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  • Writer's pictureby Lee Eisenstaedt

Why ESOPs Demand Collaboration to Build Success

A Conversation With Jeff Jamerino

President & CEO

Superior Electric Great Lakes (

100% Employee-Owned Since 2015

Jeff Jamerino became the president and CEO of Superior Electric Great Lakes two years ago after being with the company for 25 years. While he didn’t anticipate stepping into the role of president and CEO he has embraced all facets of the role and hopes to leave the company

well equipped for the next generation to take over. He believes in having a strong collaborative effort with his partners and employees and has an open mind when it comes to new processes that may help the business. During this Leading with Courage® in ESOPs conversation, Jeff shares how his management philosophy and continued interest in learning and collaborating with other ESOPs has helped him step into and flourish in the role of President and CEO.

Leading With Courage Academy: What's the most important thing I should know about Jeff? What should I know about you?

Jeff: The most important thing to me is my family. I know that's not business related, but none of this has to be business related. My family comes before anything. I enjoy working, but I don't work for its own sake. I work to take care of my family and nothing is more important than that to me.

Walk me through how you got into the position that you have today. I was at Plante Moran for eight years. The longer you’re there, it gets to the point with public accounting the less it's about accounting and the more it is about sales and client development. At that point in my life I don't think I was ready for that and it was time to move on. So I left briefly. I was at a home healthcare company for about a year and a half that just didn't really work out. Then, an old friend from Plante Moran put me in touch with Superior Electric and I was able to get the position as CFO and have been here for the last 25 years, the last two years as President of the company.

Just curious if you had the chance, would you work for companies that were not ESOPs?

I don't think not being an ESOP is a deterrent from me taking a job, but if you are an ESOP, it's certainly going to be something that would catch my attention and be a strong factor in my decision making.

Do you think it's possible for someone that doesn't have ESOP experience to move into a CEO position in an ESOP?

That's a good question. I think from the technical side of things, I think there would be some learning curve, but I think that's doable for any intelligent person.

I think more importantly would be the personality and management style of the person. If you're used to running a benevolent dictatorship, you're probably not going to fit in in an ESOP. You’ve got to have a collaborative style in order to be successful with an ESOP. Otherwise, if you want to run it like a benevolent dictatorship, you lose all the benefits of being an ESOP.

As you look back over your career, how did you develop as a leader? What did the various organizations you were with do to help you?

I learned a lot in terms of day to day management of people from Plante Moran. Early on in my career, one to two years in, I was being put in charge of an audit assignment and supervising other people and during tax season, I was supervising younger staff, getting tax returns done and things like that. So in terms of managing people and day to day hands-on delegation, I learned a lot from them.

Can you think of anyone in particular that had a tremendous impact on you as a leader?

You know honestly, probably the biggest influence would be a partner at Plante Moran. His name is Tom Doyle. He and I were of similar temperaments, but he was better at reigning in his emotions than I am, or at least at that time. And I certainly learned a lot from that. He always had a practical approach to things. He was not a pie in the sky kind of accountant. He was more of a “let's do what's right for the client” and “let's be practical about it.” Just because some technicalities say you have to do this, is there a reasonable workaround that can satisfy everybody? And he was very good at that too.

You said you had to learn how to reign in your emotions. Emotional intelligence is a a challenge for everyone, especially during these unprecedented times. Anything you learned along the way?

First of all, maturity and growth certainly played a factor in that you just learn as you go. As you go along you can't just let your emotions out every time you get worked up about something. It goes back to the old adage of step back, breathe and just take a moment and think about what you're saying before you say it.

I think that when I was younger, I was probably much more shoot from the hip. And I still have that tendency, but I'm certainly much better at managing that impulse than I was back then. So I think it's really important to just take that minute, think about what you're saying, think about what the implications are. Honestly, the other part is I've tried to adopt the golden rule as I've gotten older to treat other people as you want to be treated. I try to keep that in mind as I deal with people.

Is something about your personality that you think makes you really good at this job or well suited to it?

I think that, in general, I'm very organized and methodical about how I go about things and trying to get things done. I'm also very open minded to new technologies and new ways of doing things. I think you have to be flexible as CEO of a company unless you want to run it as a benevolent dictatorship, which you certainly can do. I think especially being an ESOP, that's just the wrong approach. So I think my willingness to be open to ideas and to listen to people is probably the biggest thing.

I think you mentioned this earlier, this notion of collaboration fits with that. That would be a prerequisite for the kind of mindset you have to have as an ESOP leader, I assume?

Absolutely. You certainly can't run an ESOP as a democracy. You still have to have a management structure in place. Somebody's got to be the boss and ultimately make decisions but I think that if you want the ESOP to be as successful as it can be and to get everybody to buy into the whole idea of ‘Hey, we're doing this every day to better all of us’, if you shut everybody down and don't listen to what they have to say, I think you're going to lose that. I think you need to have that collaborative spirit in order to maximize the potential of the ESOP.

What's some of the best advice you've ever given or received?

I can't point at something specific, but I will say that going to the ESOP convention that the ESOP association puts on in Las Vegas you get to meet all kinds of people from all kinds of companies that can bring a nugget of wisdom about ESOPs, especially when you're brand new to it. You know, that first year or two when we were just learning about ESOPs and figuring out how they work, I learned a lot of good things from people.

The former shareholder of Superior Electric really drilled discipline into us, and I don't mean discipline in terms of, how you discipline a child. I mean more discipline in terms of being methodical about how you do things, creating systems, creating ways of doing business and then sticking to those. Especially in construction, where your jobs are constantly changing and a job can go from profitable to a loss in the blink of an eye, we've got a whole discipline built around monitoring all of our jobs and meeting with our project managers on a monthly basis to make sure that we're running the job properly, that we're billing the job, collecting the job, getting our change orders processed. I'm very appreciative that he emphasized cash is king.

