Both men decided to move to co-op ownership, giving their employees a chance to buy into the business and allow for democratic governance, with each of the worker-owners having an equal share in the business.
“For Tom and I, it was very much a business decision,” said Ewing, who specializes in sales and had been company vice president before the changeover. “We were concerned about what would happen when we eventually retire. Employees are our only asset, really. This is the perfect way to keep them engaged.”
The year-long process brought Ewing and James to ICA Group of Northampton, which helped them explore a variety of different succession models.
According to ICA Group’s website, 75 percent of business owners reported a year after selling their companies that without careful planning, they regretted the transaction, and also that millions of businesses close up shop after the owner retires.
Democratic employee ownership, the firm explains, is built on the people who helped build the company being the best people to take it to the next level, and seeing whether the existing staff has the skills, technical expertise and relationships to help the business succeed.
The 40-year-old nonprofit consulting firm, that focuses on worker ownership, said “The (Ewing Controls) owners wanted the business to remain a place for their engineers to ‘practice their craft,’ and were not interested in selling out to larger, strategic buyers in their industry that would likely just extract key assets and close the firm. The new worker owners are excited about the possibilities this new structure has for the future of their company. … While no management changes were made at the time of the transition, the governance structure transitioned to democratic employee ownership, with the new worker-members electing and serving on the board of directors.