You might be scratching your head wondering what in the world is “Keeling” talking about—football and how to manage a company? What is the connection? Football is not anything like a business that is successful. Keeling must have lost marbles!
Well watching the 2021 Super Bowl, and the domination of the Tampa Bay Buccaneers over the Kansas City Chiefs triggered memories.
On June 10, 2003, 18 years ago, I testified to the House of Representatives’ Committee on Financial Services’ Subcommittee on Financial Institutions and Consumer Credit. Its hearing was an overview of the financing of employee ownership, and should Federal law make financing of employee ownership more accessible.
Because the “employee stock ownership plan”, or ESOP, was, and still is, the most common structure of broad-based ownership in our nation, and I was the President of the largest trade association advocating for more ownership through the ESOP model, I was the lead civilian witness.
While the hearing also had a variety of witnesses from organizations representing broad based employee ownership, such as worker co-operatives, it also included two leaders of two ESOP companies, George Ray, CEO of LeFiell Manufacturing, Santa Fe Springs, California, and Sherry Ceresa, Statistical Analyst, Gardeners’ Supply, Burlington, Vermont.
(Note George led LeFiell to become one of the first 100% employee-owned company in the nation, and Ms. Ceresa presented the story and experience of the Vermont ESOP company Gardeners’ Supply since becoming employee owned. George was also the Chair of The ESOP Association 2005—2007 and served on its prime governing body for 10 years.).
To be noted, in 2003, the Republicans were the majority of members of the 208th Congress 1st Session, and thus its chair was the late Republican Congressman Steve LaTourette, Ohio’14th District. To be noted also the so-called ranking minority member was then Congressman Bernie Sanders, an independent from Vermont, now Senator, who has always caucused with the Democrats. (Of course, now Senator Sanders is a major figure in the Senate and national Democratic Party.).
The purpose of this blog is not to relive the hearings that really focused on legislation proposed by Congressman Sanders to broaden non-tax policies by the Federal government to broaden broad-based employee ownership, including through the ESOP model. (Those were the days, as his main co-sponsor was super conservative, or so-called right-winger Congressman Dana Rohrabacher, California, who had worked and wrote pro-ESOP speeches for former President Ronald Reagan.).
No, my purpose is not to tout the proposals to increase employee ownership that was the purpose of the Sanders’ bill, but to express the view a well-managed successful business can be analogized with a well-coached football team that delegates decision-making to players on the field.
Why?
Most members of the subcommittee responded very positively to my testimony that more employee ownership through the ESOP, as proven by credible research, created more profitable, more productive companies, more sustainable work forces, and if more common would broaden equitably wealth.
But Congressman Tom Feeney, Republican, representing 14th District of Florida, challenged the effectiveness of having employees be owners and being involved with decisions of how to handle the operations of the company—of any style. He mentioned various criticisms of ESOPs because of the lack of diversification, or an employee owner losing his/her job, when an ESOP company did not succeed or survive, due to developments beyond its control, among other comments.
Although I responded to all his comments—and the exchange was very respectful—the one that really got me going was his comment that for a football team to succeed, it had to have its “coach” making the key decisions, not the players. His statement was in general, that player decision making would lead to an unsuccessful football team.
I concluded my response to his negative comments on broad-based employee ownership, asking for the Subcommittee’s indulgence for me to comment on the Congressman’s football team comment.
First, I stated that based on visits with hundreds of employee-owned companies, I often saw that a well-managed company was similar to a well- coached, well performing, successful football team.
I emphasized that he had raised a topic that in my mind triggered why good management, no matter what the ownership structure, but when all employees had motivation and satisfaction, the company succeeded as would a well-coached football team.
(I made clear that while I was never an excellent high school football player, I lettered three years on a team in Texas—and yes, high school football is a big, big deal on Friday nights during the fall in Texas.).
I noted to Congressman Feeney than each player on the team was provided a rather long playbook—with hundreds of pages—that were not just descriptions of team plays, and arrangements on defense—but the playbook was full of descriptions how the player was to adjust his assignment before the snap, when on the field on offense or defense, when the opposing team came to the line of scrimmage in a formation, line-up, that was not anticipated, or described in the playbook.
I noted, having played tight end, sometimes there would be a defensive player lined up right across me; sometimes no one; sometimes the nearest defensive player was an outside safety. If the play called was a pass, what was I supposed to do? If a run, who was I to block? If on defense playing safety—or behind the line of scrimmage—and an end split out wide, or a running back was put in motion to my side of the field, was I to play pass defense against the man in motion, or the end?
In other words, I had to make decisions on the spot; I could not run over to the coach and ask, after the play had begun, “coach, what do I do now?”
No, I had to weigh the options that the play book had set forth; and if there was a formation, etc. etc. that was not described in the play book, I had no time to run over to the coach, and say, “what do I do now?”.
I had by 2003 visited so many employee-owned companies where I actually had average pay employees mention that they had recommended how to change the operation of a machine; to change a marketing pitch; to alter to whom to forward phone calls. And I had executives, including CEO’s, etc. say that what the employee, or employees set forth was a better way to “do it” and their recommendations often led to more production, less cost, more sales, more satisfied co-workers, versus refusing to do anything different from what the boss told them. And the boss had frequently said, “use your judgement; make a comment; give me your thinking” compared to “do it my way, or the highway.”
In sum, I told Congressman Feeney, with all due respect, I disagreed with his view players did not decide on a successful football team but only the coach, for when I played football where football was a big deal, no one expected to never, ever, think what was best, and instead always only respond as the coach told you. And that only good coaches always trusted the players to react appropriately when the other team came forward with the unexpected formation, running pattern, pass pattern, versus so on.
So, putting every detail in the hands of the CEO, and tuning out independent thinking, or not providing the tools—the so-called playbook—in a world of change is not good management, no matter form of ownership—empower all employees to understand their work, and feel her/his view, reaction to how to do a job well, in different circumstances, is the model for success.
No, employee empowerment, no matter, the structure of ownership, is better than a micro-managing boss, who stymies employees’ ingenuity, and their hands-on experience helping improve the company’s performance.
(If interested in reading the June 10, 2003, hearing, go to “govinfo.gov” and follow the instructions to click on 108th Congress, 1st Session, House hearings, Committee on Financial Services, June 10, 2003.).