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Agenda for 2023 

today2023.01.23. 227 5

Background

 Organizations With More Owners and Fewer Renters 

 

By David C Forman, Author of Fearless HR and Fearless Talent Choices

 

WHY SHOULD YOU CARE? 

The one thing we know about 2023 it is that we don’t know much at all.  Will it be the Great Resignation or Great Reshuffle?  Will anyone who wants a job, get one; or are layoffs on the horizon?  Will the labor market be tight or tighter?  Can wages keep up with inflation?  Will global supply chains become more reliable?  Will wars and pandemics recede or rebound?  How will other political, economic, and social events impact us?  And what combination of all these factors will become the most salient in the years ahead?

It seems very apparent that the turbulence and uncertainty we have recently experienced will only intensify.  Stability is a remnant of the past.  So how do we respond to this uneasy blend of ambiguity, threat, and opportunity?  And more specifically,  how do we create an organization that maximizes strength of association, doesn’t settle for just being good enough, shares power and responsibility, elevates employees to be equal partners, and equalizes benefits for both employees and organizations in a time of unrelenting change and disruption?

The Way We Are Working Isn’t Working

Let’s start with the traditional employer-employee dynamic.  There is literally one letter that separates the two entities, but this does not describe the significance of the difference.  For decades, organizations been characterized by hierarchical relationships, power in the hands of a few, too many organizational layers and roles, and unimaginative but compliant decision making.  This “top-down” approach has proven to be too slow and cumbersome for today’s fast changing world; but even more significantly, it has impeded organizations from reaching their human potential  and individuals from being truly dedicated and committed to what they do.  Is it time to change the way we are working? 

But  given the tumultuous conditions on the horizon,  it may be best not to make bold moves now, especially after making so many adjustments to the pandemic.  Both employers and employees may choose to ride out the storm.  Organizations may prepare for this uncertainty by doing the minimum, and preparing for low engagement and high turnover.  Employees could wait out this period before making commitments that are more lasting.  This would seem to be the less risky course of action for both organizations and individuals.

But maybe not.  It seems counterintuitive; but in a maelstrom,  a dynamic, resilient, and  supportive company may be the type of safe harbor that reduces (as opposed to exacerbates) tension and risk among employees.  A strong association with a vibrant company can be exactly the right partnership for tough times.  While many organizations may take the hunker-down, conservative, minimalist approach, perhaps it is time to do exactly the opposite.

Owners and Renters

One way to think about various levels of commitment and risk is a distinction witnessed every day.  When finding a place to live, we usually have two choices:  Rent or buy.  Putting the availability of financial resources aside, what is the different state of mind between the two?  How do owners approach things differently than renters?  Are feelings of responsibility similar or markedly different?  How is the risk-reward equation balanced for both parties?

There are certainly different types of owners and renters, but usually the differences that pertain are:

Factor              Renters                  Owners
PerspectiveTransactionalIntegral
Time horizonShort-termLonger-term
Investment philosophySave on expensesInvest to grow
Likely approach to making changesMaintainImprove
Typical actionsWork around issuesSolve the problem
Psychological stateBe satisfiedTake pride 
EffortDo just enoughAll in
ResponsibilityNot responsibleResponsible
Locus of controlNot in controlIn control
OutcomesSingle bottom lineMultiple bottom lines

Figure 2:  Characteristics of Renters and Owners

The feeling most people never forget is the first time they own their own home.  Ownership provides belonging,  meaning, and value at a whole different level than being a tenant.  But can this sense of ownership and commitment be extended to workplaces?  

Developing Owners:  The Big Six+

This feeling of ownership may pertain, in varying degrees, both to where we live and work.  For a place to live, ownership is a relatively simple transaction:  You buy the property, become an owner, and then you demonstrate “psychic ownership” by feeling and acting differently.  Typically, the more time, energy and resources invested in the property, the more valuable ownership becomes.

In organizations, this transaction can be more complex.  In some businesses, ownership does have a  financial component as well.  Employees can be gifted, given the opportunity to buy stock, or partake in the company’s financial gains.  Employees, then, are actual owners of the company to some extent, just like the fans of the Green Bay Packers own their beloved football team.  

But many organizations (and teams) are not structured this way.  For most businesses, nonprofits, and governmental organizations ownership comes from a different value exchange.  It is not about money for ownership but mutual, shared, reciprocal commitments.  This new compact or alliance ( The Alliance, Hoffman, Casnocha, and Yeh, 2014) is based on employees being “all in” (not just satisfied or engaged) while the organization provides a workplace that one is proud to contribute to, care for,  and call your own.  This reciprocal “psychic ownership” can be an extremely strong bond so long as each side fulfills its commitments and responsibilities.

So, what are the ties that bind and lead to this strongest of associations?  How can this level of commitment be achieved?  What does an organization need to do to develop a workplace that entices talent to aspire to ownership, not just membership?

