Hercules Industries was family-owned since 1962. When it came time for the owners to transition out, they heard presentations from buyers and investors, but none of the presentations impressed the owners and none felt like the right fit.
That is, until the former owners lit up when they heard about employee ownership, specifically an employee stock ownership plan (ESOP). The choice was clear as the owners knew that an ESOP would be a wonderful way to transition the legacy to the employees who helped build it.
Hercules is a steel fabricator and wholesale distributor in the HVAC space. They made the transition to employee ownership in 2019, offering an ownership stake to their community of hard-working and loyal employees.
In transitioning to an employee ownership structure, Hercules finds ways to promote an ownership mindset through a unique communications committee and training videos educating their team about “lemonade stand basics.”
The communications committee was established immediately upon the conversion and has made a huge impact. Between sculpting messaging and organizing events, the committee was given free rein to communicate about the employee ownership structure within Hercules and build enthusiasm among employees to participate in the ownership mindset and process. The committee represents various roles within the company, both tenured and brand-new employees and geographic diversity between Hercules’ six states. One of the committee’s biggest accomplishments is hosting the annual share reveal events, where employees learn about the growth the company has seen in the past year.
The “lemonade stand basics” videos teach employees the basics of what Hercules does as a company, how business ownership works and encourages employees to step into the shoes of ownership. Not only do these training videos teach employees about business ownership, but they help employees see the importance of their voice and ideate ways they could improve the business.
“We have a rich culture of coming together. Going through the pandemic as employee owners made that feel very real,” said Dan Luzietti, Chief Financial Officer at Hercules. “It renewed our entrepreneurial spirit. It sounds funny for a 60+ year old company to say that, but employee ownership offered an energizing spirit behind what we had to overcome. It was a pleasant surprise.”
When asked why one may consider employee ownership for their own business, Luzietti shares that he loves the concept of employee ownership.
“Our people have rallied behind the uncertainty of the past few years. There’s now a vehicle to reward the people doing the work. Back to our legacy, that is what our family ownership wanted, to share in the success of the business with their employees.”