A change in ownership for a local company can be an anxious time for employees, who might fear layoffs, unfamiliar new management, and the inevitable loss of their company culture.
But the employees at LBS, a century-old publishing supplies company in Des Moines, didn't have anything to fear from new owners when the company was sold in 2014. After all, the new owners were them.
LBS this year marked 10 years of 100% employee ownership. Under its Employee Stock Ownership Plan, workers accrue stock in the company throughout their tenure, which the company then buys back from them when they leave or retire.
Founded in 1921 as a bookbindery, LBS now sells hardbacks, fabric, adhesive and other supplies to other book publishers, and to makers of other types of luxury packaging. For nearly all of that time, it was owned by members of the same family. But in 2014, owner Frederick 'Fritz' James was ready to retire and looking for options to plan his succession, Marketing Director Julia Hulsebus said.
"He had a couple offers to sell the company, but he wanted to make sure LBS stayed in Des Moines, and he wanted to make sure the employees who worked for him for so long didn't lose their jobs," she said.
So Fritz instead sold the company to its employees, who now stand to see their shares increase in value as the company performs well. Employees begin receiving stock after their first year, and become fully vested after six. The new model has contributed to strong employee retention and a greater degree of commitment and initiative than might be common in other workplaces, Hulsebus said.
"You have different expectations that the company has for you, because as an employee owner, you benefit from the success of the company. So the expectation is you help drive that success," she said.
And the company they own is growing. LBS has acquired three companies in the past several years, including former competitor Gane Brothers & Lane Inc. Employees at those companies also are now part of LBS' stock ownership plan.
A decade in, employee ownership has not just protected a longtime Des Moines manufacturer but helped it thrive, Hulsebus said.
"A lot of the internal communication has changed over time. A lot of the expectations that are brought to employee owners have changed, because you're not just here to do your job," she said. "You own part of the company."