Can an ESOP Improve Your Company?

Posted by Tim Garbinsky on Apr 20, 2021 11:00:00 AM

Tim Garbinsky, Communications Director at NCEO, talks with Rich and Steve about the 40-year legacy of NCEO, the impact the current political climate can have on employee ownership, and why employee-owned companies either thrive or fail.

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Episode with guest: Tim Garbinsky

Communications Director at NCEO

(This episode was recorded in March of 2021.)


Key Episode Take-Aways:

1. Satisfaction can be achieved even in working the most boring, mundane jobs at an employee owned company. (click to jump to this topic below)  But the way, the way people really engaged with even the very minutiae of things was very different to what was, in theory, like a cooler job as a butcher. And other jobs I'd had in the past, no, I had a very varied working experience, and work history until that point. And this was the job that sounded the most mundane on paper. But where the people were easily the most satisfied.

2. The political environment for ESOPs has usually been relatively positive, almost never negative. (click to jump to this topic below)  I'm not going to sit here and pretend I know what's in store for us as a community. But by and large, the political environment for ESOP specifically remains positive. It's always been at least relatively positive, almost never negative. You know, there's a lot of supporters on both sides of the aisle for the ESOP world..

3. The reputation behind ESOPs and why there is a relatively small community of employee-owned companies. (click to jump to this topic below)  Why there aren't as many to now could be so many, so many, so many reasons. You know, the, the reputation around employee ownership is partially the one that I just detailed with United, as one that creates debacles, which is just not true debacles can be created out of it. But ESOPs themselves, don't necessarily in any way, shape, or form contribute to that. But beyond that, they have a bit of a reputation as being more complex, or more expensive.


Continue scrolling to read the full episode transcription.

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The "Change the Game" Podcast is sponsored by Prairie Capital Advisors, helping businesses think forward. For more information visit prairie That's

Announcer 0:24

Welcome to the "Change the Game" Podcast, where we share stories of open-book management and highlight capitalism at its best. Thank you for tuning in to this episode of the "Change the Game" Podcast with special guest Tim Garbinsky. In this episode, Tim talks about the 40-year legacy of NCEO, the impact the current political climate can have on employee ownership, and why employee-owned companies either thrive or fail. Here's your hosts, Rich Armstrong and Steve Baker.

Steve Baker 0:55

Welcome to the "Change the Game" Podcast where we are changing the game by doing business differently and highlighting stories of capitalism at its best. I'm Steve Baker, and with me here, as always is Rich Armstrong, president of the Great Game of Business, and co-author of our new book, Get in the Game: How to Create Rapid Financial Results and Lasting Cultural Change. Hey, Rich, how are you?

Rich Armstrong 1:18

I'm good. How are you, Steve?

Steve Baker 1:20

I'm better than usual. In fact, if I were any better, I'd be twins. I'm very excited today because we got a very special guest with us Rich, we've got Tim Garbinsky with the National Center for Employee Ownership. He's the communications director there. And he works with volunteers and allied organizations in the media to figure out the best creative, most effective way to disseminate information about employee ownership, which is NCEOs mission, right to get out there and teach people what employee ownership is all about. He got a BA from Duke because he's a badass. And he has since worked as a content creator, an educator. He takes all that skill and puts it into NCEO. He originally, he was from the Washington DC metro area, and he's but he's lived and worked and studied on three different continents over the past decade. He's got a real passion for other culture and all people. And he likes to read, write, and listen to and create music. So, I think you guys probably have something to talk about there. He's active whenever possible, Tim, thanks for being here.

Tim Garbinsky 2:28

Thank you so much for having me. fellows. I appreciate the time.

Rich Armstrong 2:31

Yeah, thank you, Tim.

Steve Baker 2:33

Well, you've got one heck of a background, very eclectic. I like it. But the one thing that really pops out to me is, you know, we haven't traveled in a year. I want to know what three continents you've been on. I hope one of them is Antarctica.

Tim Garbinsky 2:49

Oh, no, no, that's, that's still on the bottom of the list. Unfortunately, I Well, one of them is North America, of course, here we are. So, the other two are Europe, I lived in Italy for a little bit, as well as France, and then North Africa. So, I lived in Morocco for just over half a year.

Steve Baker 3:08

Nice. Sounds like hanging around the Mediterranean sounds pretty, pretty good idea there.

Tim Garbinsky 3:14

You know, it's hard to beat so many aspects of that mostly the climate and it's kind of why I'm in the Bay Area, now, to a certain extent is always chasing that perfect sort of 78-degree temperature, you know.

