Best Practices: Simple Ideas for Kickstarting Employee Participation

The best ESOP companies are the ones that generate the most ideas from the most people about the most things.

Leading-edge ESOP companies move beyond just soliciting input from employees about their jobs to getting them involved in periodic reassessments of where the company is at and how it can move forward, including participating in annual strategic planning.

When people become CEOs of ESOP companies, whether by being promoted from within or coming from the outside, they might hear about these ideas from an advisor or a conference and feel persuaded. Most say they have an open door and encourage any employee to share ideas. But managing in a truly participative manner is not part of most executives’ emotional muscle memory. People get promoted for being good at making decisions. There is often a reluctance to take a chance on ideas from other people that seem risky. Even if executives genuinely want to move in this direction, they need a practical place to start. Going from a fairly traditional corporate culture to a highly participative one in which leaders are biased towards saying “yes” to ideas and there are active structures in place for employees to take initiative is a very big leap to take all at once (and the structure will probably fail because of it).

So, how do you get started? I have a lot of ideas, but I asked Tim Everidge, CEO of ESOP-owned Radian Research, for his feedback. I have been on Radian’s board for several years and have seen how Radian has evolved into a leader on these issues in the ESOP community (in large part thanks to Tim’s initiatives). Here is what he told me.

“Especially when companies (and their CEO) are just getting started with employee participation, I suggest a very straightforward, simple approach/process. The CEO could have a company-wide meeting in which he asks two simple questions: ‘What is the one thing we could do to improve our work environment for our employees?” and ‘What is the one thing we could do to improve our business performance?’”

The employees are then provided with sticky notes and pens to write one idea per note. Afterwards, each employee reads their idea out loud and places the sticky note on the wall or bulletin board. There should be no judgement of the ideas, but fellow employees can ask clarifying questions if they do not understand something. Note that it is recommended that the employees write their names on their sticky notes, but in a low-trust environment, they may not be comfortable doing that, so it could be made optional. This allows the CEO to return to employees later and ask further clarifying questions, provide compliments, etc.

At the conclusion of this part of the exercise, the CEO then asks for one employee volunteer from each department (for larger departments, it is acceptable to have up to three representatives). If there are not enough volunteers, then some employees may need to be “voluntold.” The CEO explains that this team of employees will work with the management team (including the CEO) to sift through the ideas and find one idea for each of the two questions that has the most impact.

Next, the employee team and the managers (including the CEO) go through the ideas and determine the chosen ones (which must be measurable so that the company knows when it has achieved improvement). During this exercise, the CEO is a facilitator rather than a dictator, and he/she must ensure that the employees are participating. Then, they should all craft a plan to implement the idea. The plan must include monthly milestones, allowing for measurable progress each month. Note that while reviewing the ideas (aside from the chosen ones), there may be a great idea that is very simple to address without any subsequent planning or actions. It is acceptable to address some of those great ideas in real time—the employees will likely appreciate it.

Then, there are employee scoreboard meetings held each month, showing the two chosen ideas, the monthly milestones of the plan, and whether or not the milestone for that given month was accomplished. If it was not accomplished for a given month, there must be a meeting with the employee team, management, and the CEO to determine what actions will be taken to get back on track towards successful execution of the plan. This strategy is then presented to the employees in the scoreboard meeting. Reporting on progress with full transparency is important. Having someone from the employee team moderating the scoreboard reporting is recommended. The CEO is present at these meetings as a facilitator and should provide affirming and complimentary words.

Throughout this entire process, the CEO must be engaged, supportive, grateful, and present—a leader who is of service to the employees while also being mindful of business results.

Tim’s idea is a great way to start. A variation on this structure would be to ask employees in advance to write down their ideas about the two questions and then discuss them in small, randomly assigned groups of about eight people. Each group would have a facilitator, discuss the ideas, and pick the best one or two on each issue. They would then report these to the group, and the entire group of employees would vote on the top few ideas to pursue.

Either approach (or your own variation on these approaches) can help get the company moving towards more elaborate structures that eventually become part of the company DNA.