developing a high performance ownership culture

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

October 18, 2012


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

October 18, 2012


ESOP Success Drivers

October 18, 2012

Supportive legal / regulatory

environment

Well-managed ESOPs

Competitive ESOP

companies

Public support


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

October 18, 2012

http://www.caseplace.org/

6 TEA New South Chapter | Ownership Culture October 18, 2012

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?

7 TEA New South Chapter | Ownership Culture October 18, 2012

The Big Picture:Alignment Drives Performance

Strategy

LeadershipCulture

HighPerformance


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

October 18, 2012


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

October 18, 2012

http://www.ted.com/talks/dan_pink_on_motivation.html


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

October 18, 2012


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

October 18, 2012


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

October 18, 2012


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

October 18, 2012


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?

October 18, 2012


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

October 18, 2012


It’s a Balance

Passion Planning Resources

October 18, 2012


Discussion / Questions

October 18, 2012


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 High-Performance Ownership Culture”

www.praxiscg.com/published-work/building-long-term-value-developing-high-performance-ownership-culture

October 18, 2012

http://www.praxiscg.com/

mailto:[email protected]

http://www.praxiscg.com/published-work/building-long-term-value-developing-high-performance-ownership-culture

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