Transitioning Leadership at an Employee-Owned Firm
Kimberly Jones Is Preserving a Legacy and Building a Future for Butler/Till
by Sarah Stranahan
Fifty by Fifty spoke with Kimberly Jones to learn what it is like to step into leadership at an employee-owned B corporation. Jones became the president of Butler/Till, an advertising and media firm, in 2015, one year after the company’s founders had transitioned to 100 percent employee ownership through an Employee Stock Ownership Plan (ESOP). Transitioning leadership from business founders is notoriously tricky, and stories of failed transitions abound. Fifty by Fifty wanted to know if and how the ESOP structure eased this transition.
“The transition was really well planned and well executed,” said Jones, who gave most of the credit to her predecessors, Sue Butler and Tracy Till. “Sue and Tracy put a lot of thought and care into building a woman-owned business that respected the work/life balance of its employees. They put the same care into thinking about what would happen to the business when they retired.”
Choosing Employee Ownership
Butler and Till had already created a unique organizational culture at their company, one that combined exceptional support to employees with high expectations around performance and personal responsibility. They wanted to preserve the culture that had made Butler/Till both a great place to work and a successful business. Knowing that those who worked at Butler/Till valued the culture of care and excellence and would be most likely to preserve it, they decided to sell their company to the employees, using an ESOP to gradually transfer ownership. And they mentored Jones to lead the business into the future for the new employee owners.
Knowing that those who worked at Butler/Till valued the culture of care and excellence and would be most likely to preserve it, they decided to sell their company to the employees.
The ESOP and the succession plan were announced on the same day, nine months before Jones became president, although both moves had been planned well in advance. Jones knew from the start that the employees she would be managing were also the owners of the business. “I had such wonderful mentoring for nine months that when I actually became president in January 2015, it was almost anti-climactic; nothing changed.” She added, “It was like learning to ride a bike with training wheels.”
A Careful Leadership Transition
A seamless leadership and ownership transition requires preparation and care. Jones recalled how Butler and Till asked their new executive leadership team (Jones; Melissa Palmer, chief operations officer; and Peter Infante, chief strategy officer) to take a series of road trips to visit other employee-owned companies that had been through leadership transitions. They thought it was important to learn firsthand what had and had not worked. “At the time it felt like, why are we doing this when we have so much to do in the office?” said Jones. “But it was really helpful, and in the process Peter, Melissa and I really bonded as a team.”
A Corporate Purpose: “Create Connections. Make a Difference.”
One of the first things Jones did as president was to create a corporate purpose statement for Butler/Till, “Create Connections. Make a Difference.” “After gaining insight from every employee as to what Butler/Till means to them and how we impact those we serve, the leadership team locked ourselves in a room until we had a draft of the purpose statement,” explained Jones. “We knew we had landed on something good when after a few weeks of sitting with it, we didn’t want to change a thing.” This purpose statement serves as a compass that has guided Jones through her first three years as president.
Tackling a Major Acquisition
Notably, during Jones’ first year as president, in addition to the leadership transition and the new ownership structure, Butler/Till also completed its first major acquisition, buying Brand Cool, another Rochester-based marketing agency that focuses on energy and sustainability. It was a lot to juggle.
“When you list all of those transitions,” acknowledged Jones, “it does sound like a lot. But these were all exciting opportunities for Butler/Till, aligned with our purpose and values. Because we were clear about our purpose, we found ways to rise to the challenges and make it work.” Rising to challenges is something Jones has experience with, having earned her MBA while working full time and raising two children.
Because we were clear about our purpose, we found ways to rise to the challenges and make it work.
Jones recalls, “When Butler/Till was presented with a unique opportunity to acquire Brand Cool, our first reaction was, ‘There’s no way we can do this,’ followed quickly by ‘but it’s a perfect fit, so let’s figure it out.’ ” Brand Cool’s focus on sustainability was a mission fit for Butler/Till. And Brand Cool was also a B Corp and a N.Y. state benefit corporation. When Brand Cool became a wholly owned subsidiary of Butler/Till in June 2015, the companies merged more than their operations; they merged their innovative ownership and governance structures as well. The employees at Brand Cool became members of Butler/Till’s ESOP, and Butler/Till became a certified B Corporation. Since then, the firm has consistently scored, Best for the World (in the top 10 percent) for the “worker” category, in the annual list that B Lab prepares.
Ownership design proved a facilitating structure to support moral leadership and a caring culture.
The decision to acquire Brand Cool has paid off for Butler/Till and for Brand Cool. Brand Cool, citing revenue growth of 120 percent and a doubling of personnel, opened a new office in San Francisco in late 2017. Butler/Till is growing too, with revenues up 33 percent and personnel growth up 37 percent. But the number that Jones is most proud of is Butler/Till’s 7 percent turnover rate, much lower than the industry average of 25 percent. “We are proud that we create meaningful and rewarding work and that talented people want to spend their whole career with us.”
Design Lesson: Ownership is a Critical Part of Leadership Transition
When Sue Butler and Tracy Till decided to sell their business, they understood that good leadership was essential for a smooth transition that would preserve their culture. But they also understood that leadership alone could not guarantee that their unique business culture would thrive. Their employees, who created the business value and benefited from the culture, they realized, were the best insurance to protect that legacy. At Butler/Till, like many of the businesses profiled in Fifty by Fifty’s research on “Next Generation Enterprise Design,” ownership design proved a facilitating structure to support moral leadership and a caring culture. With the foundation of a secure ownership structure and a clear purpose, Jones has led a smooth transition and taken Butler/Till to new heights of success.
Sarah Stranahan is senior editorial associate at The Democracy Collaborative and a leading member of its Fifty by Fifty employee ownership team.
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