Subscribe
Share
Share
Embed
Creating connections is essential to building a community. It’s even more important when the people you’re trying to connect with aren’t in the same location. Businesses and companies have always found geographic distance to be a challenge to building a really great community-oriented culture. At Empowered Ventures, the same challenge holds true, which is why we decided to start Empowered Owners, the podcast that takes you inside Empowered Ventures.
In each episode, CEO Chris Fredericks will have a discussion with one of our employees to discover and highlight their distinct personalities, perspectives, and skills while also keeping you in the loop with exclusive news, updates on company performance, and a glimpse into the future plans of Empowered Ventures. Not only is this an opportunity for Chris to learn more about our amazing employee-owners, but it’s also an opportunity for you to hear regularly from Chris and others from within Empowered Ventures.
00:00:00:09 - 00:00:22:04
Casey Grisez
Hello everybody, and welcome to another episode of Empowered Owners, the community Building Podcast by and for the employee owners of Empowered Ventures. Join us as we take you inside the world of employee ownership, discovering the stories, insights, and sometimes surprising adventures in a family of businesses where everyone's an owner. Now let's dive in.
00:00:22:06 - 00:00:54:19
Chris Fredericks
Welcome to another episode of Empowered Owners. I'm Chris Fredericks, I'm the CEO of Empowered Ventures. Joining me today is Casey Grisez, one of my colleagues here at Empowered Ventures. We're excited to dig into some fun Esop related topics today together. So recently we had an EV Esop update meeting with all of our diverse from all of our companies that joined remotely, and we shared some information about how EVs, Esop is doing and some different kinds of information about the Esop and how things work.
00:00:54:21 - 00:01:22:09
Chris Fredericks
So we thought it'd be fun to, you know, follow that up with a more in-depth conversation about some components of what we talked about. One of the things we talked about was the newest share price. So each year, you know, the EV, Esop is revalued and a new share price is issued. So we're going to dig in a little bit here shortly to how that process actually works and what typically goes into the determination of a share price.
00:01:22:11 - 00:01:42:11
Chris Fredericks
But first, to kick it off, I want to kind of formally welcome you, Casey. You've been with EV for about a year now ish, but you and I know each other longer than that. And you've been helping with, you know, a lot of stuff here at EV over the last year, but thought it might be a good opportunity first for you to, you know, introduce yourself to all the EV ers who might not know you yet.
00:01:42:12 - 00:01:46:00
Chris Fredericks
So who are you? Casey?
00:01:46:02 - 00:02:06:00
Casey Grisez
How much time do you have now? So I, yeah, I joined EV, about a year ago. The the finance and marketing associate. I think that's the order of the title. We have finance and marketing associate. So wearing two hats for the organization. But Chris and I go back with, I think 2016, 2017, maybe. And we'll talk about it.
00:02:06:00 - 00:02:30:22
Casey Grisez
But it's fitting for this conversation that I spent about five and 5 or 6 years doing, business valuation. So I worked on the TVF valuation before it was EV eight. And just through, you know, staying in touch with Chris through the EV formation and, and all of kind of the steps along the way. Yeah. There was a point, you know, what, about two years ago, we started talking and there was a need for both some finance up and some marketing up.
00:02:30:22 - 00:02:36:16
Casey Grisez
And you are crazy enough to do. Let me let me join. And it's been it's been great ever since.
00:02:36:18 - 00:02:55:14
Chris Fredericks
Yeah. It's been awesome. And I mean, just to just to reiterate a couple of things. You you actually worked on the TVF valuation many years ago, and that's how we first came to know each other. And then you kind of took some other career paths, you know, in between then. But we stayed in touch. And you have a unique brain.
00:02:55:16 - 00:02:57:19
Chris Fredericks
I think that's a compliment.
00:02:57:21 - 00:02:58:16
Casey Grisez
Your title.
00:02:58:20 - 00:03:19:18
Chris Fredericks
You know, describes it. You know, you have an interest in both kind of finance stuff and numbers and, and all that. And then you also have this kind of marketing brain. But I, I would put it differently. I mean, I think you put it differently. How would you describe why you have these interests in these two different kind of typically not combined kind of skill sets in a job?
00:03:19:20 - 00:03:39:08
Casey Grisez
Yeah. No, I think I was just about to jump in and say, I think I view it as it's storytelling, just in two different languages. Right. So on on the marketing side, it's telling stories about our people, the businesses, employee ownership, its impact, you know, kind of all all of that side of it. When you get an A number is it's telling stories about a business just in a, in a different way.
