In my mid-20s, I joined a startup as the 18th employee and took on a role that was a stretch for me on multiple levels. This company moved at lightning speed and I always had too much to do and many tough decisions to make. But, even though we faced many challenges, I loved my job. I knew my role was important to the company’s success, and I knew what I had to do in order to be effective. And though I occasionally worked long hours, I didn’t mind because I knew by contributing to this company’s success, I would in turn become successful.
Business owners dream of having employees who can think like entrepreneurs — like owners of the business. Imagine what your organization could accomplish if every employee was self-motivated and focused all their energy on making your business successful, knowing they in turn would become successful as well.
How do you mobilize all that human intellect and ingenuity for competitive advantage? How do you build an ownership culture? Below, I’ll provide six things you can do to help your employees become more motivated, engaged and put their best foot forward at work.
1. Be transparent about how you make business and compensation decisions
To a significant extent, the success of a group depends on how much its members share the same view of their purpose and motivation. Employees today increasingly expect their leaders to be transparent. They want to understand how their organization makes decisions and how those decisions impact them, the organization’s customers and society at large. This trend is driven by, but not exclusive to, millennials.
Transparency was a core value at the startup I mentioned earlier. Once a month, our CEO would walk us through the presentation he’d just given to the board that morning. He would review how the company was doing against its goals, dive into all sorts of financial metrics, share his perspective on why we missed certain targets, zero in on certain challenges and invite a discussion on what each team can do to turn things around.
When executives are forthright with employees about company goals, priorities, initiatives and challenges, and the trade-offs they as leaders must make, employees are able to better prioritize their work and develop solutions that benefit all parts of the business.
Yet, even in companies where transparency is a priority, compensation typically still exists in shadows.Think about this. Compensation impacts every employee deeply and can cause employees stress, tension and unhappiness when they suspect or know they’re not being paid fairly.
Sharing your compensation philosophy, strategy and policies with employees isn’t just a way to put their minds at ease. Being transparent about compensation could empower your employees to make better decisions on behalf of your organization. This is something that the CEO of Glitch (formerly known as Fog Creek Software) — Anil Dash — understood and capitalized on.
“We talk a lot about how everybody at the company should spend the company’s money as if it were their own. To do that right, we have to give everybody enough information to know what our people cost,” Dash says in a Medium article.
Want some help deciding what level of transparency makes sense for you? Check out our whitepaper, The Pay Transparency Spectrum.
2. Ask your employees to set their own goals
One unique aspect of my previous job was how I was encouraged to set my own goals and trusted to decide how best to achieve them. Like all other companies, the executives set the company goals each quarter. From there, the sales team set monthly goals for revenue and bookings. At this point, the marketing team would take the sales target and come up with a marketing target. Once the monthly marketing target was set, I’d write down the three to five initiatives I personally would commit to within the next month to ensure our team met our target. My colleagues would do the same. Our plan was then shared with our head of sales and CEO. We were effectively using the OKRs method before we knew about OKRs.
This approach requires buy-in from each employee, and it worked well for our particular culture because the plan was extremely detailed, time-bound and focused on outcomes. There was no room for misunderstanding and everyone was on the hook to deliver on their commitments.
3. Provide an upside
If you want people to act like business owners, you have to give them a stake in the success of your company. There are several ways to give employees a stake in your business; you must decide what makes sense for your situation and culture.
At my previous company, the marketing team was eligible for a monthly bonus, based on whether we reached our monthly goals. And, the bonus was close to 20 percent of base pay. Because the goal was something I’d personally helped set, I knew it was within my control to accomplish, and I knew missing the goal has a negative downstream impact on the sales team, so it was easy to stay focused on the work that needed to be done. Besides monthly bonuses, the firm also gave me significant amount of stock options.
Profit sharing could be a good option as well. One company that’s done this is Chobani, America’s leading Greek yogurt brand. Not only does the yogurt company pays its workers in its upstate New York factory more than twice the minimum wage, it also has an equity sharing program in which employees collectively own 10 percent of the business. The company allots shares to its employees based on tenure, reportedly helping some of the company’s longest serving employees become millionaires.
Founder Hamdi Ulukaya says once he rolled out the profit sharing model, he saw a change in his people. People take more pride and ownership in the brand and their work when they have equity stake.
