Work to Own
Employee ownership has boosted Chroma's bottom line
Est. 1991 | Bellows Falls, Burlington | 100 employees
Many local manufacturers complain about the burdens of doing business in Vermont. Their litany features taxes, electricity rates, Act 250 and other state regs.
To Paul Millman, however, Vermont is a state of virtue. “I can’t imagine living and working anyplace else,” says Millman, cofounder and public face of Chroma Technology. “Vermont’s cultural and political values are very significant to us. Just as one example, which other state is looking to decouple health insurance from employment?”
The son of Brooklyn Socialists, Millman is clearly not a typical businessman. His company, which makes optical filters for microscopes, isn’t average, either.
Chroma is owned by its 100 employees, who, grouped into committees, make most major corporate decisions. And that mode of organization has boosted the company’s bottom line, not just its social-responsibility image. Chroma’s revenues grew 6.5 percent in 2009, from $19.2 to $20.5 million.
“Studies show employee-owned companies are more productive than privately owned ones,” Millman says in a telephone interview from his Westminster home, where he’s recovering from back surgery. Up the interstate in Burlington, the product manager of 89 North, a new Chroma subsidiary, echoes that assertion. “The fact [that] we’re all owners creates a sense of purpose,” says Chris Baumann, who helps build light sources for microscopes. “People are willing to go the extra mile.”
They’re also reluctant to leave Chroma. That may be due in part to the dearth of jobs offering good wages in the so-called Precision Valley in southern Vermont, where Chroma is based.
Mainly, though, worker loyalty stems from having a stake in a successful company, Millman says. Some of those who do depart for opportunities elsewhere soon yearn to return. Baumann, for example, came back to Chroma from Arizona two years ago to work with 89 North, which is housed in Burlington’s Chace Mill. “I loved Arizona, but I didn’t love the drive to maximize profits” on the part of his employer there, Baumann says. “They’d say you have to let three people go even though you knew the company would be making back its losses next year.”
Chroma recently closed on the purchase of a vacant 28,000-square-foot building in Bellows Falls, which will double its capacity there. “2011 is going to be a boom year for us,” Millman predicts. Soaring demand for the company’s products is being powered by President Obama’s stimulus initiative, Millman says, pointing in particular to a big budget increase for the National Institutes of Health, a key source of funding for Chroma customers.
But the company’s sustained success is not tied to federal largesse, Millman adds. Chroma thrives, he says, “because of our ability to create a brand that makes other manufacturers want to use our equipment in their products.” And the Chroma brand is characterized, Millman adds, by risk taking in the service of customer satisfaction.
He offers the example of a company that says it can afford to pay only $250 for a Chroma widget that will cost $1000 to manufacture. “We’ll make it for them in hopes of gaining a customer and in hopes four other people will want to buy the same item,” Millman explains. “We’re really a service company disguised as a manufacturing company.”