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Updated: 8 hours ago Ask ACE

Ask ACE: How do you prepare leadership and management to run an ESOP successfully?

By Priscilla Hansen Mahoney, Blazing Trails Coaching

Q: How do you prepare leadership and management to run an ESOP successfully?

ACE advises: An Employee Stock Ownership Plan is often described as a succession strategy, but the truth is, the transaction is just the starting line. The success of an ESOP depends on how well leadership and management are prepared to guide the company in its next chapter.

One of the biggest shifts is moving from an owner-led model to a team-led model. In a traditional business, the founder or owner usually makes the final call. In an ESOP, leadership must foster transparency, accountability, and communication across all levels. That doesn’t mean every employee votes on every decision, but it does mean leaders must operate with clarity and consistency, so employees feel the impact of ownership in their daily work.

To set an ESOP up for success, leadership teams should:

  • Build strong systems: Establish governance, clear roles, and regular meeting cadences that connect strategy to day-to-day operations.
  • Develop leaders: Train managers in both people skills and financial literacy so they can model ownership thinking and explain the “why” behind decisions.
  • Establish and live core values: Define the principles that guide behavior and decision-making and hold leadership accountable for modeling them every day.
  • Strengthen communication: Ensure information flows consistently across the company, helping employees understand how their work contributes to long-term value.
  • Practice patience: Recognize that cultural change doesn’t happen overnight — ownership mindset develops through repetition, education, and trust.

When management commits to these practices, the payoff is significant: stronger retention, engaged employees and a company that’s truly positioned to carry forward the founder’s legacy.

Priscilla Hansen Mahoney, founder of Blazing Trails Coaching, is a certified Lean Six Sigma Green Belt and iPEC professional coach and works closely with ESOPs to strengthen leadership and culture. She is a past president of ACE.

About ACE

The Association for Consulting Expertise (ACE) is a nonprofit association of independent consultants who value “success through collaboration.” The public is welcome to attend its regular meetings to share best practices and engage with industry experts. For more information go to www.consultexpertise.com.

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