Behaving Like Owners, and Opening the Books

I remember in my days at a great Indiana Fortune 500 company, one of the core values was to get employees thinking and acting like owners.

There are various ways to do this from distributing ownership to variable compensation plans to focused improvement efforts.

But any successful approach has a few common anchors.

1. All employees including the ownership must have a common understanding of what is important. That starts with a clear vision of where we want the company to go; what we value and what’s really important around here. In our case it’s serving customers excellently with a minimum of waste; and continuing to stay abreast of the innovations in our industry while creating an environment that is fun and challenging. That is our formula for sustainable success which allows for delighted customers, a return on capital invested, growing employees and future employment. The “what’s important around here” piece will work better if everyone has a hand in developing it and understanding it.  The more understanding the better.

2.There needs to be alignment. This is a simple concept, but absolutely critical.  It’s  the favorite song of most human beings. It’s station  WIIFM. “What’s in it for me.”  How does each employee’s actions not only affect the company but themselves. This is the magic of measures and alignment. Setting clear measures – collectively – and rewards and/or recognition for achieving them creates half of the equation – motivation.

3.Motivation alone is necessary but not sufficient. Each team member needs to understand how they affect the critical measures . Done well these result in all of us  acting on behalf of the customer, eliminating waste, taking the personal initiative to understand how we can improve not only in our own piece of the flow, but across all critical processes in the company. Liberating the knowledge of employees and creating energy for improvement adds an extra dimension of value for all.

Our approach here is something called Open Book Management – an approach championed by a company SRC – the Springfield Remanufacturing Business in a book and philosophy called the Great Game of Business. We’ve spent time gaining clarity collectively on what’s important – including our vision and our values; and we’ve educated ourselves by laying the books bare for all. That lets us know how we eliminate waste, how we make money, and where the opportunities to improve financially are.  And employees share in the enterprise value they help to create.

Open books will tell you the financials, not the full health of the company. The balance comes from listening to our customers and measuring what’s important to them, looking at the consistency of our internal processes,  and making sure that our team members have the tools and knowledge to perform effectively for the customer.

Clarity of what’s important, alignment systems, and capable and motivated employees are the foundation. Then we have to execute.