Culture Of Ownership

Did you see Adam Bryant's interview with Container Store CEO Kip Tindell in Friday's New York Times?  Early on Bryant asked Tindell about his most important leadership lessons to create a thriving and productive workplace culture.  Here's what Tindell said:

The way we create a place where people do want to come to work is primarily through two key points.  One of our foundation principles is that leadership and communication are the same thing.  Communication is leadership.  So we believe in just relentlessly trying to communicate everything to every single employee at all times, and we’re very open.  We share everything.  We believe in complete transparency.  There’s never a reason, we believe, to keep the information from an employee, except for individual salaries.

There's a lot to absorb in the leader's answer when it comes to communications team building.  But it boils down to creating a culture of ownership and accountability that is based on mutual trust – workers' trust in the leadership to engage them and provide a nice place to work, and leaders' and managers' trust that a payoff of employee engagement is increased commitment, including offering more ideas to improve processes and ultimately customer satisfaction (and sales).

It is this foundation of trust that has allowed the Container Store to reach true midsize status, with over 4,000 employees, while expanding from 38 locations when I blogged about them in 2007 to 48 today (yes, during this recession).

Related: One of our most popular posts is this one that's also about transparency.

This week, once again, my e-mail inbox contained the disappointing results of a Gallup study that indicated that the Work Environment Index dropped to a new low in February. 

The Work Environment Index measures job satisfaction, the ability to use one's strengths at work, trust, and openness in the workplace, and how one's supervisor treats him or her.  The Work Environment score was 51.6 in February 2008; 48.7 in February 2009; and is now at 48.0 in February 2010. 

Why are these results so concerning?  Among other things, these scores say two things:

1. Quality of life is negatively impacted, and
2. Workforce effectiveness and workplace productivity aren't nearly where they could be. 

As a leader, do you want to make sure that these numbers don't apply to you?  Do you want a productive workplace with highly engaged employees and a culture of ownership?  If so, consider these actions: 

1. Take a hard look at your organization's culture.  What's the level of employee engagement?  Do your managers know how to manage and lead?  Do you sense a positive energetic organization or one that reflects fear and/or boredom? 
2. If you think there is an opportunity for improvement, get serious about it.  Start with doing an employee survey to better understand where you are doing things right and where you could improve.  If you are going to be serious about improving your workplace culture, don't guess.  Get the facts – directly from your team.
3. Once you have the facts, do something about them.  This is where the work gets hard.  Changing a culture, which means changing the way people behave, isn't easy.  Get outside help if you have to.  Be clear about your "end goal"; if you do this work successfully, what will your workplace culture look like in a couple years?  Develop a plan to get from where you are today to your end goal.  What are the key steps?  How will you measure your success?  How will you engage employees along the way?  How will you build trust, a foundational component of a great workplace? 

The workplace studies are yielding consistent results: there is a growing problem with job satisfaction and, in turn, productivity.  As a leader, do you want to be part of the solution or part of the problem?

In my last post I mentioned the employee satisfaction level (45%) recently reported by The Conference Board and concluded by asking "whose fault is this anyway?"

When I've asked similar questions, I get a range of answers.  Some are adamant that it is the leader's fault.  Some say the employee should switch jobs if they are so dissatisfied.  Others can't come up with an answer.

Here's the answer: It is the leader's fault and the employee's fault.  In organizations with an effective workplace culture, all parties have a sense of ownership. 

In creating a culture of ownership and in turn a productive workplace, we often write about what leaders should do.  I'm going to look at the flip side of the coin and point out what leaders shouldn't do if they want to contribute to a culture of trust, employee engagement, or team building.

1. As your organization's leader, DON'T be so intensely focused on results that you forget people are your most important means of getting to those results.  A quick story: Years ago, during the first six months of becoming a CEO, I learned this the hard way.   I overused the phrase "I expect" and the majority of my interactions with my team were about what they were doing to deliver the numbers.  Thank goodness a combination of my own experience, an executive coach, and feedback from a couple people on my team helped me realize that the intense focus on results was backfiring.  Clearly, a productive workforce requires building engaged employees. 
2. DON'T ask for input and then ignore it.  This approach squashes open communication in the workplace.  This approach says "I don't care about your ideas or expertise."  Without communication and caring, building trust is unlikely. Guess what?  Poor communication + minimal trust = less than optimal results.
3. DON'T decide that you are going to launch an initiative (large or small) to improve employee engagement unless you plan to follow through.  Not surprisingly, this reinforces a perception that you as the leader really don't care about employees and you can't be counted upon to do what you say you will do.  And that goes back to one of my beginning points: In a great workplace, the culture of ownership contributes to results. 

