Transcript Document
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
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 %
Over 20 years
Over 10 years
Over 2 years
2 years or less
Board of Directors
100%
Majority (50%+)
Minority (under 50%)
C-Corp / S-Corp
Leveraged /
Unleveraged
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ESOP age
Internal / external
ESOP Trustee
Internal / external
Professional advisors
Guests
TEA New South Chapter | Ownership Culture
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ESOP Success Drivers
Supportive
legal /
regulatory
environment
Well-managed
ESOPs
Public support
Competitive
ESOP
companies
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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
High
Performance
Culture
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Leadership
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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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ESOP Governance…and
Opportunity
Shareholders
Individual
Owners
ESOP Trustees
are
represented
by
ESOP
Participants
select
elect
Board of Directors
appoint and oversee
CEO / President
hire and oversee
when meet
eligibility
requirements
Leadership Team
hire and oversee
ESOP
Committee:
Promote
Ownership
Employees
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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
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Participation
TEA New South Chapter | Ownership Culture
Improved
Performance
October 18, 2012
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?
Level of Engagement
Change
Fantasy ESOP
Culture
Change
Benefits Only
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TEA New South Chapter | Ownership Culture
Supporting Pillar
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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
[email protected]
215.753.0303
Article: “Building Long-Term Value: Developing a HighPerformance Ownership Culture”
www.praxiscg.com/published-work/building-long-term-value-developing-high-performance-ownership-culture
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