Steve Baker 3:27

With all that experience, what drew you back to, to the States and specifically to the NCEO?

Tim Garbinsky 3:35

Well, if I'm going to be relatively candid, I was overseas, I didn't have too much intent of coming back, there was an illness in my family, which has since resolved, you know, well, so that's fine. But I ended up flying back to the States, sort of in a huff in a hurry and use up all my funds in getting back and realized my only choice now was to work. So, I did the typical millennial thing. I moved in with my parents in Wisconsin. And I got a few jobs, working class jobs, I was a butcher. And I worked the till I worked the register at a at an employee-owned company. And it was while there that I started to sort of develop this passion for, you know, good equitable jobs and this sort of employee ownership culture. The job I had that was employee-owned. It was one of the strangest stores you can imagine. It's actually takes me a minute to remember all the things we sold because they don't relate at all. It was a pharmacy, a costume shop, a beer, and wine store, and also a shipping place. So, we would send stuff for ups and USPS.

Rich Armstrong 4:52

That's entrepreneurship.

Tim Garbinsky 4:55

Entrepreneurship is one way to call that Rich for sure. Absolutely.

Steve Baker 4:59

Sounds like most of the parties I went to in college.

Tim Garbinsky 5:02

Well, there's the connecting factor, Steve, I was missing that component [Laughter]. So, it was it was a while there that I sort of became resolved around two different things. One was that I never wanted to live anywhere, so cold ever again. And the other was that it's worth creating and maintaining and supporting good jobs. You know that job was, it was a basic cash register job. And these people were bought in, these people were engaged and happy to be there, these people were being rewarded for their time, you know, in a way that they wouldn't have been other places. And that's when sort of I saw the position at the NCEO, and it was just sort of the perfect confluence of factors. So that's, that's actually kind of the long story long if I'm being honest there. But yeah, that's what brought me to the NCEO.

Steve Baker 5:52

I have a quick follow up, Tim, I've known you since you started. At NCEO. And it's been great to watch your journey. But go back a little bit. So, your first exposure to employee ownership was to actually that job at the employee-owned company?

Tim Garbinsky 6:08

That's correct.

Steve Baker 6:09

Awesome. And so, was what did you first think about employee ownership? I'm curious because I remember my first thought about it. I just want to hear yours.

Tim Garbinsky 6:18

Yeah, so I'm one of, I think two people now at the NCEO whose exposure to employee ownership actually came via working at an employee-owned company. And my first impression was admittedly abstract, I didn't actually understand how it worked, I didn't understand the tangible benefits. And truthfully, I didn't work there long enough to be eligible. So as a material benefit, it remained abstract to me. But as a sort of, as an ethos, or as a way of working, it was sort of very, very clear the way in which people sort of took ownership of their job, even in such small waves, because when you're working the cashier as a cashier at a place that you know, sells these very specific items, it feels like maybe you don't have a lot of control over your job. And maybe that can be true in some respects.

1. Satisfaction can be achieved even in working the most boring, mundane jobs at an employee-owned company.

But the way, the way people really engaged with even the very minutiae of things was very different to what was, in theory, like a cooler job as a butcher. And other jobs I'd had in the past, no, I had a very varied working experience, and work history until that point. And this was the job that sounded the most mundane on paper. But where the people were easily the most satisfied of anywhere I'd work. So,

Rich Armstrong 7:40

Very cool.

Tim Garbinsky 7:41

Yeah, exactly. I it was sort of this instant recognition of what employee ownership could create in that respect.

Rich Armstrong 7:50

But that's great. I'm glad it brought you to the NCEO. You know, so the NCEO, just, I think just completed its 40th anniversary. And so, it's been around a while, but it is nothing like celebrating a big milestone anniversary in the middle of a pandemic, right. But I wanted you to give us just a brief history of the organization. And maybe some of the accomplishments that you've seen over the years, maybe particularly last year, because I think you guys did an amazing job through a pandemic to keep this movement alive.

Tim Garbinsky 8:25

Thank you, Rich, I appreciate that question. And before we go any further, I also want to say I appreciate having this conversation with you too, because if I'm remembering correctly, my very first call when I was at the NCEO was with you too, because you didn't know you were on the board. And Loren, our executive director was like, Oh, we want you to get to know people around the community. And there's no better welcoming committee than you two. So, I appreciate you two having been there all this time, and then also being there now.

Rich Armstrong 8:51

But we didn't run you off, that's good to hear.

