Teal Takeovers Help Small Biz Owners, Employees

Record numbers of small business owners are retiring. Members of the Baby Boomer generation own 2.9 million businesses. Many are struggling to find buyers to take over their companies. Solving this problem in a Teal way presents a unique opportunity to do good by doing well for retiring business owners, employees, and communities. 

There’s a nascent movement under way to buy small businesses and transform them using the principles of self-management, evolving purpose and wholeness. 

Early results are positive. The NER Group, a Spain-based organization, has invested in 120 businesses in recent years using Teal principles.  

Two year business results for NER Group transformations:

  • +40% productivity
  • -30% absenteeism
  • +25-300% profit
  • +42% salary

Taking lessons from The NER Group and other pioneering efforts, I am part of an initiative called Infinity Point that aims to buy small companies in the United States and transform them into Teal organizations. Our approach involves a novel funding approach: using loans from the U.S. Small Business Administration & market-rate-return impact capital to buy small businesses. 

In finding firms to purchase, we ensure that the vast majority of the company’s employees agree to a transformation of the culture and the adoption of self-management. We then get rid of management (the roles, not the people), putting decision-making power in the team’s hands. We raise pay, focus on employee development and set profitability goals that enable the employees to purchase the firm within several years. 

“Teal Takeovers” may sound radical. After all, we’ve long lived under the sway of Milton Friedman’s 1970 perspective on capitalism, which focused solely on maximizing shareholder value. That singular focus has become synonymous with the caricature of capitalism as a system solely driven by profit extraction.

In contrast, Frederic Laloux’s concept of Teal organizations presents a compelling alternative to the extractive forms of capitalism that Milton Friedman advocates. And instead of being new and novel, it’s actually a return to the roots and formation of where capitalism started. 

Back In 1776 Adam Smith, who many consider the original proponent of the invisible hand of capitalism, emphasized the moral obligation of businesses to contribute positively to society. By addressing issues such as income inequality, environmental sustainability, and social justice, Smith advocated for a more holistic approach to capitalism that benefits all stakeholders.

Boomer business owners have a chance to do well by doing good through pursuing more Teal approaches to transitioning their business. These approaches include employee stock ownership plans (ESOPs), Employee Ownership Trusts, and co-ops. And far from being an exit of last resort, most owners are choosing this option with a well educated buyer. 

By promoting self-management, wholeness, and evolutionary purpose, Teal organizations today empower employees and foster innovation. Embracing Teal principles can lead to stronger economic performance and address the inherent tensions between workers and owners often seen in traditional business models. The increased economic performance and change in labor relations could be in business owners’ long-term interest.

Research shows that businesses that embrace more holistic ways of work outperform those solely focused on maximizing shareholder value. By involving multiple stakeholders in decision-making and aligning business goals with societal needs, companies can create value that extends beyond financial returns. 

As we navigate the complexities of modern capitalism, it’s clear that a paradigm shift is needed. By embracing principles of social responsibility, exploring alternative organizational models like Teal organizations, and rethinking traditional ownership structures, businesses can become powerful agents of positive change. Let’s seize the opportunity to create a future where capitalism works for the benefit of all stakeholders, driving inclusive prosperity and sustainable growth.

Travis Marsh is a board advisor of Infinity Point. He’s also the author of Lead Together: The Bold, Brave, Intentional Path to Scaling Your Business, a member of The Teal Team and a Principal of consulting firm Human First Works. Hear Travis discuss Teal Takeovers at the next Global Teal Meetup of the Americas, May 9, noon-1:30 PT. Register here.

Image courtesy of Phil Dokas