5by5 co-founder and 3LS Professional Services CEO Shannon Litton shares how she chose employee ownership over a traditional sale, and what she learned taking her agency to 100% employee-owned
Shannon Litton, Chief Integration Officer at 3LS, Inc. joined host Andy Farquharson on The Alternative Exit. The podcast explores employee ownership as a succession planning strategy. In the episode, Litton traces the path that took 5by5, the Nashville marketing agency she co-founded, from a growing independent firm to a fully employee-owned company.
5by5 made the Inc. 5000 list in five of its first seven eligible years, and interest from private equity and trade buyers followed. Litton explains that selling would have meant saying goodbye to the team that built the business. Her thinking changed when a new client mentioned over lunch that his employees owned his company. What followed was years of research and winning over a skeptical partner. 5by5 then launched a 30% ESOP, a starting point chosen to avoid taking on a larger loan.
Litton also talks about how she prepared her people for the change. She brought 12 leaders into the plan a year early. She announced the news to 55 employees at Disney World. And she explains why employee-owned companies need a steady rhythm of both inspiration and information. A later conversation with her mentor, 3LS CEO Eric Strickland, led to 5by5 becoming 100% employee-owned within weeks.
Today, Litton leads 3LS Professional Services within a family of employee-owned companies totaling about 1,500 people. In the episode, she argues the employee ownership movement should measure its progress by the number of employee-owners, not the number of ESOPs.
Watch the full episode of The Alternative Exit here.