A Rambling by Dennis Quaintance, CEO & CSO (Chief Storytelling Officer)
I’m certainly not the first person to be amazed by the way we can sort of “become” our dominant thoughts.
Ever since I was but a pup working at a hotel across the Clark Fork River from the U. of M. in Missoula, Montana — I started working in the housekeeping department there when I was 15 — I dreamed of working with a highly effective and harmonious team. (I have always loved, loved, LOVED genuine camaraderie…the sort where folk work together to really get things done, not the “pat-a-cake, pat-a-cake baker’s man” kumbaya stuff disguised as camaraderie.) Yet…this notion had to be a dream, because genuine camaraderie wasn’t the norm there or at many (most) other places that I’ve worked. As a result, finding or developing this kind of collaborative team became a dominant thought for me.
It became clear to me that to get the rubber to the road for the level of cooperation and harmony I imagined, leadership teams need to do a lot of things well. To my mind, the most important thing is having the interests of all of the members of a team aligned. Please don’t let that notion diminish the obvious importance of a leadership team being grounded in a culture based on merit and fairness, or ensuring that the whole team has a clear sense of which way is “North” (where’s the organization going?) and that the leadership team is effective at communicating why going North is a good idea, plus having a good distribution system for compasses. But, assuming that all those important things are competently handled, it’s getting the interests of members of the team aligned that seems to result in the sorts of outcomes consistent with my dream.
Over the 28 years that QW has been a thing, we’ve strived to set up our relationships with our colleagues so that we had aligned interests. For example, we put in a “Lucky Star” program that allows folk who play restaurant or hotel in ways consistent with our intentions and values to get rewards, recognition and benefits – things like being able to get a schedule that dovetails as much as possible with the other priorities in their lives. Yet I still longed to reach the next rung on the “aligned interest” ladder. So, this hardheaded cowboy kept dreaming and searching for ways to attain even higher levels of camaraderie and effectiveness. Through the years, Nancy (my cohort and bride) and I have shared this dream with many people, including our good friend and lawyer, Cy Johnson. He was like a broken record, repeating, “Consider an Employee Stock Ownership Plan (ESOP).” His persistence, coupled with the reality that I’m not getting any younger (Nancy is), caused us to “go deep” in our effort to figure out how we might not only make QW more effective, but also increase the probability that it might be a viable enterprise for decades to come…well beyond when the two of us will be playing key roles here.
I came to realize that there are three areas that need to work out well for a company to last longer than most. Beyond having a reason to be in the marketplace (filling a need), I think a company needs a good succession plan for the key members of the management team, plus a strategy for the evolution of the governance of the enterprise and how and by whom it will be owned. We’ve observed that with most outfits like QW the issues of governance and ownership are dealt with reactively when the founder(s) decide, or are required for health or other reasons, to step away from their leadership roles. That didn’t make sense to us. I remember my wonderful stepfather, Dale Moles, telling me that most people mature first physically, then intellectually, then spiritually. He mused, “Might a person be better off if that sequence were reversed?” That nugget influenced me to think, “Let’s focus on the evolution of this organization’s ownership and governance first, then on the succession plan for the leadership team. Let’s approach this in the reverse order of what is typical.” Couple that notion with Cy’s mantra of “ESOP… ESOP … ESOP,” ringing in our ears and you have the seed and germination process for what, as we announced last November, grew into QW being owned, in effect, by our colleagues through the QW ESOP Trust! (QW is one of but a few employee-owned hotel and restaurant management companies in the country.) BTW: Mike Weaver and I collaborated on this process. I’m sure lucky to have such an amazing person as my business partner and great friend.
