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ESOP Association Blog

A Look at the 2020 ESOP Company of the Year

NCM Associates seems to make a habit of rising to the top. Google the term “automobile dealer consulting” and you’ll find the company at the top of the list, offering an impressive array of services to automobile dealers across the nation. The company also rose to the top of the ESOP Company of the Year competition in 2020, displaying an impressive array of activities aimed at further cementing in place an already strong organizational culture.

NCM started in 1947 with 20 Group, a program that enables non-competing dealerships to gather in small groups where they discuss challenges, brainstorm ideas, and share best practices. The dealerships form deep, trusting relationships with each other and with NCM, which participates in the meetings.

From these intimate relationships with customers, NCM has learned which products and services serve them best—and has expanded its offerings as a result. Today, in addition to 20 Group, the company offers consulting, training, software solutions, and travel services.

Along the way, NCM has shown the value of also forming deep relationships with its employee owners.


Mapping the Future

When CEO Paul Faletti joined NCM 11 years ago, the economy was mired in the Great Recession and the company’s share price was moving in the wrong direction. Employee owners were understandably nervous about the future. Faletti, though, saw opportunity.

He says the company had an impressive track record and was well known in the industry but wasn’t maximizing the power of its ESOP. He saw great potential to leverage the ESOP to strengthen the company culture and forge a competitive differentiator for the business.

“When I go out to pitch new businesses, one of the first things I talk about is what makes us different,” he says today. “Every single person that you interact with at NCM is an owner of the organization, and that resonates very well with clients, who are business owners themselves.” Knowing that employee owners have skin in the game helps build trust with clients, he says, which is key for the business and its success.

Today, the company’s brand promise, “Helping each other succeed every day,” applies equally well to clients and employee owners. “That really sums up how we manage our external and internal relationships,” says Faletti.

But that alignment between internal and external relationships was not nearly as strong when Faletti joined NCM; developing the culture that now serves the business so well took time and effort.


The Ownership Culture Committee

Faletti had to begin by building the infrastructure that would turn the ESOP into an ownership culture machine. The first step was creating an Ownership Culture Committee; it was an idea—and a name—that Faletti picked up from other ESOP companies.

The group is made up of five rotating members who hail from different parts of the business and can represent the interests of various business units and employee owners. The group was designed to meet twice a month. Committee members typically are held to a three-year term limit.

The committee also includes a sixth, permanent member who can offer insights on past efforts and how they fared, and who serves as a liaison to the executive leadership team. The position was created nine years ago by Faletti and the former VP of HR and has been filled ever since by Angie Tucker.

Tucker says the committee has worked hard to find ways to educate, engage, and communicate with employee owners, some of whom work in different locations.

New employee owners participate in a quarterly ESOP training program, which includes an introductory meeting with Faletti. At these events, new owners learn how the ESOP works, how it can benefit them, and how to read a stock certificate. The training is designed to encourage questions and provide answers.

The company also hosts a private Facebook group for active employee owners and company alumni. The group helps everyone stay up to date on important events and activities, such as the announcement of the share price and the window for diversifying ESOP accounts.

The committee also developed a monthly celebration to honor employee owners’ birthdays. During these events, committee members offer education on the ESOP and answer questions.

Faletti says this kind of ongoing education is vital: It helps new employee owners understand and appreciate the ESOP, and it helps those who have been with the company for some time remember that an ESOP is a special and unique benefit.

To further extend the culture, NCM offers employee owners several personal touch points. For example, when employee owners enter the ESOP they receive a custom caricature that is posted to a special wall next to the main lobby entrance. Another wall includes written testimonials from employees who answer the question “What does employee ownership mean to me?”

The company also promotes employee ownership through company letterhead and a dedicated web page.


Adapting to the Times

While NCM already had a strong culture in place, the company understood that it was vital to keep adapting during the pandemic.

The Ownership Culture Committee started meeting twice as frequently—once a week for 90 minutes. Tucker says the extra meetings have helped the group develop new ways of keeping remote employees connected and engaged, including time to engage socially, virtual scavenger hunt games, and other new efforts.

To help avoid feelings of isolation, the company announced that all employee owners could use company Zoom accounts for video chats with family and friends.

NCM also turned its quarterly meetings into bi-weekly family gatherings, at which staff can learn about the strategic plan, hear how the company is doing, and review financial data. At these meetings, “we talk about the good and the bad,” says Faletti. If the company had a tough month, failed to get an expected contract, or experienced unexpected results from the pandemic, those things would be discussed.

Sharing information is a fundamental part of NCM’s philosophy, and it pays dividends. Tucker says the family gatherings have attracted great attendance because everyone wants to see how the company is doing, and that the company’s transparency helps employee owners navigate troubling times. “Paul and the senior leadership team have really stepped up to ease everyone’s nerves,” she says.

Tucker also lauds Faletti for personally calling each of NCM’s 180 employee every few months, a practice he started after the pandemic began. The conversations focus on the people, not just their jobs, says Tucker. Faletti’s sincere interest in the well being of employees and their families spoke volumes to employees and left them feeling cared for and appreciated.

For Faletti, it is just how NCM operates. “I just think it is something you should do—check in with your people,” he says. “We try at every possible opportunity to let our associates now that we really care about the person,” he adds, noting that “the company will thrive if the employee owners know that.”

So far, despite the pandemic, the company is thriving. Faletti developed the hashtag #emergestronger and employee owners have taken it to heart. The company is doing well and even adding staff.

Tucker sees employee owners actively looking for ways to help each other, including lending a hand so colleagues in other areas can meet their deadlines. “They are invested in this company,” she says. “They are employee owners.”

The cultural advantage Faletti sought more than a decade ago seems firmly in place now. Through their philosophy and their actions, NCM is showing that building strong relationships—with customers and with employees—is how good business gets done.