This list of "don'ts" is endless.  Have you been on the receiving end of a don't?  As a leader, have you learned a valuable lesson from a don't?  Those of us at Winning Workplaces would love to hear your story.

This post from last week on Canada's Axiom News site caught my attention.  In it, Jennifer Higgs cites the Vermont Employee Ownership Center – and our 2007-09 Top Small Workplaces – in making the case that companies that are employee owned have "disproportionate excellence" relative to their peers that are not.

Higgs' evidence to support this case includes the fact that a third of our winners the last three years thrive with the help of a true culture of ownership, and that, at least in Vermont, employee-owned firms have tended to win more awards.   She also cites employee engagement research compiled by the National Center for Employee Ownership (NCEO) which finds that, as we've shared here, employee-owned firms "tend to grow faster and are more profitable with higher productivity than non-employee-owned companies."

But, while desirable, do these business outcomes equate to "disproportionate" excellence, or success?  One firsthand perspective I can offer might shed some light on this question.

This year I had the opportunity to read and score a batch of our Top Small Company Workplaces applications.  I looked at the following factors for success, as assessed in our extensive application:

• *Business structure & growth
• Employee metrics
• Benefits
• Learning & development
• Workplace culture & people practices
• Impact of people practices
• Employee participation
• Impact of economy & company response
• Fostering community & collaboration
• Goals & sustainability

I put an asterisk (*) next to the first bullet above because this is the area that asks about employee ownership.  It is only one of 10 areas I, and the rest of our reading teams, are looking at.  I personally put as much or more weight into applicants' benefit offerings, employee development strategies, and responses to the essay questions that make up the last six areas listed above as I put into their business structure/growth.

For me and surely for others now reviewing applications, employee ownership by itself is not a guarantee of moving on to the next round (where our judging panel – of a caliber on par with our 2009 roster, TBA – will select the winners that will be featured in the June issue of Inc. Magazine).  Because employee ownership has historically been viewed similarly relative to many other success factors by our final judging panel, you get the majority of our winners over the last three years that are not employee owned.  This includes such excellent organizations as Healthwise (2007 Winner), Lundberg Family Farms (2008), and Anthony Wilder Design/Build (2009).

So in terms of addressing the claim that employee ownership equals "disproportionate excellence," I stick by what I wrote here last month: While employee ownership is not essential for creating a Winning Workplace, it is often tied to the ability to do so.

How much weight do YOU give employee ownership, as compared with other factors, to achieving excellence (defined as long-term success and sustainability)?

I just posted a poll on LinkedIn.  You can go here to vote on it.  (You have to be on LinkedIn to do so – you can sign up for free here.  Once you do, don't forget to join our group!)

I'm testing a hypothesis: I suspect that most respondents will say that when they catch up on posts for a blog they subscribe to in their feed reader (I use Google Reader), having too many posts to read per day is more annoying than average posts being too long.

Why am I going down this path?  It does have a link back to small business and activities for employee engagement, I promise.

I got to thinking the other day, when I was doing a bit of winter cleaning of my blog subscriptions, that blogs with either one very prolific writer (Chris Brogan comes to mind) or many writers (see Small Business Trends) that pump out a lot of content might turn off some otherwise engaged subscribers based solely on the volume of text they need to read each day to stay informed – even if, as is the case with the two above-mentioned blogs, the content is always first rate.

This is one of the reasons I'm the sole blog writer for Winning Workplaces: one person writing two or three posts-worth per day does not equate to an unwieldy burden for our readers.  (At least, I hope it doesn't.  *wink*)

Now, change blog content to your product/service line, including your marketing efforts, and answer the following questions:

1. In your (understandable) quest to appeal to as many potential customers as possible, and to cater to the ongoing demands of existing customers, has your product/service line become a burden in its size or complexity?
2. Have you ever surveyed customers on this?  Specifically, have you asked them if ease of understanding of your offerings is a point of difference vs. your competitors?
3. Turning inward – inside the workplace – in support of a culture of ownership, have you similarly surveyed your employees about their understanding of what you sell?

You might be surprised by the honest feedback you solicit from all stakeholders through these questions – including your own in response to question #1.

As John Jantsch wrote on his Duct Tape Marketing blog last week, the simplest secret to business growth is finding what works and doing more of it.  By extension, for your organization this could mean ditching what doesn't work, including products/services that are redundant or not easily understood.

