Organization Background
Essential Ingredients (Ei) was founded in May 1996 in Augusta, GA. The company, which distributes chemicals and other supplies to the cosmetics industry, has been 100% employee-owned since 2011. More recently, it has become part of a holdings company called Cathedral Holdings. With a stated purpose of “being a blessing to others and inspiring others to be a blessing as well,” the Essential Ingredients team is driven to live out this purpose for decades and generations to come.
Challenge
When co-founder and chairman Kris Maynard and his partners decided to sell 100% of their company to an employee stock ownership plan (ESOP) in 2011, they were excited about the future of their business. But then the company went into a financial nosedive—what Maynard calls their “ESOP Death Valley.” Maynard admits that he had played a part in running the company in a way where employees had been protected from the financial challenges the business faced. “We kept our P&L in a locked vault,” he says. Adding to the stress was the fact that the company had taken on bank debt for the first time ever to finance the buyout.
Solution
When Maynard first learned about The Great Game of Business® (GGOB) in 2014, he immediately recognized that it could help associates inside the business to think and act like the owners they had become. By embracing financial literacy and transparency, and creating shared goals, Maynard hoped the Ei team could achieve better engagement among employee-owners in performing against their annual budget. They began playing Great Game™ companywide in 2016.
Results
Ei always had a great culture. But playing GGOB has helped the entire team more fully embrace their core values, which include acting with integrity and respect, providing opportunities for growth and development, achieving excellence through teamwork, fostering a fun and enjoyable workplace, striving to be a blessing every day. “We are all employee owners, and, as such, we believe that input from all levels is crucial to our success,” says Justin Jordan, who took over from Maynard as CEO. That level of teamwork also continues to pay off in terms of financial results as well: Ei’s revenue has grown on a compounded rate by 12%, while EBITDA spiked by 18%. Perhaps more importantly for the employee owners at Ei, shares of their ESOP have grown at a rate of 28%.
“It’s such a comfort to have several layers of people involved in setting up our five-year plan. We understand what the market is doing and we’re coming up with plans to deal with what’s coming rather than just blindly doing your job day-to-day. With GGOB we know where we are going as a business and it helps understand what it means to be a true owner in the business.”
~ Mary Susan Robertson, IT Business Analyst
Pain Points and Opportunities
It would be an understatement to say that supply chains have been chaotic over the past two years. But Ei has made it a top priority to ensure that their customers can rely on them whenever they need them. “We’re probably unusual in that we carry eighty days of inventory to ensure that we can be ready for our customer the same day they place an order,” says Jordan. But Jordan also admits that delivering on that promise has come at a cost: the sense of burnout and mental stress among the team. “Our VP of sales made the comment that he had never seen a company perform so well financially but carry so many burdens,” says Jordan. So finding ways to create mental breaks—from taking a walk to reading a book—has become a priority for the entire company.
“It was so powerful to have 60% of the employees involved in different groups sitting down and thinking about our strategy and five-year plan. Everyone has a say, which just reinforces that we are employee owners and what we say matters to the company. That’s really helped us deal with the Great Resignation because people want to grow here with our goal to become a 100-year-company.”
~ Courtney O’Brien, People Operations Analyst
MiniGame™ Highlight
After pausing MiniGames for the past two years of the pandemic, Ei kicked off a new game built around teaching personal finance with the help of Dave Ramsey’s SmartDollar program. The aim was to help the team understand budgeting, debt reduction, investments, building wealth and giving generously from a personal level to positively impact each associate’s life. The company also saw the potential benefits as teammates gained a better understanding of budgeting and financial benchmarking. As an extension of Ei’s purpose of being a blessing to others, the company purchased a program subscription for a local women’s shelter they serve. Each volunteer, staff member, and shelter resident now has the opportunity to use the program to improve their financial position.
What’s Next
One of the areas the Ei team has targeted to improve in the coming year is finding ways to encourage frontline team members to create MiniGames on a more organic basis. “We’re not sure why but the term MiniGame has become something of a four-letter word around here,” says Jordan. “Part of the trap may be the name or the amount of creative energy we think we need to apply to name the game and create a fancy scoreboard. We just need to find new ways to get folks engaged and committed to playing them with the same energy we did back in 2015,” says Jordan.
“When I came here, I had never before worked for an organization that shared financial information and communicated it to everyone on a weekly basis. The discussions about why things are happening and what we can do to cope with changing market trends is so powerful. It also challenges us to be as accurate as possible with our forecasts and rely on each other to get the best answer possible. We want to know what’s coming around the next corner not just for ourselves, but for the ESOP, which impacts everyone.”
~ Ali Hasnain, Financial Analyst
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