Basic Persuasion Skills in Employee Ownership Corey Rosen National Center for Employee Ownerships

NCEO What We’ll Do  Using employee ownership to persuade customers  Getting employees to think and act like owners

NCEO Employee ownership as a marketing tool  Surveys in 1980s showed that by overwhelming margins, customers were positive about buying from employee ownership companies  The “brand” may have been somewhat tarnished by United, Enron, et. al., however.

NCEO Marketing ideas  Web site  Business cards  Advertising and logos  Signage  Sending employees to trade shows, having them meet with or visit customers  Other ideas?

NCEO Perils of marketing  The employee ownership bad boys  You have to walk the talk, or would you really want a United mechanic employee owner to sell your airline?  Employees need to know you’ve sent the message

NCEO Ownership Management  It’s very, very hard to motivate people; it’s easier to provide them an environment where they can motivate themselves  Ownership is a reward, not an incentive  Ownership behavior is essential to business success  Lots of small ideas matter (see Ideas Are Free)

NCEO What Is Ownership Management?  A “company of businesspeople”  People understand what their ESOP is and how it works  Information about financial, quality, productivity, and other corporate goals is widely shared  Employees have meaningful and regular opportunities to share their ideas and information about how to make the company better  Core company values guide employee behavior

NCEO OBM: You Want Me to Tell Them What?  Money is the most sensitive of topics; people are reluctant to share financial information about themselves or their companies  Owners and managers fear information will leak to competitors and suppliers  Management doesn’t think employees will understand anyway, and, even if they do, what will they do with this information?

NCEO OBM II: You Want Me to Learn What?  It’s so boring! It’s so complicated! It’s so irrelevant!  I know they’re hiding something anyway  They’re just trying to make use work harder and accept less pay  What else?

NCEO But Information Is Not Enough  It’s not just that you want people to think like owners. You want them to act like owners.  Having a stock plan and knowing how it can pay off (because you now understand the numbers) can be motivating, but…  There have to be specific, structured opportunities to share ideas and information

NCEO Allowing Participation Is Not Enough  When do I do it?  What if I don’t feel confident to express my idea?  What if the boss doesn’t give me any feedback or puts me off?  What if someone else takes credit?  What if I get credit?

NCEO Participation Needs Structure  It creates a safe place to share ideas and information  It creates an expectation that people will share ideas and information  It provides something concrete to tweak and change  Attitudes tend to follow behaviors, which tend to follow structures  So how do we get to these new, participative structures?

NCEO It Ain’t Easy  Hierarchies are well entrenched  They work well when the key is efficiency and repetition  They give people a clear career path  They provide a lot of certainty

NCEO But Hierarchies Don’t Work So Well Today  Information flow too critical  Innovation requires more flexibility and freedom  Decisions need to be made more quickly  It’s ideas that matter

NCEO Managing consent  Meetings can be ways to get employees to agree, not to truly generate new ideas  Effective leaders really will take risks  Effective leaders realize they make mistakes

NCEO The Resisters: The CEO  Fears giving up control  Used to telling people what to do  Been doing it this way for a long time, and it’s worked so far  Absent the CEO’s active involvement, progress will be very difficult

NCEO The Resisters: Middle Management  They are required to change the most, and possibly give up the most  Their situation is the most ambiguous in the new corporate order  They didn’t get to where they are by being coaches and facilitators; they got there by being good at their job and being decisive

NCEO The Resisters: Non- Management Employees  Some don’t want new responsibilities  Some resist ambiguity  Some are cynical about any changes  Some just don’t like change

NCEO Teams Are Great, But…  Many efforts to get employee teams more involved don’t work well at first – or ever  Teams may tackle problems that they don’t have adequate information or skills to handle  Team authority may be too limited or uncertain

NCEO You Never Get “There”  As people develop new skills, they will want to do more and can do more  The same old same old will get routine  Management will expect more  So “there” keeps moving

NCEO So what does work?  Mini-games  EARS  Well-defined teams  Bring an idea to work days  What else? Group work.