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Nothing Measured, Nothing Gained

Published in the Employee Ownership Report, Vol XVIII, No. 1,
January/February 1998,
A Publication of the National Center for Employee Ownership
by Loren Rodgers and Fred Freundlich
Ownership Associates, Inc., Cambridge, MA


The jury is in. Research studies have amply demonstrated that a participative, ownership culture is what makes employee-ownership powerful. But once you've decided that you want to build or reinforce a participative culture and you sit down to figure out how to do it, you may realize that it's difficult to know where to begin. Do you really have a clear sense of what employees need? Or where at your company to focus your efforts?

The Total Quality guru, Edward Deming, made a significant impact on the corporate world when he reminded us that "what doesn't get measured doesn't get done." No matter how much you want to build an ownership culture, unless you have a way to gauge your current situation, you will have some trouble knowing how to direct your efforts. Unless you can measure your progress, it will be hard to maintain the effort.

We at Ownership Associates have tried to meet this measurement challenge by developing a survey tool specifically for employee-owned companies called the Ownership Culture Survey™ (or OCS).

Over the last year or so, the OCS has been used by some of the best-known employee-owned companies in the country and by others who are just starting out. Our database of over 2,000 respondents used for this article comes from the eight companies who took the latest version of the survey. The smallest company to take the OCS has less than 30 people; the largest has over 2,000. They range from service sector to manufacturing to professional.

Here are some of our findings -- we hope they'll be helpful to you as you build your own company's ownership culture.

The Importance of Ownership

One of the most consistently high-scoring items from our survey is the one that asks people, "How important is ownership to you?" For the companies in our sample, this item was rated 7.8 out of 10. The bad news is that the score for a related item is 42% lower. When we asked people "How much do you feel like an owner?" the average score was 4.5.

The large gap between these two scores represents the potential of employee ownership. It is clear that employee ownership is important to people, but it is equally clear that in our sample companies they don't completely feel like owners yet. The implication is that ownership can be an enormously powerful motivator but even some of the best companies are not tapping into its full potential.

Survey results also show that the more people feel ownership is important, the more they tend to accept the responsibility to solve problems and the more they feel they have the tools and the abilities to do so.

Employee-Ownership and Employee Attitudes

How does employee-ownership affect people's feelings about work? There seem to be a whole host of attitudes that are associated with feeling like an owner: a strong work ethic and a desire to learn about the business, for example. Aside from these, however, there are three primary effects that strong ownership feelings produce. It looks like the more employees feel like owners, the more they feel satisfied at work, the more they are committed to the company, and the more overall trust they have in management.

Rights, Responsibilities and Ownership Culture

One idea featured prominently in the survey is the balance between ownership rights and responsibilities. For example, employee owners often feel they have a right to influence the direction of the company. If that's true, they should accept a responsibility that's part and parcel of that right: they should give their input prudently and in the best interests of the company, recognizing the role of management expertise.

In the results for company after company, rights and responsibilities actually do seem to be linked - the same employees who have a stronger sense of their rights at the company tend to feel their responsibilities more deeply.

Building an Ownership Culture: What Works

The survey suggests two specific areas which appear to have the largest effect on how much people feel like owners:

  • Understanding the ESOP. People who say they understand the ESOP (or other ownership plan) feel more like owners. It seems clear that people need to understand what the ESOP is before they trust it, and they need to trust it before they feel like owners.
  • A measure of influence at the company. Employees who feel they have some input into what happens at their company are much more likely to feel like owners. As an example, at the company that has the lowest level of perceived employee influence, employees do not feel much like owners - they had a score of 3.7 out of 10. The employees who feel the highest degree of influence feel much more like owners - they had a score of 6.3 out of 10. A feeling of influence does not mean that employees want to vote on everything - it does suggest that feeling included in the decision-making process helps people feel like owners.

Aside from the ways in which these kinds of detailed findings can help guide a company's training strategies, the most practical outcome of a survey exercise may be the opportunity it creates for internal dialogue. At the end of the day, a good survey is not just a measurement tool which tells you "how you're doing." It is also a mirror that provides the opportunity to help you understand who you are.

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