] This is a very huge step and says a lot about the work Certified EO is doing, and the people involved there. But it's also a very important milestone for all of us in employee ownership. There are many, many great organizations and people doing amazing things in the EO sandbox. As I've pointed out before, Certified EO is not just leading the way in innovation in the services it offers, but they're expanding the reach and visibility of employee ownership.
[00:00:47] We've talked about Certified EO's directory of employee-owned companies, which is an excellent and important resource that we use a lot at the EO Podcast Network in a lot of different ways.
[00:00:58] Recently [on Mini-cast Episode 163], we covered Litehouse Foods' announcement that they were going to brand some of their retail items with the Certified EO logo. This exposes all of their stakeholders, from their customers to folks involved in their manufacturing and distribution lines, to the fact that the company is employee owned. And it bears repeating that every exposure to employee ownership raises all of our profiles and helps the work that we're all trying to do.
[00:01:23] Another thing that I think is very important about the 400 members, is the fact that of the 6,400 or so ESOPs in the United States only about 15 to 20% of them are involved in any way with any part of employee ownership. I have no doubt that some of Certified EO's members are connecting with an organization for the very first time. And the more organizations like Certified EO that turn passive ESOPs into active participants in our community, I'll say it again, we all benefit.
[00:01:52] Thomas Dudley is the co-founder and CEO of Certified EO, and Thomas appeared on Episode 142 of our primary podcast, which originally aired in March 2021. I'm very delighted to share that this coming Tuesday, Thomas returns to The EO/ESOP Podcast for a brand-new conversation about Certified EO's current efforts.
[00:02:11] As a prelude to the new episode next week, I thought I'd revisit Thomas's original conversation. In this excerpt, you'll hear Thomas explain Certified EO's background. I hope you'll circle back to our archives at www.EsOpPodcast.com and check out Episode 142 in its entirety. And I hope you'll join us next week for the brand-new episode.
[00:02:30] Congratulations once again to Certified EO and everybody there on this very important milestone of reaching 400 members. With that, I'll bring you Thomas Dudley.
[00:02:40] Bret Keisling: When you formed Certified EO in 2016, what was the intent and what do you mean by "Certified EO"?
[00:02:49]Thomas Dudley: Yeah, that's a great question. So, the big intent is really, as I mentioned, to create national recognition for employee-owned business, and there are many people in the employee ownership space doing all sorts of great work.
[00:03:01] Our unique contribution is focusing on, on really the Main Street audience, the normal person, helping them. First of all, helping our community, tell this story in a way that resonates with millions of people, people who are not financial experts, who are not necessarily business owners looking to sell, but just more and more regular folks. And helping them see, well, hey, first, this is an option. Second, there are a lot of companies doing this nearby. If you buy these products, you can help your local economy. If you go and get a job here, it can create a financial opportunity for you and your family. Right? If we base our economy around this, it's going to anchor businesses in communities and create more stability. It's going to recession-proof some towns it's going to root these businesses locally so that factories don't don't move as much.
So, we want people to see the opportunities, both for them individually, but also for their communities. And I think by doing that, we can help create this broad base of support for this idea, which will help everyone in our community. Ultimately, by doing this, we will reach business owners. So, we will help facilitate more conversions to employee ownership, to grow the space. We'll drive more resources into existing companies to help them grow and grow the space. We'll make everyone's job easier, in terms of that outreach. If everyone already knows about a couple of employee-owned companies and has this positive opinion that'll help when other folks are reaching out to the business owners, that sort of thing.
So, the big intent is combining the reach of all these different companies to start this drumbeat of support and do something that'll be good for the whole community, but that we can only achieve through this coordinated effort by working together.
So, that's our big, our big picture. And that was what we were thinking about when I was in graduate school. The link there is between discovering this idea, having that "A-ha Moment," and then coming up with this idea, I got interested in public opinion on employee ownership. So was in graduate school 2015, 2016 actually got involved in the Fifty by Fifty initiative with The Democracy Collaborative as well. So, I was on that team as the researcher and doing that work. And I was lucky enough to sit in on this great convening where all these different people from like Loren Rodgers and Corey Rosen from the [National Center for Employee Ownership] NCEO and Michael Keeling from The ESOP Association and Melissa Hoover from the Democracy at Work Institute and all these different people from all over the space came together to talk about all these different ideas and I was lucky enough to be in the room because I was part of that Fifty by Fifty initiative, helping do some of the data and all that
And something that struck me both after that meeting but then also as I was thinking about this idea, was just what do, what do normal people think about this, right? I get, there's this very passionate community. I get there's these true believers who see this and I'm one of them, but what is, what is the normal person thinking? And so I looked for research and I had seen some people who had studied this at the time, maybe like 20 or 30 years prior in the eighties, maybe the nineties, but I didn't see anything recent. And we've had some great advances in survey technology. So, I used the Google Consumer Surveys platform to run some quick surveys of public opinion on employee ownership, wanting to understand consumer sentiment, but also job seekers and found really strong support.
I found consumers as interested in this as fair trade and organic, I found job seekers about twice as interested in employee owned as a great place to work. So found this really strong, positive support. And then this kind of links with the question of, well, how do you actually even find these businesses? Right?
And so, the idea of the certification program is this is a proven model to create that visibility. And what you're doing is leveraging the reach of all these different businesses. I think ballpark there's about $300 billion in revenue among companies that meet our certification standard and are employee owned. That's huge reach, right? If we can get everyone on the same page with the same mark, the same simple message, that's how we're going to get this out there and get this in front of those 300 million Americans. So that was kind of what was forming in our head in terms of the motivation for the certification program.
Obviously to have such a program, you need to have a distinction. What does it mean to be employee owned?
[00:06:50] Our intention with that is not to be the arbiters of who's a good employee-owned business and who's a bad one. No one really cares what we think on that level, right? This is a means to an end. It's not about us being the gatekeeper, but you do have to have that. And so big part of 2016 was reaching out to people to have that conversation and try to understand, okay, what does it really mean to be employee owned? And where should we set that standard?
[00:07:11] We probably talked to about 150 people, companies, service providers, trade associations, I mean all, all over the space. What emerged was -- and actually, it's funny, I have a blog post I'm going to put up on this in, actually, a week or two -- but what emerged were basically three categories, right? There's money as an aspect of employee ownership, there's involvement in decision-making, and then there's involvement in governance and different people across the space have different opinions on like which of those three is important and to what degree, but what we found is that the big common thread is the money side. And really if you aren't creating that wealth building for everyone in a broad-based way, it's hard to say that's employee owned. And you might think there are other things that need to happen as well. People might disagree with you, but I think everyone, at least the common thread we saw in those conversations was the financial aspect is really what is the common thread across all of these different aspects of the community. And the wealth building is really, what's going to move the needle on wealth inequality as well, which is one of the strongest motivations here is, is addressing wealth inequality and creating this more egalitarian or open way of doing business that has broad-based benefits and doesn't just benefit a few people.
[00:08:26] Bret Keisling: With that we'll wrap up today's episode of the Mini-cast. Please join us Tuesday on our primary EO/ESOP Podcast for a brand new conversation with Thomas Dudley. Thank you so much for listening. This is Bret Keisling. Be well.
[00:08:38] Bitsy McCann: We'd love to hear from you. You can find us on Facebook at EO Podcast Network and on Twitter @ESOPPodcast. This podcast has been produced by Bret Keisling for the EO Podcast Network, production assistance by Victoria Huerta, original music composed by Max Keisling, branding and marketing by BitsyPlus Design, 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 Descript, 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.