I lead the ESOP practice at KeyStone Executive Search. When I say this to someone I’m meeting for the first time, I’ll often get a puzzled look along with a follow up question; “Really, an executive search firm that specializes in ESOPs?
It’s true that specializing in ESOPs is atypical in the search industry. Most search firms choose to specialize in an industry (Consumer Packaged Goods, Manufacturing, Distribution) or a functional area (Finance, Operations, Sales). Generally, they do this because there is something unique about the sector they serve i.e. a senior finance position is different from a senior sales position. Likewise, a leadership position at a Consumer Goods Company requires different skills than a leader in a Distribution company.
This is the same reason KeyStone has an ESOP practice. ESOPs are different and because they are different, they require different types of leaders than other companies. Evaluating and Hiring Leaders for your ESOP.
Unique Culture & Unique Leaders
Over time, ESOPs develop distinct cultures. This is due to the fact that all employees are actually owners. Employee owners interact differently from non-owner employees and they expect (and deserve) certain things from their leaders. Successful ESOP executives must have a few different qualities than their non-ESOP counterparts.
- High Self-Esteem/Self-Awareness
- Consistent Communicator
- People Developer
- Strong Listener/Open-Minded
Identifying executives who live up to these 5 essential ESOP qualities along with having all the other skills and competencies makes ESOP executive searches complex and unique.
Because ESOPs tend to be more inclusive and participative cultures, the process for choosing a senior leader is also unique. Generally, more people are involved in the decision at various levels of the company.
While having multiple people involved in a hiring decision tends to lead to a better outcome (two heads are better than one), it also adds to the difficulty of reaching a decision.
This is even trickier when the ESOP is hiring a new CEO. Often ESOP boards are at least partially comprised of current employee owners. As you might imagine, if you’re sitting on the board and you’re being asked to hire your boss (or your boss’s boss), there’s a lot of pressure and often a good deal of anxiety. Not only are you hiring someone you will report to, but you’re also representing the rest of the employee owners in the company.
Over the many years and dozens of senior level searches KeyStone has conducted for ESOPs, we’ve created a process that keeps this anxiety to a minimum and ultimately leads an ESOP to the best possible decision for the company and its future.
If you have questions about hiring for your ESOP, give me a call or shoot me an e-mail. I’m happy to talk and help however I can.
Bruce Cooey, ESOP Practice Leader
+1 (605) 366-2286