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Dynasty Leadership Podcast

It's great if you can pick when you hand over the reins, but what if that time picks you? “Does your company consistently meet or beat the targets you set?" “Do you have the right team rowing in the right direction?" “Is there something going on in your market or company that threatens your growth? "Are you considering transitioning the leadership of the company?" “Is there a clearly articulated long-term strategy?" We specialize in guiding Family-owned businesses with 50-500 employees to become Succession ready.
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Now displaying: October, 2017
Oct 10, 2017

Karl Neset is a Fractional CFO for CliftonLarsonAllen. Karl has perfected a process that allows business owners to give employees more skin in the game and earning potential, without giving up their equity. Employees can act as owners through a profit share program that compensates people based on their contribution to the company. Karl explains why this strategy leads to a better team dynamic within the company and gives employees a strong sense of purpose, too.

 

Key Takeaways:

[1:35] Who is Karl and what does he do for CliftonLarsonAllen?

[5:10] There are roughly 10 steps in how an owner can help an employee get more skin in the game and earn more income.

[6:10] The first step starts with gathering the data.

[7:10] How do you properly compensate differently-skilled people?

[9:25] Karl shares an example of how a system like this (ownership among employees) looks like, once it’s been properly put into action.

[11:40] It’s a team discipline. If one screws up, they all screw up.

[12:20] What does the sales department look like when a strategy like this is put in place?

[14:10] A system like this makes it a lot easier on the owners. They do not have to micro-manage their employees.

[15:35] If the owner goes away for a couple of months, the business will still run smoothly, because employees are being compensated similarly to how the owner is being compensated.

[16:45] What kind of percentage does each employee get, based on their roles?

[18:35] This strategy gives motivation to both new and older employees who now see that they can be a part of something meaningful and they will get compensated fairly well for it. It gives them drive to advance within the company and obtain career growth.

[19:50] The next step is to lay out different projections for the next five years in the company. You should have three: A bad year, an okay year, and a great year. Based on these numbers, your employees will be compensated accordingly.

[21:00] This model allows for employees to make double, in some instances, than what they can in an open market. Who wouldn’t want that?

[22:35] If someone makes double their normal salary, do they start getting cocky? How does that affect the company as a whole and how do you address it?

[28:20] Before implementing a plan like this, why is it important to run it through HR first?

[30:40] Many employees/owners might think this plan is too good to be true or unsustainable.

[32:15] It is critical to incorporate wealth management classes in the company after a strategy gets put into place. Employees who see a huge spike in wealth do need to understand what that means to them.

[33:30] Why should a business owner use this strategy vs. something like using phantom stock or equity?

[37:00] What are some things to think about/potential mistakes that could happen?

 

Mentioned in This Episode:

Dynastylc.com

Claconnect.com

Email Karl: Karl.Neset@Claconnect.com

Karl on LinkedIn

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