00:03:39:11 - 00:03:56:13
Casey Grisez
And even a, you know, I know most people listening to or watching this have never seen a valuation report, but it's, you know, anywhere 80 or 100 or 120 pages. You obviously there are numbers in it, but a lot of it's words, it's it's talking through, you know what what the numbers need, what story the numbers are trying to tell.
00:03:56:13 - 00:04:16:20
Casey Grisez
And that's, you know, if you look at the company's financials, either historical or forward looking, there's a story there. It's customers changing in and out. It's sales efforts. It's new products, it's equipment investments, whatever is driving those numbers. There's a story behind it. So it's yeah they're they're a little bit different I think in how the stories are expressed.
00:04:16:20 - 00:04:19:23
Casey Grisez
But but still I think at the end of the day storytelling.
00:04:20:00 - 00:04:42:04
Chris Fredericks
I think that's awesome really helps kind of paint a picture of why you know, how people can relate to the numbers and the financial performance of a business differently than just kind of. It's easy for the eyes to glaze over when you just see a huge list of numbers, but when you start to think of it as or what's the story these numbers are telling me, that can really kind of change the relationship too, to the numbers themselves.
00:04:42:09 - 00:04:42:20
Chris Fredericks
Yeah.
00:04:42:22 - 00:05:03:24
Casey Grisez
Absolutely. And I think for anybody in a business and understanding, you know, you lost a big customer or you gained a big customer, you know, there was some great sales win or some, you know, new product line or equipment investment or something like that. You know, you know, the story, the narrative, what happened inside your business. If you see the numbers, you're probably not too surprised.
00:05:03:24 - 00:05:26:02
Casey Grisez
Well, you know, the business won out for the business, but now whatever, whatever the numbers end up saying, I think again, in a lot of cases, especially with historical, the numbers are kind of BS of trailing behind the story a little bit. And I think the other way around, the story, you know, when you're forward looking, when your projecting or budgeting or whatever you want to call it, you know, future performance, the story is running ahead of the numbers.
00:05:26:02 - 00:05:29:01
Casey Grisez
But either way there's always there's always a relationship there.
00:05:29:03 - 00:05:44:20
Chris Fredericks
Yeah. That's so awesome. So to kick us off then we mentioned the share price. And that comes from the EV as a whole or any Esop company being valued. Why don't you tell tell us a little bit about how that valuation process actually works. Yeah.
00:05:44:22 - 00:06:02:04
Casey Grisez
Well if you have about 45 minutes or an hour level, we we should be able to at least get through that a little bit of it now, it is a complex process. There's no question. I think when I say valuation, I think that the spreadsheet or the, the workbook we use in Excel is something like 25 or 30 tabs.
00:06:02:04 - 00:06:21:14
Casey Grisez
Right? And they all talk to each other and all the numbers kind of, you know, talk to each other. And I the fun part for me was it's a, it's as much artist science. There are a lot of assumptions baked in. There's a lot of, you know, educated guesses. But like is there are assumptions. We think this this number is right.
00:06:21:14 - 00:06:38:10
Casey Grisez
We think this assumption makes sense. You know. So it's it's not all one plus one equals two. That's that's a big part of it. But again I mean there's there's narrative to it as well. But from a very high level when you're, when there's a valuation done, you know the evaluator it's there are three approaches. There's the the income approach.
00:06:38:12 - 00:06:58:19
Casey Grisez
There's a market approach. And there's an asset approach in the income approach. Very again, at a very high level, they look at a company's historical, you know, typically sales and some measures of profit. You know how well if they done compared to to what they forecasted are sales going up or down. Are is profit going up or down.
00:06:58:21 - 00:07:21:24
Casey Grisez
And then kind of same thing forward looking to see okay. Is is are you expecting to grow or are you expecting to sell less. Are you expecting profit to do better or do worse. And for a valuation shop what's really important to that is the accuracy of the forecast. And in a lot of cases you're not like you are when you're value that you're buying future profit basically.
00:07:21:24 - 00:07:38:07
Casey Grisez
So how accurate is that forward looking process. And if it's you know if forecasting has been hard, if budgeting has been hard, if you haven't really been able to hit the numbers, there have been reasons why in a lot of cases they're going to give you a little bit less, you know, kind of quote unquote credit for that expected profit.
00:07:38:09 - 00:07:56:23
Casey Grisez
So yeah, so they take all those numbers. So you know exactly what happened and what you expect to happen. Apply some you know, we call it a discount rate. But basically, you know, you you don't know for sure that the profit you expect to make next year is what you're actually going to make. So they you lose a little bit of credit I guess every year.
00:07:57:01 - 00:07:57:13
Casey Grisez
And yet the.