Tim Garbinsky 8:54

Quite the opposite. Rich, quite the opposite is. Let's see. So, 40-year history that of course, predates my time at the NCEO, but started by Corey Rosen, who, you know, worked on Capitol Hill before it sort of working on the legislation that would eventually enshrine ESOPs. So, sort of one of the godfathers of this community, and he still works with the organization and sort of a senior staff member and just an overall guide for the community. And he started it in, you know, there's some debate was it his garage, was it his basement, I'm not going to commit one or the other because I'm going to get it wrong. But he started it in a home setting and built it to be sort of the premier membership and research organization for the employee ownership, and specifically the ESOP community. And since then, I'm continually or continuously sort of impressed by the way in which the organization has made, you know, a bunch of little innovations, a bunch of little pivots. While always staying true to its membership and to its mission? You know, you specifically said 40th anniversary and sort of in the past year, and you're absolutely right, what a year to celebrate the 40th anniversary. But it really, you know, everything's a silver lining at a certain point with something like a pandemic, but it did allow us to sort of showcase our ingenuity and sort of shine in a little bit of a different way. So, you know, our annual conference, which is coming up, by the way, our 2021 annual conference is coming up next month. This time last year, we just made the decision that we couldn't hold our 2020 annual conference, because the pandemic we had to cancel it just a month in advance. And, you know, in hindsight, and at the time, it felt like a crisis moment, because that's, you know, it's the center of our calendar year, it's where we go to recharge, there's so much planning that goes into it. Fiscally, it makes a huge difference for us. And we had a month to figure out, okay, we cannot safely gather, what we anticipated would be around 2000, or more people in one place. You know, the year before, we had nearly 2000 people we had every anticipation that this year was going to be that year was going to be as big if not bigger, and all of a sudden, we can't do it. And we felt that a real sort of duty to community to do something in its stead, we couldn't just cancel it. We couldn't just leave our community, especially in this great time of need, with none of the lessons that they come to expect from us. So, we in a month, we and this is an enormous credit to our conference director Ivette Torres, we shifted our entire operation online. All of the sessions were recorded, all the sessions had to be edited, all the sessions uploaded, we had to find a platform that would work for our members that would also allow us to engage in a certain amount of ways. We had to do this in under a month. We had to figure out how to navigate the sort of contractual obligations we had built in. And we did it, we had a successful conference, I'm still baffled and impressed by what we were able to accomplish as a team. And that just sort of set the tone for the entirety of our 40th year. You know, one of the things we did a lot of organizations did this, but I in conjunction with our executive director Loren Rogers, and events director Jordan Boone, we put together a series of webinars free for the entire community about how to respond to COVID. So, there were some cultural implications, there were evaluation implications, financing, implications, political implications. And we had three webinars with an average attendance around six to 700, people all free, all organized in under a week and a half. We found speakers from the community, because our community is already so open and giving, as you know, and, and we were able to provide that sort of value to the community at large. You know, we're big in sort of the cultural space, we tend to focus a lot on ownership culture and communications. And my colleague Dallan Guzinski was able to start this new sort of Culture and Communications Committee Crash Course, which is an online sort of networking opportunity. So again, it's all these, you know, what look like, maybe small innovations that really take root while also always keeping our members in sight. Because really, at our core, we're a member organization, it's who we exist for, it's what we create for. And it's gratifying to be a part of, and I'm sort of proud to see us able to serve our community and see the community sort of thrive under this sort of tutelage.

Rich Armstrong 13:52

Great story. Great story. Well, congrats on last year, because that's not easy to do. It's not easy to do. It's cool how you guys rallied,

Steve Baker 14:02

And you look so calm and collected at the conference. That's the weirdest part, but we, we admire you for it. Well, you know, you mentioned the how you rallied the team and the community to create these free resources that help people take a lot of fear out of their organizations as they dealt with the, you know, the onset of COVID. And that sort of thing. As longtime members. I mean, we've been members at NCEO at Great Game at SRC holdings for decades. We've always benefited from the information and education that you guys are really the clearinghouse for. You have a new series called, Is an ESOP right for you. Or if I'm really reading it with some emphasis, it would be is an ESOP right for you?! [Laughter] And that is free. This series is free. Why don't you tell us about that? Because I think the listeners need to know an example of what you're working on.

