{"id":453,"date":"2010-06-02T09:08:57","date_gmt":"2010-06-02T16:08:57","guid":{"rendered":"https:\/\/berkonomics.com\/?p=453"},"modified":"2010-06-02T09:08:57","modified_gmt":"2010-06-02T16:08:57","slug":"does-even-a-taste-of-ownership-make-a-difference","status":"publish","type":"post","link":"https:\/\/berkonomics.com\/?p=453","title":{"rendered":"Does even a taste of ownership make a difference?"},"content":{"rendered":"

\u00a0<\/em><\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/em><\/strong>How about incentives for employees all the way down the line and through the corporation? How do we align them to the goals and strategies of the enterprise?\u00a0 Obviously for the appropriate individuals, a bonus program aligned to the department\u2019s goals is appropriate. But how about awarding stock options to all employees?\u00a0<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Tech companies, particularly early stage and startups, still award options aggressively.\u00a0 Even with fewer IPOs than a decade ago, the dream of shared wealth certainly is not dead.\u00a0 We should be aware of the power of that dream, and bake it into our employee incentive plan to attract and retain the best available, even if the reality of instant wealth from exercise of stock options no longer matches the frothy days of a decade ago.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 I discovered the power of employee feelings of ownership early in my management career, establishing an employee stock ownership plan (ESOP), once popular as incentive compensation as well as a tax write-off for corporations and even a way to slowly transfer ownership of a company from the founders to the employees.\u00a0 These plans are not as popular today because of their complexity and difficulty to manage, lost in favor of simple stock option plans.\u00a0<\/p>\n

[Email readers continue here…]<\/em> <\/span>Each month, at the monthly company lunch for all, I\u2019d greet everyone with \u201cHello shareholders\u201d, and proceed to show the assembled throng slides of high level financial statements, pointing out progress against plan.\u00a0 That form of open book management surprises many, but if the employees are stakeholders with a taste of equity, why not underscore the value of that equity by treating them as cohorts?\u00a0 Yes, sometimes the news is not good.\u00a0 They should know this, and from you not from the rumor mill. Your fear that the confidential information may get out to the industry competitors should be tempered by the fact that you are not giving out the secret sauce, just the results of the past period\u2019s performance.\u00a0 All public companies including your public competitors must do this in greater detail each quarter, and it rarely damages their ability to sell into the marketplace.\u00a0<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Would bad news drive your best employees out the door?\u00a0 Perhaps. But it is my experience with many companies that empowered employees, treated with respect and shared knowledge, will go far beyond expectation in remaining loyal to their associates and their employer.\u00a0<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 And think of the time saved around the virtual water cooler if there are far fewer rumors to pass among your employees.<\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 So I think you know where I stand on this.\u00a0 If your company is not a “life style” enterprise and you aim to sell it someday for liquidity, or even aim toward an IPO, then you should have some form of stock ownership or shadow ownership plan for your employees.\u00a0 I know from my own experience that\u00a0 no matter how good you think you are at company-building, it is those who surround you with talent that make the difference and add extraordinary value to create\u00a0an eventual liquidity event.\u00a0 Whether out of guilt, thankfulness or simply to be fair, you should plan in advance\u00a0for sharing the profits from a corporate sale with those who helped you to the finish line.<\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 How about incentives for employees all the way down the line and through the corporation? How do we align them to the goals and strategies of the enterprise?\u00a0 Obviously for the appropriate individuals, a bonus program aligned to the … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[8,10,13],"tags":[],"class_list":["post-453","post","type-post","status-publish","format-standard","hentry","category-depending-upon-others","category-surrounding-yourself-with-talent","category-the-liquidity-event-and-beyond"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=453"}],"version-history":[{"count":0,"href":"https:\/\/berkonomics.com\/index.php?rest_route=\/wp\/v2\/posts\/453\/revisions"}],"wp:attachment":[{"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/berkonomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}