00:07:57:13 - 00:07:59:21
Chris Fredericks
Time value of money two. Right time. Right money.
00:07:59:21 - 00:08:24:09
Casey Grisez
Yep yep yep. So those together and that's you're effectively the value in the income approach. For the the market approach there are kind of two sub methods on if you want to call it that. But it's the transaction method guide like transaction method. And then a public company method in the transaction method. So there are databases where you can see, you know, although it's maybe a private company buying another private company.
00:08:24:10 - 00:08:50:05
Casey Grisez
They will report, you know, we bought this business that does this kind of gets a manufacturer. It's a plumbing business. So whatever the business says, we bought it for this price, this amount of profit there, this size, you know, they'll they'll they'll share some information. So you can look at those databases and see as evaluator, you can see this business that trying to get a value for a very similar company sold for this amount recently.
00:08:50:10 - 00:09:08:13
Casey Grisez
And you can kind of compare. So you can kind of make an inference of okay, that that's kind of like the market price. That's the market value for this business. See look look at enough of those. And sometimes it's five or 6 or 8 of them. Sometimes it's, you know, 20 or 50 or 100 depending on, you know, if it's there are a lot of plumbing businesses out there.
00:09:08:15 - 00:09:25:20
Casey Grisez
So your sample size can be pretty big. Look at those again, make some inferences. And and you come up with the value of what makes sense to, to apply to the business that you're, that you're valuing. Another company method is is kind of similar but different a lot of ways. So you look at, let's say it's better if you're a small shoe company.
00:09:25:20 - 00:09:44:08
Casey Grisez
It's the best thing I could come up with when I was thinking about this. They'll look at Nike and Adidas and New Balance and pick, you know, a number of as many as you can, public companies that are better publicly traded on stock exchanges. And what what's their value. So what is their how is the public market saying this.
00:09:44:08 - 00:10:07:18
Casey Grisez
You know, so it's saying what this company is worth. It's a little bit different right. If you're a small you're not you don't have international supply chains. You know you don't. You're not distributing to 100 countries here. You know, it's so you discount what those companies are worth. But still you're comparing it to publicly traded companies. And you can come up with a value and apply it to your company in a way that makes sense.
00:10:07:20 - 00:10:39:24
Casey Grisez
The last one asset approach is basically looking at the value of the things you own. So think of you know, if you own trucks or equipment or buildings or land, anything that you own as a business, what is the market value of those things and then see what they're worth. You don't see this very often just because in an ideal world, you're using those assets, you're using those tools, the equipment, the machinery to make more profit.
00:10:39:24 - 00:10:43:13
Casey Grisez
Then those things are worth. Yeah. So it's really.
00:10:43:15 - 00:10:47:17
Chris Fredericks
That's almost like a lower value. I think you could almost set a floor on the value.
00:10:47:17 - 00:10:57:18
Casey Grisez
Using its approach. Yeah. It's like a fire sale. Right. If, if the you know, the business shut down tomorrow, there was no more cash flow coming in. What could we sell all this stuff for? Which, just.
00:10:57:18 - 00:11:05:13
Chris Fredericks
To be clear, is an extremely rare occurrence for any company, let alone Esop companies, which almost never, you know, go out of business.
00:11:05:15 - 00:11:28:13
Casey Grisez
Right, right. Yeah, you will see it. You know that that applies to TV as well with if there's a an entity that just owns real estate or something like just sounds buildings just owns land, you know, it's not income producing otherwise it's not generating cash flow. Otherwise then you'll see for is what will take the fair market value of the appraised value of this, you know, the land or the building or whatever it is.
00:11:28:15 - 00:11:47:12
Casey Grisez
And that's that entity's value. But typically if you're making something or you know you're generating cash flow, otherwise you get to your point. That's that's a floor. Yeah. Interesting. Yeah. So they'll do a evaluator will do you know more than one. You want to typically see 2 or 3 of these approaches. Just you want them to to quote unquote talk to each other.
00:11:47:14 - 00:12:09:19
Casey Grisez
You don't want one to be way higher, way lower than the other, because then it's there. There may be something something's off in your analysis. So you blend that, blend all those together, come up with kind of an enterprise value that makes sense, that incorporates all of those. And a lot of cases you'll see the income approach just because it's it's real numbers for the real businesses is the most heavily, emphasized.
00:12:09:21 - 00:12:24:18
Casey Grisez
So you take those, you add any cash that the business holds, you subtract out if there's any debt, and then you have your equity value. You divide it by the number of shares that are owned or those that are in the business. And that's your share price. So yeah, that's a whole lot of words I kept in under 45 minutes.