You know, if you don't have your bank lined up and manage your cash resources and do projections and look ahead and be proactive when you think you do need to borrow money from the bank, that's just a recipe for disaster. 90% of the companies we've seen in our business that have gone out of business, it's not necessarily because they were unprofitable, but it was because they couldn't manage their cash flow. Given today’s situation, I’m so glad we are disciplined in managing this part of the business.

Keeping your bank at a distance is not a good idea. Including them in what you're doing makes life a lot easier.

Absolutely. Part of our philosophy is we make all of our service providers partners in our business. So whether that's our ESOP trustee, our accountants, the attorneys, the bankers, those people are all critical to our business success. I think it's really important to consult and communicate with all of those people on a regular basis so that nobody's surprised when things happen. Your company's ability to produce a regular timely financial statement is critical. An important, but underappreciated, part of communication, is having getting the financial package put together every month and getting it out to the appropriate readers.

Is there a story you tell non-ESOP leaders about your experience with employee ownership that may help them cross the line on their decisions? When somebody is talking to me about creating an ESOP or going into this, one of the most important things to me is, make sure you understand what it is you're getting into and that you educate yourself and the future plan participants as to what their roles and responsibilities are. Did you use any of the communications firms that are out there to help you with that? Or did you develop all your meetings yourself?

So we did some of it ourselves and we used Joe Rankin from Plante Moran. He’s not only very knowledgeable about ESOPs but he's a very good communicator.

There's a place called Workplace Development, they're in Ohio, they provide communications strategies for ESOPs. They had a very effective game they led us through, almost like monopoly. The point was to teach people about what you do within an ESOP. And once you decide on adding new employee, how do you integrate them or how do you onboard them into your ESOP culture? We have hired somebody that's managing HR for us. She's doing a great job of developing an onboarding checklist. And as part of what came up through all of that was, to talk about our different benefits, whether it's the 401k, the health care, and obviously the ESOP was part of that.

We have a one page back and front flyer of just the basics about an ESOP and what does it means and how does it work. As far as the education about the ESOP, I think the big thing is just continuously having to meetings and discussions about it. I don’t expect new people to just “get it” by spending more time with the company. If you look at the ESOP landscape today, what do you think the biggest challenge facing ESOP leaders is right now? If you're talking about leaders of an existing ESOP, I think the biggest threat is the regulatory agencies that have the potential to change the rules on us.

Maybe you're active in this through The ESOP Association, which tends to be more lobby oriented. Are you addressing that through them or, you know, how do you see this playing out?

You're certainly dependent on them to do the lobbying that they do and we need to continue to support that association. The other thing is try, and we've only very mildly dipped our toe into it, but to try and educate some of the politicians as well and make sure that we get them on our side. We've had a few state politicians come and visit our company and see what we're doing and how we're doing it for the employees and that sort of thing. But I think at some point, I'd love to see us be able to ratchet that up to the national level where if we could get our representative to Congress to come here and see what we're doing and the good things that we're doing and how that impacts people's lives. I think the more politicians we can get on board, the better. The better chance there is that they'll step in and try and rein in some of that excess that you see in the regulatory agencies.

I think if you're a new ESOP one of the big challenges is cost and it goes back to that regulatory atmosphere that we're in. But, to do an ESOP correctly, meaning you hire all the right professionals, you do all the right due diligence, do all the right things. It's not cheap. It's expensive. And that's because you're so concerned that the Department of Labor or others are going to come in, do an audit, turning over every rock. So, you want to make sure you have the best professionals on board. I think that that's a deterrent to some companies being able to become an ESOP because they're not a big enough that they can afford the cost of hiring all those professionals. But you have to look at the costs compared to the long-term benefits of the ESOP. When we’ve done, we’ve always found that the benefits are far greater than the costs.

Anything the advisors can do to keep their costs in check? Certainly, you can obviously do some of those things on your own or within the company. But my guess is the smaller the company, the less likely you're going to be to have internal people who have the knowledge and expertise to be able to manage some of those things. I will tell you that’s how some companies manage it. I don't agree with it, but there are a lot of companies that go into an ESOP and they just move forward and they don't worry about the regulatory atmosphere. They'll use an internal trustee as opposed to an external trustee. When you use an internal trustee, it usually ends up being the guy that's the former owner of the company. So he's basically negotiating with himself for the purchase price of the company to sell it to the employees. Then you wonder, why does that get scrutiny from the Department of Labor and the IRS? I think it's a recipe for disaster. They don't hire the right professionals. I think that's a short-term solution that has potentially very bad long-term outcomes.

Are there some resources you'd recommend to someone looking to gain more insight to becoming a better ESOP leader?

The ESOP Association and the NCEO are both excellent organizations that offer fantastic resources, whether it's resources just to read or attending their conferences. I can't say enough about their conferences. I've learned so much not only sitting in and listening to experts that know what they're talking about, but also mingling with other ESOP participants from other companies that can really provide a lot of education.

There’s a lot that goes into creating and strengthening a Culture of Leadership. Like

succession planning, self-awareness, employee engagement and understanding the

behaviors of what forms a cohesive team and high-performing organization. Where do

you even start?

Right here with Leading With Courage® Academy. We’ve built customized roadmaps for

leaders to leverage their ESOPs toward an unmistakable culture and we’re ready to do

it for you. Talk to us today at 312.827.2643 to learn how we can develop

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