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March 2013

Reap the Benefits of Employee Ownership

“There is clear and unambiguous evidence to show that employee ownership, particularly when combined with meaningful employee participation, brings tangible economic benefits for companies. But these gains are not just important to individual businesses, they have a direct impact on the UK’s economic recovery.” Employee Ownership Association Impact Report March 2013

Nothing new there then! We have all known all along that employee ownership is the best way to build employee engagement and transform business results, and thus to improve the national economy. Nevertheless these words from the latest Employee Ownership Association report provide further evidence.

Of course you might say, “Well they would say that, wouldn’t they?” However, the evidence comes from the on-going Field Fisher Waterhouse comparison of the Employee Owned Index (EOI) with the FTSE All-Share Index. Illustrated by the chart below this shows that, although the EOI only grew at 3.4% compared to the All-Share Index’s 3.7% this past quarter - hardly surprising considering the stock market's record trading in the past few months – it has outperformed the latter over the past ten years by an average of 10%.

Employee Ownership FTSE comparison

In fact interest in employee ownership is growing to such an extent that

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The Semantics Say It All!

You may – and most likely do – use it unthinkingly. It is such a little word; seemingly innocent, innocuous and insignificant. Just three letters long!

Yet, it can be profoundly significant.

In fact, if you were to think about it more deeply you might recognise the intention behind the word as a primary cause of conflict: for toddlers and tyrants alike, every race and culture and possibly every species of creation from aardvark to zebra.  At all levels: individual, family and community; personal and organisational; micro and macro.

So can you guess what the word is?

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The Tyranny of the Task!

Have you had a bad customer experience recently? Unfortunately the answer is most likely yes. And more than likely your frustration has been caused by someone’s rigid adherence to rules, even when the rules don’t appear to make sense. All too often the person serving will even agree, but say they are powerless to do anything about it “because those are the rules and that is the way things are!” 

Hopefully such experiences make you more alert to ensuring that your organisation does not operate with a radical, rigid and almost religious reliance on rules. They do prompt you to talk to your people and find out if they ever feel that way, don’t they? You can never expect to provide an exemplary customer experience if you don’t.

To do Istock_000012280649XSmallHowever, rigid reliance on rules has a near cousin that also impacts negatively on your organisational effectiveness, and thus on your service and ultimately your customers’ experience. You could call this “the tyranny of the task.” Let me give you an example. 

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Lies, damned lies, statistics ... and accounts?

Accounts - a class of statisticsYou are probably familiar with the quote about the three classes of lies – “lies, damned lies and statistics.” But I recently had reason to question whether accounts might not constitute a fourth category (or at least a special subset of statistics.) 

Why would I say that? After all it is a strange thing for an accountant to say and it certainly doesn’t come easy. My faith, however, has been called into question by some analysis I did.

Dabbling in that dangerous activity called thinking, I found myself unable to reconcile the current near-record levels of unemployment with the fact that:

  • More people than ever before are in employment; and
  • Stocks are trading higher than they were before the financial crisis, which means they are pretty close to, if not at, an all-time high.

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Are you making the same mistake?

As a leader it is very easy to try to create a process or a system that will prevent something happening again in the future when you encounter behaviour that you disagree with or disapprove of. Often, however, this can be a disproportionate response. The problem is that when you do you invariably add further complexity. And complexity nearly always invokes the law of unintended consequences, not least because it makes your original objectives more difficult to achieve.Error_000014363681XSmall

We are currently witnessing an example of this with the European Parliament proposing a law that will restrict bankers’ bonuses to 100% of their salary.  The problem with this is that it is an emotional and possibly irrational solution to a perceived problem. (The emotion behind it is clearly evidenced by one of the bill’s leading architects who, when confronted with an argument that this might cause a banking brain drain, said that was fine because just as you wouldn’t want drug dealers in your neighbourhood, so you don’t want bankers.)

While this may be an extreme example, it is a classic case of misguided bureaucracy.

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