00:12:24:18 - 00:12:33:00
Casey Grisez
But that's that's the high level a little bit of detail for anyone interested. But but pretty high level for what valuation looks like I think that's fantastic.
00:12:33:06 - 00:13:09:01
Chris Fredericks
Yeah. That's great I mean I do think, you know, starting with the income approach, almost all the methods are really ultimately a way to try to approximate the the value of the future cash flow. The, you know, the business has value from and what it's going to produce, its future income. And that's the income approach. Yeah. So and that's why I do think a lot of valuations end up emphasizing income approach the most, especially for smaller companies because there's not as many comparisons in the markets or public companies.
00:13:09:07 - 00:13:32:08
Chris Fredericks
And it ultimately is about what the business can produce from a cash flow perspective. And so I think just re-emphasized your point that when any Esop company or its financial performance recent and its expected future, that's what's really the main driver ultimately of of how the the share price, you know, is impacted. Is that fair to say.
00:13:32:10 - 00:13:53:01
Casey Grisez
Yeah. Yeah. And I think it also just reiterates that's a big part of why is being as accurate as you can or as confident as you can be in, in your forecasts and in your budgets makes a big difference to the more confidence there is in how accurate that expected future cash flow is, the better.
00:13:53:03 - 00:14:04:12
Chris Fredericks
Yeah. And thus in another way to put that is meeting your budget. Once you set a budget, like really trying to hit that budget has a lot of importance for kind of what's going to happen to the share price in the future.
00:14:04:14 - 00:14:27:10
Casey Grisez
Yeah, absolutely. So share price is when when you look at an annual statement, when at anybody in any sub, not just EV, when you, you see the value every year share price is just a small piece. That's all the work the valuation firm does is just a small piece of that. What also matters. And Chris, you talk quite a bit about this in the Esop update is benefit level.
00:14:27:12 - 00:14:35:20
Casey Grisez
So if you want to talk through what what benefit level is what it means and and how it how it kind of works with works in hand and have a share price.
00:14:35:22 - 00:15:00:21
Chris Fredericks
Yeah. So when we think about account value, as you just mentioned, what an Esop statement and the account value is going to be, it's really two things. It's how many shares do you have. How much are the each of those shares worth. And the second part is valuation. And that first part is accumulating the shares. So you know for EV and for all these Esop companies, the the shares typically get allocated annually.
00:15:00:21 - 00:15:29:01
Chris Fredericks
So an annual amount of shares is released to all the current participants. And those are generally spread out usually over that like based on, you know, income or relative income of each person capped by an IRS limit, to make sure it's a very fair distribution of shares ultimately. But each year, everyone receives everyone who's eligible, who's a full time eligible and participant receives some number of shares.
00:15:29:03 - 00:16:01:12
Chris Fredericks
And if you take those shares that each person receives each year and multiply it times the new share price for that year, you get a number. And that's really considered the benefit level for that year. It's very similar to, and, you know, all this Casey, but it's very similar to A41K benefit the others and other companies might see where maybe a 3 to 5% benefit is provided in the form of a contribution to the 4 or 1 K by the company.
00:16:01:14 - 00:16:32:13
Chris Fredericks
So someone a person earning $50,000 a year, you know, they receive a 5% for A1K allocation, that's $2,500, you know, that goes into their 41K from the company. And Esop is very similar. The shares times the value kind of divided by the annual compensation is essentially the benefit level of an Esop. And most Esops and I've included have a much more robust or strong benefit level compared to A41K.
00:16:32:15 - 00:17:04:19
Chris Fredericks
And that's there's a lot of data and studies out there that show that. But it's I think to your point, it's actually super important the the benefit and the accumulation of shares is probably as or more important than just what happens to the share price every year. Because especially for anyone that wants to build that Esop value over a long course of time, just getting more shares year after year, and that benefit level being better than average, better than A41K by a meaningful amount.
00:17:04:19 - 00:17:29:01
Chris Fredericks
Usually that's going to create that opportunity for, you know, life impacting levels of account value that, you know, it's not hitting the lottery. None of us in an Esop company just, you know, hit the lottery per se. But there's so many stories of how just accumulating shares in an Esop over the long course of time, you know, helps people be a lot more financially secure eventually.
00:17:29:06 - 00:17:36:07
Chris Fredericks
So I think benefit level is definitely the other thing to really emphasize. And we did talk about that a lot in our Esop update recently.
00:17:36:08 - 00:17:48:01
Casey Grisez
Yeah. So so share price versus benefit level. If I'm planning on being with with my company for a long time, with which of the two should I spend more times? I mean, it sounds like benefit level, but.