Tim Garbinsky 14:58

Absolutely. Well, first of all, Steve You should have been an actor because it was a great reading [Laughter]. No, that's one of the new things that we're doing right. So, it's, it's another example of sort of actually like a, an innovation that build on something we did. So, it's actually a smaller shift or pivot, we used to have several in person, basically feasibility meetings, right. We had two different ones, one was ESOP nuts and bolts is what we would call it for a short period of time. And that was a one-day series that would take place at a local ESOP company, and people would hear the story from the ESOP and then some practitioner would sort of take the rest of the way there of sort of how to do it. And then there was, Is an ESOP Right for You, which was actually a two-day meeting series, which we now can no longer do, of course. And instead of looking at that as a hindrance, which to a certain extent, it is, of course, that we can't meet in person or what have you. It's actually an opportunity for us to just broadcast our message wider and louder to a certain extent. So, we figured one of the main hindrances to the more ease off and employee ownership creation is, you know, barrier to entry. So, sort of cost. And making this meeting online and free, is felt like a no brainer. And it also made it easier for us to engage with companies that have these stories to tell of why they are now employee-owned. So, we just had our first one of those online three webinars. Gosh, is it already I guess it was late last month, it's mid-March already, I just remembered. So, it was late last month, but it's going to be a series and we're going to maintain these videos online into the future. So, it will, we're hoping it'll become part of a sort of feasibility library of selling owners telling their story. And then having people like Cory or Loren from the NCEO, demystify some of the more technical aspects of it. The first one featured, Ashley Walters of Onyx, Inc, they're in Erie, Pennsylvania. And she's also going to be our keynoter this year at the conference, tremendous story, and tremendous storyteller. So, it's hope, hope you'll be there for that. But it was really the brainchild of Jordan Boone, who I already mentioned, the events director of, you know, why not make this wider? Why not make this free? Why not do this regularly. This is, this is a need, that the business community has for better succession planning alternatives, and easier access that information. And we're situated to provide it, so why not do it? So, that's a little bit around the genesis of it. The next one isn't yet scheduled so I don't want to, I don't want to boost it up too much in that respect, but it is going to be sometime this summer, we'll do another version of this. And again, these videos will live on our website into perpetuity. So It's on the homepage right now you'll see the blog post. But that's, in short, sort of where that came from.

Steve Baker 18:08

This idea of is the ESOP right for you, is at the very front end of your process and your education. Why is that basic level information so important right now?

Tim Garbinsky 18:22

You know, Steve that's a fantastic question. And there's a lot of debate in the community around the best way to message this stuff. And I think after decades and decades, we as a community are finally coalescing around what is the best practice, which is getting business owners themselves to communicate to other business owners. That sort of peer-to-peer education is a component that was missing for so long, for so long, this sort of information was communicated by you know, lawyers are valuation experts are accountants, and, you know, those practitioners are essential to the process. And, you know, starting off with the technical aspects can be off putting. And right now, especially in the wake of, you know, COVID, and the recession slash depression that the economy just suffered from and is still, you know, on the long road to recovery, many business owners are beginning to realize, especially in the sort of upper to later baby boomer sphere, that maybe they've held on to their business long enough, and maybe it's time to very seriously consider what that next move is. So, there's a real energy around business transitions and the amount of sort of assets and wealth that are set to change hands over the next decade. And from where we sit, anything that can get this information into those hands can only be a positive. So, you know, recognizing that need, and recognizing that we don't want to create barriers. We don't want to be off putting was sort of elemental and how we've designed our feasibility materials, including this meeting series.

Rich Armstrong 20:11

That's good. That's good. So, tell me, Tim, what's NCEOs view on the current political climate? And what if any, it would, might impact employee ownership?

Tim Garbinsky 20:25

That's another great question Rich. We actually just another, you know, so many little innovations that you guys are giving me an opportunity to talk about, we just started another meeting series called Community Conversations. It's another free one for like it says the community. And it's going to be about sort of higher-level topics that pertain specifically to the employee ownership field. And the first one was about employee ownership, and the new administration sort of went back, how it will fare and, you know, trying to read the tea leaves in politics is really a fool's errand. So,

2. The political environment for ESOPs has usually been relatively positive, almost never negative.

I'm not going to sit here and pretend I know what's in store for us as a community. But by and large, the political environment for ESOP specifically remains positive. It's always been at least relatively positive, almost never negative. You know, there's a lot of supporters on both sides of the aisle for the ESOP world. And that remains true today. Some of the appointees in Biden's, not necessarily the cabinet, but some of the other political appointees are those who we've actually worked with, and who've been supporters in the past. It's about Guzman, who will be heading up the SBA, Small Business Administration, I believe, and she's somebody who from California that we talked with and worked within who has a positive view towards employee ownership. So, you know, it remains, you know, encouraging these political developments. But so much of what happens on the ESOP sphere outside of political developments, ESOPs are already very protected as a political class to a certain protect, extent, a lot of benefits for S corps, ESOPs, etc., etc. That doesn't mean we shouldn't be vigilant in protecting those benefits. But so much of what really impacts the ESOP sphere happens at the regulatory stance at the DOL. And that usually happens in the career space, the appointees aren't usually the difference makers there. It's usually the people who worked in those organizations for decades. So, you know, that's a little bit of a non-answer I just gave you if I'm being honest. But it's I also think the closest I can get to safely saying, we'll see.

