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The Innovations in Employee Ownership Award (the "Innovations Award") is an annual award recognizing creative ideas that help make employee ownership stronger, and publicizing those ideas so others can learn from them. Innovations can deal with employee participation, entrepreneurship, communication programs, education, plan design, or other ideas that strengthen employee ownership.
The Innovations Award is sponsored by TEOCO Corporation. TEOCO, an acronym for "The Employee-Owned Company," is based in Fairfax, VA: see www.teoco.com. The award is administered jointly by the National Center for Employee Ownership (NCEO) and the Beyster Institute (BI).
The application for the 2009 Innovations Award will be available in November 2008 on this page and on the Web site of the Beyster Institute.
Know a company that's a good candidate for an Innovations Award? Tell us! Send a note or call Loren Rodgers (LRodgers@nceo.org; 510-208-1307) or Martin Staubus (mstaubus@beysterinstitute.org; 858-822-6011).
Even the concept of Cedarwood School is innovative: "we've all heard of doctors' hospitals," says CEO and founder Kathy LeBlanc. "Why not a teacher-owned school?" Cedarwood has 375 students in preschool to seventh grade at its campus in southeastern Louisiana, and 32 faculty and staff members participate in an ESOP that owns 100% of the company. Through her experience with the ESOP, ownership has become central to LeBlanc's idea of what schools should be: "teachers make countless decisions that affect the quality of education-it only makes sense for them to take ownership, literally, of their own schools." At Cedarwood, ownership isn't only about shares and education isn't just about students. Faculty and staff receive extensive business literacy training and the board of directors held a "fishbowl" board meeting: an actual board meeting held on stage, with employee-owners watching the discussion and the decisions. The school weathered Hurricane Katrina thanks in part to the strength of its employee owners and the systems and governance structures created in connection with their ESOP.
In April 2000, just after it spun off from its parent company, ATA Engineering's 28 founding employees, from the engineers to the receptionist, owned the company through a combination of direct ownership and options. Not content with that system, the company crafted a complex transaction involving recapitalization, cancellation of options, and issuance of new options. The results was an S corporation with 100% ESOP ownership and an active, broad-based options program. To preserve S corporation status, the company offers a commitment to buy back options before exercise at their "in the money" value. ATA's management is project-focused; the company President may find herself reporting to a project director with two years of tenure, so the company takes recruitment seriously. ATA hires new employee-owners only when a broad-based interview team reaches a consensus decision that they are "too good to pass up." To preserve the sense of a company-wide team, the compensation of every engineer, including the entire senior management team, is driven by a single formula. ATA does not have a separate executive compensation system.
HCSS is a fast-growing, industry-leading software company that serves the construction industry. HCSS works hard to make sure that employees do their jobs with an awareness of how they influence success in the business. The result is fiercely loyal customers and employees who provide a level of service unique in their industry because they learn, act, and work with the passion of owners. That passion comes from extensive open-book management and business literacy training at HCSS University, and it also depends on a three-tier reward system that gives employees a wide-spectrum ownership interest. The short-term incentive is a cash bonus program. Stock appreciation rights (SARs) cover the medium-term, and the ESOP rounds out the picture. Recognizing the key role that management plays in nurturing an ownership culture, HCSS invested heavily in management training, with a 50 hour, 12 week course for managers representing over a quarter of the company's employees. Additionally, every employee participated in a two-day personal-development leadership course.
Judges for the 2008 Innovations Awards were:
Jeanette McTegart: CALIBRE Systems
Loren Rodgers: National Center for Employee Ownership
Randolph Rowland: Team Work, LLC
Martin Staubus: Beyster Institute
For information about the 2007 and 2006 winners of the Innovations Award, see the bottom of this page.
The award is open to any employee ownership company that promotes the spread of employee ownership plans or the development of best practices in employee ownership. (TEOCO Corporation is not eligible to win.)
For purposes of this award, "employee ownership" includes:
Companies may self-nominate for the Innovations Award by completing an application, available on this Web page in November 2008. Companies may also be nominated by third parties, although the application must include permission from an authorized representative of the nominated company accepting the nomination.
To select the prize winners, including the grand prize winner, the Awards Committee will evaluate each nominee on each of the following criteria:
Anything the nominee has done or is doing is eligible for consideration, except activities for which the nominee has already won an Innovations Award. The Innovations Award is NOT limited to activities in the past year.
In addition to the Innovations in Employee Ownership Award, which will be presented to a representative of the winning company at the NCEO/Beyster annual conference, two representatives from the company winning the grand prize and one representative from winning companies will receive complimentary conference registration.
All winners will receive prominent publicity, including the NCEO and BI websites, written materials from both organizations, and ready-to-use press-kits announcing their accomplishment. NCEO and BI will publicize the winning companies and facilitate dissemination of the ideas behind the winning entry so that the ideas can be spread as effectively as possible.
