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How This Overnite CEO Built An Award-Winning, Employee Owned Small Giant

Taken from Forbes – Paul Spiegelman Contributor

For most, a mysterious dinner invitation from the CEO would send us into a tailspin of nerves. But Lester Thornhill isn’t most people. Thanks to his unwavering optimism and endless supply of energy, Lester just saw it as a new opportunity waiting to happen.

The invitation came nearly 10 years into his career as IT Director for Life’s Abundance, a health and wellness company that makes and sells healthy products for the whole family, including pets. As a top leader at Life’s Abundance, Lester always put the well-being of the company, and its people, first. It was a duality that came naturally to him: he was raised by his mother and his two grandparents in Trinidad and Tobago, both of whom were not only teachers, but entrepreneurs.

“Growing up, my grandparents taught me the importance of learning as well as entrepreneurship,” says Thornhill. “They opened their own private school, and it was a successful, thriving institution. I watched them and learned the importance of education and to never underestimate anybody. That’s something I’ve kept with me throughout my life.”

Being raised with a mindset of servant leadership, Lester went on to build a career defined by relationships, values, and helping others grow. In his role as IT Director, that meant getting involved with every department and every person in order to help them succeed. For Lester, it was just the right thing to do—but the existing CEO, George Jochum, took notice of his leadership and in 2008, he took Lester out to dinner along with their wives. Like a storyline pulled from a Hollywood script, he asked Lester to take over his role as CEO.

“The economy was faltering and there were red flags signaling recession. I wasn’t sure what was going on until he told me that he was ready to retire and wanted me to be CEO,” says Thornhill. “It was a total surprise. It was probably the worst time to make a leadership change, but you don’t get to pick when opportunities are presented, so I said, ‘Okay, sure.’ Even though the timing wasn’t perfect, it felt like a natural transition for me.”

Although Lester had a strong background in computer science, he’d had his sights set on business since the beginning. In fact, he originally chose his career in technology in order to get an edge in the business world. When he was asked to become CEO, he had already laid the groundwork for a seamless transition.

“As we started the next chapter, I kept the same philosophy,” says Thornhill. “There was virtually no ramp-up period. I gathered the team around and told them that my goal is to help all of you achieve your professional and personal goals. It’s about me helping you — if we’re all successful, the company is successful.”

 

Lester’s situation is relatively rare, and it can be difficult for employees to have confidence in a newly-installed CEO, even when it’s a beloved team member. In order to earn the trust of his new team, Lester focused on building a culture that put their wants, needs, and motivations first. They were already on a great path, but he wanted to do the work of writing down the culture and building systems to keep it going for the next generation of leaders. As members of the founding management team prepared to retire over the next five to ten years, how would the younger generation know what was expected of them?

“My fear was that we wouldn’t be able to sustain our culture over time as different leaders left. That’s one of the reasons I became so focused on core values,” says Thornhill. “I wanted to have a way to explain what’s at the core of our decision-making and our principles. I’m very happy to say that we came up with a mission and a set of core values that accurately describe who we are and what we’ve been doing the last twenty years.”

With the company’s foundation articulated, it became easier to create systems and processes that  put the company on a clear path to prosperity. Lester didn’t hesitate to throw out traditional business practices that no longer aligned with its values. That meant doing away with annual performance reviews—a practice that is equally dreaded by most employees and managers.

“So much of what people discuss in performance reviews is ancient history. It’s not effective communication,” says Thornhill. “We created a monthly self-assessment that prompts team members to evaluate their successes, what they could’ve done differently, and their goals for the next 30 days. It creates a dedicated space for a simple, 10-minute conversation that builds a roadmap over the course of the year.”

With Lester at the helm, Life’s Abundance continued to grow and expand. Sales increased, head count grew, and in 2012, the company moved into a custom-built, new facility to meet the demands of its improved services and processes. But another challenge loomed on the horizon: some of their principals were ready to leave, and they needed an exit strategy. For most companies, including many purpose-driven ones, core values and mission take a backseat during the sensitive conversations of exits and ownership change. But traditional exit options just didn’t feel right to Lester and the rest of the leadership team.

“If we sold the company to another entity, what would happen to the employees that helped us get to where we are today?” says Thornhill. “We were concerned about losing the mission behind the company, and putting the culture at risk. So I started looking for a strategy that would deliver on the value of what we built while protecting the culture, the mission, and our people—an Employee Stock Ownership Program (ESOP) was the best option for everybody.”

In 2013, Life’s Abundance executed an ESOP transaction and became a 100% employee-owned company. As Lester explains it, it’s the best of both worlds: the selling shareholders get a fair value for their stock, and employees end up with ownership of the company. It takes due diligence, but when you get it right, there are significant financial advantages in selling to an ESOP versus traditional options. Plus, employee ownership empowers team members to think like owners and make better decisions for the company.

But employee ownership is a long-term play, and it takes time for the concept of ownership to take hold in your culture. As Lester tells Options4Growth, employees don’t always understand what it means to be an owner until they experience it firsthand, so they try to give them skin in the game to bring the ownership mentality to life.

“We have a quarterly bonus that’s revenue-based. I can honestly say to every employee, ‘You make your own raise,’” says Thornhill. “As revenue goes up, a piece of it goes to you. Ever since we have instituted the bonus, we’ve hit it every time. That quarterly bonus keeps getting bigger and bigger. After a while I say, ‘Well, let’s just take a chunk of it off and make that salary.’ Then salary goes up, and the bonus starts to build up again. People love that.”

Most recently, Life’s Abundance was named one of 2019’s Forbes Small Giants: Best Small Companies in America. With 51 employees and a revenue of $38 million, Lester continues to drive growth for the company, in passionate pursuit of their shared mission. With full control over the production of its products and distribution to customers, Life’s Abundance proudly touts a lifetime record of no recalls. And the company continues to scale its offerings, even without the help of big-box stores and Amazon.

“From the beginning, putting people first has been part of our DNA,” says Thornhill. “Profit is just a barometer for how well we’re doing in fulfilling our purpose to improve the health and wellness of families.”

To hear more of Lester’s story and interviews with other purpose-driven leaders, subscribe to my Growing with Purpose podcast.

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