The Employee Share Ownership Plan (ESOP) Effect
One of the encouraging things we see with employee share ownership plans is employees beginning to think and act like a business owner. Can you imagine if instead of just you or you and your immediate family that own and run your business, you had a team of key people within your business that thought about and acted with your business the same way you do? In other words, they thought about the business at night. They worked out new ways and better ways to improve performance or do things within the business more efficiently or add to productivity. Now, t’s not designed to fix problems or to encourage behavior from bad employees, it’s actually about getting employees to change the way that they approach the business, to change the way they think about the business and to change their behavior from that of an employee to that of an owner.
If you can get employees aligned with you as an owner, then you’ll get far better performance. The obvious question is, how do we do that? And it’s quite an easy answer. The best way to have someone think and act like an owner is to make them an owner, to give them shares in the business, not give them away, but to find a mechanism where you can allow people within the business to buy shares, become an owner, and then think and act like a business owner every day that they work within your business. You’ll see dramatic improvements in performance as a result.