“Employee ownership eliminates the conflict of interest between managers and employees. Everyone’s incentives are aligned, so everyone works together to make the company as successful as possible. In the process, people build communities that satisfy their need to earn a living and their need to excel at their profession.”
“Companies use the utopian language of employee ownership to cover up their failure to make needed changes in their management styles and structures. These companies ask employees to work harder in return for a share of the profit, a share that too often proves excessively risky or even worthless.”
Both of the above statements are partly true. Our experience and research over the 30 years that employee ownership has shown two distinctive realities: first, overall, employee ownership gives companies a performance advantage—”the ownership edge.” Second, there is no ready-to-use process to guarantee that a company will achieve the ownership edge. There are, however, six clusters of practices that appear again and again in successful ownership companies. This article describes these six components of ownership management and illustrates the myriad ways in which companies implement them.