EP35 - Speaking into the Gap. Ownership Identity, Capability, and the Leader’s Voice

In this episode, the Journey to an ESOP podcast speaks directly to founders who feel the weight of leadership and wonder how their team will successfully shift into an ESOP model. Through a blend of personal story and practical insight, Jason explores how identity, encouragement, and intentional leadership can help bridge that gap and prepare both leaders and teams for a confident, sustainable ESOP transition.

Transcript

[0:14] Welcome back everyone to the journey to an ESOP and Beyond podcast where we seek to make all things related to Employee Stock ownership plans both accessible and understandable I'm Jason Miller your host today and I'm glad you're here. Today I want to dig into something that sits underneath nearly every ESOP transition and honestly every ESOP company after the transition too. The gap between who someone is today and who they can become and the leaders who help people bridge that Gap. Let me share how today's episode came to mind a few episodes ago if you recall McKenzie and I tackled 5 myths around esops kind of Rapid Fire Styleand 1 of those myths was employees just won't get it. My immediate response wasnever underestimate people. But the more I talked the more I realized that the issue is certainly isn't intelligent it's not even ignorantit's really identity. And most employees aren't really starting from a place of ignorance they're starting from a place of disbelief.

[1:29] They've always been the employee, if you put yourself in their shoes and their mindset and their circumstances the Gap that I'm talking about comes into focus a little bit clearer. Some of them may have dreamed of Entrepreneurship themselvessome may have shelved itsome Let It Fade, and then 1 daythrough an ESOP ownership instantly becomes realbut identity.

[1:59] Identity takes time.

[2:02] Understanding really grows and steps not in leapsand that realization brought me back to something that happened on the first day of my corporate job. But first a different story, so I'm the little brotherby a number of years uh in years become less important the more you have under your belt but the 7-year Gap is ginormous when you're 10 and 17. Saturdays were work days for us but in the afternoon after chores my brother and I would sit around and watch TVand I I really think the older that I get and look back on this that he didn't want me around sometimes or at least wanted me to become disinterested uh in vegging out in front of the TV, so that he could watch the Saturday afternoon movie that wasn't his kid-friendly as you know my parents would have wanted it to be and you know Mom would say can't watch that uh with with him around and so I think on purpose uh that he chose the most boring thing that he could think ofwhich were PBS cooking shows, some of you may remember the Frugal Gourmet or Yan can cookmy brother thought that I'd leave and go play somewhere else, but for any of you who are the younger siblings you know that the time was less about what was on the TV for you than it was about spending time with the person you looked up to most in the world.

[3:30] Obviously his plan backfired uh and it kind of set the stage for something else that no 1 could see coming I I really couldn't um I like looking back on this now so let's fast forward a dozen years or so and pick up on that first day of my orientation.

[3:48] So we repaired up with a partnera mine was Michael Valen, I reached out to Michael to get his permission to share this memory thank you Michael and if any of you happen to know him you'll know how true this story can be and how representative it is of of of him and how he speaks to people and into people, so the task the Icebreaker that we had you're sitting around a bunch of new folks uh our first day first week uh at at the bank to learn about each other and get paired off uh and then the goal was to introduce the other person to the group so you spend a little time you share your stories uh and then everyone goes around and and then uh you know shares what they shared with you as as you introduced the other person, so I I told Michael a few simple things about me, um and some of those because it had to be something what do you like to do what are your hobbies and uh we we got into this I I like I like to cook I like to play around in the kitchen, uh I grew up watching The Frugal Gourmet and yang Ken Cook because my brother controlled the the TV like a tyrantand nothing nothing extraordinary just just a hobby.

[5:00] And in that time uh because this was over in Orlando I was actually staying for that uh those, overnights instead of in the hotel we had family in the area so I I would stay with my wife's grandmother um and in the evenings I'd watch the Food Network uh and so that was what was on my mind and why this came up in this context.

[5:24] So when it came time for me to introduce Michael I gave kind of a neat accurate summary is this background yours is education here's his work history um that I you Fleet for feet feet for fleet Fleet Feet I I can never remember uh the the company that he had worked for before we we came together at at the at the bank but only that it was like Foot Locker. Then Michael stood up to introduce me. And he declared with complete confidenceJason is a Gourmet Chef.

[6:07] So I had a moment of Terrorand I I looked at him probably uh you know a gape and the the room reacted with a few ooze and as and every head turned toward me uh and of course you get the questions people were asking like what what's your specialty and what's your favorite recipe and you know what what are you going to be making this weekend um tell tell us some more about thatI kind of laughed awkwardly through it and shrug Shrugged It Off, but Michael was just grinning from ear to ear.

[6:47] And have never forgotten that moment. He spoke something into me that wasn't true yetbut it wasn't impossible either, he spoke into a gap that I didn't even know existedand later that night I remember thinkingwhy not. Why am I not a Gourmet Cheflike I could be if I try. And so I began experimenting in more daring ways con constantly, I named dishes with numbers that made no sense uh called them experiment whatever 147 some were great and some were horrific. Uh my oldest son likes to hear the story about the pork chops that I marinated in V8 splashI kind of let you guys wonder whether that was on the great side or the horrific side of things. But I learnedI learned a lot. And years later when each of my kids ended up with different allergies with different severitiesI had to cook a lot of things from scratch.

