The Pros and Cons of “Ownership Thinking”

Ownership Thinking: Can It Help Your Business?

There’s been some buzz in business circles about Brad Hams’ Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit. This weekend I sat down to see what the fuss was about, and found some interesting and some not so interesting points in his work.

Hams begins with the premise that the entire new generation of workers acts entitled in the workplace because they were brought up in an entitled manner. Having worked in more than one workplace with a culture of entitlement, I have seen first-hand how entitlement in the workplace can be detrimental to the success of the business. That said, I struggle to believe that individuals in a broad and diverse generation have all been brought up entitled. Nonetheless, I found that Hams had some good general points for business leaders.

For Hams, the purpose of Ownership Thinking is “to create cultures of employees who think and act like owners with the purpose of creating wealth” (p2). In his consulting business, also called Ownership Thinking, Hams rolls out a one-size-fits-all solution to organizations of all sizes, shapes, and industries. Digging behind the formulaic process to the insights supporting them, I appreciated the four main steps Hams articulates.

Hams’ Four Steps to Developing Ownership Thinking

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1. Right People

The main point Hams makes about having the right people has to do with being willing to let the wrong people go. I’ve seen organizations get attached to the individuals that work for them, excusing poor performance, absenteeism, or any number of bad situations, because they are reluctant to face the conflict of letting them go. I’ve heard arguments that it’s not caring to fire people, especially if they’ve been with the organization for a while. Hams argues, and I would agree, that it is actually more caring to invest in the people who continue to perform.

He seems to be a little more cavalier in his willingness to let people walk out the door all at once than I might be. What if 40 percent of your staff is underperforming? I’ve worked in HR at an organization that had 30 percent turnover in a year; I can’t imagine intentionally causing that level of turnover. Hams is less invested in managing the change process of organizations as they transition to Ownership Thinking cultures. I do believe, however, with the right kind of planning, it is better to help underperformers move on than to let them continue to drag down the productivity and morale of the organization.

2. Right Education

Hams suggests that in order for employees to engage in an Ownership Thinking culture, they need to know what’s going on with the organization, in a business and financial sense. He argues that organizations need to teach their employees financial literacy, and that all employees should be able to understand income statements, cash flow statements, and balance sheets. For those leaders who are reluctant to share information, he clarifies that he doesn’t necessarily support open-book management, rather he stresses that it’s important to share enough business information with employees to engage them in looking for opportunities for profit and cost-savings.

I am a tremendous fan of his suggestion to educate and engage employees in the business goings on. Often it is the people closest to the work who know how to increase efficiencies, identify areas for cost-savings, or identify new areas for earning profits.

3. Right Measures

Hams focuses on using both operational and financial Key Performance Indicators (KPIs) as a way to ensure the forward thinking and momentum of the organization, rather than just looking “through the rearview mirror” as financial-only based measures do. He is very prescriptive about how organizations should identify and monitor KPIs, including a one-day workshop for management to develop the KPIs, a scoreboard to track KPIs at the org- and department levels, and the use of bi-weekly “huddles” to ensure accountability against the KPIs.

I would add an element that connects the strategic visioning process and the overall business objectives to the development of KPIs. I’ve seen organizations lose their purpose and/or focus because they lose sight of the big picture. While I agree with Hams’ suggestion that the KPIs should cascade from the leadership level to individual units, I believe there should always be a connection to the highest strategy level. What is the organization there to do? What is it trying to accomplish in this three to five year period? From the strategic level, the annual KPIs can be developed and cascaded down.

4. Right Incentives

The final step in Hams’ process is to ensure that organizations have the right incentives for employees. Essentially, he argues that if incentive programs are going to work, we have to both incent the right behaviors and have incentives that are of value to employees. I plan to expand on this 1-0-1 of incentive plan-creating in my next blog post. Next month I’ll also dive deeper into Hams’ suggestions for developing incentive plans.

Ultimately, creating a culture of engagement seems like a goal destined to succeed in today’s business climate. While I don’t believe the entire new generation is entitled, I do see that entitlement is prevalent in today’s organizations. Engaging employees seems like an effective way to end cultures of entitlement. Making the leap from engagement to ownership? Well, that’s a conversation for another day.

Mykkah Herner
Compensation Consultant
PayScale, Inc.

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