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The Employee Ownership Report

NewsletterConcisely written for leaders in employee ownership companies and for service providers in the field, the NCEO's bimonthly newsletter, the Employee Ownership Report, is the most efficient way to stay informed about legal issues, current events, best practices, breaking research, management approaches, and communications ideas for employee ownership companies.

Available exclusively to NCEO members, the Employee Ownership Report is delivered in hard copy and all issues back to 1997 are available in the members-only area of the Web site.

Nonmembers are invited to read the sample article below from the current issue of the newsletter. Every time a new issue appears, the sample article on this page will be replaced by one from the new issue. Join online for only $90 to receive the Employee Ownership Report and all our other membership benefits.

Read a sample issue of the entire newsletter (September-October 2015).

Sample Article from the March-April 2017 Issue:

3 Tips on Building a More Effective Team of Owners

Employee ownership is a team sport. No matter the role we play in our organizations or the level of autonomy in our work, at some point we work with and rely on others to achieve our collective best, and at the end of the day, the value of ESOP accounts is a function of company success overall. Generating the ideas and improvements that lead to that success depends heavily on the ability of our colleagues, leaders, and teams to communicate and engage with one another effectively. Research and company case studies suggest that there are some common practices and characteristics that may contribute to team effectiveness. Here, we will outline just a few tips for you to consider as you build a high performing team of employee-owners.

1. Hiring Beyond a Skill Set

First, assess your hiring practices and build effective teams from the ground up. After using the NCEO's employee survey tool several years ago, a mid-sized manufacturing company found that employees wanted a more significant role in decision making. After following up with focus groups, they discovered that people wanted more involvement in the hiring process in particular. Hiring the wrong team members was creating problems and having a detrimental effect on employee work ethic and morale.

The company responded immediately by creating a separate hiring committee composed of employee-owners. Their sole purpose is to determine if a person is a fit for the company's ownership culture and values. While one core group still determines if each hire has the right skills to perform the job, they do not hire anyone the culture committee does not also approve. Why is this important? Well, it's much easier to hire the right people than it is to change the wrong ones.

2. Create a High Degree of Involvement

In Steven Johnson's Where Do Good Ideas Come From? he speaks to the importance of collaborative networks and the connection of ideas from many different people as two critical drivers of innovation. In Ideas Are Free, Dean Schroeder and Alan Robinson agree. The most effective and innovative companies, or teams in this case, are those that value the contributions of all employees—no matter their position, expertise, or tenure—and develop cultures that actively involve them in the process of generating and sharing ideas with one another.

Remember, employee ownership is a team sport, so focus on enabling each individual to participate and thrive in a cohesive setting. While certain individuals may have more experience in a given subject or process, high performing groups find ways to solicit all ideas, big or small, and actively involve every team member in the process of improvement. For this to happen, each member needs to be reminded that their input is important and valued. Tell the group at the start of every meeting that they should not limit their input to matters that only concern their level of experience or personal expertise, because they may have ideas or solutions you would never think of.

3. Create Psychological Safety

While high involvement is key, there are often barriers to this kind of involvement that go unnoticed. One of the most significant barriers is fear. Being bold, taking risks, and putting your ideas out there for others to scrutinize can be a scary endeavor, especially if you are new or lack the experience of other team members. In 2016, the New York Times featured an article on Google's quest to build the perfect team. Google analyzed data from more than 180 of its teams to figure out why certain groups were more effective than others. The most effective teams shared two characteristics.

First, as we mentioned above, these teams created a high degree of involvement and communication from each team member. The second behavior was even more important and can enable the first to happen with more regularity and ease: creating psychological safety. This term was coined by Harvard Business School professor Amy Edmondson in a 1999 study. She described this group norm as a "shared belief by members of a team that the team is safe for interpersonal risk taking." This means that teams whose members are less fearful of embarrassment, being rejected, or punished for speaking up are likely more effective.

Why is psychological safety important? Edmondson's research found that the better performing teams seemed counterintuitively to make more errors. In reality, these teams were acknowledging and discussing more errors than other groups when they occurred. This openness is also critical for responsive ownership thinking. We want every team member to be actively engaged in the process of identifying mistakes or ways to improve.

One way you might accomplish this more effectively is by using the "Yes, and..." rule. Create a norm during certain stages of a meeting or process where everyone postpones judgement while only building on what others are contributing. While brainstorming, you might take 10-15 minutes for ideas with only one rule: you must start every reaction to an idea with the words, "YES, AND..." This creates a space where the odds of rejection are low because that behavior is, quite simply, not allowed. Once all ideas, even the crazy ones, are on the table, your team can move on to determining which are best. Doing so will improve both the level of involvement and the efficiency of your meetings by not getting immediately hung up on evaluating every single idea or contribution.

Consider these tips for your own culture and let us know if you have some of your own by emailing Dallan Guzinski at