One question we hear all the time is whether or not you should involve your employees in the exit process - whether that be a sale or a dissolution. Many think that informing employees might cause a negative reaction and prove damaging to office morale, but a few of our 17 percenters beg to differ! Read below to hear what some of our 17 percenters have to say about involving employees in the exit process!
"Most business owners don’t want their employees to know that they are thinking about selling the business. That’s one of the strongest arguments for exit strategy being good business strategy. When you approach an exit as a business strategy to build value in the business, involving your team is as natural as involving them in their daily job functions. When you set out to improve long term value, you won’t be shy about who knows, because a more valuable business is one in which most people want to work."
Initially we couldn't even tell them. It's like every other stock transaction, you can't divulge the plan until it actually occurs. You're looking at it almost like a public sale. Now the challenge is, once it occurs, how are you, the CEO - otherwise known as the chief communicator, going to get your employees to not only buy into this transaction, but realize the future value? How do you prove to them that their input to the organization will increase the valuation to not only you, but to them as well? You need to get them to have that ownership feeling so that you don't have pens walking out every day and all other sorts of things that happen when employees lose that sense of meaning and value. They need to realize that if they're saving money and they're optimizing how efficiently the business operates, it has a meaningful impact on their retirement, too.
Our employees heard chatter, and they were familiar with the buyer. The buyer did a really good job of meeting with the employees and transitioning. In some ways, because this was a bigger organization, they ended up in a better place than they were with us. So they weren’t directly involved, but the buyer did a fantastic job of building rapport with them so that when the sale inevitably did take place, they were in a great headspace to deal with that.