Employee ownership drives stronger culture and shared values
A 100% employee-owned insurance firm shares how providing employees with a constancy of purpose reinforces a shared responsibility for success.
While the insurance industry has undergone significant consolidation in recent years, Graham Company has defied the trend by becoming 100% employee-owned. Rather than taking a substantial buyout offer in 2017, CEO Bill Graham chose to convert Graham to an Employee Stock Ownership Plan (ESOP), which holds all company stock in a trust and provides it to employees as part of their retirement.
As Graham celebrates 60 years in business, the ESOP ensures loyal and dedicated employees are taken care of financially and that the business will continue to thrive under the same values that have served employees and clients so well. Beyond retirement benefits, I believe this move strengthened our company’s culture, created a sense of ownership among employees, and allowed us to make our business the best it can be for our clients.
After we announced the ESOP, we weren’t quite sure how our already-strong culture would change, but we did know we needed to make a concerted effort to ensure every employee would feel empowered to take advantage of their new ownership stake. From there, we slowly started to see “pockets of change” appear in different departments and on different teams as employees took ownership to improve their individual pieces of the business. This collaboration resulted in our culture becoming even stronger as employees feel more dedicated to the success of the company and that they are all working toward the same goal.
For companies that may be considering a similar move, make no mistake — converting to an ESOP model won’t “fix” the culture of a company. But if a strong culture is already in place, the arrangement gives every employee the freedom to use it to their advantage and enact company-wide change.
This culture also requires all employees — not just executives or senior managers — to hold each other accountable. One thing we discovered as we started our ESOP journey is that not every employee was trained in these types of soft skills, so we’re working to roll out training modules for all of our staff to learn about topics like accountability, giving and receiving feedback, responsiveness, effective meetings and more: everything that will help them “think like an owner.”
As part of this, we launched an innovation team and tasked them to start creating efficiencies across all of our departments. If an employee discovers an issue or something they think could be working better, we encourage them to bring it to the innovation team so we can identify areas for improvements or implement new technologies to better the client experience. We recognize the incredible potential to leverage new technologies to help our clients gain unprecedented insights into their operations, drive efficiencies, and better protect their employees and balance sheets. In the last 60 years, Graham has thrived on the principle of working every day to be better than the last, and that requires taking a hard look at the company and enacting changes that will drive the business forward. The innovation team is the embodiment of this mentality.
Now, like many companies, we face unprecedented challenges brought on by the COVID-19 pandemic. However, a recent study conducted by Rutgers University and SSRS found that ESOPs are doing better than non-employee owned companies during the pandemic in the areas of job retention, pay, benefits, and workplace health safety. While adjusting to this new normal hasn’t been easy for the clients we serve and us, we are proud that we have been able to weather the storm of an unpredictable year and continue to be true strategic partners to our clients as they navigate these uncharted waters.
We understand that people make a difference, and we’re proud of how the ESOP model allows us to invest in our employees for the long term. Being 100% employee-owned gives every employee a vested interest in the future of Graham, providing a constancy of purpose that reinforces our shared responsibility for the firm’s success. This has made Graham a stronger company that is prepared for continued growth and success for all of our employee-owners.
Karen Boyle is vice president of human resources at Graham Company. The opinions here are the author’s own. This article is printed here with permission from Graham.
Related: