7 Keys to Success with an Employee Ownership Culture

One of the lessons I have learned over the years as a business executive, and now as a mentor to entrepreneurs, is that if you really want employees who enthusiastically take ownership of their work, you have to start treating them like owners, not renters. Owners feel they have skin in the game, and benefit from improved effort and results, rather than just getting blamed for problems.

Unfortunately, according to Gallup’s State of the American Workplace report, only about one-third of employees feel like owners. Another 50 percent are “job renters,” bringing only their hands, but not their hearts to work. They show up every day, keep a low profile, and collect a paycheck. The remainder are actively disengaged, and passively block or actively sabotage forward progress.

It’s a growing challenge, since we now have four generations of workers together – Matures, Boomers, Gen X, and Millennials (Gen Y), all with different ideas of how an owner should act. I was impressed to see some real guidance on this subject in a new book, “Counter Mentor Leadership”, by Kelly and Robby Riggs, a father-son coaching team that spans the age spectrum.

These authors helped me validate my own recommendations on how business leaders and entrepreneurs can incent their own team members and employees to move a bit closer to the owner mentality. These include the following:

1. Clearly communicate the big picture, and current reality. Be accessible, talk often to the team about the business, and be specific in communicating a vision and goals. Don’t hide the current reality of challenges and shortfalls. Employees can’t be owners if they don’t understand the business targets and realities. They will revert to renters, at best.
2. Give every employee the necessary degrees of freedom. Remember, one of the key drivers of ownership is a sense of autonomy. By definition, the freedom box is different for every owner. Some are super-capable and deserve a lot of decision making flexibility, while others are new or less experienced, so their box must be a bit smaller.
3. Make them owners with stock options and actions. Ownership can be financial or psychological. Steve Jobs was a master of having team members own their work, with small things like developer names molded in the plastic cover of the Macintosh. Many companies now have employees put names on quality control tags, or sign their work.
4. Give advancement priority to initiative versus experience. “Time-in-grade” and years of long hours are not qualifications to become an owner. Hiring, recognition, and promotion must foster a culture of focus on job results, commitment, and growth. This is the key leveler between the multiple age generations in the workplace.
5. Provide employee feedback and coaching in real time. In this context you can describe specific behaviors that must change, and provide your actual examples so the team member can “step into” the past scenarios. Avoid any hearsay or anonymous sources, since these are likely not entirely accurate, and will provoke emotional debates.
6. Flatten the hierarchical management structure. Every owner reports to someone (Board of Directors), but every level inserted reduces autonomy and the sense of ownership. Minimize traditional organizational charts, and special perks, like corner offices and fancy furniture. This allows employees to feel more equal, and interact with leaders and role models for better communication, recognition, and mentoring.
7. Fix mismatches and commitment problems quickly. Make your expectations clear before hiring, including your ownership culture. Then, some companies, including Amazon and Zappos, offer employees up to $5000 to leave, if either side doesn’t feel an ongoing commitment to the business. No commitment is a big job performance problem.

I’m still convinced that the best advice I can give to anyone starting their career, or starting their company, is to find something that drives you to work as hard as you can, and still enjoy it. Stay humble, but don’t be afraid to take a risk and own it. As a business owner, if you want people to take ownership with you, treat them like owners. That’s how you get where you want to go.