Jill Whitnah, a 13-year employee and vice president at Christensen Group Insurance, isn’t just a salaried worker.

She’s also an owner of the Minnetonka-based, employee-owned company that’s grown from 50 to 120 employees. The company’s share value has risen more than 400 percent since CEO Bruce Christensen and his minority partners sold their interest to an employee stock ownership plan (ESOP) in 2005.

“We were told back then that, if you take good care of this house, you’ll own it free and clear,” Whitnah said last week. “They sure couldn’t confirm in the beginning what the employee-ownership value would be in the future, but it has worked out.’’

As owners, Whitnah said, that personal stake in the businesspermeates every decision. “We don’t want to spend money on any extra software licenses or anything else we don’t need,’’ she said, “And I think people often go the extra mile to benefit everyone.’’

The company provides ESOP training for newer employees and also regularly updates employees on company performance. And there’s “a celebration every year when we get our ESOP shares,’’ which are paid out of company profits.

Christensen Group and a New Ulm manufacturer, Windings Inc., are plum Minnesota examples of how ownership, and the financial benefits, can be shared with line employees. But to succeed, the business must have good cash flow from which to pay for the acquisition from owners who may be willing to sell over time — and often for less — than selling to a private equity firm, according to Neil Brozen, a certified public accountant who has worked with employee-owned companies for years.

“You want a quality company and a good management team,” said Brozen of BTC ESOP Services. “You need an owner who doesn’t necessarily just want to sell for the highest price so he can go to the beach. Someone who may want to stay involved, maybe keep the legacy and guard against a shutdown of the plant and lay off of employees, as a third-party buyer may do.”

Bruce Christensen, 57, bought the agency from his dad in 1985 when it had five employees. Christensen remembers paying about $500,000 and taking a 9 percent bank loan.

Twenty years later, Christensen and his minority partners were looking for ways to cash in some of their equity, but didn’t want to sell to a huge agency consolidator. Nobody within the company had the capacity to buy it outright. So, through advisers, they created and sold it to an ESOP. The process involves a number of legal requirements including an impartial valuation of the firm.

“We were willing to take a discount to the third-party market value,” said Christensen, who declined to name the price. “We could have sold for a 25 to 30 percent external-sale premium. But the total return can be better if you’re patient. And the ESOP allowed us to stay engaged. I was the youngest partner. I’m still the CEO. I’m just not the beneficial owner of the profits. And the ESOP has proved to be a phenomenal retirement asset for the employees. And we also have a separate 401(k) retirement plan.”

The company has prospered. And it has used the ESOP to acquire smaller agencies to round out its lines of business and make it a stronger competitor. For example, Christensen Group last year bought SMA Insurance of St. Cloud, a 14-person agency. The owners were able to sell to the ESOP and the St. Cloud agency still does business locally by the same name.

Lifetouch, the national school-photography business, is Minnesota’s largest employee-owned business, with 22,200 employees, according to the National Center for Employee Ownership (NCEO). Redpath, a St. Paul accounting firm, and Northeast State Bank of Minneapolis, where the owner is gradually selling to employees, are also local examples.

“We’re doing 25 new ESOPs a year out of my office,” said Brozen, who was visiting a Michigan ESOP client last week. “ESOPcompanies also can sell or fail. Banks like them because fewer fail than other companies.”

The NCEO says that through full and partial ESOPs and employee stock-purchase plans, about 28 million American workers participate in ownership, or about 8 percent of all corporate equity. Since 2000, there has been a decline in the number of ESOP plans, but an increase in the number of participants. In an ESOP, vested employees cash out when they retire or leave, although full payment often takes up to a year.

In June, researchers Douglas Kruse and Joseph Blasi of Rutgers University concluded that ESOP companies have higher sales per employee and stay in business longer than other companies.

In New Ulm, Minn., precision manufacturer Windings just celebrated its fifth anniversary as a 100 percent ESOP-owned company, 15 years after former owner Roger Ryberg started selling the company to employees.

Ryberg decided to get wealthy slowly and ensure that the firm would stay in New Ulm. Revenue has grown from $25 million to about $30 million over the last five years. Profits have been good enough for the company to distribute an amount equivalent to 10 percent-plus of employee wages into their ESOP accounts every year, in addition to a401(k) contribution.

“We’ve also invested in our infrastructure and our team,” CEO Jerry Kauffman said. “The ESOP helps me attract talent. People who are intrinsically motivated want to be part of something bigger than themselves … to make the world a better place. And the ESOP offers something bigger in their work world. It gets us all in this together. And everybody likes to see their retirement account build.”

Alla Volodina York University

http://www.pbs.org/newshour/rundown/learning-musical-instrument-improves-language-reading-skills/

Learning to sing or play a musical instrument can improve language and reading skills of disadvantaged children, according to a new study released Friday.

Nina Kraus, PhD, a neurobiologist at Northwestern University, found that musical training has an impact in strengthening neural functions as well as a connection with sound and reading of children in impoverished areas.

Her previous research focused on the impact of music lessons on children of the middle or upper class. This study, which is being presented to the American Psychological Association, included hundreds of students in Los Angeles and Chicago public schools with about 50 percent dropout rates.

