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For an overview of tools to create an ownership culture, see Making an ESOP Work for You.

In particular, see the training curriculum Building an Ownership Culture.

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Ownership Theory

Christopher Mackin
Ownership Associates, Inc., Cambridge, MA
Speech to the Foundation for Enterprise Development Conference
La Jolla, CA, September 26, 1995
Published in Foundation for Enterprise Development Annual Report, January, 1996


I would like to contend here today that "ownership" is one of the signal concepts of American culture, the flag and religion being two others, that most everyone claims to understand. Everyone seems to have a "theory" of what ownership should and should not mean. The apparent accessibility of the ownership concept to workers and managers, experts and non-experts alike is the quality that makes it most interesting. It is also, however, the same quality which underlies both the enormous constructive and destructive potential of the ownership idea when applied to the workplace setting. Because while everyone has a theory about ownership, not everyone has the same theory. And while it may be perfectly acceptable for different and contending theories to remain unresolved in a university seminar room, the closer quarters and financial contingencies of the workplace require at least a modicum of consensus in order to achieve successful commercial results.

In order to approach the idea of employee ownership in the workplace context, I would suggest that a first distinction be made between "perceived" ownership and "actual" ownership. "Perceived" ownership consists of the accessible impressions or definitions that employees of any rank in an organization bring to the employee ownership setting. Those definitions are rooted in social life and in personal experience with the idea of owning property of various kinds. "Actual" ownership is subject to debate. Lawyers, economists and philosophers may agree or disagree about what actual ownership might be. For us, actual ownership consists of a formal model about the various dimensions of the ownership idea that we will describe further in a minute. Effective consulting in this field requires a clear understanding of how workers and managers perceive ownership in a particular setting. No two settings are entirely alike. Understanding the differences between perceived ownership and a logically defensible model of actual ownership is what informs much of our consulting to the employee ownership community.

Economic Life and Organizational Life

Our model of ownership is constructed from nearly two decades of listening to workers and managers talk about the meaning of ownership. The model helps to define a common vocabulary, a common point of departure about ownership. At the most general level, we claim that "business ownership" involves two fundamental domains of "organizational" and "economic" life. Organizational life involves membership or people issues. Economic life involves business and money issues. Businesses exist simultaneously in both domains. Businesses are social organizations but they must be distinguished from other kinds of social organizations such as churches or clubs which are not subject to the pressures of a competitive marketplace. On the other hand, businesses are not just profit machines; they are also imbued with all the complexities of personality and power and social psychology that accompany life and work among human beings.

The organizational life dimension of business gives rise, we believe, to a whole set of distinctions about the rights and responsibilities of ownership. The economic life dimension, on the other hand, gives rise to a second and related set of distinctions about the risks and rewards of ownership.

What is the relationship of these concepts to each other? Borrowing from our political and legal traditions, we believe that the imagery and the metaphor of the scales of justice provides a promising way to understand and discuss these issues. That is to say, for every right of ownership for which you, as an owner, may feel a sense of entitlement, there is a commensurate or balancing responsibility. So, if, for example, employees are interested in voice or influence over decision-making, then there must be a commensurate responsibility to distinguish among different kinds of voices. Not all voices are the same on all issues. There is a responsibility to make that distinction, to recognize when voice must also be accompanied by or balanced by expertise. On yet another dimension of organizational life we suggest if you, as an employee owner, are, understandably enough interested in new levels of fairness from the workplace you own, well, it is also legitimate for your workplace to expect a new level of commitment from you as a member of that organization.

On the economic side of the ledger, in terms of risks and rewards, if you are interested in the rewards of ownership there needs to be a corresponding understanding of risk. In other words, if you're interested in getting that bonus or a share of the profits, it's fair for the organization to expect you to have to innovate and invest to earn it. This is again what distinguishes workplace organizations from community organizations. Workplaces don't exist in social time, they exist in economic time. They exist in a thoroughly contingent context of risk taking. Here today maybe gone tomorrow.

Cultures and Balance

This preliminary description of our ownership culture model attempts to build both a logical framework and a common vocabulary through which we can talk to each other about the nature of ownership. The scales of justice imagery we use suggests that a positive ownership culture is one which is balanced, where rights are balanced with responsibilities and rewards are balanced with risks. From our research and consulting experience, we generally find there are a lot of people who neglect this balance.

To illustrate, the rights-only and rewards-only folks are people who tend to look at ownership from an individualistic or egoistic perspective. They tend to ask, "What's in it for me?" On the other hand, the responsibilities-only or risks-only people tend to see ownership in a paternalistic way. Those with a balanced perspective on ownership, however, look at ownership as a "membership" or "partnership" concept.

Finally there's this whole ocean of people surrounding these categories, people we might call "ownership skeptics." These are people who don't necessarily declare themselves one way or another, and who are, in effect, waiting to see genuine evidence of how leadership and management will treat this issue before they decide to get into the boat and begin to row.

The most revealing data we have gathered from this rights-and-responsibilities/risks-and-rewards framework is that the two major workplace populations, management and workers, often occupy different, unbalanced ends of the spectrum on these ideas. Management, we find, is generally negative about the rights of ownership but positive about responsibilities, they are positive about risks but negative about rewards. Their message to their workers can be characterized as the following: "Act like an owner, sit down and be quiet." Workers, on the other hand, are often positive about the rights of ownership but negative about responsibilities; they are negative about risks but positive about rewards. Their message to management is, "Reward me like an owner but treat me like an employee." They want all the righteous new "good stuff" of ownership while still being able to externalize and blame, without assuming new levels of responsibility.

Starting the Ownership Conversation

At United Airlines and at other client companies we have begun to help management and workers engage these different perceptions through something we call "R & R Groups" or rights and responsibilities groups. We go into settings like United's and listen for what the 'buzz' is around the water coolers and in the board rooms about ownership. From that data we proceed to write simple cases that capture how ownership is actually being talked about in those settings. The cases are then fictionalized a bit to protect our informants and then used as a practical tool to initiate discussion, to get managers and workers to talk to each other and confront the limits of their various interpretations about the ownership idea.

With adult learners, the research is pretty clear: if you're going to try to build a consensus you can try to do it through a charismatic CEO, or a charismatic consultant who may shed light where there is no darkness, but that will only take you so far. If you're going to try and change the hearts and minds of adults, you have to get them talking to each other. And you have to find a method, a technology if you will, for pushing the ownership conversation forward, while using their concepts and their words and not just the formulations of so-called experts.

Ours is one approach to how to initiate what we call the ownership conversation. It is a conversation that is essential to companies who are trying to build and ownership culture. How do you know if you're getting anywhere with these kinds of efforts? How do you know if you are really building a bona fide ownership culture? I'd suggest a couple of approaches. Qualitatively, we'd suggest you begin to try and amass as much anecdotal and observational information as possible and track that information over time. Quantitatively, our firm has worked for three years to develop a very specific survey instrument for this purpose. The Ownership Culture Survey or OCS is a tool which measures the presence or absence in worker and manager attitudes of the concept of an ownership balance I have tried to describe here today. Tools like the OCS can help pinpoint where in an organization and around what issues these imbalances exist. Other tools such as Rights and Responsibilities Groups and more technical financial training workshops can each contribute a piece to the long term project of building an ownership culture.

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