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From Employees to Owners at Carris Reels

Loren Rodgers

May 2002

How do people go from being work-hardened employees to owners and managers of their own company? Ask the folks at the Carris Community of Companies.

They’ve been told that employee-ownership doesn’t make sense for industrial workers like them--better-educated and better-paid employees are more likely to think and act like owners.

But now, six years into employee ownership, Carris is making substantial progress toward their corporate goal to become "employee owned and employee governed."

Carris Reels was founded by Henry Carris 50 years ago. His son Bill Carris took over as president and sole owner in 1980. In 1995, Bill began transferring stock to an ESOP, which now owns 43 percent of company shares and will continue to acquire shares until it owns 100 percent of the company. About half the work force is in Vermont, but major facilities are located in nine other states, as well as Mexico.

This article shares some of the lessons that Carris has learned about putting ideas about employee ownership into practice.

Ask "Why Not?"

When the company was drafting the ESOP documents, Bill Carris specified some features of the plan himself and let employees figure out the rest. "Why not have employees design as much of the ESOP as possible? I don’t care what the allocation formula is, and they’re the ones who are going to have to live with it," says Bill.

An employee-management committee worked out a plan, challenging standard ESOP procedure in determining stock allocation. The committee developed three different proposals that each balanced wages, years of services, and an equal allocation. They put the question of which ratio to choose to a company-wide, one-person-one-vote election.

Voting continues to be a valuable tool for the company. For example, when changes were needed in the health benefits plan, employees voted on which of four options best met their needs. Why not?

Write It Down

In 1994, before the transaction was finalized, Bill Carris put together a booklet with his humanistic and business-like vision of where the company was headed. Now anybody who is interested knows why the ESOP was adopted and what their company may look like in the future.

Take Risks

Every employee at Carris votes for a representative, one for every 50 employees, who sits on the company’s Steering Committee together with corporate and plant management and helps guide corporate policy. Putting such power into the hands of elected employees was a big risk, one that the company is committed to staying with, convinced that the group is essential to the company’s vision and its success.

Follow Through

Leaders should be sure they can follow through before committing. For example, employees are invited to submit petitions to the Steering Committee through their representatives. The committee could not respond to all the suggestions, and many people were disappointed. "In retrospect," says Karin McGrath, director of Human Resources at Carris, "I wish we had warned people that it might not be realistic to expect more than five or ten percent of suggestions to be acted on right away."

When You Gather Input, Provide Feedback

Carris has asked employees to fill out surveys and used the information to guide its process. Last year, employees filled out the Ownership Culture Survey™, an attitude survey designed by my firm, Ownership Associates, for employee-ownership companies. About three weeks later, employees saw the survey results as part of a training program that built directly on the data. The quick turnaround gave employees the sense that their voices were heard.

Plan Ahead

Becoming an "employee owned and employee governed" company is a long-term process. The company is planning the concrete steps—including training, gathering input, legal documentation, and lots of committee work—with the goal to build a management and governance structure that is durable, inclusive, and business-savvy. They have been working with Ownership Associates on an influence allocation chart that will help employees productively participate in making decisions.

The Carris Community of Companies is making progress along a long road. Not all employees feel like owners yet, but they overwhelmingly think that ownership is important. Despite obstacles, the company’s leadership and its workforce are working hard to build a company where everyone is proud to be an owner.

For questions about the Carris Community of Companies, contact Karin McGrath at 802-773-9111, or by e-mail at karin.mcgrath@carris.net.

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