Recently I have had several clients ask me about how to create more of an “ownership” mentality among their staff. Although there are a number of factors involved, I believe that there are three key elements that are essential to getting your staff to think and act more like owners instead of just employees.
1. Transparency. In order for people to get involved in the business, they need to understand what is actually going on in the business. Here is a hard-and-fast rule: People without access to information do not have to take accountability for their actions. If you do not share critical business information with your team, there is no way they can contribute to thinking like an owner in making critical business decisions. It is my feeling that short of actual salary numbers and truly proprietary business secrets, you should share as much information as possible with everyone that works with you. Information IS power, and the more you share it the more power you give to your staff in helping to make the business successful.
2. Clear and Quantifiable Goals. It is impossible for an employee to take an ownership mentality for the success of the company, if they do not clearly understand what “success’ looks like and precisely how it will be measured. The single most important factor in building a “culture of accountability” is making sure that every employee has specific, detailed and measurable performance objectives.
3. A Stake in the Outcome. If you want an employee to act like and owner, you have to treat them like one, and the best way to do that is to tie their compensation directly to their performance and the overall performance of the company. It is very simple: what gets measured – and paid for- gets done.
So let’s figure out where your firm stands on these three important factors. Please answer the following questions on a scale of 1 -10; with 10 being “We are excellent at this – truly world-class” all the way down to a score of 1 which equals “We are terrible at this – we do not do it at all.”
We openly share all critical business information with our entire team/organization_________
Everyone in our organization has very clear, specific and measurable performance objectives ______
We generously reward (both in money and praise) those employees who have a true “ownership mentality” and consistently meet or exceed their performance objectives _______
We deal decisively with any employee who is mediocre and consistently does not meet their performance objectives. _______
Any score below a 7 is cause for concern. A score lower than a 5 is probably a major issue in your organization.
It is my strong belief that if you are open and honest with your team, share as much information as possible with them, set very clear and specific performance objects, and reward them for achieving and exceeding those objectives… you will have built a solid foundation for creating a high-performance team that thinks like owners and takes personal accountability for the success of the business. Exactly what every company needs more of right now!
Hope that helps – I look forward to your replies – John
Hi John,
Excellent article. Importance of a “Ownership culture” is I quess very close what you mean and not too much dependent on individuals. It’s something what you can feel, when you enter into a office or a factory and it’s something what you feel and sense from the “company language” – an all levels from the floor level to top executives. It’s about risk management as well. Today’s teams are diverse, multinationals have lot of ad hoc teams, people change etc. In order to really succeed managers/leaders should parallel with the culture of accountability create a “culture of trust”. I visited company called Fazer Oy this week and I had a very good feeling after the factory visit. It was a feeling of the real “family company”. Even though the factory itself was quite normal, you could sense from the personnel that there was something “remarkable” going on in the company.
Best regards,
Olli
Great post on a very applicable topic for today’s organizations. Some of my favorite business models come from companies who have taken this concept to the core, like Whole Foods (leader of the profit sharing model) or REI (customer/employee owned co-op with yearly dividends paid out to members). But if we’re not talking extremes, even though these ‘extreme’ models are now becoming the norm, there are many ways public and private firms can ignite ownership within their organization, as John has pointed out.
I’m a low level employee and to piggy-back on what John has pointed out, ownership is the most motivating factor in my workday. Just as the bi-product of a company looking out for their own interest is profit, the same invisible hand can be applied to employees in the workplace; give us ownership, freedom and a personal incentive blended with disciplined boundaries, and you’ll breed value. Force us to succumb to ‘the benefit of the company’, and the ‘tragedy of the commons’ is inevitable, just as public parks in urban areas almost always turn into havens for graffiti. It’s Economics 101, but most leaders are still under the misconception that their product, cause, or leadership is the motivating factor for their workforce. It’s not, just as the motivating factor for the average business isn’t the common good…it’s their own profits.
“Transparency” (point 1) and “Having a Stake in the Outcome” (point 3) are great tactics to use in giving employees the tools to succeed. A culture that does not cultivate through these methods should expect sub-par performance and lack of passion within their collective human capital…no matter how good of a leader he/she is.