This week I called your attention to an upcoming conference in Minneapolis on employee ownership hosted by the National Center for Employee Ownership (NCEO) and the Beyster Institute.

Also this week, NCEO appeared, as it frequently does, on ESOP consultant Aaron Juckett's popular popular One-Stop ESOP Blog.  Juckett shared selected findings from NCEO's compilation of research over the last three decades showing the impact of these plans on performance for private and public companies, as well as employee compensation and stock options.

As Winning Workplaces concentrates on the workplace culture effectiveness of small to midsize, privately held firms, I wanted to share the key metrics from this research collection Juckett cites that support the gains in productivity and sales in these organizations that can come with implementation of an ESOP:

• Productivity growth: 2.3%
• Sales growth: 2.4% - 3.8%

When many business leaders look into ESOPs, they focus on the tax incentives (certainly understandable given where the economy is, and with the healthcare reform legislation currently in Congress).  But they should also take into consideration the longer-term benefits of higher productivity and sales that can come from a culture of ownership that creates greater employee engagement.

While employee ownership – implementing an ESOP or other shared ownership program to turn employees into employee-owners, giving them a financial stake in the success of the business – is not essential for creating a Winning Workplace, it is often tied to the ability to do so.  For example, 10 of our 15 Top Small Workplaces for 2009 share ownership with their associates.

Whether you're looking for an introduction to creating a culture of ownership in your firm, or already do so and want to hear the latest, road-tested practices that are working well for other businesses, you'll find both at the National Center for Employee Ownership (NCEO)/Beyster Institute Employee Ownership Conference, which will be held in Minneapolis on April 20-22, 2010.

Winning Workplaces can personally vouch for the expertise of NCEO, a California-based nonprofit membership organization that provides unbiased information and research on broad-based employee stock plans.  Their Executive Director, Corey Rosen, a sought-after speaker on employee ownership, has had a presence at our annual conference the last few years.  And last April, he presented a webinar for us on options for transitioning ownership to exit gracefully.

Click here to view the program for the NCEO/Beyster Institute Employee Ownership Conference.  As you can see, some of the content is geared toward communications team building within the context of an ownership culture.  You'll want to register here by March 19 to attend at the early bird rate.

Check out the latest 2009 Top Small Workplace video I just added to Winning Workplaces' Facebook page.  The company we interviewed here is Chicago's famed Steppenwolf Theatre.  Startups should admire the scrappy beginnings of this organization, and established firms can identify with annual revenues of over $15 million in an industry that's faring as bad as or worse than a number of others out there.

The message Steppenwolf General Manager David Schmitz conveys is that you can never overuse your younger employees.  I think it makes even more sense to get them involved in your culture of ownership as early and often as possible given that next year Generation Y – folks born after 1977 – will overtake both the Baby Boomers and Gen X as the most dominant generation in the workforce.

Here are some of Steppenwolf's lessons learned that Schmitz shares in the video:

• Young people need to feel important in the work they're doing.  A daily commitment by leadership to let them take leadership roles where they otherwise might not get them can have a powerful impact on their performance.
• Trust that young people are there for the same reason as all other employees, and management.
• Young people and social media don't have to go together like oil and water – allowing them to use it on behalf of the company can work as long as everyone is on the same page about the firm's message.  Though part of making this work is being prepared to combat negativity as part of a "true dialogue."
• Younger employees can drive innovation throughout the company since innovation is inherently "a very youthful idea."

Related: Our final Executive Learning Series Webinar for 2009, for which Schmitz was a co-presenter, was on building employee engagement specifically among young talent.  Access a recording of this webinar for the unbeatable price of just $25 as part of our Year End Special.

Winning Workplaces and Inc. Magazine are almost a month into the application process for our joint 2010 Top Small Company Workplaces competition, with about six weeks to go until the deadline of January 22.  So while there's time for trends in the employee engagement research we're gathering to change, I noticed something interesting that could be much more intriguing if the ratio holds.

One of the questions we ask every year is the percentage of the company owned by the CEO.  From 2007-2009, this has hovered around the 50% range, +/- 5 percentage points.  But as the chart below shows, this share of ownership has dropped 21 points from 2009:

*Current application cycle – figure not final

It will be interesting to see if this is just a yearly blip – if it goes back up into the 50% range in 2011 – or if this is the sign of a sustained, downward trend that's due to real factors.  If the latter is the case, I'm guessing one of these factors is the desire to motivate and hold on to top performers in the midst of a tough economy.  We have seen that strengthening the culture of ownership by sharing more of the equity of the business with employees can be a powerful means toward this end.

Is the share of CEO ownership of your company in line with what we're currently seeing as part of our awards program application?  Apply today and tell us.  (The winning companies will be featured in Inc. next June.)

Zappos, the popular online retailer of shoes and other merchandise, has become a leading case study for those that, like Winning Workplaces, study the payoff of employee engagement.  The workplace culture Tony Shieh has created in his Las Vegas-based business has been studied by all the major players in the small business leadership space, including our Top Small Company Workplaces media partner, Inc. magazine.

But besides their approach to workplace team building, I think Zappos is innovative when it comes to their presence in and around their Vegas HQ.  I recently drove through Vegas, twice, en route to see family in Salt Lake City over Thanksgiving.  I couldn't help but notice the highway miles along I-15, both north and south of Vegas, that Zappos has uninterrupted as part of Nevada's Sponsor a Highway program.

It turns out that permanent exposure – assuming Zappos continues to pay the Adopt A Highway Companies to keep their miles of highway clean – equates to a lot of eyeballs, at what is a competitive rate when compared to similar advertising in other mediums.

After a little digging, here's what I found about how Zappos' Sponsor a Highway exposure compares to other forms of advertising:

• Annual rate for participation in Sponsor a Highway according to Jennifer at Adopt a Highway, per mile per month: $200.  Times 12 months = $2400.  Times 10 miles (encompassing the Las Vegas metro area) = $24,000.  Reach = 1,865,746 according to Wikipedia.

(A bit of background: Nevada has both sponsor-a-highway and adopt-a-highway programs.  The difference is that sponsor a highway, which Adopt A Highway Companies runs – confusing, I know – is more cost effective for the state.  This is because adopt a highway companies are in charge of their own clean-up, and often sign on for free but then don't do their part.  Zappos does sponsor a highway – the paid option – to ensure the job gets done right.)

By comparison, to reach 1.8 million...

• via web advertising costs approximately $65,000 (assumes a cost per 1000 of $35).
• via a major magazine like Inc. costs approximately $106,000 (assumes a full-page color ad – unobstructed like the Zappos road sign).
• via a major newspaper like The Wall Street Journal costs approximately $323,000 (assumes a full-page color ad – unobstructed like the Zappos road sign).

One big differentiator of Zappos' highway advertising through Sponsor a Highway, vs. the above three forms, is that there's an implied corporate social responsibility component.  That gels well, I think, with the caring culture of ownership that turns Zappos customers into evangelists for the brand.

Is your company visible through Adopt/Sponsor a Highway in your state?  If so, what benefits do you attribute to your participation?

Dr. Jeff Cornwall, chair of Belmont University's Center for Entrepreneurship, made a great point today on his Entrepreneurial Mind blog:

The odds of successful family business succession goes down with each generation.  There are challenges with even making it to even the second generation of family business ownership, and by the third the odds become rather steep against successful succession.

The key is succession planning.

Providing more context, Cornwall points to an article by a faculty member at University of Nebraska in Family Business Magazine.  It turns out that this publication is one of 19 resources listed on the Related Sites page of our website, under the Family Business section.

If you run a family business, click here to access this section of our website for valuable resources to help you improve your people practices to ensure a successful culture of ownership for future growth.

I enjoyed Standout Jobs founder Ben Yoskovitz's Instigator Blog post sharing the wisdom that there is competitive advantage in how well a company carries off, of all things, the surprise.

Referencing a book on this topic by Andy Nulman, founder of the Just For Laughs event and co-founder of Airborne Mobile, Yoskovitz writes,

People will give you their money if you surprise them.  And I don’t think enough people realize the value, importance and power of surprise.

Too true.  And as Yoskovitz later alludes to in his post, most consumers are so fed up with the status quo of how companies treat them that it doesn't take that much of a surprise to convert them into paying customers.

As they do with respect to other leading-edge trends for small businesses, our honorees by and large have embraced the surprise as a way to get on potential customers' and clients' radar screens, earn their business, and especially keep them coming back – helping to preserve their cash positions and support people practices to retain their best employees in tough times.

