Unaverage Leadership

A Bird In The Hand - Is Worth Two In The Bush

In too many instances ESOP companies believe that the value of an employee owner's ESOP account is a motivating incentive.  The issue with the ESOP account value is that it is viewed as the bird in the bush.  The view of the ESOP is similiar to the bird in the bush - Will I get my ESOP money (can I catch the bird)? - Will the ESOP account be there when I leave (will the bird stay in the bush or will something else get the bird)? - The ESOP is a scam (two birds in the bush, unbelievable). 

A cash incentive is the bird in the hand.  It allows the employee owner to really feel success.  One could say it teaches people how to catch the bird in the bush.  A good incentive plan is self funding and it teaches employee owners how to increase the value of their ESOP accounts.  If the incentive is being paid, chances are the value of their ESOP accounts will increase. 

Putting a bird in the hand of employee owners may well give you two birds in the bush, but if you do it right you may have a whole flock of birds in the bush!

 

Where Is My Money?

Employee owners are provided a statement at least once a year that shows them what their ESOP account balance is worth - $10,000, 100,000, maybe a $1,000,000. At some point in time all employee owners will eventually ask the question (sometimes out loud, many times to themselves), "Where does the money come from to pay out my ESOP account?"

A legitimate question, that in many cases is given little attention or is avoided all together.  Companies that do not address this question, but want employees to act like owners, create a somewhat hopeless situation.  It could be compared to the response of someone looking at their future benefit statement from the Social Security Administration.

How employee owners get their ESOP money is discussed often.  Sadly, the discussion on where the money will come from does not happen often enough.  Their is risk in this type of discussion, but there is also great power if handled well.  

Life Long Learning

Change is occurring at an accelerating rate never before seen in human history.  This acceleration of change will make lifelong learning paramount for those who want to be successful.  Leaders of organizations will be required to make this a critical part of their daily routine.  To stay current with how the world can impact their organizations and the people they lead, leaders will need to seek out opportunities that stretch their understanding of themselves, their organizations, and the interconnections with the changing world around them.

ESOP company leaders are fortunate that the "Leading In An Ownership Setting: The Program For CEOs" is being offered once again.  The program is a collaboration between the ESOP Association and the University of Pennsylvania's Center for Organizational Dynamics.  The program is designed for leaders who want to learn, maximize the impact of employee ownership, and create a lifelong network of peers in the employee ownership world.

I can personally attest to the program as I was a member of the advisory group that help develop the program, and I participated in the first program that was offered.  The value you receive from the program will easily out way the initial objections of cost and time that prevent some CEOs from attending.

The program will begin in June of 2011.  The program is coordinated by Dr. Virginia Vanderslice, a member of the University of Pennsylvania's faculty and a long time practitioner in the employee ownership world.  Please feel free to contact her at ginny@praxisCG.com for more details or feel free to contact me at victor.aspengren@mchsi.com to discuss my experience

Begin your lifelong learning journey today.

Repeat, Repeat, Repeat

Educating employee owners on how your ESOP works is a never ending process.  Companies spend hours creating games, holding meetings, and looking for creative ways to explain how the ESOP impacts it's employee owners.  Do not beat yourself up trying to make the process exciting and glamorous.

In the world of education, an effective and simple tool is repetition. Studies show that repetition is a powerful tool in the learning process.  Do not be afraid of repeating your ESOP information over and over.  There will be complaints of the same old thing, but hold the course on repeating the essentials of how your ESOP works.  ESOP education takes time, practice, and patience. 

Governance & Culture

Many companies do not recognize the role of governance in building a company's culture.  Which by the way, improves the bottom line (study after study proves this).

I recently visited the John Lewis Partnership in England.  They are an employee owned company that has 70,000 partners (employee owners in our terms) and is the largest retailer in England.  Year over year they out perform their competition.

Within John Lewis's governance structure they have  positions called the Registrar.  The purpose of these positions is to ensure that the culture of the company is not comprised in the course of conducting business.

The role of the registrar roles up directly to the Managing Director (Board Chair in our terms).  They are not hampered by the typical management system and have a direct link to the top.  Not only do they have a direct link to the top, the Registrar system has the ability to remove the Managing Director if they are not supporting the culture of John Lewis.  This is not some radical company, this is the number #1 retailer in England!

The structure of John Lewis has taken the typical leadership role and separated out the business/management role from the people/culture role.  This allows each role to have a more intense focus, and both roles are included and integral in the governance structure.  John Lewis has realized that business success and culture go hand in hand and they have put a governance structure in place that supports, enforces, and celebrates this relationship.

What is your link between governance and culture?

Flickr photo by Dawn Endico