The most successful ESOP companies have one thing in common. Their employees are not just motivated and engaged, they are actively engaged in structured opportunities to identify problems and generate new ideas. Open doors are not enough; you need a system that not only makes this possible but makes it part of people’s jobs. This book brings together the best ideas from the best companies that have made this happen—and shows you how to make it happen in your own company.
“Corey Rosen has been our professor all along the way in helping us find how to make employee ownership work. In this book he will show you the way too.”
—Jack Stack, President and CEO, SRC Holdings Corp.
“This collection of true stories will be an invaluable resource for those business leaders who want to build special companies designed to unleash the people power in their companies to create extraordinary business performance and fulfilling work lives for their employee-owners. I wished we had these examples over 30 years ago as Web Industries experimented slowly and sometimes painfully over many years to achieve some measure of success. This gem of a book provides real-life tutorials that will give leaders the confidence to embrace the transformation challenge, lead change deliberately, and build lasting value for their companies and their people.”
—Donnie Romine, former CEO, Web Industries
“Each company example is interesting in itself, and together they make a powerful, practical case for ownership-style management.”
— John Case, author, Open-Book Management
Table of Contents
2. What It Means to Be a Leader in an Ownership Culture Company
3. Share, Teach, and Use the Numbers
4. How to Create an Ideas Generation Process
5. Work-Level Teams
6. Beyond Work Teams: Getting Employees Involved in Strategic Planning
Conclusion: Evaluate and Change
About the Author
About the NCEO
From Chapter 3, "Share, Teach, and Use the Numbers"
Employees won’t learn much from nor be able to use a detailed company financial statement. So SRC focuses on what is called common sense financials. These are simplified versions of standard financial statements that revolve around the company’s critical numbers. SRC focuses on usable numbers, not accounting. Bakers says this “includes understanding how profitability is driven, how assets are used, how cash is generated, but most importantly how employees’ day-to-day actions and decisions impact business success. Employees rarely need to know about debits and credits or how to do an adjusting entry. But, depending on the company, they may very well need to know exactly how production efficiency is calculated, or why receivable days matter, or how the purchase of a new computer system will affect the income statement and balance sheet. The bottom line is this: People remember what they find relevant and useful.” These numbers are then discussed within the broader corporate strategic context.
From Chapter 4, "How to Create an Ideas Generation Process"
MSA, whose open-book system we visited earlier, also has an ideas process to build on the numbers. In looking to the future, the leadership team of the company asked itself “How will we innovate to create new solutions?” After some discussion and research, they came up with a system intended to harvest ideas from the entire population of the company, and how to go about implementing the best ideas. Rather than seeking large innovative proposals, the company is seeking to leverage the adoption of many small improvements. The new process has been coined the MSA Idea Engine.
A six-person Idea Engine Committee from three locations makes up the ideas team. Team members had previously gone through some Lean training together and were best equipped to implement a process for implementing improvements. The team manages the MSA Idea Engine process of obtaining, reviewing, and steering the implementation of ideas received from within the company. That involves employee huddles, an idea board, ideas email, and a vetting process for the ideas. All employees participate in one or more teams based on their functions.
Huddles by each team in the company are held every month, and at every third huddle (quarterly) there is a goal of generating three ideas per employee. The team then has an idea vetting discussion and then votes for the winner, with each employee getting three votes. The whole process takes 20 to 30 minutes or less. The winning idea from each team is submitted on an idea card that looks like this:
From Chapter 5, "Beyond Work Teams: Getting Employees Involved in Strategic Planning"
On employee ownership day in October, the plants divide into cross-functional teams for a strategy execution exercise. The teams each have a trained facilitator, but they do not have anyone from site leadership. The teams brainstorm projects in the context of the company’s market strategy. They identify the ideas they think most merit pursuing, which may include some prior ideas that did not get adopted. They choose a spokesperson, often someone newer as a way to train people. At a general assembly, the presenters stand up and describe what the teams are recommending to management. The result can be 20 or more ideas, many of which will overlap because people have been doing this for years and have a good sense of what is possible and needed.
I had the privilege of observing this process at one of the Web facilities. The team meetings are made up mostly of machine operators. The discussion is at a very high level, informed by a working knowledge of the key metrics and a keen sense of the company’s mission and strategy. The company-level meeting to review the ideas is similarly impressive. An observer who did not know who these people were might well assume they all had MBAs.
In November and December, the site leadership team considers the strategy deployment recommendations, chooses 3-5 key projects, and recruits “A3” teams to execute the months-long projects. (A3 refers to a paper size the ideas are recorded on.)
Over the next year, the A3 teams all use an A3 process to evaluate and track progress. Named for the paper size, the process is used in many companies as a way to chart the objectives, metrics, progress, and responsibilities in a project’s implementation. Teams meet weekly, and once a month at a plant meeting, team reporters update all staff on each team’s A3 progress.
The corporate office does not approve the ideas developed by the teams, but if the teams need significant capital resources to pursue the projects, they might need support from corporate.