employee ownership

Management Evolution: Where do you stand?

You probably know that, if you put a frog in cold water and slowly heat it, it will eventually boil to death. This fact was popularised by management guru Charles Handy in his 1989 book, “The Age of Unreason.”  But, even though you know the parable, do you ever stop to think about it, its implications and its relevance? After all, Handy must have had a reason for telling it.

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Nothing to Lose and Everything to Gain!

“Mine!” “No! Mine!” How often have you seen that scenario play out? I certainly found it a recurring theme over the holidays as I watched my two very young grandchildren play. And I would guess that 95 out of 100 initially happy games that ended up in tears, did so when such conflict arose. Even when it wasn’t about direct ownership, it was about perceived injustices over “turns” or temporary ownership of a particular activity. The concept of possession thus seems to be a deeply ingrained in our culture from a very early age.

Whether this is good or bad, is actually irrelevant. Less materialistic cultures, such as the San people of the Kalahari, suggest that it is possible to have a culture without ownership and consequently with considerably less conflict. This, arguably, makes ownership the Pandora’s Box that seems to be the price we pay for civilisation and something that is almost impossible to discard. Indeed, you could argue that ownership underpins capitalism, which, historically, has been responsible for the world’s major economic development.

Yet, even in commerce, ownership is a root of contention and conflict. You only have to watch “Dragon’s Den” or “Shark Tank”, with would be entrepreneurs pondering an investment offer to see this.

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Seasonal Wishes

It seems to come around more quickly than ever, as if trying to catch you by surprise.  Nevertheless, ready or not, it is once again the time of the year to take a break from business and the responsibilities of everyday life and focus on things that are just as - and possibly even more - important. No doubt you have earned the break and, however long yours is, as you take it, I wish you and yours everything you wish yourself for the festive season holidays and the coming New Year. May you see the fulfillment of every one, and even more. I look forward to your company again in the New Year.

2016 Happy Holidays

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If you like what you have read contact me today to discuss how my ‘Every Individual Matters’ Model could provide the catalyst to help you create a culture in which everyone cares and the business becomes our business, embedding improvement that transforms – and sustains – organic business performance.

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Bay Jordan

Bay is the founder and director of Zealise, and the creator of the ‘Every Individual Matters’ organisational culture model that helps transform organisational performance and bottom-line results. Bay is also the author of several books, including “Lean Organisations Need FAT People” and “The 7 Deadly Toxins of Employee Engagement” and, more recently, The Democracy Delusion: How to Restore True Democracy and Stop Being Duped.


When will we learn?

When will we learn, or, as Bob Dylan put it, “When will we ever learn?” That is the question I found myself pondering after reading two very different articles this week.

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The New Need to Build a Better Business Model

You couldn’t have made it up! In a world where the excesses of business have fuelled strong – sometimes violent – protests against capitalism and corporate malfeasance, Donald Trump won the US election because he was perceived as a businessman! Despite the onslaught of attacks on his personal character and his suitability for the role, he became the first man in history to become US President without any military or political experience whatsoever, because of his business credentials and the hope that this would enable him to bring about change.

This is like giving your most vociferous, disgruntled customer, who knows nothing about the ins and outs of your operations, control over your entire organisation, albeit on a far grander scale. You can imagine how concerned your other stakeholders would be if you were to do that. So it is hardly surprising that Trump’s election is causing consternation and creating a backlash. Inevitably people are taking stock of the implications and wondering how it is going to affect them.

Yet, in all the post-election reflection, there is one aspect that does not appear to have been considered in any great depth. And it is one that, perhaps, warrants the greatest thought: “What are the implications for business?” Without any doubt they are significant.

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Turbo-Charging Transformation & Performance Improvement

Turbo-charger www.123rf.com_37618271_sIt is encouraging to know that employee ownership is becoming increasingly popular and more widespread. According to Chief Executive Magazine the number of worker-owned businesses in the US is growing around 6% per year and such businesses now account for 12% of the private sector workforce. Apparently, this is due to initiatives “to empower their workforce employees by selling their stock to an ESOP or similar worker-owned arrangement” and/or “from founders wishing to reward employees while cashing out of their business.”   

Yet, notwithstanding such developments, difficulties remain. The article identifies 2 major dilemmas:

  1. Private companies lack the public trading capability that listed companies use to motivate employees;
  2. Governance “challenges” if subsequent owners are unwilling to continue running the business.

Then, presumably as solutions to these dilemmas, the article offers two case studies. The first describes the transformation effected by a shared compensation system at Johnsonville Sausages; and the second reveals how, over 30 years,  Burns and McDonnell, grew from 600 to 5,500 employees (816%) and increased revenues from $40 million to $2.6 billion (6400%) as the result of an ESOP (Employee Share Ownership Plan.) Then, despite this example of extraordinary growth that most organisations can only dream about, the article simply concludes by identifying the upside and downside of ESOPs. So let me add to the subject.

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A Better Way than Worker Cooperatives and ESOPs

I have recently noticed a spate of material on the subject of worker cooperatives. The most interesting was the Forbes article “For Some, Worker Cooperatives Emerge As An Alternative To ESOPs” which made me wonder if worker cooperatives were a new trend.  If so, it certainly provides food for thought.  

The article suggests that worker cooperatives are a result of changing demographics and a means of addressing the disruptive effects of generational change. Perhaps, but their providing a solution for only “some” implies that ESOPs (Employee Share Ownership Programmes) are the only other option. While history certainly entitles both to be options, being the only two suggests rather limited thinking. After all, both have their shortcomings, which – at the very least – warrants exploring other possibilities.  

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PS How to Effectively Align Your Performance & Rewards

My regular blog last week was inspired by Part 1 of an article by Andy Rice from Black Box Consulting, entitled "Performance (Mis-)Management." I therefore feel it is rightfully incumbent upon me to follow up and also share Part 2 with you. This second part identifies 3 questions you need to ask yourself about the design of your performance measures.

I am happy to report that, although expressed in different words from those I used, the basic principles are the same as in the 3 questions I recommended. The article, however, does nothing to question the validity of rewarding performance as an effective management tool. I therefore think my points remain valid and I stand firmly behind them as something every organisational leader should at least be considering.  


How to Effectively Align Your Performance and Rewards

As someone who aims to be an effective organisational leader, do your ever wonder why you have a performance related pay/incentive remuneration scheme? Certainly, if you are one of the nearly 15 million people who have watched "The Surprising Truth About What Motivates Us"  that is a question you ought to have been asking yourself. Or is it something you haven’t dared asked yourself, simply because performance related pay is virtually ubiquitous? When nearly every organisation – regardless of type or nature of business – has such a scheme, you would be bucking the trend and possibly damaging your employer brand if you didn’t.  

If that is the case there are still a number of criteria that you should be looking at to ensure that you have performance measures and remuneration and reward structures that optimise organisational performance. When it comes to effective performance measures and rewards you naturally need to ask yourself 3 questions.

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What Is The Future of Work?

With 3 in 10 jobs in the US held by the self-employed and their sub-contractors there is no doubt that the workplace is changing. (Source)  It is hardly surprising then that 2 out of 5 (40%) of people around the world believe that traditional employment “won’t be around in the future.” Thus the most recent issue of Management Today with its feature section on “The Future of Work” makes for interesting reading.

Some of the key points it makes warrant highlighting and further comment.

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