In addition to an equity sharing program, it may make sense to consider an employee stock purchase plan (ESP), which provides an easy and cost-effective way for employees to purchase shares in a company. Computershare conducted a study with the London School of Economics in 2017 on the use of Employee Stock Purchase Plans (ESPP). They found workers who participate in an ESPP work longer hours, are absent less frequently, are less likely to quit and express greater job satisfaction.
More recently, a study from Fidelity found stock programs can be a great tool for attracting and retaining female talent in particular. A survey by Fidelity Investments found nearly half (49 percent) of women say a company stock plan is an important benefit when considering taking a job at a new company, and more than half (52 percent) of women said access to a company stock plan increases loyalty to their employer.
The findings came from Fidelity’s biennial survey that examines the evolving role of company
Stock plans within the corporate benefits landscape. They found company stock plans are increasing in importance, especially among women.
According to the survey results, almost two-thirds of women (64 percent) felt their company stock plan provided a sense of ownership in their organization. The research also found 48 percent of women indicated they work harder knowing their company stock plan will reward them for their company’s performance.
See the latest trends around using variable pay and incentives. Download PayScale’s 2019 Compensation Best Practices Report.
4. Give people stretch assignments
When your employees gain new skills and uplevel their competencies, they will be more ready to tackle the challenges within your new organization. And when you proactively help employees gain new skills, not only will they become better leaders, they’ll also be more loyal to your organization.
How will people absorb new skills? Stretch assignments is the answer.
A stretch assignment is any project that cannot be completed using your current expertise. Research from Korn Ferry found stretch assignments or rotational assignments are the most valuable skill-building experience in the leadership development journey, ahead of action learning, mentoring, exposure to more senior leaders and formal classroom training. When Egon Zehnder surveyed 823 international executives, asking them to reflect on what had helped unleash their potential, no other form of career development came close: Seventy-one percent cited stretch assignments.
When I was with that 20-person startup, I took on a variety of stretch assignments — often involving tasks typically reserved for senior executives in larger companies. The more stretch assignments I completed, the more I felt like an owner. And it wasn’t just me. I also saw transformation within my coworkers; several of my co-workers started their own businesses after leaving the organization.
5. Encourage employee feedback
Soliciting employee feedback and then listening and acting on that feedback is a sure way to help employees feel respected and included. The key is to ask questions that make employees want to contribute to your company success.
Here is one example of a good way to solicit employee feedback:
“We distribute a quarterly pulse survey [that] allows them to give us [anonymous] feedback about the company at a macro level. We ask a set of 15 questions around teamwork, leadership, career growth, etc., each quarter to measure movement on any dimension. Then we give them three open text boxes to answer the questions: What are we doing well? What do we need to improve? What else is on your mind? We get our results each month with an average participation rate of about 75 percent and have more than 225 lines of data from the responses to those three open-ended questions. This allows all employees to feel heard and want to contribute to making our company win.” – Mai Ton, vice president of human resources at White Ops
6. Be intentional with every conversation
If you want your employees to feel like they matter, pay close attention to how you speak. When you speak, make sure they realize they bring something to the company no one else can.
Instead of saying “good job” after a project well-done, highlight the specific contributions they made on a project and/or the character traits you admire within that person. For example, to an employee who really values relationships, say something like, “You really were the glue to the team; I appreciate how used your calm demeanor to defuse this tense situation and bring everyone to a constructive solution.” To an employee who is more achievement-oriented, you might say something like, “I really appreciate that you took ownership of the project and had strategic impact here and here.”
Additionally, be careful what you do and say when your employees come to you for help. When someone asks you a question about how to do their job, do you tell them the answer or do you ask probing questions and challenge them to come up with their own solution?
My previous boss was great at leading me to find solutions for myself. He always asked me what I thought would be the best approach to tackle a problem and what I thought the specific tactics should be. At first when I joined the team, I wasn’t accustomed to having to deal with so much ambiguity. But over time, I became more comfortable with planning, evaluating options and coming up with my own solutions — crucial skills business owners need to have.
Conclusion
When you take the time to foster an ownership mindset with your employees, they will become more productive and effective. And equally important, they will feel valued. These are some some ways to develop your employees and foster an ownership mindset. What other means have you found to be effective?
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Banner photo by Jeroen den Otter on Unsplash
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