Making the transition to employee-owned dealer

The flooring sector—an industry filled with family businesses—is no stranger to succession planning. Typically, the next generation will take over the company’s leadership in hopes of preserving the founder’s legacy and the company culture for years to come. But what happens when a company has no natural successor to involve in the succession planning, and someone from the outside comes in to lead the team?

That was the situation I faced in May 2022, when I took over the role of president at Sacramento, Calif.-based Gold River Flooring. After more than 30 years of successfully serving the Greater Sacramento community, the company’s founders, Meredith and Jeff Krekelberg, were looking to retire. So they did what many retiring flooring company owners do when they hope to keep the business running—they put it up for sale. They received an intriguing offer from a company called Teamshares, which buys successful small businesses from retiring owners and converts them to employee-owned business. As part of the transaction, Teamshares brings in a new president to lead the company through its next phase of growth. In the case of Gold River Flooring, that new president was me.

Over the last year, I’ve learned a lot about how to build trust with employees during a leadership transition. Following are six takeaways:

1. Trust your team. As a new leader, it can be tempting to try to insert yourself into every aspect of the company. Don’t do that. Companies are successful because of the strength of their employees. At Gold River Flooring, I used people-oriented leadership principles to build a culture of mutual respect so every member of our team feels empowered to do their job with minimal oversight.
2. Lead by listening. The strongest skill you can develop as a new company leader is empathetic listening. By encouraging employees to confide in you—and making sure their concerns and ideas are heard and acted upon—you develop a much deeper trust than you would with a top-down approach.
3. Collaborate often. Silos are good for grain but bad for company culture. At Gold River Flooring, we encourage cross-departmental collaboration by teaming up employees to tackle a common company problem.
4. Open the books. Make financial performance data available for all employees to analyze. This helps them understand how their work affects the bottom line.
5. Encourage employee ownership. Becoming employee-owned has had a profound impact on our business. Profits are up because the very people who helped build the business into the community staple it is today have a vested interest in its growth. The responsibility we all feel has led to greater productivity, increased satisfaction and a collective desire to keep innovating and improving.
6. Don’t be afraid to adapt. Building a resilient company culture means being able to navigate change without losing a sense of our core mission and values. Being employee-owned has made our shared mission that much clearer and allowed us to meet the changes in our industry and our world with confidence.

Matt Stumpf is the president of Gold River Flooring, a chain of Sacramento-based flooring retailers that recently transitioned to employee ownership after a sale to Teamshares. Stumpf, a California native and serial entrepreneur, is passionate about helping companies create a culture of excellence and integrity.