Why Communicating Is So Hard—and What You Can Do About it

Corey Rosen

National Center for Employee Ownership

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Plan for this sessionSome brief remarks on communicationsGroup to seek ways to explain various

key issuesHarry the Horse P/E GameGenerating specific ideas

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Ben Was Right

"Tell me and I forget. Teach me and I remember. Involve me and I learn."

Ben Franklin

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And So Was Satchel

"It's not what you don't know that hurts you, it's what you know that just ain't so."

Satchel Paige

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And This Guy Too

It’s hard to remember what you didn’t once know

Corey Rosen

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“Tell Me” CommunicationsLetters to employeesSummary plan descriptions in legaleseAnnual statementsNewsletters (unless employees write for

it)Flyers, payroll inserts, posters

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“Teach Me” CommunicationsEmployee meetings with officers or

advisorsOrientation sessionsWeb sitesSummary plan descriptions in ordinary

language

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“Involve Me” CommunicationsRole playingEmployees teaching other employeesGames (Jeopardy, Wheel of Fortune,

etc.) Interactive Web programs (quizzes,

road maps, games, etc.)

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Start from the BeginningExplain what a company isExplain what stock isExplain what profits areExplain how profits relate to stock

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What’s A Company?

Group to define

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What is Stock?

Group to define

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What Are Profits?

Group to define

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How Do Profits Relate to Stock Price?

The horse race game:

Half of the table owns Harry the Horse and wants to sell him. The other half is considering buying Harry. Harry is three years old and has a few good years left. He’s in good health. In the last year, Harry has won $300,000 in prizes; the labor, stabling, food, transportation, insurance, and other costs for owning him are $250,000. Sellers meet for five minutes to come up with an asking price. Buyers decide what to pay. Then take five more minutes to negotiate.

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How Did You Decide the Price?

Did you consider: Risks (health, better competition, race

track closings) What else you could do with the money

and how much you’d make How risky Harry is relative to other

investments The rate of return you want from owning

Harry

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Harry’s Sale PayoffThe price is a multiple of earningsBuying a company is much like buying

Harry—there are risks, rewards, and other things you can do with the money

Because the price is a multiple of earnings, increasing earnings makes the share price go up (or down!) by much more than each dollar earned.

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Miscellaneous Tips

Write in plain language, field test, and refine Post q&a’s on a web site and in written

communications Repetition and variety are key; do a lot of

different things often Use multiple media; people learn in different

ways (audio tapes, flyers, cartoons, meetings) Tell stories Laugh and have fun

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Don’t Forget to Unteach

There are a lot of common misperceptions: Profits equal sales Company owners never have to sell There’s a hidden set of books Management is overpaid There’s a hidden motive in this We’ll never get paid out anyway

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Worst ideas Worst communication ideas• Introducing the plan without some kind of fanfare to make it seem as big a deal as it really is. It’s

important not to oversell, but employees need to know this is a major change.• Giving out too much information all at once, especially in the first time or two an employee

encounters the ESOP. • Relying on annual meetings alone.• Failing to get other employees engaged in communication processes along with experts and

management.• Running programs longer than people’s boredom threshold.• Relying too much on voluntary evening programs when people have other commitments and

interests.• Allowing meetings to become gripe sessions.• Not inserting communication packages with something that employees will open anyway, such as pay packages.

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More worst ideas• Celebrating the ESOP before explaining it. It’s important, as noted above, to roll

out the ESOP in a meaningful way, but it’s equally important that the plan be explained, not sold. If you build an ownership culture, people will become excited later and then you can celebrate.

• Not specifically addressing and assuaging concerns that if the ESOP is being used for business transition, the company has plan for replacing the departing owner with top-level management who employees trust or believe can do the job.

• Developing a mission statement before clearly orienting employees on what the purpose of the process is.

• Summary Plan Descriptions written in legalese will be read by almost no one.• Making orientation voluntary is a mistake—everyone needs it!• Using blanket training approaches when knowledge and skills vary—tailor the

message to the audiences.• Not explaining how bonuses might go in one direction and stock another in the

same year.

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Good ideas• National ESOP month is a good excuse to have fun—create prizes, games,

celebrations, and other events.• Create a “certified employee owners program.” Either every employee or employees

who are interested go through a training program and get a “CEO” business card at the end. When they graduate, have a celebration that everyone in the company or department attends. One company asked employees to write essays from participants in the program on how to make more money. In this company, training session were 60-90 minute once of twice a month over a few months.

• Have monthly, quarterly, or annual meetings to go over profits and performance, keeping the numbers in terms employees can understand.

• Point to examples of ESOP distributions to retired employees or, better, have them come back and tell their stories.

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More good ideas Invite owners or employees of other ESOP companies to talk about why they set up

their plan or how it is working. Use games or skits. Try “lunch and learns.” Provide some food and have a company leader run a discussion

of a particular ESOP or company issue. Instead of trying to explain about ownership culture from the start, begin with explaining

how you can own your job by making more decisions about it. Get silly. Have the CEO and/or managers act foolish, serve dinners in waiters’

uniforms, or agree to wear a funny outfit if a goal is met. Play “guess the stock value.” Let employees guess the next valuation or, better, have

employees break into teams to discuss it and come up with a guess. Give prizes to the winners

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Still more• Create “lunch buddies” by assigning long-term employees to take a new employee out once a

month for lunch for a few months.• Don’t just limit orientation to new employees; let anyone come who wants to brush up.• Start a “lunch with the boss program,” either one-on-one or in small groups.• Try video testimonials from current and retired employees about what the plan means to them.• Send sample annual statements to employees not yet in the plan.• Use multiple media: newsletters, brochures, videos, tapes, meetings, games, etc. Different people

learn in different ways.