Partnering with Employees (ESOPs)

Continuing on the theme of partnering I wanted to look at an often overlooked form of partnership… partnering with employees.

Businesses and other organizations often talk about how their employees are their most important and valuable asset.  Yet we often talk of partnering with other companies, partnering with customers and partnering with suppliers… but employees are often excluded or organizations “pretend” employees are partners.

For the sake of this discussion I am going to define employees as people employed, on the payroll or on a contract basis, by a business where both the business and the employee are benefiting from the arrangement.

Now based on my previous posts (“Why Partner?” and “A Good Partnership“), a good long-term partnership is only possible if both partners care about each other’s mutual success and are willing to give without expectation of always getting an immediate payoff… the payoff may be farther out in the future.

Many organizations want long-term commitment with employees focused on the success of the organization, but treat employees as “resources” to be added and removed when required. Many employees see this reality and in turn are not terribly committed to an organization long-term.

Sure, businesses have to face the realities of the market. They need to turn a profit or they won’t stay in business. Their mandate is to increase shareholder value… after all, the shareholders invested their money and sweat to get the company going.

Small and mid-size businesses (and some large) often employ the major shareholders in the organization. These people are totally focused on both the business and increasing shareholder value because they part of both structures.

One way of increasing employee retention and aligning employee long-term goals is to offer Employee Share Ownership Plans (ESOPs). Shares may be real or unit based (mimic real shares).

This effectively takes the employee-employer relationship from take-take short-term to a much longer-term focus. Employees will now focus on the success of the company and the company will focus more on the success of the employee shareholder: both for the longer-term outlook.

And guess what? If your ESOP is set up properly the other important aspects of partnerships are taken care of:

  1. How to measure and manage the success of the partnership.
  2. How to disengage if the partnership no longer works for one of the partners.

And it’s good for the business.

This is a direction I am looking into (there are other options as well.) I like and respect the team here at Sunwapta and I am taking a longer view so see how we can all succeed proportionately to our contributions. I want real employee partners, long-term.

Maybe one day they will be running the company and I will be sipping pina coladas on the beach somewhere.

Note: ESOPs can take a year or more to properly plan for and implement. They are not for every situation and require a number of conditions to be right to implement successfully. Some good ESOP information can be found at:

By | 2017-04-04T16:37:19+00:00 December 12th, 2008|Categories: Business Strategy, Doug's Blog, Dream Teams|

About the Author:

Doug Wagner is an entrepreneur, President and Co-founder of Sunwapta Solutions. Sunwapta's mission is to help businesses transform from surviving to thriving, sustainable growth. From strategy to implementation, this means marketing, sales, managing your brand and delivering consistent value. Get more clients and keep them.