00:17:48:03 - 00:18:07:21
Chris Fredericks
Yeah, and benefit level, mainly just the longevity, I think is what someone should focus on. Because for EV, for other esops the benefit level itself, the number of shares can kind of go up and down each year because of some complicated mechanisms. We're not just kind of putting our, you know, finger in the air and saying, what should the benefit level be?
00:18:07:21 - 00:18:38:13
Chris Fredericks
It's kind of set by a formula. So, you know, it will go up and down. And there's probably a normalized level that it it will it will end up at. Just for reference, I think most esops are probably in the 10 to 12% benefit level range. And you know, that's double more than double A for A1K benefit. So just that longevity of just believing in that stronger benefit level as a concept and then just accumulating those shares over time.
00:18:38:13 - 00:18:54:22
Chris Fredericks
I think that's way more important to focus on than, you know. Did the share price go up or down? I think the reason Esop companies like to talk about share price is because it's really fun. You know, when you do have that year where the share price goes up a lot or you hit a goal and we'll talk about that later.
00:18:54:24 - 00:19:21:10
Chris Fredericks
You know, it's fun. It's exciting. It's easy to point out and say, yeah, we hit. We we did something and we all want it. All these sub companies want to do that. We want to grow share price, but we don't want to get too focused on it as like on an annual basis. How much did you know. Some years it probably could go down because when you mention public companies, their stock goes up and down every day and you don't want to live and die by kind of those fluctuations, ultimately.
00:19:21:12 - 00:19:43:00
Casey Grisez
Yeah. But I think that's where for me, putting in the effort that we can to, you know, and we obviously if there's economic factors that impacts public companies as well. Right. There are a lot of factors in a business outside of any individual's control. But the things that we can control. Yep. To help contribute towards share price, I mean, that's where benefit levels are.
00:19:43:02 - 00:19:56:09
Casey Grisez
You know, higher than 401 K and benefit levels are at a great level and also share prices going up. That's it's a great place to be. Yeah. And obviously not guaranteed things happen but it's a great place to be.
00:19:56:11 - 00:19:58:03
Chris Fredericks
Absolutely I agree.
00:19:58:05 - 00:20:21:11
Casey Grisez
But you you mentioned so you know with benefit level obviously it's shares that are being allocated out every year. You know you mentioned in the presentation that there are there is a risk in theory that all the shares for a given Esop company can be allocated out. So if there are no retirements, nobody leads. That can leave the company for sure.
00:20:21:11 - 00:20:35:12
Casey Grisez
For those shares to get allocated to to other employees, how do we ensure that, you know, even if we don't, we don't hit a point where, hey, sorry, we don't have any shares left. You have to wait for somebody. Yeah, somebody else to retire.
00:20:35:14 - 00:21:08:13
Chris Fredericks
Yeah, it's a great question. And it is a common topic of discussion amongst Esop companies. So generally speaking when an Esop is established, it's there's an initial schedule of how long the shares will be allocated. It's typically 20 to 40 years or something like that. And if you just if an Esop company just kind of sticks with that plan and doesn't do anything differently at the end of that period of time, there won't be any more shares left to allocate anymore.
00:21:08:13 - 00:21:38:19
Chris Fredericks
They'll just all be allocated. And that has happened to some Esop companies. But we are fortunate and a lot of Esop companies now, like in the modern day, let's say, have learned from others and others mistakes in the past and developed pretty simple techniques to kind of not run into that problem, to not ever get to the end of a period of time and not have any shares left to keep allocating for the benefit for future employees.
00:21:38:19 - 00:22:16:23
Chris Fredericks
So the simple way to explain it is that every time that we have former participants who have left and they're going to receive their their payment for their shares, all the shares for that year are re spread out, let's say, over another period of 20, 30 years, something like that. So it's like it's a perpetual share kind of I don't want to say recycling or reallocation because those mean particular things in an Esop, but they're perpetually re spread out so that we essentially will never run out of shares.
00:22:17:00 - 00:22:39:10
Chris Fredericks
Where EV as an example, is roughly 50% allocated today. And that's a really great place to be. And in our estimates for the future, it's going to stay around 50% allocated. And we'll just always have a nice amount of opportunity for future. While everyone who's currently with EV also has, you know, a good chunk of shares in their accounts to make it meaningful.
00:22:39:12 - 00:23:05:19
Casey Grisez
Okay, so let's think about it. I guess in my mind, visually, let's say we're using 30 year periods. Yep. And there are let's say 10,000 shares. Yep. Big round numbers. So somebody who has a thousand shares allocated and let's say if she retires, those thousand shares aren't put back into the original 30 year bucket. They're established effectively in a it's a thousand shares in a new 30 year bucket.
