Employee Ownership is an Emotion
I just returned from the National Center for Employee Ownership’s (NCEO) annual conference. The organization is focused mainly on Employee Stock Ownership Plans (ESOP), a specific type of tax-advantaged program that allows employees to own their employer, in full. The NCEO and its membership are passionate about employee ownership. The conference is always an inspiring event.
Every executive wants their employees to think and act like owners. They believe with ownership comes focus, engagement, and passion. With these triggered, success is supposed to be far easier.
But ownership is tricky. I break it down into three main categories.
Physical ownership is the actual holding of something that is yours. This is a visceral and easily understood. When the thing being held is also valued this can also be powerful. But don’t be fooled. You also own that old stuff in your garage that you are going to give away as soon as it gets warm outside.
Like a sentimental heirloom at your mom’s house, or an online purchase that has not yet been delivered. Mental ownership is where most compensation communication programs stop. We focus on helping people understand the mechanics of something they cannot hold in their hand. Imagine it like $500 in the bank versus a $500 bill in your wallet. The money in your wallet feels more real and can be more difficult to spend. This is the biggest reason casinos convert your money to chips. The chips feel less real and are therefore easier to risk.
This is the connecting circuit that activates the real power of ownership. Think about the baseball fan who refers to the team as “us”. This is the source of passionate employees. Emotional ownership is so charged that it can be powerful without physical and mental ownership. People don’t have to hold something or understand something for them to passionately own it. People are emotional animals. If we feel like we own something, we actually own that thing. Or, as a psychology professor once told me. “What you feel is everything. If something truly feels and believes they are Napoleon, then as far as their life is concerned, they ARE Napoleon.” Maybe not the best professor, but I love that line!
This is why emotional ownership is where you should start. You don’t need a new compensation plan to create the spark of ownership (although it’s a good idea.) You don’t need people to understand the mechanics of their plan for the plan to have a impact (although it certainly helps.) What you need is for people to feel like they are part of something bigger and more important. You need them to believe that their actions and decisions contribute to the success (like fan cheering at the big game.) If you make this happen, the rest become much easier. Without it the rest is muted, as best.
Back to the NCEO conference. The event is mainly attended by two types of companies. The first are companies looking for ideas to make their companies and ESOP perform better. The second are companies looking for ideas to make their companies perform EVEN better. This first group are often comprised of companies who have not activated the power of emotional ownership. Their employees physically own the company, and mentally understand that, but they do not use that ownership as fuel for success. The second group often have several of their passionate owners in attendance at the conference. These people are from all job levels and job families. Their uniting force is their excitement for each other and their company.