The 80 employee owners of Cal-Tex make aftermarket products including paint, fabric and leather sealants for automobile dealers, but their most impressive accomplishment is showing how much a small visionary company can accomplish. Rather than an aspiration, the Cal-Tex statement of values and purpose actually do permeate the internal company culture and relations with customers. One of the company's core values is humility, which management exemplifies by shifting an astounding level of decision making to the work force. Aided by intensive daily sharing of financial data, employees set their own production goals in accord with the company's quarterly goals. Those who meet their goals gradually achieve the status of Certified Employee Owner (CEO), a status that gives them the right to attend company planning sessions regardless of their job titles. The judges wrote "this company's employee owners engage themselves in their company's success profoundly and personally-the level of creativity, connection and exuberance at Cal-Tex amazed us."
Some companies lead from the head, some from the heart. New Belgium Brewing does both. The company offers an emotionally rich induction ceremony for new employee owners-people share stories from their personal lives and their experience at the company. They leave the ceremony with a visceral attachment to the company and to their fellow employee owners. At the same time, the company takes a head-on, systematic approach to one of the touchiest issues in employee ownership: employee involvement in management and governance. New Belgium specifies the decision making roles and process for a number of types of decisions, and it automatically includes a member of its employee committee on the board of directors and the company's strategic planning team.
Employee ownership is not a new idea; neither is branding. But never has a company brought the two together as powerfully or comprehensively as North Highland. The company, which provides management and technology consulting services, used an extensive process and involved employees at every step to derive its internal ESOP brand: "Own your life. Own your career. Own your company." This brand permeates all major processes at North Highland, including employee recruitment, policy and benefit evaluation, employee communications, marketing, and training. Employee owners have a ready answer for what makes their company different, and the ubiquity of the brand has created a different work-life model that centers on the individual employee.
The only public company among this year's award-winners, Paychex is well-known as a provider of payroll, human resources, and benefits solutions to small and medium businesses. With over 11,000 employees and $1.6 billion in revenues, Paychex was named one of Fortune magazine's "100 Best Companies to Work For" in 2007. Its multi-pronged equity compensation program includes an employee stock purchase plan, a company stock fund in its 401(k), and a broad-based stock option program that covers well over 90% of the work force. Employees take extensive advantage of the ability to invest in Paychex, and the company in turn invests in employees with award-winning employee training programs.
With over a thousand employees, Pizzagalli Construction is known for the facilities it builds. More quietly, it has created an internal structure where ownership has become an integral part of day-to-day operations as well as its big-picture strategic planning. The company developed explicit ownership-based criteria for recruiting, training and promoting employees. Job descriptions, for example, spell out concrete ownership behaviors-and these expectations help determine who is promoted. On the strategic level, Pizzagalli's 2006 retreat for its 200 managers focused on promoting ownership culture. The company also engaged over 400 employees in the analysis that led to the company's strategic plan development. With a bilingual ownership-oriented newsletter, Pizzagalli represents the information-sharing, inclusive, task-oriented best of employee ownership.
Reflexite Corporation
www.reflexite.com
Avon, Connecticut
Reflexite, an employee ownership company since 1985, has consistently been a pioneer in ownership management practices and a leader in the employee ownership community. This award, however, recognizes Reflexite's sophisticated approach to integrated ownership, involving not only its ESOP, but a stock option program, a monthly cash "owners' bonus," a global ESOP, and a recently introduced stock purchase plan. This extremely rare combination of short-, medium- and long-term ownership programs complements an extensive education and information-sharing system and ambitious employee involvement activities.
CALIBRE
www.calibresys.com
Alexandria, Virginia
CALIBRE is a management and technology services company that brings impressive systems-level thinking to the development of its own employee ownership. CALIBRE offers 16 coordinated communications vehicles through a variety of media. One member of its active employee committee sits on the board of directors. CALIBRE also ensures continuous improvement in its own internal operations with structured organizational feedback-partly in response to an employee survey, CALIBRE recently amended its plan to accelerate its participation and vesting schedules. This Innovations Award recognizes CALIBRE for integrating best practices in governance, communications, plan design, and employee feedback into a coherent package.
HDOS Enterprises
www.hotdogonastick.com
Carlsbad, California
Celebrating the 60th anniversary of the founding of its first Hot Dog on a Stick restaurant, HDOS Enterprises is receiving the Innovations Award in recognition of its success in creating an ownership culture under conditions considered impossible by many experts. Despite its multiple locations (over 100 stores in 15 states), size (over 1000 employees), industry (known for high turnover rates), and the average age of its work force (19 years old), HDOS Enterprises is a 100% ESOP-owned company. Its carefully tailored training program conveys a profound respect for the abilities of its employees, and the company itself offers an opportunity for advancement and personal growth.
SmithBucklin Corporation
www.smithbucklin.com
Chicago, Illinois
At the top of its field, SmithBucklin is the world's largest association management company. On June 24, 2005, SmithBucklin became 100% employee-owned in a transaction that included a one-time opportunity for employees to transfer 401(k) assets into the new ESOP. Judges noted a number of innovative features of the transaction and the plan design that resulted in impressive participation rates. SmithBucklin also offers an internal market for company shares and governance practices that will help redefine the best practices for the future. SmithBucklin was nominated for the Innovations Award by the Principal Financial Group.
Copyright © 2008 by The National Center for Employee Ownership (NCEO) (phone 510/208-1300; email nceo@nceo.org; WWW http://www.nceo.org/). All rights reserved.
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