As printed in Culturati: Magazine

Business Leadership in the Age of Aquarius

Share the wealth

In the manufacturing workforce today, most employees are trained or educated to perform complex tasks and/or problem-solving. Some of the best improvements are developed by technicians and engineers on the production floor. That’s why there is a case to be made to create profit sharing to reward all employees for the value they create.

The Optimax Story

How we got to where we are — technology  

Optimax is a manufacturer of precision optics for research and industry. Optimax makes optics for NASA space programs that include the Mars Rovers, Pluto New Horizons, the Transiting Exoplanet Survey Satellite (TESS), and many more. These space programs have missions that are focused on discovery to give us a better understanding of the world/cosmos around us. TESS is searching for and identifying earth-like planets circling nearby stars. When you work on programs of this magnitude, you need skilled employees that will be precise. There is little margin for error; no opportunity for repair after the launch.

Our mission is simply Enabling customer success and employee prosperity, and everything that we produce, from our optics to our corporate culture, is with the highest integrity.

Future Workforce

Creating a self-managed culture

We believe that most people wake-up in the morning and want to create value, and the trick is to create an environment that allows people to show up and do what they know needs to get done to create value for our customers. One way we are striving to do things differently and better is — self-management.

Self-management requires integrity, personal accountability, and good communication; it requires much more than simply performing fundamental tasks.  Our culture of continuous learning and continuous improvement at Optimax sets the stage to create employees that excel, are innovative, and above all, curious to always ask questions and look for ways to do things better.

To prepare our employees, we give them training, equipment, and information so they can make good decisions that create value for our customers. Regarding training, we systematically strengthen the team through an annual peer-review process to identify successful endeavors and opportunities for improvement that culminates in an individual learning plan. Manufacturing data is collected and then output as charts and tables so that trends can be identified.  We also share monthly financials with all of our employees (revenues, expenses and profit), so they have an accurate picture of our financial performance.

Since everyone is involved in ensuring customer success, from sales to shipping, we share the profits with all of our employees.

This means roughly half of each revenue dollar is distributed to the workforce as payroll and the rest of the revenue is used to pay the costs of doing business – like rent, utilities, depreciation, and materials. When there is profit at the end of the month, we take 25 cents of each profit dollar and share it with the workforce.

However, it is more than just profit sharing that helps to motivate and maintain a strong workforce. We want people to show up as their whole-self and embrace diversity in every form. It is our ultimate goal to support people in their personal development and help them strive for excellence and build their careers. Empowering employees that are interested in leadership and improvement.

Growing a community

Creating economic success

Manufacturing has changed significantly since the 1800s. Back then it was not unusual for workers to endure unsafe work conditions, no benefits, low wages and long hours. Today most workers have a high level of training or education and are core players in a team. 

For the past 20, years Optimax has generated $300M in revenue, and $150M has been given to our workforce to spend or invest as they wish; and many of these dollars are spent in the local economy. In 2019, we completed an expansion that doubled our current facility size, and in the next 20 years, projections show that Optimax will generate $2B in revenue, where 50% of that revenue ($1B) will be given to the workforce. That’s how you grow a community and support local economies.

Creating an environment and a way of business where people can build careers. This is how the business has been run for nearly 30 years, which begs the question, how do we structure the company to continue the journey for the next 100 years?

Business Succession

Take the road less traveled – and “trust” in your employees

There is a lot of great work being done across the country to help start-ups, but I feel we are failing to protect our small to mid-sized companies. Investors and shareholders are very important in the early development of a company, but as the company becomes a self-sustaining economic engine, those investors become less relevant. If the investors could be eliminated, then all future wealth creation could be shared with the employees that are participating in creating wealth.

Looking at all of the common ways of business succession (selling to the highest bidder, ESOP, LMBO, etc.), none of these options seemed to fit our long term goals and objectives. Many times in our community, a company will get acquired by an investor group or conglomerate then get shut down, resulting in a loss of good local jobs, and the technology of interest is taken out of the community. We do not want to see this happen at Optimax or to other small to mid-sized businesses. So, we decided to take the road less traveled and created a Perpetual Purpose Trust (PPT) within the Employee Ownership Trust law.  This solution puts all of the voting equity into a Trust where the only beneficiary is the Purpose – thereby eliminating shareholders from the corporate structure.

Three golden rules of our Perpetual Trust…

• Don’t sell the business

• Always give 25 cents of each profit dollar to employees

• Make sure the leadership evolves towards self-management to encourage a strong workforce, innovation to solve emerging market needs, and continuous improvement to achieve better efficiency.

The Trust’s long-term vision…  

• 100 years of prosperity

• Creating jobs

• Continuing to build up and strengthen our employees and our local community

To develop a plan like this, it takes not only proper documentation to form the Trust but also trust in your current and future employees. This business structure is not right for all companies, but if a few courageous business leaders choose to convert their company to a PPT, it will begin to strengthen communities across the nation.