The Power of Ownership

The Power of Ownership

“Mine!”  Who hasn’t heard a young child say that? The concept of ownership is one of our most primitive senses.  Indeed, I once read that the difference between North American and South American history, (both colonised around the same time) could be attributed to the encouragement of land ownership stimulating the greater development of the North.    

Be that as it may, you would have some difficulty arguing against the idea that ownership is an integral part of capitalism. The concepts of limited liability and the lasting, legal persona of the corporation would not have been possible, or nearly as successful, without distributed ownership and the amelioration of risk it created. So much so, that you might even argue that ownership is the heart of capitalism. Which is why it is strange that so little has been done to make employees owners. Even stranger – and certainly ironic – is that efforts to encourage this are sometimes seen as socialism!  

In fact, making your employees co-owners of your business has to be the ultimate in capitalism. Why? Because it also gives them a stake in the outcome. This makes it more personal. It gives them the pride of possession. Now, instead of simply being ‘servants of the organisation’ they become ‘partners in our organisation.’

Apart from anything else this also bridges the historic divide between owners and workers. Being seen as, or treated as, or perceived as being treated as, nothing more than a costly resource, is the root of all industrial conflict. No one likes to feel unappreciated or unvalued. And a philosophy that regards people as a resource – a cost to be minimised – perpetuates that sense.

Giving employees a stake in the business cuts right through that mindset. It reshapes the whole relationship and its dynamics. That has to be a win-win for both parties. This is endorsed by this article on ownership, in which the point that shared ownership cannot work without shared purpose is particularly relevant.   

Having a stake in the business is a basic catalyst for ensuring that there is a shared purpose. Both organisation and individual – employer and employee – have the goal of optimising the organisation’s performance to deliver the best results possible. This in turn, has to drive improved communication, better co-operation and greater collaboration, and therefore a cohesive culture with stronger strategic alignment. It all becomes one powerful virtuous circle; something that benefits everyone.   

This is the reason why Employee Share/Stock Ownership Plans (ESOP’s) are popular. But, as you are well aware, these are not the panacea they promise to be. This is primarily because

  • They are not universal;
  • They are often not equitable;
  • They can be all-too-easily manipulated;
  • Such ownership is simply seen as part of their remuneration package and so the intention gets corrupted and diluted: ownership is linked to personal performance and so the organisational benefit and sense of shared purpose are lost and employees still don’t get any real sense of ownership.

As a result they can often be counter-productive and cause more resentment. So beware being caught up in an ESOP fable! You need an ownership model that overcomes these failings and truly creates a sense of shared purpose that delivers on the promise of ownership.  The ‘Every Individual Matters’ Model offers you that.  It creates engaged employees who will say "Mine!" about your organisation.

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