“Research has shown that there are differences in the brains of children raised in impoverished environments that affect their ability to learn,” Kraus said in a press release from the APA. “While more affluent students do better in school than children from lower income backgrounds, we are finding that musical training can alter the nervous system to create a better learner and help offset this academic gap.”

In the study, half the subjects received regular group music lessons for five or more hours a week, while the other half had no musical training.

According to researchers, the reading skills of children with formal music training remained the same over a year long period, while the other students’ reading scores declined.

Another group of students, part of the Harmony Project, a music program for inner city kids, took part in band or choir practice every day after schools.

After two years, researchers found that students with musical training were faster and more precise in hearing speech in background noise, which Kraus connects to students having the ability to concentrate on a teacher’s voice in a noisy classroom.

Children in both groups had comparable IQs and reading ability at the start of the study.

Kraus conducted the study with Margaret Martin, founder of The Harmony Project, who was featured on the PBS NewsHour earlier this year talking about the benefits of musical training on young brains. 

“We’re spending millions of dollars on drugs to help kids focus and here we have a non-pharmacologic intervention that thousands of disadvantaged kids devote themselves to in their non-school hours — that works,” Martin said.

Alla Volodina York University

http://www.npr.org/blogs/ed/2014/07/29/336301660/should-kids-get-a-trophy-for-showing-up

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Likely this reporter’s very first award for participation, found squirreled in a box in his parents’ basement.

Mary Turner/Courtesy of Cory Turner

Talk about a spirited debate …

Just Google the question, “Should kids get trophies for participation?”, and the first page yields headlines like “Losing Is Good For You” and “Hell YES all the little league kids should get trophies!”

I remember collecting a shelf full of participation trophies from years of playing YMCA soccer. Did they make me who I am … or spoil me rotten?

On the ‘No’ Side

“No,” says Stanford psychology professor Carol Dweck. Kids should not be given trophies simply for participating, she says. Dweck explains her answer with an anecdote from a mother she’d recently spoken to.

“Her daughter rarely showed up for her soccer team. She had a terrible attitude,” Dweck says. In spite of that, “at the end she got a giant trophy and would have been devastated had she not.”

Dweck concedes a child shouldn’t have to be the best player on the field to get a trophy, but it should reward something, like improvement or team spirit.

Next up: Susan Harter, a professor of developmental psychology at the University of Denver.

“What do I think about that? I think it’s a little bit excessive,” Harter says, leaning toward No. Instead of a firm No, though, she re-frames my question:

“At what time of [a child’s] life do we want to bring home the cruel reality that somebody’s better than somebody else?”

I got a lot of questions-as-answers to my unanswerable question. Like this one from Tovah Klein, author of the book, How Toddlers Thrive:

“You know, I’m always thinking about, ‘What is that debate really about?’ Do you really care if everybody gets a trophy?”

Klein says kids should play because they enjoy playing. She argues, play should be intrinsically rewarding and that “[kids] don’t need an adult saying, ‘You get a trophy because you played well today.’ “

So far, the score is roughly 3-0. Is there no one out there willing to argue on behalf of the humble participation trophy?

The ‘Yes’ Votes

Kenneth Barish, a clinical associate professor of psychology at Weill Cornell Medical College, isn’t afraid to say it: He thinks kids should get trophies for participation. “This is a minority view now,” he says with a laugh, admitting that he’s had to defend the idea even within his own family.

Barish says he sees no harm in adults encouraging participation with a trophy and that he’s found no evidence the practice leads to entitlement among kids.

“It may be all they get,” says Jorge Perez, vice president of youth development and social responsibility for the YMCA, another Yes vote. The Y has made a habit of giving participation trophies, he explains, “because we want to anchor the experience.”

A few years back, Perez says, several young men visited him with YMCA baseball trophies they’d received as kids. And these weren’t fancy, first place trophies. They were “tiny,” given simply for participating. But the men had kept them and clearly valued them. Perez argues these trophies act as an important marker, to say ‘I did this, I finished this.’ “

“That’s why those kids hold onto those trophies,” Perez says. “That’s why Mom doesn’t throw them away.”

Wait. She doesn’t?

The Basement

And that’s when it occurred to me: I don’t know what happened to my shelf-full of participation trophies. If they’d been important to me or my mom — markers, as Perez says — I would presumably know where they are.

“I went down in the basement,” my mother tells me after I call and ask if she knows what happened to the trophies. “I was appalled at the number of boxes that have your name on them. And none of them said ‘Trophies.’ “

She insists I threw the awards away years ago — because they didn’t mean anything to me. But then she surprises me by telling me she did find one … not a trophy at all.

“A dark, plum-colored ribbon with gold print on it that says ‘Decatur YMCA Soccer, Participant, 1983.’ “

I would have been 7 years old, and this is likely my very first award for participation. I have no idea how it survived for three decades — whether I saved it or my mother scooped it out of the dust bin years ago — but it did, this fragile little ribbon. And so I’m inclined to make that another Yes vote in the participation debate.

Which means … we have a tie. No winner, no loser.

Trophies for everyone.

Or not.