By Chris Budd
Sometimes owners who have sold to an EOT forget that they are no longer owners.
Likewise, leadership teams in newly employee owned business don’t always realise that their role is different than stepping into the shoes of the founder.
Truly letting go can be hard for founders; truly empowering can be equally hard for leaders who have been waiting to take over.
I’d like to share a few examples of good and not so good practice in this area.
Owners Letting Go
One owner told his leadership team of the plan to sell to an EOT, and then embarked on the Eternal Business Programme. He is a particularly enlightened business owner (as well as the EOT plan, he is a BCorp expert), and has spent many years introducing far reaching methods for collaborative decision making.
One of the senior employees came to him about a conversation they had had a year or so ago, whereby the senior employee would be made a director. The employee pointed out that he had performed well, and now deserved the position. The owner agreed, and shared the news of the forthcoming appointment to director with the leadership team.
The response of the leadership team was, shall we say, less than positive! They had been working with the owner on the transference of control, and now the owner appointed someone to director without so much as consulting them.
The Entrepreneurial Spirit
This is the sort of decision that owners are used to making. The entrepreneurial spirit is so important in the early days of a business, and owners (and, in particular, founders) must be nimble and agile in their thinking.
This is, however, a characteristic that needs to be reined in when the business is owned by the EOT. This is not always easy, when instinct takes over! In this instance, the decision to make the appointment would not have changed. Involving the leadership team in the process would have helped them feel the owner was genuine in his desire to let go, as well as give them the chance for valuable experience.
This challenge is not only for the former owner, however. Sometimes it is the new leadership team who think their role is to take over running the business.
For example, there is the company who became owned by EOT amidst great fanfare, with lots of plans for employee engagement. Six months later, the leadership team sent an email to all employees advising that they were moving office.
There had been zero consultation, and the employees were less than impressed!
This can be particularly hard for leadership teams that have been waiting for founders to let go – maybe even had thought they might get to be the next owners – and then seen the business sold to an EOT.
Transference of Control
The process of preparing a business for the sale to an EOT is the simultaneous letting go of control by founders, and the taking of control by employees in general and leadership teams in particular.
It can be rather like the school disco, boys on one side girls on the other, each waiting for the other to make the first move. If a founder is complaining that employees are not ‘stepping up’, then it may be because they have not created the space to allow this to happen.
If leadership teams are complaining that the founder has not let go of control, it might be because they have yet demonstrated they have developed the skills to give the founder confidence.
In reality, both processes needed to happen at the same time, little step by little step. But they do need a conscious effort by both parties to make it happen.