One place to look is the literature and research on high-performing companies.  There are many valuable sources including Gallup (1998 and beyond), Dan Pink (2014) , Josh Bersin (2022), Neil Doshi and Lindsay McGregor (2014), Paul Zak (2017),  The World Economic Forum (2019), Satya Nadella (2020), Marcus Buckingham (2022), and Gary Hamel and Michele Zanini (2020).  In Fearless Talent Choices (2020), after reviewing these and other sources, I conclude that there are no secrets of high performing organizations; the evidence is there for all to see, but we are just not very good at turning this knowledge into action.

A further review of these findings is useful to identify those qualities that would impact organizational ownership aspirations the most.  It is useful to come up with a manageable nucleus of critical characteristics that truly matter.  Long lists of 12 to 15 qualities are easy to forget or ignore.  My list of the Big Six+.

            The Big Six+                      Description
Transparency and Open ParticipationNo more secrets.  People will do the right thing if they have the opportunity and information they need.  Everyone is included and can participate.
TrustThe bedrock of a reciprocal relationship.  If trust does not exist, everything crumbles.  Trust is a multiplier:  The more trust is repaid, the more it is extended.  Follow through on commitments.
Aligned Purpose and ValuesMatters of the heart.  Believing in something that matters.
Flexibility and ChoiceA two-way street.  People take responsibility for their choices.  Choice begets ownership.
Challenging Learning ExperiencesKeeping people fresh, marketable, and at the top of their game.  Showing you care by investing in people.
Joint AccountabilityBeing accountable to each other, not just bosses.  We are in this together, not separately.
+     is SerendipityHave some fun, Be memorable.  Applaud quirky.  Laugh.

Figure 3:  Five + Critical Qualities Leading to Ownership*

* More information, examples and tools for each quality are in Fearless Talent Choices, 2020.

At the very least, an organization built on these principles would be noteworthy and a very attractive place to work.  An executive at a highly successful startup company was asked to reflect on its successful rise, and the answer was:  We are part Peace Corps and part Marine Corps:  We do things for people that matter to them, and, just as importantly, we are in the business of achieving results for which we are all accountable.  Both corps are required.

Vibrant Organizations, such as this one,  present an interesting choice for employees and future new hires.  Are you “all-in?”  Do you want to help shape the organization, feel connected to it, commit to its success, and invest in its future?  Do you want to own or rent?  You now have the opportunity; the choice is yours.

There is another key choice to be made:  Do the leaders of Vibrant Organizations embrace this notion of employees becoming owners and more directly involved?  Some leaders might perceive this as diminishing their power or undermining traditional hierarchical relationships.  But with more work being done in teams today (Nine Lies About Work, Buckingham and Goodall, 2019); these historical relationships are being transformed anyway, so the step to employee-owner is not as great as it might seem.  The irony is that leaders strengthen their organization by sharing  power with others.   It seems counterintuitive but giving up power actually increases its impact.

One final comment on the time horizon for organizational renters and owners.  Tenants can generally opt-out whenever they want, while owners have a longer-term commitment.  But ownership is not forever and does not require a specific number of years.  Ownership, however, is more than a pleasant experience;  it needs to demonstrate results (remember the Marine Corp).  In most cases it takes several years for results to be realized.  This time horizon may be quicker but leaving too soon precludes making a meaningful impact, both for the organization and individual. 

Conclusion

Unlike owning a house, ownership in an organization is a shared commitment.  It is a joint responsibility that binds people who have made this choice together.  It is a strong association based on a reciprocal exchange of value that is meaningful to both parties.  Ownership also provides a sense of community that is derived from hard work, shared responsibilities, and achieving results that matter.  In times of turbulence, this community can be an effective buffer against risk, doubt, and anxiety.  It can provide a safe harbor in which talent can be unleashed to enable organizations and individuals better optimize their human potential.

 In some ways, owners are more valuable to organizations than leaders.  This may seem blasphemous, but leaders can only do so much—they are not everywhere, all the time.  Owners are ubiquitous and the power of shared responsibility and joint accountability is significant, often much more impactful than the bond between leader and employee. 

And then there is the argument that employees, regardless of their hierarchical rank, have always been owners. They are the ones that make, sell, and support the organization’s product and services.  Without them, there is nothing to own.  So, lets welcome them to the team they have always been on. 

Being a tenant is fine.  It serves a purpose, may be necessary, and is perhaps the prudent choice in uncertain times.   But, given the choice, most people want to  help shape decisions, invest in the future, be a part of a dynamic community, achieve meaningful results, and be “all-in.”  Organizations must keep, and continue to keep, their end of the value exchange.  Because if trust is broken, promises become hollow.  But if organizations do honor their commitment, they will not only be magnets for future talent, but will take an important step in  realizing human potential and changing the language and discussion around the true owners in the organization.

Written by: Dave Forman

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