Nothing beats a deep recession for sharpening the business mind.
After weathering the difficult times of 2007, MN Builders created a simple but ambitious goal to “future-proof” ourselves. This meant creating a long-term, sustainable company that would not necessarily be dependent on the people who started it, nor on the economic pendulum. The idea of allowing employees to control their own destiny—in the form of some kind of shared ownership of the company—was born.
As we looked around the business landscape, we saw firms being bought and sold, and this approach did not strike us as a very successful business continuation strategy. Some of these companies managed well for the first year or two, but then things changed, starting with the company philosophy. The new owners wanted to put their mark on the enterprise. Long-time, key employees left, and the business struggled to maintain the success it had before it was sold. Some firms failed and just closed the doors. Others became a poorer version of what they were before. In our case, we felt we had worked too long and too hard to let that happen to MN Builders. And it was really important to us that our team members feel secure in an industry where jobs are temporary at best.
From the beginning, MN has always had a very strong team spirit. We’re a tight group. And one of our core values has always been to look after our employees, because we believe that translates seamlessly into looking after our customers, too.
To that end, we have always provided really good benefits for people who work here, including a family health plan that covers everybody, and their family members at very low cost. (This was one benefit that was non-negotiable during the 2007 recession.) We’ve always had a good and generous retirement plan, as well, along with profit sharing. That said, it struck us that employee ownership was the next logical step toward enhancing the job security of everyone who worked at the company.
Around 2010, we started getting serious about looking at Employee Stock Ownership Plans (ESOPs). The more we looked into it, the more intriguing the idea became. Yes, it seemed complicated and heavily regulated, largely because of the tax advantages for all involved. But it really appeared like a path to strengthening our company‘s financial position and to increasing employee engagement and productivity. Perhaps most important of all, we felt it would create a pride of ownership and sense of belonging that many companies lack.
We met people who were almost evangelical about ESOPs: regular folks like us, working in companies that were more successful than their competitors. These employee/owners spoke passionately of sustainability, resilience, and that team spirit that we already had in our own company.
We dove into the research, attended ESOP conferences and seminars, read articles, reviews, and books. We talked to advisors, colleagues, friends, and family. And, finally, we took the plunge, initiating a partial employee buy-out back in 2016. A few years later, we pivoted to majority employee ownership, and we haven’t look back since.
ESOP is a big part of why our company is different. MN Builders is controlled and managed by our employees, for the benefit of our employees. We think this approach contributes to a different and better experience for all—employees and clients alike. If you’ve worked with us, you’ve felt it.
Oh, and lastly, it’s all of our responsibility to change things for the better, even if it’s just in our little corner of the world. We believe MN is doing that with employee ownership.