Rich Armstrong 22:46

I think the important point is that and I think you mentioned it is that there has been a lot of bipartisan support for this for a long time. Is it, it's an idea or concept that that makes sense in terms of helping not only companies be more successful, but most importantly, that it gives opportunities for employees to see a whole another level of wealth generation. And I think they recognize that, and they've supported that in the past. And that's good news.

Tim Garbinsky 23:16

Absolutely, absolutely. The bipartisanship can't be lost there. I think that speaks that I think that just be frankly, speaks to the sort of win win win nature stops, it's the benefits are, are tangible, and relatively obvious to anybody who looks long enough for company, for employees, for community. There's a, can't remember who told me this. But somebody wants told me that employee ownership is the only idea on which the three Jesse's agree Jesse Jackson, Jesse Helms, and Jesse Ventura [Laughter]. So, that should give you an idea of the sort of political universality of employee ownership.

Rich Armstrong 23:58

Yeah, well, Tim, you mentioned something very important, I think it needs, share this with the audience is that you talk about the win win win proposition. You don't just say that, but you do have a lot of research that backs that up. So, if the audience would want to visit your website and maybe even their membership, there's a lot of research that really checks us out to see if this really does make a difference. And it's very, very good research.

Tim Garbinsky 24:25

1,000% Thanks for saying that, Rich. Yeah, you know, we're a membership organization. But, you know, one of our primary benefits to members and to the community at large is I think producing research that continuously shows the efficacy of these measures in these ownership structures. One of the other ways in which we shifted in the last year, you know, we do an executive compensation report. And last year was it being time to do the new one. And, you know, it was a time of great struggle and crisis. But that wasn't reason not to do it. So, we did it. And we also built-in questions around COVID. And around the responses companies are taking in the employee ownership community to COVID. And how they're dealing with these issues of, you know, how are you, how are you compensating executives, while at the same time, furloughing employees? Like how are you balancing that? What are what are the prospects for these companies? So, it does have sort of a traditional research bent in there. And it also does take a look at, you know, particularly in this time, what are companies doing? And how are they responding to that crisis? So, yeah, the research is, you know, the proof is in the pudding, the research continuously shows sort of the benefits of these models.

Steve Baker 25:41

Mhmm. Well, I, I can tell you that, so I joined 15 years ago, and at SRC, and that was my first exposure to employee ownership other than, you know, going to a grocery store that says, employee-owned on the side of the building, then you slap the bag boy on the back, so it's going to be working with the owner and then they're like, no, get away from me. Don't know what's going on, right, No education. But I've learned so much and I'm passionate about it, I've been able to generate more wealth here with SRC, then, you know, the markets have provided. And, of course, Rich has served on the board a number of times I've served on the board, we're passionate, and everything, you know, the everybody listening, it's awesome, you should check into it. But let's Timothy, get serious here, put on your serious hat. And let's talk about examples. You know, you know, some employee-owned companies have failed out there. And I'd like to know, tell me a story about one of those.

Tim Garbinsky 26:42

Yeah, no, that's fair. I, I don't like to sugarcoat I'm, I think I'm a basic realist. So, I'm never going to come in here and say, it's good for everybody. It works all the time because there's nothing in the world that is or does, right. So that would be foolish for me to do. I think that I mean, there's a few examples. And at the end of the day, business is business, right? So, there's going to be some businesses that fail on business terms. And then of course, along with that, the ESOP then fails. ESOPs are not a failsafe. If your company is struggling, and you adopt an ESOP, that's not going to all of a sudden make it a successful company. That's not how these,

Steve Baker 27:19

Great one right there. It’s not a magic pill, it's not going to make everybody you know, unite to save the company, that's for sure.

