This week brought confirmation of something that I have more than suspected for a long-time. Yet, while validation brings vindication, the picture portrayed is alarming. It would have been better to be proved wrong.
According to the 2013 Deloitte Shift Index Report the Return on Assets (ROA) for US business has declined from 4.1% in 1965 to 0.9% in 2012. (See the graph below.) That’s a decline of 78% over 47 years!
This is extremely alarming when one considers that the US is the world’s Number One economy. You can only wonder what the decline is for the entire block of “developed” economies. It helps explain just why China is closing so rapidly on that # 1 position!
Whether you find this alarming or not, I don’t know. For me it is, even though it is no surprise. It is inextricably linked to the low levels of employee engagement, which in turn are the inevitable consequence of the extent to which even the declining ROA has only been achieved at the expense of employees. After all, isn’t most organisational investment justified on the basis of “headcount saved”? You cannot grow a business if you are destroying the market for your goods and services.
Nor can you build and protect a brand if you don’t have the loyal employees to ensure this.
That is why I continue to maintain that the only way you can safeguard your long-term future is to have your employees on your side. This means that you have to stop treating them as costs and start treating them as the vital assets they are. The best way to do that, and create the line-of-sight and strategic integrity that you need, is through employee ownership. You need to make your employees co-owners of the business. And the Zealise model of employee ownership, creating ownership without equity and at no cost to employer or employee, offers the ideal way to do this. It provides the platform to pull together and reverse the trend.