The members of our Exit Planning Peer Advisory Board (PAB) spent a significant amount of time last year learning about, evaluating, and implementing Ownership Thinking into their own businesses – and discussing their challenges, solutions, and progress at our meetings.
Each business owner had a different approach to introducing the concept to their employees and weaving it into their cultures and operations. Tom Bouwer, a business consultant and educator of executives, has boiled down the concept of Ownership Thinking into some primary principles and practical steps for implementation. Below are some ideas drawn from his Ownership Thinking perspective.
Education is foundational to making ownership thinking work. You can’t expect your employees to buy in to the concept if they don’t know and understand what’s going on with your company financially.
- Educate your employees about how your business makes money.
- Have regular meetings at which you share your company’s most recent, complete financials.
- Transparently interpret what’s behind the numbers.
- Be sure your employees understand why you are in business.
- Share how you feel, modeling the feelings of ownership you’d like employees to adopt.
- Be sure to encourage questions and don’t hesitate to address difficult subjects.
Recognition and incentives are another basic element of ownership thinking. As a prerequisite, an understanding of how individual jobs impact the company is critical. According to Brad Hams, founder of the concept of Ownership Thinking, when ownership thinking is instilled in the business, both opportunities and earnings increase, providing the additional revenue to fund more opportunity and rewards for everyone.
- Start by rewriting job descriptions which include how each employee’s defined work affects the company’s outcome so that employees understand how their job performance helps or hurts the company.
- Establish a recognition program that includes all employees.
- Recognition should include publicly recognizing employees within the organization, not just a personal reward. Be sure to tie in how their performance has positively impacted the company and its customers.
- Along with expected performance, offer support in the form of information, tools, and counsel.
- Schedule regular one-on-one meetings with employees in which updates are discussed, questions are asked, and clear goals are agreed upon together. Establish who will do what and when, including how the employee will receive the support they need to achieve the goals.
Values are the foundation of your company’s culture and inform operations. Values should be considered at the start – with hiring – and permeate every aspect of your company.
- Develop a hiring process for your company that is detailed and used consistently. Of course, you’ll hire for skill, personality, and character. But talk with candidates about topics beyond what you find on a resume to get a feel for their personal values and whether they are a fit for your organization.
- Define the values upon which your business is based and allow for open discussion and input from employees, including in meetings.
- Take values to the next step to define and cultivate your culture, based on those core values.
- Don’t assume that employees associate the values with how your company performs – point out how your company’s values define ethics, the quality of work, and how you treat customers and each other.
Incorporating Ownership Thinking into your company will obviously boost your bottom line. Since your workforce is typically the #1 value driver of a business it can also help boost and maintain the value of the business. An ownership thinking mentality and practice will also strengthen the stability of your company and contribute to a more solid exit strategy and successful exit.
I’d welcome the opportunity to discuss your exit strategy and how Ownership Thinking can benefit your company not only now, but as you prepare for what will likely be the largest financial transaction of your life. Contact me for a complimentary consultation.