We were never interested in hiring wage earners, we were looking for stakeholders willing to care about the business as much as we did.In our case, we have hundreds of people on the front line, talking to our customers, every single day. I want these people to care – about our business, about our customers and about our future. And if they see we’re getting something wrong, I want them to feel able to speak up.
All of this is easier, and more likely if they have a meaningful stake in the business.
Don’t expect share ownership to be an easy sell with all of your employees.I recently spoke to a start-up founder who had to convince his staff on the merits of share ownership. He said that offered the choice, most would prefer a subsidised gym membership. Given only half of all UK start-ups survive longer than three years, perhaps they have a point. That’s why it’s important to make sure share schemes have a tangible value and are not just seen as akin to buying a lottery ticket.
It’s commonplace to hear that the only way to create value from employee share schemes from unlisted companies is to sell or float the business. Don’t believe it.I think a well-structured share ownership programme is one that gives employees the ability to monetise their shares when they choose to, without feeling locked in for an interminable timeframe. Yes, this is harder for an unlisted company than for a listed business, but it’s by no means impossible. For example, we create an internal marketplace for our shareholders every year. We publish our share price, alongside an annual report that explains how we’re performing. We then ask all our shareholders whether they want to buy or sell shares in the business at that price, for a certain time only. Creating this annual window lets people plan ahead when making important life decisions.
Personally, I like knowing that shares in the business have helped people to buy their first home, paid for their children’s education, or even just allowed them to take a well-earned holiday.
CEOs can’t do it all aloneShare options and share incentive plans should be attractive, but share ownership, and money in general, will only ever go so far. Every business functions because of thousands of decisions made every single day. As it grows, you can’t make all of those decisions on your own. Instead, you have to start relying more on the people around you, as hard as that can sometimes be. Perhaps that’s why I’m such a big believer in employee share ownership. Because it means I get to sleep that little bit easier at night, knowing the people I’m working with are thinking and behaving like the owners of a business they are personally invested in. – Which they are.
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