Jay Hardy, president of Hardy Diagnostics in Santa Maria, recently crossed a big item off of his to-do list — he sold the company to his employees that he and his lifelong friend, Rob Shibata, founded 34 years ago.
“I have planned on doing this for a long time,” Hardy said. “Owning Hardy Diagnostics has been tremendously rewarding for me. Now, everyone at Hardy Diagnostics can share in the joy and rewards of ownership, just as I have.”
Employee ownership promotes participation and leadership on every level for the more than 230 employees of Hardy Diagnostics. The company’s Open Book Management system encourages involvement and personal responsibility.
As Rianna Malherbe, who has worked as a technical support specialist for about a year, puts it, “Having co-ownership means having a commitment to holding a bigger picture vision, even as I focus on everyday details of my personal role as part of our continuous improvement process.”
Companies that are employee owned are known as ESOPs (Employee Stock Ownership Plan). Over time, employees are granted real shares in the company at no cost to them. There are about 11,000 companies in the United States that are ESOPs like Hardy Diagnostics.
Due to employee involvement, ESOPs generally have a superior track record compared to other companies. An ESOP is 25 percent more likely to stay in business. ESOPs have 25 percent higher job growth over the last 10 years compared to the non-ESOP. Employees at ESOPs have retirement accounts that are 2.5 times greater than their non-ESOP counterparts and they were four times less likely to be laid off during the recent recession.
As employee owners, they work within a culture of ownership that produces both rights and responsibilities: the right to be informed about the management, strategy and financial health of the company. They are also encouraged to question practices that may not be in the company’s best interest. The net result is to work in a positive environment and share in the company’s financial success.
As an employee-owned company, Hardy Diagnostics will not be obligated to outside shareholders who care only about the bottom line. This ensures the freedom to emphasize other values, like community involvement, environmental responsibility and the wellness and satisfaction of the workforce as whole people.
“A company made of hundreds of owners who really care about their work is a powerful, if not unbeatable, force in the marketplace,” Hardy said. “I get a great deal of satisfaction when an employee tells me that they actually look forward to coming to work each day.”
Hardy Diagnostics joins a long line of successful employee-owned companies such as Southwest Airlines, Publix Supermarkets, Gore-Tex, Clif Bar, New Belgium Brewery and King Arthur Flour. Employee-owned companies are renowned as some of the world’s best companies to work for due to their high-involvement employee cultures. Hardy Diagnostics is a successful and rapidly growing company; employee ownership makes a piece of the pie that much more coveted.
— Mike Welch and Karissa Tucker represent Hardy Diagnostics.