Tim Garbinsky 27:26

Not at all. Not at all. And it's one of those things where when we're talking about sort of a checklist for companies that are considering this, there's a lot of things that sort of go into that. But one of the most basic is, is your company already experiencing success? Are you already able to build year on year? Are you experiencing growth at a stable clip? Because if you are an unstable company, you're going to still be an unstable company. It's not going to change the nature or the identity of a company just by implementing it, not at all These things take sort of nurturing the way that anything does. As far as ESOPs go, there's a few high-profile failures that have I think, unfortunately, sort of damaged the reputation of ESOPs at large. So, they're one of the biggest was in United Airlines. And it's one of those things where United Airlines, you know, clearly not a failure of a company. They're still flying people around the world in the middle of a pandemic. So, they got to be doing something right, right. I think anyway, but it's one of those. It's one of those things, where it also, you know, you got to prime your company for it in ways that can be maybe hard to see, right. And this is, I'm a very pro-union man. So, this is not negative union talk for me. I think unions and ESOPs can live side by side successfully, and there are examples of them. But there were some issues with the implementation of the ESOP at United where I believe the Pilots Union wasn't necessarily on board. The Flight Attendants Union had issues with it. And there are a few other things I don't know the case study well enough to speak authoritatively on it. So, I'm going to stop there and say that internally, it was a successful company that still wasn't primed for ESOP ownership in the right way. We actually with the last Is an ESOP Right for You that we did the online one, there were a lot of questions we had so many questions that we couldn't get to them all at once. So, I and Loren, our executive director, we did a brief Q&A follow up. And in that follow up, actually, also available on the exact same page and that exact same blog post on our website, Loren details the United story, and sort of what went wrong. And I'm going to invite you to visit the website and watch that video and learn from him. Because he's, he's a far more authoritative speaker on these things and I am. So, I would encourage you if you are interested in what went wrong at United there's a few lessons to learn there.

Rich Armstrong 30:08

Very good.

Steve Baker 30:09

Well, I like the fact that you're pointing out that it's an ESOP is a way to, to make a transition in ownership, to empower people in a different way, to enrich them in a different way, to show a long-term strategy for growth in people both professionally and monetarily. But then, you know, it isn't going to fix your company. And so, I think that's something for the listeners to really pay attention to, and say, you know, hey, let's fix the business. Of course, that's what Great Game is all about, right? That's why I think Great Game and employee ownership go well together is, you know, run the business well. And then you can not only do well, but to do good as well. So, thank you for that.

Rich Armstrong 30:53


Tim Garbinsky 30:54

Agreed, agreed. And I really, you know, just the highlight, y'all, you know, one thing I like about being at the NCEO is we're not like the sole purveyors of knowledge, not at all, we're very frequently usually a conduit for other people's knowledge. Because, as in any field expertise is diffuse, you know, certain people have different expertise that we can all stand to learn from them. And if I can, you know, gas y'all up just a little bit, I always enjoy the Great Game sessions, maybe the most out of any of the conference, you know, when we were in person, they were, you know, we would have to sit in on a session to sort of monitor things and provide aid. And I would always choose y'all sessions first, because they're the most engaging, the most interesting, and the lessons are applicable sort of, in things outside of just ESOPs. They're just good, solid, business and life lessons. And I've always respected and admired about y'all. And if I may, I know y'all are doing a pre-conference session for our conference, so it's going to be great. It's only $50. It's on the 16th of April. And I, you know, I imagine so many of your listeners already know this. But in case you don't, I encourage you to attend that, because I know it's going to be fantastic.

Rich Armstrong 32:08

Well, thank you for that Tim. $50, that's quite a bit for Steve and I were precon. We may have overpriced it there a little bit.

Steve Baker 32:18

Shooting for the stars

Rich Armstrong 32:18

So hey, you know, getting back to reality as well, you know, that same thing kind of position Steve was talking about is that, you know, has been 40 years of really pushing on this idea of employee ownership. And there, unfortunately, still is a relatively small community of employee-owned companies. And I was just curious about, you know, why don't you think more people haven't explored this and looked at this as an option for ownership transition, but also maybe where it NCEO sees it going in the future. Do you see a tipping point? You see it where, you know, where do you see the growth of this kind of idea in the future?

Tim Garbinsky 33:01

Yeah, no, that's, that's an important question for the community. So, it definitely has to be asked. So, I appreciate that, Rich.

3. The reputation behind ESOPs and why there is a relatively small community of employee-owned companies.

Why there aren't as many to now could be so many, so many, so many reasons. You know, the, the reputation around employee ownership is partially the one that I just detailed with United, as one that creates debacles, which is just not true debacles can be created out of it. But ESOPs themselves, don't necessarily in any way, shape, or form contribute to that. But beyond that, they have a bit of a reputation as being more complex, or more expensive. And there are examples where that's true. But I think also by and large, people underestimate, in general, how expensive, or how complicated it can be to sell one's business anyway. Selling to an outsider, selling to management, all of them have their costs, all of them take time. And there's no one set path, or no one set track and how to do it or how it's going to go. So, I think part of it is overcoming those, like preconceived notions that a lot of business owners have.