00:23:05:20 - 00:23:08:18
Casey Grisez
Okay. Yeah. And this is going to be spread out is analogous next 30 years.
00:23:08:18 - 00:23:09:18
Chris Fredericks
Yeah. Yep. Exactly.
00:23:09:18 - 00:23:35:00
Casey Grisez
Okay. That makes sense. So you mentioned before briefly share price goals. And it's something that you know we at least I know for Evie I don't know if you did a TVF, but at at MBA we certainly have always had share price goals recently set one for 2030. And you know these are these are intentionally you know you to the acronym be happy.
00:23:35:00 - 00:23:56:19
Casey Grisez
Just stay still. Don't still don't love it. But big hairy audacious goals. It works. It works. It's so big. Yeah. They're specifically big hairy and audacious. And you you talked a little bit in the presentation about how we get there. And it's not just again, we talk it's not just financial. You know, like I mentioned with share price, there are ways that that we can influence that there ways we can influence our business.
00:23:56:21 - 00:24:10:24
Casey Grisez
Yeah. Yeah. So I'd love for you to talk through you know, what what you're thinking about in terms of how we can influence how we as an organization can work together. To, to hit that at that 2030 share price goal. Now if you want to look through these one by one.
00:24:11:01 - 00:24:30:19
Chris Fredericks
Yeah I'll cover I'll cover all of them. Okay. Just to lay that to, to reiterate, you know the big goal it's what I shared in the, in our update last week or recently was that it's not success isn't just hitting that goal. Like we don't have to hit that big goal to be a successful company over the next five years.
00:24:30:21 - 00:24:51:17
Chris Fredericks
But it's fun. Let's go for it. We see if we can get there. If we set a huge goal and we fall a little short, we still like succeeded a lot. So just to reiterate, we don't have to climb every single mountain we put in front of ourselves. But we can we can see if we can get there and the journey will be worth it is kind of how I think about these big goals.
00:24:51:20 - 00:24:56:00
Casey Grisez
You just got back from a from a bank in dripping Dallas, I did. Oh, it's always worth trying to climb.
00:24:56:02 - 00:25:21:06
Chris Fredericks
I did, and to be honest, there was a particular mountain that we wanted to try to climb. We wanted to get to the summit and we didn't know if we could. And we tried and we couldn't. We couldn't do it. But this is actually really funny. The fact that we tried led us to find a giant group of mountain goats that we would not have seen if we hadn't tried to climb this particular mountain.
00:25:21:08 - 00:25:34:24
Chris Fredericks
So we were able to sit and and watch these really cool mountain goats. And that was our win. We were able to have a win even though we did not get to the top of that mountain. So hey, look at that. It was a perfect analogy.
00:25:35:01 - 00:25:37:01
Casey Grisez
Mountain goats can always be your silver lining.
00:25:37:03 - 00:25:56:00
Chris Fredericks
Exactly, exactly. So what we've landed on. How can everyone help us, though, to try to achieve this goal? And it's really calling it ownership in action. It's it's what is being an EV or be an employee owner at a in an EV company. What does that look like and what can everyone do to lean in and really do their part?
00:25:56:02 - 00:26:20:04
Chris Fredericks
And I truly believe everybody can lean in and do their part, because these are all things that all of us can do in our in our, in our jobs and in our roles. So growth is the first one. Growth can mean a lot of things. Definitely. We're referring to trying to grow the business revenue wise, and each company hitting its growth goals is a big part of what we want to do and need to do to achieve the big goal.
00:26:20:06 - 00:26:51:04
Chris Fredericks
But revenue growth doesn't just come from just adding customers or selling more to customers. That is a one way it ultimately plays out, but that, plus the individual kind of growth as a person, actually plays a much bigger role in what I think of as organizational growth, because it's developing new skills as an individual that enables the business to also advance in a really simplistic way.
00:26:51:06 - 00:27:09:00
Chris Fredericks
Each person, as each person grows and improves, the collective grows and improves. And it's it really does work that if everybody kind of leans into a growth mindset, that will translate to organizational growth over time. So that's that's number one.
00:27:09:01 - 00:27:19:21
Casey Grisez
Not to put you on the spot, but I'm curious if you have any any examples of, you know, just kind of day to day sure. Things that people in the Opcoes have done to, to grow as people.
