Is Your Team Missing the “We” Factor? 5 Signs of a Low Ownership Mindset (and How to Fix It)

Creating a workplace environment that fosters a culture of ownership is crucial for any organisation. We’d all like our teams to ‘own the outcome’, but establishing a solid company culture can take time — and a lot of wrong turns — to get employees to feel invested and responsible for their contributions.

When employees take ownership of their roles and can see they have agency in the success of the business, it directly impacts the company’s success by driving overall performance and growth. This article explores various strategies to cultivate an ownership mindset among team members and its broader implications on company success.

Signs Your Team Lacks an Ownership Mentality

Recognising the signs of a lack of ownership mentality is the first step in addressing the issue. Some common indicators include:

1. Lack of Initiative: When things go wrong, no one steps up to address the problem. This lack of initiative can lead to stagnation and missed opportunities for improvement.
2. Duplication of Efforts: Without clear ownership, multiple team members might work on the same tasks, leading to wasted effort and reduced productivity.
3. Low Accountability: Employees may consistently avoid taking responsibility for mistakes, leading to a culture of blame rather than problem-solving.
4. Stifled Innovation: Without a sense of ownership, employees may be less inclined to propose new ideas or take calculated risks, stifling innovation.
5. Poor Morale and Engagement: A lack of ownership can lead to disengagement, as employees feel their contributions could be more valued and impactful.

The Impact of a Lack of Ownership

At first, you may not even realise your team is missing the ownership mentality. But you might be seeing low engagement scores, poor punctuality, and a decline in overall productivity. When employees do not feel a sense of ownership, they tend not to invest their energy in making the business better.

This can become obvious in the lack of innovation. There’s little to no incentive to take the initiative in proposing new ideas or shoulder the responsibility of bringing them to fruition.

The overall atmosphere of the organisation can become mired with complacency, where employees do the bare minimum. If you’re noticing ‘quiet quitting’ it may be partially due to employees sensing they won’t see the rewards for improving the business.

But owners? Owners never quiet quit.

The Role of the Employee Share Ownership Plan (ESOP)

An Employee Stock Ownership Plan (ESOP) can be a powerful tool in fostering an ownership mindset among employees.

To massively oversimplify how an ESOP works, companies issue new shares or use cash to buy existing company shares for the employee trust fund, which employees can accumulate over time as part of their retirement benefits.

The company doesn’t have to be listed on the ASX, NYSE or LSE. Private shares can be created with the help of your Succession Plus advisor.

There are a few ways to fund the ESOP, such as the purchase company shares, issuing new shares or obtaining them through borrowed funds. These are then granted upon certain conditions, such as employment duration or business KPIs being met, a path for employees to get future remuneration.

Setting up an ESOP benefits the employee, as well as the business in a few ways:

Automated Financial Incentives

ESOPs provide employees with financial rewards by giving them a financial stake in the company, aligning their interests with the organisation’s success. This financial incentive can motivate employees to work harder and smarter, as they directly benefit from the company’s profitability and growth.

Enhanced Engagement and Productivity

Ownership in the company fosters higher levels of employee engagement and productivity. Employees who feel they have a stake in the company are more likely to be committed to their roles, leading to improved performance and innovation.

Improved Company Culture

ESOPs encourage shared responsibility and accountability, promoting an ethical and responsible company culture. This shared ownership can lead to a more cohesive and motivated workforce, as employees feel their contributions are valued and impactful.

Opportunities for Leadership

Employee ownership provides opportunities for leadership development. A supportive leadership team plays a vital role in fostering an ownership mindset by providing consistent updates and resources to help employees understand their roles and the company’s vision. Employees invested in the company’s success are more likely to advance in their careers and take on leadership roles, reinforcing the ownership mindset.

Guidance for Overcoming the Challenges of an ESOP

While ESOPs offer numerous benefits, they’re not without challenges.

As with any initiative or cultural shift, an ESOP requires ongoing employee education and mechanisms to measure the program’s success. Determining the fair market value of company shares is a complex process that often necessitates the involvement of external appraisers and financial experts.

Working with Succession Plus to create systems of regular communication and updates, as well as establishing key performance indicators (KPIs), can help overcome these challenges and sustain the ownership mindset.

Strategies to Cultivate an Ownership Mindset

To foster an ownership mindset, recognised work practices and goals must align with core company values. Any incentive model has the potential to stoke bad behaviour or grow a toxic culture if one doesn’t. We take the time to define outcomes that are in harmony with the company’s vision, helping to reinforce strategic continuity and clarity among employee-owners.

For example, if ‘innovation’ is a key value in your business, there can be no doubt as to the overall vision for the business, and honesty around which areas need improvement.

Clarifying what is recognised as ‘innovative’, codifying what will be measured in a new idea, allowing for dedicated thinking time, and allocating resources towards R&D initiatives all help towards this goal.

In this way, ESOP participants can see the potential for change and measure the direct impact of their contributions on the company’s success.

Personalise Career Paths

Career pathing allows employees to see long-term career potential that aligns with their passions and meets their professional growth needs.

A personalised approach serves as both motivation and reward, encouraging employees to take ownership of their roles and career development. In many cases, an ESOP will not be made available to all employees at the outset, with access offered as a reward for commitment to the company’s goals.

Establish Intentional Communication Milestones

A proactive approach to communication can help tie employee-targeted messaging to the business growth strategy. Regular updates and clear communication about the benefits and opportunities of employee ownership can reinforce the ownership mindset, encouraging engagement in and excitement around the plan.

Delegate Decision-Making

Authority over everyday judgment calls should be delegated to those closest to the work. There isn’t a person alive who wants to be micromanaged or be forced to ask for permission around every small act.

Delegation and trust build a sense of personal agency, empowering employees to make decisions that lead to desired outcomes, fostering a sense of responsibility and ownership. The more often managers can delegate rather than do, the easier it is on them, too.

Encourage Cross-Functional Collaboration

To prevent silos and enhance visibility across teams, encourage cross-functional collaboration. This can be achieved by having employees from different departments work together on projects or participate in decision-making processes, promoting a sense of shared ownership and accountability.

Conclusion: Foster the Ownership Mindset by Matching Responsibility with Reward

Cultivating an ownership mindset within a team is essential for driving organisational success.

By recognising the signs of a lack of ownership and implementing strategies such as ESOPs, personalised career paths, and intentional communication, companies can foster a culture of ownership that enhances employee engagement, productivity, and innovation.

Ultimately, a strong ownership culture not only benefits employees but also contributes to the long-term success and sustainability of the organisation.

Dr Craig West

Founder & Chairman | Succession Plus

Dr Craig West is a strategic accountant who has over 20 years of experience advising business owners.

With a background as an accountant in practice and two master’s degrees, Craig formed a strong view that the majority of business owners (and often their advisers) were unprepared and unaware of the steps required to prepare for exit. He then designed and documented a unique 21-Step Business Succession and Exit Planning process to assist owners and their advisers in navigating this process.

Craig now acts as a strategic business and financial mentor for mid-market business owners. Craig has written four critically acclaimed books educating business owners on employee incentives, succession planning, asset protection, and exit strategies. Additionally, he has completed doctoral research on Employee Share Ownership Plans (ESOPs) for succession.

Craig is a Member of the Forbes Business Council where he leverages his extensive experience to contribute valuable insights on helping business leaders navigate the complexities of growing and exiting their businesses.

In April 2024, the Exit Planning Institute admitted Craig to the International Exit Planning Circle of Excellence.