2012 Company of the Year

 

Summers Manufacturing

 

L-R  Paul Phillips, Manager at Summers Mfg; Deb Anderson, President of Summers Mfg.; Sarah Gengenback, President of the MN/Dakotas Chapter.

Our ESOP story began in 2001 when the Summers family decided that an ESOP plan would be a good way to help diversify their substantial investment in the family business. As retirement approached for two of the family members, a monumental decision was required. There were purchase offers from outside sources to consider. In the end, the family decided that the employees were best suited to carry on the business that they had helped build. And so, on December 31, 2006, Summers Manufacturing became a 100% employee-owned S-Corp.

Along with new ownership came new leadership. Debra Anderson, the last of the second generation Summers family to be actively involved in day to day operations, stood at the helm, ready to guide our ship as President and CEO. At the same time, her two retiring older brothers, Larry & Carter Summers, agreed to serve on the Board of Directors. Firmly dedicated to developing an ownership culture for the company, Deb set out to dissolve the top-down management style that had been the norm for over 40 years and build up an engaged and empowered workforce capable of making proper business decisions. It wasn't going to be immediate and it wasn't going to be easy, but the lofty goal was clear and plans were needed to help initiate the transition.

The MN/Dakotas ESOP Chapter became a vital and trusted resource as this journey began. The expert knowledge of the staff and members helped us generate a map and the plotting of the course began. Safely navigating around known pitfalls while swiftly traversing these yet unknown waters would test both the Captain and the crew!

An ESOP Communications Committee was established to educate and inform the participants of the incredible benefit that we now held in our hands. Webinars and reference materials jump started the process as the committee began executing its charged task. Attending ESOP chapter meetings and the Midwest Conferences also helped motivate and inspire our members to initiate activities with fellow employee/owners including:

  • Annual Employee Ownership Month observances
    • Weekly educational activities with prize awards (Crossword, Word Search, etc.)
    • Celebration meals prepared by the committee and served by the Board of Directors
    • Food Drives for community Food Banks
  • "Guess the Stock Price" contest
  • Incorporating the "Employee Owned" wording into our company's logo
  • Recognition celebrations on the anniversary of becoming 100% Employee Owned
  • ESOP 101 training (explaining how the initial transaction occurs), as well as more in-depth training
  • Product 101 training (everyone needs to know what we build & how our customers use our products)
  • Coordinating letter writing campaigns to legislators in Washington, DC
  • Annual Meeting/Statement Distribution Celebration with dinner, entertainment, and prizes

 

The ESOP Communications Committee enjoys strong support and encouragement from the Board of Directors!

Our involvement in The ESOP Association began when we became 100% employee owned and has grown since that time. Our company was featured at a MN/DAK Chapter meeting in June 2011, where our President gave an overview of what we have done so far and what we hope to accomplish. We have also had employees sit on a Chapter meeting panel and volunteer for one of the Chapter Committees.

Two years ago the Summers ESOP Communications Committee came up with the idea of inviting employees to submit their names for a drawing that would take them to the Midwest Conference in Minneapolis. The winning participants were then required to write about their experience at the conference for our bi-weekly newsletter that is distributed throughout the company. This "eye-opening" experience for those attendees validated what we are doing, what we can become, and what part they can play in this adventure!

Another pivotal moment on our journey occurred after two Board members attended the Great Game of Business in St. Louis. Validating the leadership vision, the movement towards open book management began. Finance 101 classes educated all employees on basic business fiscal terms with follow up classes to keep everyone abreast of our current financial status.

Probably the most significant and visible catalyst that helped begin the shift in our culture was when leaders from every department were assembled into a planning committee to develop our Strategic Plan. An experienced consultant was brought in to help facilitate an efficient process. Every department in our company had input as well as ownership in the plan. A Mission Statement and a Vision Statement were also established and Company Values were defined. Everyone is accountable not only to themselves but also to everyone else. These major changes in management style were not immediately embraced by everyone. Even some long term employees failed to adjust to the transition and are now no longer part of our company.

Other notable actions deserving mention include:

  • The establishment of a self-funded Profit Incentive Plan designed to build teamwork by rewarding every employee at an equal level when and if profit benchmarks are achieved.
  • Retaining an outside Independent Trustee to oversee the fiscal responsibilities of the ESOP plan.
  • Guidelines that bring department heads into the process when prospective new team members are being considered for their departments.
  • Utilizing the Great Game of Business philosophy, we created a mini-game competition for our welders to promote productivity and efficiencies. The winning team earned a celebration lunch for their plant, including window washing in the parking lot by the Board of Directors.

 Our share value performance since becoming a 100% ESOP owned S-Corp has been nothing short of phenomenal! The first year saw a small decline in value, due to the large ESOP loan used to buy the shares from the Summers family. This initial decline is typical and was explained by the statement provider's representative who spoke to participants and answered questions with the distribution of that annual statement. Since that time, our share price has grown over 30% each year - well beyond most employees' wildest imaginations!

But the absolute most intriguing and exciting part of our story is what is yet to be written. The establishment of an ESOP combined with an engrained ownership culture can provide a foundation that holds infinite possibilities. What we choose to build on that foundation is only limited by our own resourcefulness and determination! We've had a taste, and now nothing short of the feast will satisfy us!!

Summers Manufacturing builds "Field Tested Tough" farm equipment with manufacturing facilities in Maddock and Devils Lake, ND and currently employs around 200 people. Our products are marketed through a dealer network across 14 states and 4 Canadian Provinces as well as several other countries.

Currently serving more than 50 ESOP companies, Boulay has the experience and expertise to offer value at all stages of your ESOP lifecycle. Knowing th...