Why Employee Ownership Matters More Than Ever with John Abrams

What happens to a business when its founder is ready to step away? Too often, legacy companies are absorbed, shuttered, or changed beyond recognition. But what if there were a better way—one that preserves the company’s culture, protects jobs, and gives employees a meaningful stake in its future?

In this episode of The Leadership Habit podcast, host Jenn DeWall sits down with John Abrams, co-founder of South Mountain Company and author of From Founder to Future, to explore the growing movement of employee-owned businesses. Whether you’re a business owner planning for succession, a leader interested in sustainable growth, or simply curious about new organizational models, this episode is a must-listen.

Meet John Abrams, Founder and Author

John Abrams founded South Mountain Company in 1973 and spent nearly 50 years turning it into one of the highest-scoring B Corps in the world. In 1987, he transitioned the company to a worker cooperative—at a time when there were only a dozen such businesses in the U.S. Today, he’s a leading voice on employee ownership and runs a consulting firm helping others do the same.

“My only goal was to leave the company in the best shape it’s ever been,” Abrams reflects. “And as I look at it now, it’s in better shape than that.”

Employee Ownership Isn’t Just a Trend—It’s a Solution

Employee ownership isn’t just a feel-good concept—it’s a proven way to address economic inequality, increase engagement, and build more resilient businesses. Abrams highlights the stark economic disparity that has grown over the past few decades, pointing out that at the end of the 1970s, the typical corporate CEO earned roughly 20 times the typical worker’s salary. Today, that ratio is more than 250 to 1.

This widening gap has left many workers feeling disillusioned and undervalued. In contrast, employee-owned companies offer a model where profits, decision-making, and purpose are shared more equitably among employees. Studies have shown that these organizations tend to have higher retention, better morale, and stronger long-term performance. In a moment when Americans are seeking more stability and fairness at work, employee ownership offers a powerful solution.

There’s More Than One Path to Ownership

Many leaders assume that converting to employee ownership means launching an ESOP—and nothing else. But as Abrams explains, there are three primary structures:

• ESOPs (Employee Stock Ownership Plans), which are tax-advantaged and ideal for larger businesses
• Worker Cooperatives, which emphasize democratic governance and are common in smaller organizations
• Employee Ownership Trusts, popular in the UK and gaining traction in the U.S., which allow founders to sell their companies to employees through a trust structure

Abrams urges founders to explore all options:

“There’s no right answer to this. Every business is different. Each has its own culture, its own values, its own aspirations.”

By understanding these pathways, leaders can choose the structure that best aligns with their company’s size, goals, and values, ensuring a smoother transition and greater long-term success.

Succession Planning Is an Urgent Need

According to Project Equity, nearly half of privately held businesses in the U.S. are owned by people over the age of 55. That means millions of businesses will change hands or cease to exist over the next 15 to 20 years. Yet most small businesses have no succession plan in place.

Abrams calls this a silent crisis:

“Trillions of dollars will change hands in the coming years, and many of those businesses will close or be sold to private equity. Employee ownership offers another way.”

Instead of shuttering companies or watching their missions erode under new ownership, founders can consider selling to their employees. This protects jobs, preserves local economies, and honors the culture they’ve worked so hard to build. It’s not just succession—it’s legacy planning.

Culture Matters More Than Control

One of the most surprising myths about employee ownership is that it leads to chaos or a lack of leadership. Abrams flips that idea on its head:

“Employee-owned companies need stronger leadership, not weaker. The key is separating what decisions owners make from what managers lead.”

He also encourages business owners to view every new hire as a potential owner, which shifts how companies recruit and develop talent. Hiring for long-term alignment, rather than just immediate skills, ensures a stronger culture over time.

Culture is one of the strongest predictors of employee engagement, and that’s critical right now. Gallup’s 2025 State of the Global Workplace report shows that only 21% of employees worldwide are actively engaged at work. Companies that create a sense of shared purpose, transparency, and involvement—hallmarks of employee-owned businesses—have a significant competitive edge when it comes to attracting and retaining top talent.

Redefining Growth for a Sustainable Future

Many leaders are pressured to pursue growth for growth’s sake, but Abrams argues for a more mindful approach.

“There’s another word besides growth—and that is ‘enough.’ Sometimes, enough is enough.”

He challenges the notion that success is only measured by expansion or shareholder returns. Instead, he encourages leaders to define growth in terms of depth, not just scale: getting better, not just bigger.

This mindset isn’t anti-profit. In fact, it can lead to more sustainable, values-aligned success. Abrams calls it the “triple bottom line”: profit, people, and planet. Companies that adopt this framework prioritize long-term health, community well-being, and employee satisfaction, rather than pursuing quarterly wins at all costs.

As he puts it, “The ideology of continuous growth… that’s the ideology of the cancer cell.” True leadership means knowing when growth serves the mission—and when it undermines it.

Why It Matters

Leadership isn’t just about profits—it’s about purpose and legacy. This episode is a timely reminder that how we structure businesses has a direct impact on employee engagement, community resilience, and long-term sustainability.

As Abrams puts it, “We can all share in the bounty.” Employee ownership isn’t a radical concept—it’s a practical solution for preserving what matters most in business: people, culture, and impact.

Where to Find More from John Abrams

• Buy his book: From Founder to Future: A Business Roadmap to Impact, Longevity, and Employee Ownership. 
• Check out his consulting firm, Abrams & Angell
• Connect on LinkedIn 

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