Robert Frost once said, “Isn’t it a shame that when we get up in the morning our minds work furiously—until we come to work.”
In the new economy, we need to equip people to think and act like owners. Everyone must come to work fully engaged and ready to make difference. A global revolution is under way, and it calls for gutsy leaders—people who can inspire knowledge workers idea merchants, and business innovator to exercise their own brand of leadership. The future belongs to those who use the power of culture to feed the entrepreneurial spirit.
Here are eight ways you can create a culture where people have a stake in the success of your business.
- Recognize that ownership is more than a stock certificate. Ownership is a state of mind, a way of looking at the world and approaching work. Owners are people who step out from behind titles and job descriptions to act on behalf of the customer and the company. Non-owners hide behind position descriptions (“It’s not my job.”) and throw problems over functional walls (“Let me transfer you to…”) as an excuse for inaction. Owners cater to the purpose of the organization—its mission, vision, values, and strategy. Non-owners cater to the boss. Owners focus on the business results of their actions regardless of who is watching. Non-owners focus on the chain of command Owners ask the tough question: “How can we make it better?” Preoccupied with safety, non-owners gravitate toward the comfort of the status quo where things are more predictable and less disruptive.
- Develop leaders who know how to liberate talent. Ownership is about giving people the freedom to act and removing the fears that cause lack of initiative. Unforgiving, zero-defect cultures foster cautious inactivity that kills the ownership mentality. People who don’t feel safe live under an umbrella of fear that makes them reluctant to make decisions, own problems, admit mistakes, take on projects, and act in ways that grow the business. When people cling to safety, they have no commitment to ownership; accountability vanishes, and self-preservation arises. Ownership is trusting that employees will operate with the company’s best interests in mind. Putting our trust in these people tells them that we think they are trustworthy. It suggests that we have faith in their character and competence. It boosts their self-confidence. Strengthen a person’s self-confidence and you strengthen his or her ability to think and act like an owner of the business. Herb Kelleher, Southwest’s chairman, says, “You build self-confidence when you give people the room to take risks and fail. You don’t condemn them when they fail. You just say, “We’ve just spent a good bit on your education; we hope to see you apply it in the future.”
- Lay out the guiding principles. As a leader, you have to be confident that when the decisive moment comes, those who have assumed ownership will exercise common sense and good judgment. As the one assuming ownership, you have to be confident that what you are doing is the right thing because, after all, with ownership comes responsibility and accountability. Exercising good judgment and doing the right thing result from a clear understanding of the company’s guiding principles. Your firm’s business purpose and strategies, its mission, vision, values, and philosophy all define those principles. In essence, they create a set of helpful boundaries. When the boundaries are clear, employees have more freedom to step up, take action, and assume ownership for getting things done. When the boundaries are fuzzy, people get nervous and cautious. The result is a culture characterized by compliance instead of commitment.
- Help people become business literate. When people understand how revenues and costs translate into profits, they become business literate. How many people on the front lines of your organization understand how the company makes money? How many of them are capable of reading a financial statement? If you asked them how much it costs to run their part of the business, could they tell you? How can we expect them to cut costs if they don’t know what those costs are to begin with? When people start asking cost questions, they are starting to think and act like owners of the business. The true experts are people at the point of action. Smart leaders open the books and equip these people with the financial information they need. When employees become business literate, they look for ways to drive costs down.
- Make information relevant, fun, and interesting. The key to creating business literacy is getting people to internalize the information. If busy people do not see the information you put out as relevant, fun, and interesting, they are less likely to use it or be impacted by it. Information is relevant only when it is useful. If the salespeople at Sears knew that only three cents out of every dollar shows up as profit at the end of the day, they might be more passionate about watching costs and serving customers. Southwest Airlines’ annual profit-and-loss statement is written simply and illustrated with icons and cartoons, making it compelling to read and easy to understand.
- Eliminate the “class” mentality. Leaders who are serious about leveraging the knowledge of every person must also eliminate the “class” mentality-socially prescribed or stereotypic boxes. This mentality undermines work in three ways. First, it strips the individual worker of his or her dignity and lowers morale. It essentially says, “We don’t believe in you enough to trust you with this information. It ensures that power resides at the top and widens the gap of inequality. Second, it doesn’t capitalize on people’s knowledge. The company pays for insight it never receives. Third, it crushes the entrepreneurial spirit. People stop caring, learning, and growing. When a financial statement is written so that only a CFO can understand it, forget about getting the frontline involved in a dialogue about cost containment. You breed compliance versus commitment. If your frontline people aren’t interested in reading a profit-and-loss statement, assess whether your information is too complicated or too mundane to capture their interest.
- Show people how the business affects them personally. Most of the 18-year-old ramp agents at Southwest are business literate. They know that when they push a plane just 30 seconds late, that delay could translate into one hour and 45 minutes at the end of 11 flights in a day. Southwest would have to add 35 more planes at $30 million each to maintain its schedule. That could mean wage concessions, profit sharing, and lowered job security. They know how their job performance creates results, and how those results affect their lives. Southwest has made information relevant and interesting to its employees.
- Give people a stake. Stock options and profit sharing can be powerful incentives to think and act like owners. However, just because people have stock options, they won’t necessarily think and act like owners. When you offer stock options and profit sharing without the culture to support these motivational tools it’s like putting new tires on a car that needs an alignment. When you add stock options and profit sharing to the rest of this list, you reward and reinforce people for behaving in ways that are consistent with an established culture. In doing so, you leverage the power of the incentive!
Build a corporate culture of employee ownership.