00:27:19:23 - 00:27:53:10
Chris Fredericks
Yeah, I mean, there's a lot of people that have added new skills that I've seen, you know, that if it's almost like following a curiosity. So we've had I've seen many people in different roles where, hey, I'm really curious about that other part of the business. Can I learn about that? And so we had one person, for instance, at TVF, who was started off in kind of an assistant purchasing kind of role, but she was really interested in the more technology systems kind of process improvement stuff.
00:27:53:16 - 00:28:22:23
Chris Fredericks
Didn't have any particular background in that. But because she was really curious and very energetic about it, you know, the business supported her to to learn and grow in those areas. And now her name is Kelsey. Now she's in a completely different role. In that role is, you know, much more technology oriented, systems oriented, her her day to day job is, you know, helping the business improve and use systems to improve.
00:28:23:02 - 00:28:43:00
Chris Fredericks
And she absolutely loves it. And it's a it's a higher, you know, impact role for her than what she started doing. So that's just one example. I mean, it doesn't always have to be a change in a role though. I just want to re-emphasize that, you know, each or every person's role and job can be taken to the next level and just from individual growth as well.
00:28:43:02 - 00:28:51:23
Chris Fredericks
So I think of it more as like just following your curiosity and not just getting stuck in, oh, this is all I do. I just kind of do the same thing over and over again.
00:28:52:00 - 00:28:53:14
Casey Grisez
Yeah. It's great.
00:28:53:16 - 00:29:28:11
Chris Fredericks
Yeah, very related to that is the second one, the second ownership and action point, which is innovation and improvement, focusing more on the innovation part because, you know, the growth in revenue back to the first point is so important. And it's really innovation and how we how our companies provide products and services. And continuing to add more value to customers innovatively now doesn't necessarily mean we all need to be, you know, an Apple or a Tesla or whatever, like reinventing some entire new industry.
00:29:28:13 - 00:29:56:15
Chris Fredericks
That's not what innovation has to mean. I think it means looking at what each person, each company provides to you know it as a service. And how can we level that up? How can we really, you know, do something better and differently that's going to create an impact for that customer and make their job easier. Ultimately, each company, their job is to make the customer's job easier, whether that's through better products, you know, better services or whatever.
00:29:56:17 - 00:30:20:23
Chris Fredericks
So every person kind of looking for those opportunities to innovate is so important. The third ownership and action item that I that I think is really important is service. Every one of our companies, and I'm so proud of this has a deep history of pride of service. So it's actually really neat to see it still in action for me today.
00:30:20:23 - 00:30:33:20
Chris Fredericks
Like business comes to mind with the pride of service. The pictures of this, the products and of banners at work on LinkedIn. If people haven't seen it, it's like pieces. It's work. Literally works of.
00:30:33:20 - 00:30:33:24
Casey Grisez
Art.
00:30:33:24 - 00:30:57:15
Chris Fredericks
It's art is truly works of art. And I, I can't emphasize that enough, but I do think that's actually a shared thing across most all of our companies, something we actually look for when we think about adding another business to our portfolio. It's just people that really take so much pride in that service that they provide. And that's what I want to share too, that I don't think that's just external.
00:30:57:15 - 00:31:22:01
Chris Fredericks
So customer service is like typically a department in a lot of companies. But I think service is something every function, every department provides. And the customer could be, you know, another department in the same company. It could be, you know, the actual customer ultimately. But thinking of that yourself as a service provider, that's your job. Who is your customer?
00:31:22:02 - 00:31:46:01
Chris Fredericks
Maybe someone else in the same company and just wanting to take pride in that service. I think that kind of, mindset is so key to, you know, ownership in action that ultimately, again, everything's all about growth and improvement. That's going to lead to the share price goal. But that's in a moment to moment basis that mindset I think makes a huge huge difference.
00:31:46:03 - 00:31:58:08
Casey Grisez
Yeah it's just it's it's incremental. What are you doing to make things a little bit easier for whether it's customers or those you work with. And that those, those little things add up. It's not nothing revolutionary, it's evolutionary. But when you add them together.
00:31:58:10 - 00:32:24:01
Chris Fredericks
Yeah exactly, exactly. And the last one, which might be a little counterintuitive, but I think is important is enjoyment. And and what I mean by that is it's hard to keep your energy up, to provide great service, to think about growth and improvement and all those things. If you don't like kind of your experience at work, if you if it's a drudgery, if it's a struggle.
00:32:24:03 - 00:32:52:04
Chris Fredericks
Having said that, I know work is I mean, there's it's always stressful. It's always hard. That's kind of part of what work can be sometimes. But I do think when when things kind of come together in an ownership culture where people are pulling together and rowing in the same direction and care about the same things and care about each other, want each other to succeed, the struggle becomes more enjoyable.
