Making every employee an owner
- July 18, 2016
- / Quint Studer
- / training-development,quint-studer
If you own a business, I’ve got a question for you.
Do your employees share your commitment to the company’s success?
And for those who work for someone else, do you act as if you are an owner?
One of the questions I get most from business owners or CEOs is how they can get their employees to act like owners. In its most simplistic form, the remedy is to treat them like owners.
While the vast majority of a company’s employees may never have the full experience of being an owner, a well-run company creates an ownership culture and comes pretty darn close to having all employees think and act as if they were an owner.
Let me give you two personal examples, one where employees don’t have the sense of ownership and one where they do.
I was hungry and really wanted something from a place about 10 minutes from where I was living. It was 8:35 p.m. and the restaurant (mainly a takeout place) was open until 9 p.m. I drove over and got into the parking lot at about 8:45 p.m. When I got to the door I noticed it was locked and the two employees had the chairs on the table and were cleaning up. Checking my watch and reading the hours on the door I knew I was there in time. I knocked on the door softly. Then I knocked louder. While I thought the workers should be able to hear me, they kept cleaning and I drove home.
Because many of these stores are independently owned franchises, I know this may be an exception. However, I have not ever been back to that store. My thinking was: If the owner were there, the door would have been open and I would have received my meal.
On the flip side, my wife, daughter and I were driving home from a football game and it was about 8:55 p.m. and we realized that we did not have much at home to eat, so we decided to find a spot. My daughter mentioned a pizza place where they pre-make pizzas to cook at home. Seeing the time, I said I doubt they can make us one, however, let’s stop and see. When we walked in, I apologized for getting there so close to closing and said I understand if we are too late. The employees (I know the owner was not there) quickly said, “Not at all … what can we get you?”
While we were waiting, two more customers came in and they also got served. It may have cost a bit of overtime, but I am sure the revenue covered the expenses. The pizza was great and we have gone back other times and shared the positive experience.
This owner created a culture of ownership.
In working with organizations, I’ve asked people to meet in small groups and outline the difference between “renting” and “owning.”
Naturally, the first example is your living arrangement. I’ll ask: “Who rents where they live?” I pick a raised hand from the crowd and continue.
— How much was the property you rent bought for?
— How much are the mortgage payments?
— How long is the mortgage?
— What is the interest rate?
— What does the landlord pay in taxes?
As you would suspect, usually the person can’t answer any of these questions. Why? Renters have an incomplete picture of the financials related to the property.
Here are some tips that help to create a sense of ownership:
- An owner makes selections. Involve the employees who will be working with or for an interviewee. This creates ownership, because the employees have been part of the selection process. It will help the existing employees feel more responsibility for the new hire’s success.
- Share financial information. Owners know what is going on. I learned this when working at a place that was experiencing serious financial challenges. To help the staff realize what was going on, all financials were shared. We showed in black and white what expenses needed to be based on current revenues.
Immediately, we had much improved behavior in cost management and service. Later, when I became a president of an organization, I used this experience and shared all financial data. Owners know the financials. Renters do not. To create a culture of ownership, share and explain the financials.
- Ask for help in solving problems, product development, marketing, product selection, etc. Owners are involved in the decision-making process. Ask the employees what they think in all aspects of operations. Even when you may not agree with the employee, it gets the thinking out in the open, which leads to good conversations.
You cannot expect employees to act like owners if they are not treated that way. CEOs often worry most about sharing the financials, but after it’s done, the response is often, “I wish I had done this sooner.”
Creating and sustaining a culture of ownership creates a better company.