by Ken Ingram
In today’s economic and competitive environment, the top two challenges facing a business of any size will be the maintenance and growth of human capital. Becoming an employer of choice is a new success factor. Forget the boomers because what companies are now facing is a transition from Generation X made up of people born from 1966 through to 1976 (41 Million), to the Y generation who were born between 1977 and 1994 (71 Million). This next human capital transition will require a whole new set of engagement and employee leadership ideas. I hope you are ready.
Two of the most innovative cultural leadership ideas that are beginning to take hold in North America for 2017, include:
- Ownership Thinking OT ( Hams)
- Employee Share Ownership Plans ESOP (P. Ellis)
The goal of Ownership Thinking (OT) is to create an organization where employees think and act like the owners. It is a cultural change with the objective of inciting everyone to create wealth both for themselves and the organization. When you think about it, if each individual in the organization had a vested interest and understood the relation between the balance of cash flow, risk, revenue growth, market share and several other variables it would be possible to double the business’s revenues within a remarkably short period.
The bottom line is what your employees do not know about the business can hurt you as much as what they think they know about your business. So, I would like to suggest that now might be a good time to do something completely different. It would mean that you would need to ‘divulge’ many of the things that you initially thought should not concern the employees. It would mean being an open book and letting them see the real business picture. Once this is implemented and you see the results of everyone thinking like owners it will be a good time to introduce the next step.
Employee Share Ownership Plans (ESOP)
Why implement an ESOP? In fact, I had the same question initially, but after some reflection found that it made a lot of sense. Just think about it: you now have a group of people thinking and acting like they have a real stake in the company so why not take it a step further and give them a stake. It could be a great business transition strategy because studies have shown that the success rates of a business sold within the family are only 30%. When sold out-right to another company this goes up to 50% and finally, when the business is sold to the employees it reaches 80%. Wow! What a great way to ensure the legacy of your business. In Canada, according to Profit Magazine, 40% of the fastest growing PME had an ESOP program in place.
With globalization, more people are now roaming the globe like never before to look for employment and opportunities that are in line with their values. So, attracting the best-of-the-best will be a strategic growth strategy for 2017 and beyond. As Jim Collins wrote in his book Good to Great, “You cannot achieve great things without great people who have a vested interest.” Jim also wrote,“When you combine culture with the discipline and the work ethic associated with entrepreneurship, you are more likely to achieve great results.’ Let’s face it, a lot of great books have been written about how to unleash the potential in your organization, but few of these books provide you and your company with a recipe to implement the ideas.
The Four key components of OT and ESOP are:
- Right people: Attract the right people who believe that their contributions will be recognized and rewarded.
- Right education: The right education is beyond book smarts because it includes on-the-job business education that you will need to initiate so your employees understand the financial aspects of your business to enable them to make wiser decisions. In the past business owners have kept major information secret.
- Right measures: includes placing the importance on key performance indicators that are critical to your results in the current year and this can be used to forecast the following years.
- Right incentives: by focusing on the right measures in an environment of high visibility and accountability you can drive your businesses profitability from the inside.
In many respects, these ideas are like corner stone’s that will become the foundations human capital trends for today and well into the future – fundamentals that will drive growth and profitability. In the end, if you are not moving into the future with a human capital growth strategy you just might find yourself becoming a follower in your industry versus one of the leaders. As I mentioned at the beginning, becoming an employer of choice is no longer a choice. It is becoming a must. The next generation is eager to work for companies that inspire them to become the best that they can be. They are full of talent and ideas. They have a thirst for knowledge including ownership thinking. A piece of the action just might be the right recipe for your business in 2017 and beyond. If you want to know more about this or would like to explore other ideas we are just a phone call away. Do you have the audacity to become a leader in human capital trends?
Ken Ingram is the President of The Achievement Centre Montreal, a professional development and corporate “Human Sigma” training centre for businesses seeking the highest levels of leading-edge training, coaching, and consulting solutions. TACM partners with businesses striving for organizational excellence to accomplish shared goals and objectives in seven strategic areas: sales and business development, leadership and coaching, strategic planning and goal setting, right people in right roles’, effective and productive people, performance management, Black Belt Six Sigma. ‘What results do you want?’ He is a member of the West Island and St-Laurent/Mount-Royal Chamber of Commerce, Certified by Emploi Quebec. Guest lecturer at McGill University in 2004, 2005, 2006, 2012 and a full member of the Worldwide Association of Business Coaches (WABC ). For more information on his services, visit: www.TACresults.com.