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Developing a High Performance Ownership Culture The ESOP Association New South Chapter Fall Conference Orlando, Florida October 18, 2012 Alex Moss Praxis.

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Presentation on theme: "Developing a High Performance Ownership Culture The ESOP Association New South Chapter Fall Conference Orlando, Florida October 18, 2012 Alex Moss Praxis."— Presentation transcript:

1 Developing a High Performance Ownership Culture The ESOP Association New South Chapter Fall Conference Orlando, Florida October 18, 2012 Alex Moss Praxis Consulting Group, Inc.

2 Agenda  Attendee demographics  Success Drivers & Employee Ownership Foundation  Ownership Culture framework & tools  Discussion 1 October 18, 2012TEA New South Chapter | Ownership Culture

3 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 2 October 18, 2012TEA New South Chapter | Ownership Culture

4 ESOP Success Drivers 3 October 18, 2012TEA New South Chapter | Ownership Culture Supportive legal / regulatory environment Well-managed ESOPs Competitive ESOP companies Public support

5 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: CLEOwww.caseplace.org  Edmunson Scholarships 4 October 18, 2012TEA New South Chapter | Ownership Culture

6 5 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? TEA New South Chapter | Ownership Culture

7 6 October 18, 2012 The Big Picture: Alignment Drives Performance Strategy Leadership Culture High Performance TEA New South Chapter | Ownership Culture

8 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 7 October 18, 2012TEA New South Chapter | Ownership Culture

9 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: Book: Drive 8 October 18, 2012TEA New South Chapter | Ownership Culture

10 9 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, 2012TEA New South Chapter | Ownership Culture

11 Individual Owners ESOP Governance…and Opportunity 10 ESOP Trustees select Leadership Team Board of Directors appoint and oversee elect hire and oversee Shareholders Employees CEO / President hire and oversee ESOP Participants when meet eligibility requirements are represented by ESOP Committee: Promote Ownership October 18, 2012TEA New South Chapter | Ownership Culture

12 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 11 October 18, 2012TEA New South Chapter | Ownership Culture

13 How do ESOPs Affect Business Performance? OwnershipParticipation Improved Performance 12 October 18, 2012TEA New South Chapter | Ownership Culture

14 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 13 October 18, 2012TEA New South Chapter | Ownership Culture

15 What Kind of ESOP Do We Want? Change Level of Engagement Culture Change Supporting Pillar Benefits Only Fantasy ESOP October 18, 2012TEA New South Chapter | Ownership Culture 14

16 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? 15 October 18, 2012TEA New South Chapter | Ownership Culture

17 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? 16 October 18, 2012TEA New South Chapter | Ownership Culture

18 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? 17 October 18, 2012TEA New South Chapter | Ownership Culture

19 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 18 October 18, 2012TEA New South Chapter | Ownership Culture

20 It’s a Balance  Passion  Planning  Resources 19 October 18, 2012TEA New South Chapter | Ownership Culture

21 Discussion / Questions 20 October 18, 2012TEA New South Chapter | Ownership Culture

22 Contact Information Alexander P. Moss Principal Praxis Consulting Group, Inc. 9 West Highland Avenue Philadelphia, PA Article: “Building Long-Term Value: Developing a High- Performance Ownership Culture” 21 October 18, 2012TEA New South Chapter | Ownership Culture


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