The QW ESOP Trust exists to provide retirement benefits for QW staff members. Period. When folk choose to join this team, it is now even more in their own best interests to help QW take great care of our guests and colleagues. Delighted guests are the result of staff members who want to be here and are pulling in the same direction. From now on I’ll bet that if one of our colleagues is walking around acting like Eeyore, others might say, “Hey, friend, we’re all eating out of the same feed bucket. Please don’t take a leak in it!” (I modified that “bucket” line from something more colorful that Nancy’s daddy, Jim King, told me. He’s a great guy…and a hoot!) So, do you reckon that QW now has a context of aligned interests with everyone that works here? I sure do. Another thing that made this ESOP idea seem like perfect timing is that Nancy and I LOVE our jobs…and we are even more excited about playing our roles within the context that this ESOP ownership provides. We’re skipping to work with even more pep in our step (skips), and we don’t plan to push back from the bar for a good while.
Do you find it as interesting as I do that 44 years after this hotel/restaurant greenhorn started dreaming of getting to work with fully aligned interests with his colleagues, QW now is operating as an ESOP? This context seems like the perfect structure to cause aligned interest. Be careful what you dream!
This joyful pic was made just after we announced this big news to our colleagues.
Digression No. 3201: I’m pretty sure that we are well served by keeping our dominant thoughts on the sunny side of life. I think we get to choose. I’m not preaching, I’m just saying. (Can you tell I just watched the documentary about the Carter Family and their music?)
My bet is that you are left with more than a few questions about how this ESOP works. I’ll take a shot at addressing what I’m guessing you might be wondering.
- Congress created ESOPs in 1974. Since then, the structure has been modified and further perfected. I share this because most of what I say below wasn’t invented by QW, it’s the structure that the rules require. This ESOP is a no-kidding qualified retirement program regulated by the Department of Labor and the IRS… folk you don’t want to mess with!
- Sharing that reminds me to insert some weasel words: This explanation isn’t comprehensive and is NOT intended to communicate details of the plan. It’s just a gross overview and simplification that, because of the all-too-obvious limitations of this writer, is probably deeply flawed. QW staff members have access to a summary of the plan and the actual 74-page plan document. The words in those are the ones that matter.
- The ESOP Trust doesn’t own any real estate. Mike Weaver and/or I, along with Nancy and some others, have always owned the real estate. That didn’t change. QW has always rented the restaurants and operated the hotels for a fee. That all stays the same.
- Our colleagues don’t put money into the ESOP trust. They gain participation in it simply by working here. A person’s level of participation is determined by how much they make, but there is a cap for folk who make more than most.
- Mix that method for determining the level of each staff member’s participation in the plan in terms of how many “Retirement Units” (RUs) are assigned to each person each year with the fact that the value of the RUs is determined annually by a professional and independent appraisal of the company, and you have the formula for how it works.
- Everyone who works more than an average of 19½ hours a week, who has been with QW a year and is over 18 gets to participate. After three years, their account “vests.” That means that they have the rights to it. If someone leaves prior to becoming “vested,” they forfeit their account.
- If someone leaves prior to retiring (as most will), if they are vested, they’ll start getting the value in their account after five years (in some instances longer) and they will get the value over five years. (That is pretty neat. It aligns people’s interests with QW’s even after they leave!)
I’m talking about this ESOP more in this Rambling than most of our colleagues here at QW have heard us talk about it. That is because to them this ESOP is bound to seem like just a lot of words until later this summer when they get their first participation statement. Once our colleagues get those statements, I think we’ll all understand this better. That is when we’ll start talking about it more. And, once we reach the three-year vesting threshold, I think we’ll really “get it.” (I say “we” because I’m a participant, too!)
Whew…if you hung with me this far you deserve a gold star: A Lucky Star!
If you have an appetite for more, Taft Wireback with the Greensboro News and Record wrote a well-researched and accurate story about this; so did David Ranii with the News and Observer in Raleigh. Those and some other interesting and well-done press pieces are available at QWRH.com.
This Rambling is like a report on a developing story. We’ll keep you posted. It is sure a pleasing experience drinking from the same well as my wonderful colleagues. Together, when we do things that cause QW to be healthier, we all benefit…or, if we goof up, the opposite can happen. Both outcomes are proven to be good at getting us up and at ‘em.
Copyright 2017 Dennis W Quaintance, used with permission Neighborhood Letter, Summer • TM & © 2017 Quaintance-Weaver and affiliated entities