A Matter of Ownership by Kevin McManus
First published in Industrial Magazine December 2003
Back in 1995, I was fortunate enough to leave an employer just before a major acquisition occurred. In October of 2003, I was not as fortunate. In the weeks preceding the unexpected sale of my most recent full time employer, we had been having a variety of discussions amongst the operations team about the significance of ownership, and how a sense of ownership impacts human performance. The announcement of the sale only served to heighten the importance of this concept.
With the new owners coming in, we had a chance to reflect on how much ownership our people currently had in the old company, and theorize about how this sense of ownership might shift following the announcement. In the weeks that followed the change, it was interesting to notice how people still referred to the old owners as if they were still in charge. It was also interesting to observe how people modified their performance in the wake of new ownership. In some cases, productivity improved significantly. In other cases, performance levels actually slipped.
People take ownership in things they believe in, whether they are work practices, ways of building relationships with others, or providing value to the customer each day. The manner in which a given company treats its people – how much information is shared, how compensation is structured, how often people are trained, and how people are treated when problems occur – goes a long way towards laying a foundation for high performance. Unfortunately, we often discount the power of ownership in improving performance, just as we often fail to design our work systems to promote higher levels of ownership.
Before you start thinking too hard about how ownership sounds like some squishy, human resources concept, you should consider the factors that drive the pace at which our people work. The simplest example exists when we look at walking speed. I walk a lot of miles a day at work. By walking four to five miles an hour instead of two or three, I gain precious seconds each day. Does my level of ownership in my team's success or the success of the company affect my walking speed? Is there a difference in the amount of ownership I feel towards my team versus the company?
The level of ownership that may or may not exist in the hearts and minds of our people consistently challenges us as we attempt to implement lean, six sigma, or other improvement initiatives in the workplace. For example, we can help drive a quick changeover mentality by designing our change parts properly, having all necessary tools at hand, and by providing clear documentation on how the changeover should occur. We cannot however design in changes that make a person do a six inch reach in five tenths of a second instead of eight tenths. Ownership has to provide that type of motivation.
“I don't care” attitudes are perhaps the best indicator of a lack of ownership. Material waste is one example of a reflection of such attitudes, as are absenteeism and tardiness. We are much more inclined to look for such attitudes among the hourly ranks, but in reality, we should be much more concerned about the degree of such thinking among our salaried people. Waste is much easier to track on the front lines, but that does not mean it doesn't also exist relative to white collar work.
As ownership declines, so does the pace of work. If you have never worked in a company where ownership was high across the workforce, then you probably will have a hard time visualizing how the pace of work can change as ownership levels increase. Additionally, you will struggle to put into perspective the degree to which your current levels of performance are falling short of their potential. I would suspect that in the average company, ownership levels are very inconsistent, and at a below average level. Should this be the case, we are really missing out on an opportunity to significantly increase our levels of output and quality, while naturally also reducing our costs.
Ownership is best promoted by giving people a financial stake in the success of the company. If a company is publicly held, stock ownership is the best form of this type of compensation. If you don't want to go to that extent, monthly or quarterly profit sharing is an option. If even that form of added compensation is too much of a change, it is likely that a lack of ownership is already creeping into your ranks. Recognition alone is not enough to drive and sustain high, wide spread levels of employee ownership.
Ownership can also be promoted by increasing the frequency of customer visits to your facility. Ownership and pride are very closely related, and giving your people the chance to show off their work is perhaps the best way to increase pride in workmanship. Having a strong, supportive management presence on the floor also helps, but external customers have more of an impact on pride then internal customers do.
Do you feel that there is a high level of ownership in your current company? If not, what factors have contributed to the decline of ownership? What changes do you think need to be made in order to begin driving ownership levels higher? Do you even believe that ownership is important, or that you have a role in helping to ensure that ownership levels remain high or increase? Try throwing those questions out at your next leadership team meeting.
In the future, I believe that measuring ownership will become a requisite in high performing organizations – the great ones already do it on a consistent basis in some form or fashion. We will need to measure ownership in the coming years because we will be placing greater and greater value on mind speed in addition to valuing the pace of physical movement. If we don't have the hearts of our people, they will be able to restrict their performance in two key ways, no just one.
Eventually, we will pick the low hanging fruit from the six sigma and lean performance improvement trees. Once that fruit is gone, we will seek out the next set of tools or philosophies that will help take us to the next higher level of performance. We might want to begin however by simply looking at the correlation between ownership and performance levels. In doing so, we might be able to short circuit some unnecessary fads before they take too many of our training hours and dollars. How much ownership do you personally feel in your company, and why? What would you change to drive ownership to higher levels?
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