[8:01] So that we could control the ingredients and we can control what goes into it and then make sure that it's still healthy and nutritious and uh also probably most important to anyone who consumes and eats food like that it that it was good that it was delicious, but that confidence and that experimentationbecame invaluable to my future. And today I'm certainly not a Gourmet Chef um but I do makegreat foodand I've never forgotten what Michael did. He named a capability that I hadn't claimed yet.

[8:47] In that moment has helped shape the way that I think about transitions leadershipand really ownership.

[8:59] Because most employees don't lack intelligence they don't lack abilitythey don't lack potential. They lack someone sayingyou can do this. You can carry this pieceyou can grow into this level of responsibilityyou can be a Gourmet Chef. You belong in this story.

[9:27] People rise when someone they trust speaks into the Gap where they stand and where they could stand.

[9:36] That's where esops come back inFounders and leaders actually do this more than they realize, you encourage you coach you develop peopleyou promote from within you create opportunity, it's part of why your business is even healthy enough to consider an ESOP as a transition. Here's kind of the tension the leap fromyou employee you're fantastic at your role. Toyou can carry pieces of my rolefeels different.

[10:16] It's not about capabilityit's about identity transfer. And in an ESOP transition that shift becomes more visible not because the team is lacking but because the founders role your role, typically a blend of like instinct and relationship history and pattern recognition and years really years of accumulated judgment, and you do it flawlessly seamlessly automatically.

[10:51] Nobody has ever expected to replicate that 1 for 1. I think a lot of you may realize that and may even say to yourselves well no 1 can can do what I do know 1 can replace me. And if I'm not here then what.

[11:14] Had a conversation recently with uh a couple of Founders in this this scenario and it is very common you are in great companywhen you think about how has anyone ever going to replace me. How are they going to do what what I douh and, we we always use the uh the the wearing of the hats like how many hats do you wear and as an owner you wear a ton of hats throughout your your growth and throughout your the life cycle of your your company, uh and you're wearing a lot of them today and you put 1 on and take 1 off sometimes you're wearing all 12 of themand what I often say in this is that you should consider dividing your hats, and a lot of really good advisors uh would say that too because of the uniqueness what you've been able to build No 1 can be you. And it might take more than 1 person to make up for what you bringto your Enterprise. And this isn't a failure to develop people because you can't find the the 1 or the the successor. But it's because the founders role itself wasn't built as a transferable job description.

[12:41] It really evolved organically from day 1but here's the beautiful part. When responsibilities become visible and intentionalpeople step toward them. They begin seeing themselves in the future story of the companythey start connecting the confidence that they already have to responsibilities they've never carried. It's really important. To think about what you dohow you do it and how that can become a system a process a definition a a role or part of a role. Let me repeat that 1 part when responsibilities become visible and intentional people step toward them.

[13:39] When again they start connecting the confidence they already have to responsibilities they've never carried that you're going to be transitioning as you look to your next chapter, that's going to speak into them in a way that's different than you may have considered before. And that connection doesn't happenin a single meeting it doesn't happen because the ESOP closest and it it definitely doesn't happen through an email or memo it happens gradually. Through repetitionmentorship delegation and really small wins that accumulate into identity.

[14:25] And that's what allows people internalize the mindset of an owner rather than simply receive the paperwork of 1.

[14:35] And this part's really importanteverything I've just said isn't only about preparing for the transaction it's about what happens after it. ESOP companies Thrive when the culture continues to speak into people like Michael did to menot just into their tasks but into who they are into their identity. After the transaction employees still need to hear you have a voice here. You're part of what we're buildingyou matter to how this company grows. You're allowed to grow into this ownership role.

[15:19] Because the transition to ownership isn't completed at the closing table it begins there.

[15:28] I said to someone uh recently after the close of the ESOP welcome to the starting lineum and for for those of you that have gone through that before um you can imagine the the uh extra lift kind of the carry of the transaction on on top of of running a very successful organization uh and it's not a Sprint to the Finish Line really I don't want to give you uh that that idea or an owner's Marathon um but it is, um that when when the transaction occurs when we're at the closing Table after the closing table um you think that this chapter has has closed uh that the we've completed the work we've done the task uh and really again it that's where it begins, and that's that's the starting line. So the samereinforcement that helps employees understand what ownership is before that before the ESOP. Is the same reinforcement that strengthens the company for its futurefor decades.

[16:50] ESOP sustainability is identity sustainability for individuals for new employee owners. The company is it flourish or the ones where leaders keep calling people upward. Or capability is named where potential is Affirmedand really where responsibility is shared with intention.

[17:18] Whether you're a Founder preparing for a transition or a 10-year-old ESOP company building your next generation of leadersspeaking into the Gap is what keeps the ownership mindset alive and thriving.

[17:36] So if someone says Ah employees just just won't get it I go right back to Michael introducing me as a Gourmet Chef. He spoken to a future version of me I hadn't considered yetand that's what esops give people. A future version of themselves they never imagined or an ownership dream that they stopped believing in for themselves. Ownership becomes real at the moment of transaction, but ownership becomes internal When leaders and peerssayyou can grow into this. You're part of thisyou matter here you've got thisnever underestimate people. Most of them were just waiting for someone to speak into that Gap and help them step into the identity that they've had the capability for all along.

[18:36] Thank you for listening todayI always say that but I mean it. If you found value in this episode please share with a friend with another founder with another ESOP company with anyone who needs to hear it, I'd love to hear from you so please reach out to us at journey to an ESOP, calm and I will see you next time here on the journey to an ESOP and Beyond podcast thank you.