During September and October 2000, the Ohio Employee Ownership Center (OEOC), with Kent State University's Graduate School of Management and New Media Services, hosted a delegation of faculty members from three Russian State Universities, from the cities of Tver, Voronezh and Volgograd. The purpose of our internship in Ohio was to study how various business outreach programs work. In addition to the OEOC, we visited the Center for Technology Transfer, the Minority Business Program, the Small Business Development Center, KSU's Workforce Development Training Center at the Trumbull campus, MBA Essentials at the Geauga and Stark campuses, the Kent Regional Business Alliance, Lorain County Community College, the Western Reserve Business Center for Women, the Center for Executive Education and Development, the Urban Center at Cleveland State University, the Cleveland International Program, Ford Motors, and GMTI/Lester in Twinsburg.
We participated in a number of activities of Ohio's Employee-Owned Network, including the Employee Ownership Retreat. A highlight of the tour was the help and hospitality of three ESOP companies which invited us to see how employee-owned firms look and work in practice.
Each of the companies showed us different perspectives on the work they are doing and answered a lot of questions the delegation had about ESOPs and other business issues. The first company visited was YSI, which hosted Ohio's Employee-Owned Network's ESOP Communication Committee Summit. The meeting gathered people from six Ohio and West Virginia employee-owned companies. All of them shared their experiences with the work of communication committees. One of the most interesting things for us to learn was that they believe committees can work better than the traditional hierarchy of managers. The use of employee committees is almost unheard of in Russia, even in employee-owned companies. Another thing which was quite interesting for us is how and why YSI gives new employees a week of orientation to tour the entire company and meet the other employees. Russians would consider this a waste of time.
At Gledhill Road Machinery in Galion, Ohio, president Gar Gledhill presented the history of its becoming an employee owned company. It was touching to hear from the owner of the family business that employee ownership seemed like a good way for the company to go. He said that the business was started by his grandfather at the time of the Great Depression and survived, so now it would be a shame to give it up and sell to someone who doesn't care as much about this business as the family and employees do. That was a true story which one cannot find in academic research about ESOPs and employee ownership.
We also visited Joseph Industries (Streetsboro, Ohio). Part of the Fastener Industries holding company. We spent a number of hours there learning about their ESOP and their holding structure and asking their employees and managers about various aspects of employee ownership and their collaboration with the OEOC. It was the first time the Russian visitors had heard of an employee-owned holding company, and they were fascinated by the idea. They were also surprised that the people at Joseph were willing to take time from their business tasks to explain their ESOP and their business activity. Jay Simecek, general manager of Joseph Industries said, "Time permitting, we encourage our employee-owners to become involved in showing our company and its ownership culture to outsiders. In the process, visitors learn about us and by teaching we learn more about ourselves and experience pride and teamwork."
In every visit, we were learning one or another aspect of ESOPs as a mechanism and employee ownership as a system. We asked each other whether it is all true since it is so different from the realities of our country. Every person in the delegation had his/her own view, and we had some lively arguments after the visits were finished. The level of American technology didn't seem so different from many Russian firms, but the methods of managing and using that technology were a real surprise.
The delegates were amazed that committees would be considered to work better than just having the director or chief make decisions. They tended to view the committee process and time devoted to forming close connections among co-workers as costly and distracting. Some delegates thought that employee ownership is just a tool to make people work harder for their retirement savings and free the government from any responsibility to provide a pension. They thought that the management system put all the responsibility on the shoulders of the employees. They were also surprised by the lack of hierarchy in the firms they visited. People in the firms we visited had the confidence to take the initiative and assume responsibility for making decisions. In Russia, people look to the leaders and to regulations to control their decisions. Although some delegation members disapproved of the methods they learned about, others thought, "Why is it bad to have control over your future? What do our people have as a state pension after 25-30 years of work?"
For people in Russia being independent is a new and scary concept after life in the centralized system. Maybe that is why we were tempted to say "too good to be true." Despite such a difference in our perceptions and our polemics about employee ownership, all of us agreed that it works because it is clearly common sense and gives people a real opportunity to build their own future.
Olga Klepikova is the OEOC Russian program coordinator and served as guide and translator for the delegation.