Steve Baker 34:14


Tim Garbinsky 34:14

And then the other is, honestly, it's the sheer awareness thing at a certain point where, you know, these things aren't being pushed with the money that private equity has. You know, the main purveyors. And the main advocates of employee ownership and ESOPs are companies like yourselves who don't have any sort of fiscal stake in doing so. And who don't have a budget to go around proselytizing on it either. You can't go to companies and try to convert them and us who are nonprofits. So, we can't compete in the same way with the sort of noise and visibility that something like private equity can generate, right? But there is a little bit of. I mean maybe now is the tipping point. You know, we've been saying that for years. So, I want to be a little bit cautious and saying that it's right now. But I do think we are at a little bit of a watershed moment with the sort of visibility of sort of inequity in the country around income inequality with visibility around how private equity has routinely, regularly, all across the board gutted companies and move them out of state, move them out of country, and also of high-profile successes of employee ownership being celebrated more globally, you know, the, the, what are they called? So sorry, Mungialdea. Um, so I can't believe I forgot their name. Enormous cooperative in the Basque region in Spain was just, you know, universally lauded in the New York Times, when the owner of Chobani gave away shares of his company. It's not an ESOP but it's a form of employee ownership. It was a universally celebrated thing. And so, part of it is, these things are being seen more and celebrated more. And I do think that there's been an uptick, even since the start of COVID, of how many sorts of major publications are talking about employee ownership as a serious model and highlighting its successes. So, you know, we still have a long way to go. And I also want to challenge one thing, which is sort of the idea of what it means to be successful for the employee ownership community. The number of companies has been either stable or going down or going up marginally year on year, it really depends on how you're looking at it or counting it. But the number of employee owners, growing is a success, right? And when ESOP companies acquire other companies, that creates more employee owners, even if it doesn't create more employee-owned companies, and that's a different way to sort of track the success of the ESOP and employee ownership model and its growth within the business world. So, I do think your assessment is correct. But there's other ways of looking at it that show maybe a more positive view as well. But by and large, the lessons remain the same, that it needs more visibility, it needs more demystification. We got to combat the myths a little bit more successfully. And, you know, there's hope against hope that we're, we're fighting the good fight and come out on top. You know, that's kind of how it is.

Rich Armstrong 37:30

You're definitely fighting the good fight.

Steve Baker 37:33

How many employee owners do you think we have in the United States?

Tim Garbinsky 37:39

You know, I would usually feel comfortable answering that I think the last tally was somewhere around 13.5 million with several trillion in assets. But I, I won't quote research authoritatively without ever without ever consult, without consulting research director Nancy Wiefek. I don't want to upset my dear friend and colleague, Nancy. So, I will say the numbers can be found on our website, then they're up to date. And you can check it out there.

Steve Baker 38:08

So, there you go. So how do our listeners not only learn if 13.5 million employee owners is correct, and probably win a small prize. But also, they could get registered for maybe that, that you know, kind of beginner series, you know, Is an ESOP Right for You, get registered for the conference, and basically learn more about National Center for Employee Ownership, employee ownership at large, and just kind of get acquainted with the massive amount of resources you all have, how do they find you?

