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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 January-February 2019 Issue:

Creating Alignment between Employee Committees and Leadership Teams

One of the most important factors contributing to the success of employee committees in achieving their culture and communication goals is how well-aligned the committees and the company's leadership team are.

The responsibility to create effective alignment should never rest solely with committees themselves. Leadership can play a significant role in both enabling committees to be successful and supporting them through some of their biggest challenges when it comes to creating a strong culture of ownership. There are several things to consider when working to create more effective alignment of between each group's goals and the practices that will help all teams involved achieve them.

Avoid Making Assumptions about What Ownership Means to Others

"Ownership" can mean a lot of different things to a lot of different people. It's important to remember that neither the leadership team nor committees of an ESOP company can define this for employees. In fact, one employee surveyed by the NCEO actually wrote that when it comes to managers communicating about employee ownership, "all they mean is that employees get stock." This comment may seem a bit odd, seeing as it is technically the stock in their ESOP accounts that makes employees owners, but this type of attitude toward what it means to be an employee-owner is far more common than many might think.

Rather than try to sell the importance and potential of employee ownership to employees, it is a far better practice to first ask what matters most to them or what would make them feel more like an owner of the company. When employees feel a real sense of ownership that goes beyond just the stock in their accounts, they are far more likely to trust the company, its leadership, and in return, serve your company's mission and clients like an owner would. You may find that the things employees want most include more education, more communication, more involvement in decision making, or more chances to suggest improvement ideas. These various aspects of company culture cannot always be transformed by any one group alone.

Awareness of Each Group's Limitations

Awareness of what matters to employees is the first big step for both committees and leadership. The next step is to discuss the reality that both teams will have their limitations when it comes to effectively improving attitudes around various aspects of the company culture. For instance, when it comes to communication around the ESOP or ownership at the company, too many companies try to sell the ESOP rather than explain it. Leaders may also have different ideas about what it means to be an employee-owner than employees do. This is why employee-led communication committees can prove far more effective. If given the resources and time to become experts in the plan, employee committee members can provide far more credible communication and education efforts that their peers can relate to.

On the other hand, when it comes to employee empowerment or involvement in decisions that affect their day-to-day work, ESOP committees may not be able to act on their own and may need leadership involvement. While the bias in an ownership culture should be for leadership to truly empower committees to act without leadership approval, there are times when it is necessary, committees for their expertise or their legitimation of the idea. Leaders need to give their buy-in to the process to transform the company into an innovative, highly involved culture. It is rare for an ESOP committee to have any formal authority over the practices of management, so it becomes increasingly important for leadership to make their expectations and goals clear to those in management positions.

Structure for Meetings between Committee and Leadership

Just as each of these groups creates a structure for their own regular meetings, a similar structure should exist for committees to meet with their leadership teams to discuss their ongoing needs and challenges. Without structure for these meetings on a regular basis, they may lose their importance or, even worse, not take place at all. This would make it incredibly difficult to create any alignment between the groups moving forward, and it inhibits of these groups from exchanging their own insights and challenges with one another.

In fact, some of these representative and employee-driven committees are important contributors to their company's large leadership meetings, some of which last several days and involve important discussions related to company culture, strategy, and performance. The impact of including employee representatives or committee members in these more intensive strategic events can be significant, especially considering that many colleagues get insights from and opportunities to interact with employees in ways that general managers do not. Sometimes this is due to lack of structure, but it can often be that employees simply feel more comfortable and safe communicating their concerns honestly with colleagues as opposed to those in leadership. Not having committee members present can be a missed opportunity.