I have heard this refrain a lot from owners of companies throughout my consulting career, “I want my employees to act like an owner of this business.” On the other hand, I have heard employees talk about how ‘they would do things differently’ if they were the owner. What does this mean in the owners mind when they make this statement? What are employees asking for? Acting like an owner might and usually does mean different things to different people.
Is this just wishful thinking by owners dealing with personnel problems they don’t want to face and or frustration with the poor financial performance of their company? Can you really get employees to act like the owner of the business? As an owner do you know and are you willing to do what employees will ask of you in order for them to ‘act like an owner’ and in the end will they act like one? From the employees perspective what are they really asking for and what are they willing to give or do to ‘act like an owner’? Are both parties statements just loose talk?
ESOP plans are marketed and sold as a mechanism to make employees ‘owners of the company’. The owner of the business has decided based on different motives to implement an ESOP. They are communicated to the employee base and prospective employee’s as being an ‘owner of the company’.
Other strategies like ‘phantom stock’ plans tie selected individuals to the company. Monetary incentive programs such as profit sharing invests employees in yearly financial performance of the company but are only focused on the financial performance of the business. Consultants and Human Resources departments talk about and put in place programs to encourage employees to quote ‘take ownership over their work’. There is a lot of talk about ownership but what is the reality?
We know financial rewards incentivize people however they usually miss the mark of changing individual behavior long term and in some cases cause the opposite behaviors intended. Programs, training, and process changes typically have a ‘short retention period’ unless closely monitored and modified as necessary. In the end they are focused on many different outcomes.
What is it that owners are ‘really’ after when they say, ‘act like an owner’. They want employees to understand all the effort and stress they have lived with to build the business and what they deal with on a day-to-day basis. Their company is a personal relationship, like a mother to a child. They have given birth to this thing, nurtured it to this point and have their current financial well-being and for their future tied up in the business. It is as much if not more an emotional attachment than a financial one. They may be on the financial hook with the bank for all their assets, but their attachment goes well beyond that. They feel no one can really understand what they have sacrificed for the company because they haven’t experienced it. Who they are their identity is intertwined with the business.
Employees want ‘to be part of the business’. They want access to information they don’t have. They want to be able to ‘see’ on an on-going basis all the financials and certainly deserve a salary increase. They want involvement in what they view as ‘critical’ decision making as a part of acting like an owner. They articulate this without any emotional attachment to the business. At the end of the day their motivation is self-centered.
Owners want employees to think and take actions ‘like an owner’ period. Employees want to look at the books and be involved in all decision making without any financial repercussions or obligations. They are both acting from a deep psychological level with needs that can’t really be met to everyone’s satisfaction.