Founder Paul Eldrenkamp Reflects on the Conversion to Worker OwnershipDecember 2021
by Rachel White
After nearly forty years as the owner of Byggmeister, Founder Paul Eldrenkamp sold the company to us, its employees. The sale capped off a seven-year planning process including a leadership transition in 2018. During the transition process, Paul started on his next chapter as a business consultant and coach with HELM Construction Solutions. He is planning to continue this work when he fully retires from Byggmeister next spring.
Before Paul exits Byggmeister, I wanted to chat with him about how and why he decided to sell to us, his employees. I had already spoken to Byggmeister’s new worker-owners about the conversion and was wondering how Paul’s perspective would compare.
Rachel: There are several different paths you could have chosen for your transition out of Byggmeister. Why sell to your employees?
Paul: Small businesses are a collection not just of people but also of the habits, traditions, and connections between those people. When I first started thinking about retiring, I asked myself, would these people with their shared knowledge have greater value spread out among other companies? Or would they have greater value staying together as a team? I came to believe that Byggmeister has greater value as an ongoing concern than as individual talents distributed around other businesses. That’s certainly not true of every company.
Rachel: Why do you think Byggmeister provides greater value as an ongoing concern?
Paul: I hope this isn’t just parental pride so to speak, but my sense is that Byggmeister sets the standard on multiple fronts simultaneously: quality of design, customer service, building performance, accountability, tracking and measuring the impact of our work, learning from our mistakes, and striving for continuous improvement. In staying together, Byggmeister can continue to help push the industry forward.
Rachel: I think I know the answer to this, but why worker ownership? Couldn’t you have kept the company together by selling to one or a small group of employees?
Paul: On a practical level, selling to a single individual wasn’t an option as there was no one who had both the skill set and the desire to take it on. And offering ownership to a small subset of employees seemed like it could destabilize the company’s collaborative culture. So, worker ownership felt like the best choice by a wide margin for very practical reasons. But philosophically and morally, it also felt like the right choice. I see worker ownership as a model for the sorts of collaboration and conversation that we need more of in the country. A successful worker-owned company can demonstrate that people from a broad range of backgrounds can work together and own a business.
Rachel: In 2014 you let us know that you hoped to retire by 2024. So, you’re ahead of schedule. But at the time I remember thinking that a ten year off ramp was awfully long. Why give us so much notice?
Paul: I knew that it would take a while to hand off my operational responsibilities. One thing I had learned over the course of my career is that it’s extremely difficult to hire for positions of significant responsibility. It can often take more than one attempt. There was less churn than I expected in part because you were able to grow into the leadership role relatively quickly.
Rachel: What advice do you have for companies considering worker ownership?
Paul: The Owner needs to create an organized and strategic pathway for sharing and handing off responsibilities, and then must implement the process, learn from what works and what doesn’t, and adjust course as needed. This learning is both about the systems, habits and disciplines that need to be put in place, and about the kinds of people who have the aptitude to follow and maintain those systems, habits, and disciplines. For Byggmeister, putting a management team in place and developing that team’s ability to run the business was critical to the success of our ownership transition.
Rachel: Any final thoughts?
Paul: I am proud of the way Byggmeister has tried very hard to push an industry that can come across as too conservative, poorly managed, and only borderline accountable. Although I don’t think I’ve ever clearly articulated this to the team, I like to think that Byggmeister exists for good reason, and that part of our reason for being is to show that there is another, better way. That’s why I’m so delighted and gratified that the employees are committed to carrying the company forward.