00:32:52:06 - 00:33:29:18
Chris Fredericks
It's maybe I'm thinking back to my backpacking trip again, but like, it's not easy to hike a mountain. It's not easy to, you know, do it, do hard work. It is stressful. It's hard. It's a long day. It's 8 to 10 hours or whatever. That's why it makes it even more important to enjoy such. You know, in some sense, like the whole effort and the process and being at work and the people you get to spend time with, and being the type of person that makes other, others lives enjoyable, you know, all those things come together to create energy.
00:33:29:21 - 00:33:53:15
Chris Fredericks
And, you know, I think that individuals having enough energy to continue to do all these things growth, innovation, service, you know, that's ultimately the secret sauce to me of a lot of Esop companies that I've, I've come across that have been really successful and actually what's driven. So much of the success and all of our companies, you know, to date is these types of things.
00:33:53:15 - 00:34:08:19
Chris Fredericks
So hopefully this kind of ownership and action mindset framework helps people simply kind of keep in mind, like what they can actually do day to day to actually impact, you know, our ability to achieve our, our goals in the future.
00:34:08:21 - 00:34:28:01
Casey Grisez
Yeah. No, no. And I think for me, what I, what's really I don't know is dovetailing off of enjoyment. What's really fun about this is it, you know. Yeah, it at least in part, is to help us hit a share price goal and to keep growing the share price and keep growing the businesses. But hypothetically, let's say we do headed in 2030.
00:34:28:01 - 00:34:29:20
Casey Grisez
It's still not still not the end.
00:34:29:22 - 00:34:31:02
Chris Fredericks
You know, it's not the end if.
00:34:31:02 - 00:34:47:18
Casey Grisez
We're here, you know, in a business for ten or 20 or 30 more years, if you dread every morning waking up, going to do what you're doing, it doesn't matter what the share price is at the end of the day, or what it's going to look like when you retire. Yeah, it's going to be a tough the tough way of going.
00:34:47:20 - 00:35:08:21
Casey Grisez
Yeah. But just the day to day of we're growing, we're innovating and improving. We're taking care of each other and we're having fun. You know, Sunday scaries tend to tend to take a backseat when that's that's how you're living I totally agree. So we did get just pivoting real quick. One question. So with with when you did your presentation, we solicited questions.
00:35:09:00 - 00:35:26:00
Casey Grisez
We did get one. I want to make sure we we cover it today. So I'll read it read it directly. So don't miss anything if I'm retired and fully vested employee from an EB portfolio company. And I pass away, what happens? The balance of my payouts, if not all, payout, has been made to me. So I think, yeah, probably a question a lot of people think about.
00:35:26:02 - 00:35:56:24
Chris Fredericks
It's a really good question. And I'm really glad it was asked. It's really important and it's easy to not to not remember or think about, you know, it's kind of like life insurance. It's hard. You don't tend to want to think about things like this. So I'm glad this person asked. So yeah, in this situation, if if you know a person you know were to pass away after being retired and but fully vested in their in their Esop account, the amount would still be paid in full to whoever the designated beneficiary is.
00:35:56:24 - 00:36:33:10
Chris Fredericks
And there's an actual form that everybody has to complete as part of being in an Esop. And it's it's completed initially, you know, once they join. But that that designated beneficiary or beneficiaries, whoever they are on that form, they would receive the full vested balance. It's it doesn't get, you know, wiped away or something. But that just is a reminder to everybody that, like, you have completed that form and if you ever need to change that form, just, you know, reach out to your HR department and let them know that that is something you need to make changes to.
00:36:33:12 - 00:36:38:14
Casey Grisez
Yeah, use this as your moment to think about who did I put on there should that change?
00:36:38:15 - 00:36:39:14
Chris Fredericks
Yep.
00:36:39:16 - 00:36:44:14
Casey Grisez
Yeah, absolutely. You might want to hit that point and have a go go somewhere. Not you don't want it to go.
00:36:44:16 - 00:37:03:17
Chris Fredericks
Yeah yeah absolutely. But great question. And yeah I mean take this too as an opportunity to like keep the questions coming. There's a QR code that floats around now that people can reach us directly, very easily, or just come to our website and at empower Dot ventures and send us a note if you have any other questions about how the Esop works.
00:37:03:17 - 00:37:18:07
Chris Fredericks
But Casey, thank you. This has been a ton of fun. I'm sure not the first or not the last time you'll be on the podcast with me or with with us all. So thank you for all your explanations and for joining me on this episode.
00:37:18:09 - 00:37:19:08
Casey Grisez
Yeah, it was fun. Thanks, Chris.