Are you a business owner wondering how you can engage your employees and get them to think like you would when making decisions?
I recently read "Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit" by Brad Hams.
Brad talks a lot about entitlement and how it is "destroying companies, our economy, and crushing potential". Entitlement is basically the idea that you should get paid just for showing up at work; no matter what your actual impact is.
Brad's personal mission is "to eradicate entitlement".
Basically it starts with the idea that given a choice, people actually want their work to be meaningful and productive. People also want to learn and grow to their full potential.
Companies can achieve this by focusing on several things:
- Educating employees: teach them the fundamentals of of business and finance and how what they do affects the company.
- Measurement: identify Key Performance Indicators (KPIs) and start measuring them and making those numbers available. You can go as far as you are comfortable; top level numbers or right down to something resembling open book management (though that is not key in his view).
- Incentives: Skin in the game. Should be self-funding, significant and based on actions that are key for the business strategy. Keep them at the company level if possible to avoid silos of self-interest.
- Employee Stock Ownership (ESOPs): Are an option for some companies but it depends on your business strategy, situation, etc... it is not necessary to achieve the result and they can be complex. If you have an ESOP Ownership Thinking is required to benefit.
- Rapid Implementation Plans: Short projects to achieve improvements in the KPIs and thus your bottom line. These should be short-term; three months or less if possible to maintain interest and get results.
Overall, I found a lot of good stuff in this book. Brad and Ownership Thinking are in good company too. If you have read "The Great Game of Business" or "A Stake in the Outcome" you will recognize many of these very topics.
What I liked about this specific book is that it was not focused solely on one company or industry and he gives lots of real examples of KPIs and improvements you can implement.
Of course, understanding the theory is just the beginning. The harder part is implementation. But the rewards are worth it.
It turns out that Brad's mission to eradicate entitlement and our mission "To help people achieve their full potential." dovetail nicely. The reason is that we've decided to focus on the impact that a great company has on the entire realm of owners, employees, families, customers, vendors and community.
By improving businesses, we both seek to improve everyone on the team to their full potential.