"Equity: Why Employee Ownership is Good for Business" is the title of a book written by Corey Rosen, John Case and Martin Staubus and published by Harvard Business School Press in 2005. It more than hints at the fact the authors think that employee ownership is a powerful business force.
The point of the book is made very clear in the first few pages when the authors state, "Even people who should know better – Human Resource professionals and stock plan consultants for example – often view ownership of shares or stock option plans as just another tool in their kit bag of benefits … They haven't understood just how powerful a notion ownership is or how it is capable of transforming a company."
Absolutely! And their model is predicated on equity ownership where employee ownership is synonymous with employee share ownership plans or ESOPs. Now most of these employee ownership plans entail employees buying their shares, whether directly or through discounted share options. So, unless the shares are held in trust on behalf of the employees, this makes it very unlikely that all employees will be shareholders and so consider themselves to be owners. Yet if employee ownership makes people act like business owners and delivers the kind of significant difference to performance improvement that the authors say it does, can you imagine how much bigger the difference would be if you were to make all your employees owners?
How powerful then do you think an employee ownership scheme would be that offers you the option to make all your employees co-owners:
- Without shares?
- With no cost to your employees?
- With no cost to you and without any making them feel that they are the recipients of charity?
Well, that is what my approach offers! If you are looking for the benefits of employee ownership, just imagine how much better they would be with this innovative, new approach. So what are you waiting for?
Interesting, I’m interested in managing a small business since I got interested in a lot of the franchise opportunities over at http://franchiseexpo.com and I’m considering sharing ownership. Thanks for this!
Bay I think you make an important distinction between ownership as a benefit to be paid for and a stake in the business that promotes the right kind of engagement.
I’m looking at the practicality of setting up the 12boxes operation so that associates are stakeholders from the start.
A typical arrangement for a business franchise (I’m perhaps using he term loosely) that is based on the transfer of knowledge is that the ‘franchisees’ are concerned not to grow the business because they see this as a threat to their share of market.
Early recruits are tempted to raise barriers to entry, introduce a hierarchy of ‘supervision’ which soaks up time and resources that could be used to engage with clients. I don’t see either of these as being necessary or good for the business.
We want to recruit associates on the basis of talent and shared values and introduce a culture where good advice and ideas can come from anywhere.
I look forward to discussing with you soon how we might explore your approach and get things right from the start.
Malcolm,
Thank you for that insightful comment. I look forward to our discussion whenever you are ready to move forward.
In the meantime, however, I would suggest you start from the principle that the greatest competitive barrier is exemplary service. If you can instil that in your associates you will be more than half way there.
Bay