By Clark Howell – Howell Marketing
Tri-community Area Chamber of Commerce “Crossroads”
2005 was an exciting year for the employees of Expert Laser in Southbridge, MA. That was the year that the company instituted a unique ownership arrangement, opening up a new era for Expert Laser employees. As expected by management, this new arrangement has spurred the long-time dealer of printers and inks onto very good things and has increased growth. The new arrangement is called an Employee Stock Ownership Plan (ESOP) and it places the ownership of the company – as well as the overall bottom line – squarely on the plates of the employees. For Expert Laser, this has turned out to be a win-win for everyone involved.
ESOPs first came to light in the 1970’s, in part, as a way of creating a new kind of “ownership culture” for certain companies interested in increasing their productivity and retaining control of corporate direction. Another important aspect of most ESOPs is to act as a viable retirement plan, as is the case with Expert Laser, for vested employees. Not available to all corporations, ESOPs are however a viable option for certain “closely held” and successful corporations who wish to transfer the equity of the business from an owner to the employees. The way in which this takes place varies from business to business, but most ESOPs cost nothing to the employee. According to Eric Willard, CFO of Expert Laser, “the company takes on the cost of “buying” the shares from the owner. A trust is set up that begins to purchase the shares of stock from the owner, in our case 51% of the shares. The company borrows the money and loans it to the trust for the purchase”. He goes on to say that each year certificates are issued in shares for the trust to the employees as the principal of the loan is paid down. The employees then receive shares in the trust which holds the shares of the company.
Expert Laser’s marketing manager Bob Chernisky put the issue this way. When asked what this arrangement means to a typical employee, he said that most employees now have the attitude that “Hey, I own a piece of this thing” and it causes their workers to bring to the workplace a new sense of mission and pride. Knowing that they have a hand in the actual “bottom line” of the company makes a huge difference in overall performance. He explains that, as a result, Expert Laser employees now function very well on their own and with “very little regular supervision.” In a tour of the Southbridge facility, Bob pointed out that one of the work areas was without its supervisor, who was on vacation. He then added proudly, “There’s nobody over there supervising those people… they just work.”
This is important because fierce competition with off shore facilities and companies is something that businesses, especially in Massachusetts, have to deal with on an ongoing basis. However, according to Mr. Chernisky, Expert Laser is not simply getting by… it’s growing! A culture of ownership, as he puts it, starts to take over and slowly but surely employees begin to realize that the things they do, on a day to day basis, will affect the business’s bottom line. Indeed, efficiency and a strong work-ethic are important aspects of what Expert Laser does for its clients.
Not just a seller of copy machines and printers, the company offers a full line of services for these machines, most often in the form of Partnership Programs with their clients. Once a partnership service contract is signed, the client only deals with one single PO to take care of all of its printing, toner and servicing needs. The client also now deals with a single office imaging vendor. This means that Expert Laser becomes uniquely responsible for how efficiently a client’s printing needs are met. In other words, it’s Expert Laser’s responsibility to keep things rolling in the client’s work place. To illustrate this point, Mr. Chernisky explained that a simple thing like replacing a suspect part before it fails (rather than waiting for it to fail) benefits both Expert Laser and the client. The tech knows that if the part should fail, he’ll be called upon to make a special unplanned visit sometime down the road, and that this “extra” expense will have to be bourn by Expert Laser. So, the part gets replaced (at no cost to the client) before it breaks. The client wins and so do Expert Laser’s employee/owners.
So, what’s in store for Expert Laser in the future? The sky’s the limit, according to those you talk to at the company. With nearly 3,000 current clients, large and small, this win-win attitude seems to be spreading throughout the region and throughout the company. The employees, or I should say the owners at Expert Laser wouldn’t have it any other way.