How Employee Ownership Transformed KJT’s Culture, Brand, and People
Founded in 2007, KJT is an evidence-based consulting services agency that serves the pharmaceutical, medical device, biotech, and healthcare segments by providing evidence, insight, and collaboration. In 2013, the KJT Employee Stock Ownership Plan (ESOP) was created, which purchased 20% of the company from its founder and gave employees ‘skin in the game’ with an ownership stake in the company and its success. In 2019, KJT became 100% fully employee owned, making employee owners full financial participants in KJT’s long-term success.
The transition to employee ownership has resulted in visible, tangible returns on its employees’ hard work, which has led to a highly motivated workforce and a higher financial stake for employees all while improving corporate culture, increasing employee retention, and strengthening client relationships. KJT achieved record growth in 2021, which can be attributed to the lively, motivated ownership culture.
While KJT has realized great reward, the ESOP journey is not for the faint of heart, KJT has invested considerable time and resources to get to where it is today.
What is an ESOP?
In the simplest of terms, an ESOP is a qualified retirement benefit, based on company stock. This means as the total company value increases above the current ESOP valuation, employee share values increase. The longer an employee works at KJT, the more stock they will accumulate. Employees can earn company stock as a retirement benefit through no financial commitment or contribution of their own.
Why Did We Choose ESOP?
Since KJT’s origins in 2007, the company’s focus has been to balance both profit and culture, which is what initially led to KJT becoming a 20% employee-owned company in 2011. Ever since that initial purchase, KJT has become even more focused on a balanced corporate culture, knowing the long-term value it would bring for the ESOP, employees. and clients. When KJT became 100% employee owned in 2019, the agency significantly increased in size (both employees and revenue), continued maturing its business practices and research delivery process, and doubled down on using its unique culture to grow the ESOP.
Ownership Education & Culture
The journey from independently owned to 100% employee ownership required considerable time and energy from the senior leadership team, and a full commitment to educating employees about the benefit of working for an employee-owned company. In switching to an employee ownership culture, KJT saw a much bigger need for regular information-sharing and two-way communications. In the beginning, this was primarily because employees needed to feel comfortable that the ESOP model would add value to their retirement and incentive plans (as compared to the traditional 401k cash match, for example). They also needed to understand how ESOPs work and the expectations that come with an employee ownership culture. Given this, KJT spent a significant number of resources supporting employees from an educational perspective across areas such and ESOP 101, financial literacy, KJT’s business model and communication.
While the collective business acumen of KJT’s employees continues to grow, the organization has leaned into celebration: the desire is for employee owners to be proud of themselves for their contributions to KJT’s journey. As a company, it’s also important to recognize and reward employees for their hard work and how they contribute to KJTs success.
More Than Just Financial Literacy
“Ownership culture” is truly KJT’s way of being, so much so that it is embedded into the company’s Mission statement: to build an ownership culture where all employees create value for clients to have confidence in business decisions. On a typical day at KJT, some of the traits one would observe about their employee owners include:
- Encouragement of innovation and new ideas
- Supporting and encouraging teamwork
- Promoting a positive work culture
- Commitment and drive to deliver value to clients, which includes full investment in s the long-term success of KJT’s clients
- Living by our KJT’s corporate values: Balance, Mutual Respect, Empowerment, Empathy, Integrity, Mindfulness and Ever Better
- Driving growth at an individual and enterprise level
As time goes on, KJT has realized that a broader purview helps employees make decisions that better reflect their ownership. To build momentum for KJT’s mission and vision, there is transparency sharing financial and company information monthly. Fostering and investing in professional growth and development among employee owners is also critical to long-term success and is a key tenet of an ESOP culture.
Wired for Growth
At the end of the day, an ESOP is a tool to generate financial stability in retirement for employees – but it can also push an organization to create new pathways and processes that enable the full benefits of an employee ownership culture to shine through. What may look like a retirement plan at its most basic level is really a game-changer in how ESOP companies like KJT approach continuous improvement and growth opportunities across all areas and functions.
A View That’s Worth the Climb
ESOP is a great option for organizations considering their business strategies for sustainable growth into the future – it was for KJT – and it takes a lot of work! Long term success hinges on employee buy-in, which requires a strong vision for the future and the tools for everyone to get there. There are no shortcuts on the ESOP journey, but KJT has found the destination to be well worth the effort.
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