Tim Garbinsky 38:42

Fantastic. So, I'm going to recommend three different things. And depending on sort of your level of interest, I think it'll fit any number of your viewers. If you just want to dip your toes if all you're trying to do was learn a little bit here and there about us learning a little bit here and there about what's going on in the community. The easiest lowest barrier thing you can do is subscribe to our email bulletin. It's completely free, of course, send it out twice a month, and it has just a compendium of sort of our blog posts that detail what's going on in the community or sort of news highlights, as well as upcoming events, new publications. For instance, we just published an updated and revised ESOP committee guide for communications. We have beyond engagement which is applicable to wider than the ESOP community. It's just cultural lessons. And I know SRC is actually featured pretty, pretty prominently in that publication since you all are such a fantastic example of so many different things. So, if you're just trying to dip your toes, the first thing I would say is, yeah, sign up for the newsletter, excuse me for the bulletin, and sort of get a feel for what's going on in the community. Beyond that, the next thing to do is probably become a member. You know, like I said, we're a membership organization, and we have a lot of stuff that's available to non-members, but the real benefits kick in when you're a member. So, we have weekly webinars that touch on all variety of topics, we've built in a networking component to them. We have a newsletter, which used to be every two months now it's every month and that has research that has news, that has interviews, that has highlights. And that's member only. And then also you get discounts on everything we do. So, our publications become discounted. We actually have a new sort of introductory membership tier which is ESOP Essentials. It's aimed at business owners who are just starting to learn there's a curated component, a PDF, and a web page that guide you through which webinars to re-watch which articles to read if you're trying to have exploring ESOP feasibility, but it's also just a good way to get acquainted with our resources. Again, it's called ESOP Essentials, you can find that on And, last, but maybe the best way is, like you said, get registered for the conference. You know, it's a shame that it's not in person. But the good news is you can register anytime between now and the 15th [of April]. And be ready to learn from wherever you are, it's a great way to get a sense of who's in the community, what the community talks about. And if you are a member, of course, it's discounted. And you can do that, you can get registered their And I would say that's, that's any of those three is good. And they all build on each other. So, you don't want to do just one, you can do all three, and you'll gain something from all three. Yeah. So, long story long again, that's what I would recommend somebody to do if they're interested.

Rich Armstrong 41:42

Well always promoted the NCEO as a huge resource on employee ownership, and you guys never failed to support that and deliver on that. So, there's plenty there, there is definitely plenty there and at a fairly inexpensive rate. So, that that's, that's true, as well. So, we've covered a lot of topics. Tim, just one last question for you. Is there any one question we should be asking you that we haven't?

Tim Garbinsky 42:10

You know, you would think I'd be prepared for that question. Somehow. I'm not. I think people should ask me less questions if we're being honest. [Laughter] But what do people usually say at this time? What do other people like to be asked? I want to I want to live in other people's shoes. What do other people like to be asked?

Rich Armstrong 42:29

Well, what more should the employee ownership community, or I'm sorry, our audience should know about employee ownership community?

Tim Garbinsky 42:35

Ah, there we go. See? That's good. So, you're doing my job for me Rich. That's how good of a board member you are. You do my job for me. I don't deserve such kindness. That's great. You're fantastic. I think, you know, for those who aren't already a part of the employee ownership community, it's a welcoming space, everybody is invited to learn more, everyone could benefit from learning more, even if you're not in a position to create or transition a company to employee ownership, you can still benefit from some of the practices that are implemented at employee-owned companies. These are, a lot of it is just best business practice, right. But by and large, I guess what I would tell people is, you know, now's the time for these important things to really start taking place. So, if there's any way in which you can be active and can be a supporter, and that doesn't necessarily mean fiscally, you don't, you don't have to, you know, find the donation page on It's as simple as, you know, talking to people about what this is and how good it is, and how this can make a difference. And when you see it, supporting it, you know, put your money where your mouth is and shop at employee-owned companies, for example, when you get the chance. You know, these things, you know, it can feel like where you spend your $40 on groceries, or I just way undervalued groceries, but it can be. It feels like those things might not matter on such a micro level. But you know, the macro is created from the micro, so these things matter.

Rich Armstrong 44:08

That's great.

Steve Baker 44:10

Yeah, man, that's awesome. Well, we're big believers in trying to close the gap between the haves and the have nots. And employee ownership is definitely a huge way to make steps toward that. So, thanks for being with us on the podcast. Tim.

Tim Garbinsky 44:24

Thank you both so much for having me. I appreciate the time. I'm enormous admirers of you guys from my very first day at the NCEO, that story remains true. And I just anytime I get to engage with y'all and build this community to be you know, bigger and better, I'm happy to be there.

Rich Armstrong 44:39

Well, great, thank you. Thanks, Tim.

Steve Baker 44:41

Thanks a lot. You can learn more about the National Center for Employee Ownership at And it's filled with people like Tim Garbinsky who are just awesome and passionate about the subject. And we're also big fans. So, let's keep the conversation going guys, send us your questions, your stories, your best practices, your challenges, and your victories. And remember, you are not alone. That's what this community is all about. That is capitalism at its best. Thanks for joining us, and we'll see you next time.

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Topics: Employee Ownership, Leadership, Community, esop, COVID

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Hosted by Rich Armstrong and Steve Baker the Change the Game podcast highlights true life stories of organizations influencing positive change by doing business differently. They’re teaching people how business works and closing the gap between the haves and have-nots. It’s capitalism at its best. Inside each episode, you’ll discover stories of entrepreneurs who are Changing the Game.

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