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What is Ownership Culture?

During October, we celebrated Employee Ownership Month with a happy hour and learning session with one of our members New Belgium Brewing Company. One business owner raised a challenging question: “What is the downside of employee ownership?”

While we know that running a business is always challenging, transitioning to employe-owned will not automatically lead you to achieve the employee ownership facts and statistics that we often tout. The carrot, it turns out, cannot drive organizational change all by itself. So we have occasionally met an exasperated business owner who sold 30, 40, or 50% of their company to an ESOP and cannot figure out why little has changed after the transaction. The answer to the business owner’s question is that employee ownership takes work—but it’s a different work than you might be used to.

Whether your company has converted to employee owned or is still in the process, the key to optimal results is creating an ownership culture. Some managers believe that holding employees accountable to greater productivity or higher sales will result in an ownership culture. Accountability alone, however, does not inspire workers to think and act like owners.

Of course, it’s essential for any business to hold its employees accountable to clear goals and accurate measurement of success. Extrinsic accountability in the form of regular reviews, audits, and project management checklists are all necessary, but when employees are intrinsically accountable, you’re cooking with gas. Here’s how to get there:

5 Steps to Create an Ownership Culture

  1. Make an agreement about your primary business goal. If management has been transparent in sharing the strategic vision and the financials highlighting key performance indicators, then most employees will know the desired results. Most is not enough. It will take everyone rowing in the right direction to get where you need to go. At this stage, managers may be tempted to appeal to their experience to outline how business should be done, but this moment is less about how and more about who and why. Employees must align their action and energy toward a common goal.
  2. Allow employees to make decisions at multiple levels of the company. When you have employees that own their projects they do not need to be micro-managed nor will they want to be. If employees feel that they don’t have autonomy then they will either be acquiescent and only do enough to get by or they will be rebellious. According to Gallup, only between 30–35% of employees are actively engaged. This lack of engagement comes from a lack of autonomy, which is why actively disengaged employees are the first to rebel.
  3. Keep track of organizational results and share these results with the employees on a regular basis. Train employees to understand how their performance affects the company’s bottom line. Use financial statements as a way to “keep score” so they can see their progress, or create games that focus on a particular organizational aspect that affects company growth. (Need ideas? We’d love to help!). Any employees who might not traditionally be comfortable with P&L statements, forecasts, or financial goals will gradually grow comfortable with thinking at an organizational level, and trained employees will be able to make the autonomous decisions mentioned above.
  4. Empower your employees to identify problems and to solve them—together. Many employees are afraid to take this step because they’ve been operating for so long in a business that isn’t functioning as a team. This step essentially asks employees to stop only thinking about their department or area of expertise and to bring their full critical thinking skills to other areas of the company. When employees become conscious of more than one area of the company, they will feel a greater sense of ownership because they will understand how their part relates to the whole. Allow your employees to meet with other departments to come up with creative solutions that everyone can support.
  5. Cultivate appreciation. Stocks appreciate in value both from a company actions and from how a company is seen. Appreciation for people works in a similar way. Recognize your team’s actions with specific, authentic appreciation and watch them light up and return to their work with greater purpose. When we pay attention to something, we give it value, so take the time to appreciate your employees not just for what they do but for who they are (their passions, their goals, their families). Personal relationships thrive when there are at least five expressions of gratitude for every one expression of criticism—why not try a similar ratio at your workplace? (An added bonus: this step has the lowest cost and the highest return)

Want to learn more about creating an ownership culture?

Ultimately, a single list will not speak to the nuances or needs of your specific organization. That’s why we’re here. If you’d like to go deeper into ownership culture, here are three options:


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