Riddell: Can every employee be an owner?
October 26, 2016
More and more entrepreneurial managers and owners are coming to the conclusion that talented and dedicated employees are their key to long term success. As a result, they spend a significant amount of their time trying to find and keep the talent while developing the dedication. Central to this program for many entrepreneurs is fostering a sense of employee ownership.
Fostering a sense of employee ownership is a process by which progressively thinking managers and owners attempt to impart a “feeling” of personal ownership of the business. This is often accomplished by enabling employees to make “ownership type” decisions and is usually reinforced by some type of “ownership type” compensation. The underlying logic is that people who own things tend to treat those things differently (better) than people who merely use those things. So if we try to position employees as “owners” then these employees will make better decisions and therefore the company will be more successful. For the most part, these good intentions when successfully implemented are quite successful.
Unfortunately, however, it is in this area of successful implementation that some real problems arise. Many times I have listened to a frustrated entrepreneurial manager lament the unwillingness of an employee to “step up and take ownership.” Often this same manager has implemented many decision making and compensation policies to reinforce this direction, but to no avail. Characteristically, decisions of any significant magnitude are “delegated up” so the complaining manager never gets to enjoy the productivity benefits that improved time and decision management should provide.
So as an entrepreneurial manager or owner, assuming that you believe in the desirability of the employee ownership concept, what do you do when confronted with this situation?
First and foremost I think that it is important that you realize one thing right off the bat. No matter how much training you do, no matter how creative your compensation programs, no employee, unless he or she co-signs your bank note, will ever feel the same degree or pressure of ownership as you do. Just disabusing yourself of this false promise can sometimes do wonders for your sanity.
Secondly, the best you can hope for is that through persistent and conscious efforts on your part, you connect the impactable performance goals of the company with the personal development goals of the employee. Doing this will create an area of mutual interest/benefit and is about as close to employee ownership as you are going to get without an actual legal and financial exchange of ownership rights.
Finally, a simple recognition that not everyone wants nor can be an owner in itself can be very liberating. Your professional goal then becomes one of setting up an environment for this employee ownership concept, consistently working the process, but recognizing that all employees may not actively participate. Over time and assuming ongoing and increasing success, this inactivity in participation will be an indicator of an employee’s need to be “released to the market.
Developing emotional commitment among employees is an ongoing challenge for every manager. The successful ones accept the challenge and recognize that it is journey that never ends.
Following a successful international business career, John Riddell turned his attention to small business/entrepreneurial pursuits that included corporate turn-arounds, start-ups, teaching, authoring business and sports columns and serving as VP for the Chattanooga Chamber of Commerce directing its Center for Entrepreneurial Growth.