developing a high performance ownership culture
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Developing a High Performance Ownership Culture. The ESOP Association New South Chapter Fall Conference Orlando, Florida October 18, 2012 Alex Moss Praxis Consulting Group, Inc. Agenda. Attendee demographics Success Drivers & Employee Ownership Foundation - PowerPoint PPT PresentationTRANSCRIPT
Developing aHigh PerformanceOwnership Culture
The ESOP Association
New South Chapter Fall ConferenceOrlando, Florida
October 18, 2012
Alex MossPraxis Consulting Group, Inc.
2 TEA New South Chapter | Ownership Culture
Agenda
Attendee demographics Success Drivers & Employee Ownership
Foundation Ownership Culture framework & tools Discussion
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Who’s Here?
Size: employees Over 1,000 Over 500 Over 100 100 or fewer
ESOP % 100% Majority (50%+) Minority (under 50%)
C-Corp / S-Corp Leveraged /
Unleveraged
ESOP age Over 20 years Over 10 years Over 2 years 2 years or less
Board of Directors Internal / external
ESOP Trustee Internal / external
Professional advisors Guests
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ESOP Success Drivers
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Supportive legal / regulatory
environment
Well-managed ESOPs
Competitive ESOP
companies
Public support
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Employee Ownership Foundation: Silent Auction
Goal $4,000 Progress: $2,000, so far Drawing: coming right up!
Impact Jobs research Other performance research, Kelso (& other)
Fellowships UPenn CEO program Case studies: www.caseplace.org, CLEO Edmunson Scholarships
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Future Vision [From Southwest Chapter, September 2007]
Imagine that it’s October 2012, and you are celebrating the past 5 years’ achievements under employee ownership In what ways does your company look the same? In what ways do we look different? Stories that illustrate our success?
So: what are you learning?
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The Big Picture:Alignment Drives Performance
Strategy
LeadershipCulture
HighPerformance
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Employees Generally Value:
Payroll Cash: today Security: next month / next year(s)
Job quality Work environment: people, physical Learning / advancement opportunity Making a difference
Short term benefits, e.g. vacation, health care, profit sharing, etc.
Retirement benefits, e.g. Pension, 401(k) Ownership = ESOP
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Intrinsic Motivation: Daniel Pink
“There’s a mismatch between what science knows and what business does.”
Extrinsic motivators work for narrow, fixed, known tasks
Intrinsic motivators work for the kinds of problems that increasing define our work and our economy Autonomy Mastery Purpose
TED talk: www.ted.com/talks/dan_pink_on_motivation.html
Book: Drive
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Ownership Culture
Running your company so that employees think, feel and act like co-owners
Employees at all levels understand who decides what and why have access to structures, training, information and
management support for participation participate actively, effectively and appropriately to
continuously improve company performance
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Individual Owners
ESOP Governance…and Opportunity
ESOP Trustees
select
Leadership Team
Board of Directors
appoint and oversee
elect
hire and oversee
Shareholders
Employees
CEO / President
hire and oversee
ESOPParticipants
when meeteligibility
requirements
arerepresented
by
ESOP Committee:
PromoteOwnership
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We Know It Works: Sample Research Findings
Dramatically lower job loss during Great Recession: ~4:1
Improved worker productivity Increased sales growth rate Reduced employee turnover Substantial individual account balances Better retirement benefits: ESOP + other
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How do ESOPs Affect Business Performance?
Ownership
Participation
Improved Performance
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Bottom Line
The ESOP creates an opportunity for you to share the wealth you help create
The data is on your side: it can be very successful
There are no guarantees, success is up to you
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What Kind of ESOP Do We Want?
Ch
ang
e
Level of Engagement
Culture Change
Supporting PillarBenefits Only
Fantasy ESOP
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How: Step 1
Formulate “Ownership Vision” linked to business strategy: what’s the value of being employee-owned, what does “good” look like? Finance Independence Operational
What evidence would tell you that it’s working?
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How: Step 2
Clarify “Ownership Behaviors” What should employee-owners do? What do leaders & managers need to do to
support this? Learning goals
What knowledge & skills does each group need to support these behaviors?
What will you track / measure?
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How: Step 3
Assessment & gap analysis What are we already doing that is most
successful? What is consistent with ownership culture…we just
don’t call it that? What do we need more of? What do we need less of?
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How
Step 4: Planning & ongoing execution Education & communication Incentive alignment Participation structures / mechanisms
Step 5: Monitoring & evaluation Periodically review data Corrective action Learning & continuous improvement!
Step 6: Lather, rinse, repeat
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It’s a Balance
Passion Planning Resources
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Discussion / Questions
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Contact Information
Alexander P. Moss
Principal
Praxis Consulting Group, Inc.
9 West Highland Avenue
Philadelphia, PA 19118
www.praxisCG.com
215.753.0303
Article: “Building Long-Term Value: Developing a High-Performance Ownership Culture”
www.praxiscg.com/published-work/building-long-term-value-developing-high-performance-ownership-culture
October 18, 2012