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As with any company, succession planning is vital to ensure business continuity and forge a path forward. For Consumers Pipe & Supply Co., a family-owned and -operated, value-added distributor of pipe, valves, fittings, actuation and steam specialties, it was faced with the challenge of positioning itself for future growth, and the answer came from within.
On Jan. 1, 2022, the company, formally owned and operated by the Abeling family, celebrated its succession by announcing the completion of its transition to becoming 100-percent employee-owned through its newly created Employee Stock Ownership Plan (ESOP). Its five locations and one distribution center are all now run by its ESOP board of directors.
“The continuity of business succession was important to me,” explains Mike Abeling, president and CEO of the 56-year-old distributor. “Now the company will last into perpetuity for future generations. Legacy was a critical factor in selecting this transition, but equally as important was ensuring that anything we did as owners would also help the employees succeed.”
The process to transition to an ESOP was two years in the making. “We were ready to go 2020, but due to COVID-19, we wanted to hold off and make the transition at the right time,” he says. “With the help of a good team of advisors who helped us craft the organization, we were ready to do so Jan. 1, 2022.”
Consumers Pipe & Supply holds firm to its company culture, which models the High Performing Culture philosophy. The model allowed Consumers Pipe and Supply to create its own set of 32 Fundamentals, unique to who they are and how they operate. “Fundamental No. 10, ‘Think and act like an owner’ takes on new meaning to everyone,”
He adds that all employees are trusted team members. “We want our employees to feel that they ‘own and operate’ their own business; owning a stake in the company fosters tremendous pride. We also want our hard-working and loyal employees to benefit beyond their wages alone if they continue to help grow their company. Together, we strive to be more efficient, safe and responsive to our customers’ needs.”
When asked about the reaction of employees and the impact of the decision, Abeling says, “It has been great! The employee-owners have started committees and training sessions to bring everyone into the business process.”
The decision to navigate into an ESOP allows the company to remain independent, and as an active member of the AD buying group, “The support (from the group) has been overwhelming,” says Abeling.
When asked for any advice to share with others who face the same challenge of formulating succession, Abeling states: “For anyone with a good management staff that you want to protect and share the business with, and if you want to preserve family leadership and structure, take a look at the ESOP.”