Here's a list of 10 Winning Workplaces honorees that surprise and profit from it:

1. Aquascape  How: First-time purchasers of Aquascape's water garden and pond supplies are quickly (and happily) converted to evangelists through fun and informative gatherings such as their annual Pondemonium.
2. Dancing Deer Baking Company  How: People don't just want to indulge their taste buds when they consume cookies and cakes – they want to enrich their soul.  DD makes this possible through their products that support causes that matter in their home state of Massachusetts.
3. Gentle Giant Moving Company  How: Today there are other moving companies that differentiate on service, but this notion didn't exist when Larry O'Toole founded Gentle Giant in 1980.
4. Headsets.com  How: Mike Faith's business would be profitable but arguably not nearly so much if "customer love" and training managers to look for things done right – not wrong – weren't hardwired into their culture of ownership.
5. Jackson's Hardware  How: A focus on mentorship and cross training means all employees can help any customer with questions to facilitate sales.
6. Mike's Carwash  How: Front-line employees wear neckties, applying a Nordstrom-like "If it's not right, we'll make it right" approach that's rare in the industry.
7. New Belgium Brewing  How: Craft breweries are a dime a dozen these days, so how do you stand out?  New Belgium has done so by tuning their eco-conscious customers in to the company's eco-themed team building strategies.
8. Rackspace Hosting  How: Similar to the industry-redefining service of Gentle Giant, Rackspace found unparalleled success by applying "Fanatical Support" to web hosting, spawning many imitators.
9. Skyline Construction  How: It's an ESOP company that is 100% employee owned; union and non-union employees and customers have a say in the firm's strategic direction.
10. The Paducah Bank & Trust Company  How: Through everything from customer outreach via an ice cream truck to subsidizing a major community revitalization effort, Paducah is not merely a bank but a public partner.

Image credit: Wikimedia Commons

Winning Workplaces' most recent Success Story on 2008 Top Small Workplace King Arthur Flour Company – part of our October IDEAS newsletter – represents a first among the over 100 such small business profiles we've written.  It's the first to chart revenue growth by people practices, proving the payoff of employee engagement.

As my colleague Jason Ticus, who interviewed employee-owners at the Vermont-based consumer goods firm, wrote, "For decades the company operated small scale and independently, actually shrinking to the point of having only three employees in 1990 (with revenues of $3.5 million)."

That year served as a launching pad, though.  The graph below depicts three strategic pivot points that – fueled by their culture of ownership – enabled King Arthur to increase its revenue by over 1800% from 1990 to today.  And employ 157 (5200%) more people.

Related: Learn how 219-year-old King Arthur is mixing tradition with new inventions from their CEO, Steve Voigt, in this webinar recording.

You may have seen this week that Forbes published a list of "The Most Influential Business Thinkers."  On it are the likes of Harvard Business School's Gary Hamel, Virgin empire-builder Richard Branson, and Apple Co-Founder Steve Jobs (who is teenagers' most admired entrepreneur according to a Junior Achievement survey).

But the Forbes list, which also includes Bill Gates and Malcolm Gladwell, is made up of visionaries that most everyone in the small business community has heard of before.  What I think would be more valuable for these leaders is a list of influential thinkers that are their peers, and who have received less attention by the mainstream business press.

So, based on Winning Workplaces' research and events that reveal the payoff of employee engagement and team building strategies, I've compiled our own Top 10 list.  Check out these small business rock stars if you haven't already:

1. Andrew Field, President, PrintingForLess.com.  Street cred: Created the first and largest online printing company.  If you go to their website and click on About Us you'll find several videos that show how PFL's culture of ownership translates to better service, higher sales, and employee retention and community-building in rural Montana.
2. Larry O'Toole, CEO, Gentle Giant Moving Company.  Street cred: Created a $30 million moving and storage business that has carved out a solid territory on the East Coast against stiff competition based on a service model that has inspired the likes of College Hunks Hauling Junk and Meathead Movers.
3. Jan Blittersdorf, CEO, NRG Systems.  Street cred: The employee benefits offered by this Vermont-based wind energy company align with its mission and values, and thus help attract top talent.  They include cash incentives for purchasing hybrid vehicles and energy-efficient home appliances.
4. Paul Silvis, Founder, Restek Corporation.  Street cred: If you're looking for the story of someone who had the product know-how but had to learn business leadership skills from scratch, Silvis is your guy.  After leading Restek to over $47 million in sales and several mentions on the Inc. 500, he is now heading up a new company, SilcoTek.
5. Diane Hessan, President, Communispace.  Street cred: Hessan is brimming with leadership lessons – see this post from yesterday – after leading her company, which provides online customer communities, back from the brink in 2001.  The firm has been trendsetting when it comes to flex-work and communications team building practices.
6. Dev Patnaik, Managing Principal, Jump Associates.  Street cred: On a recent kick of helping companies use the quality of empathy to their strategic advantage, Patnaik could just as easily conduct a master class on small business team building.  From their employee gatherings to their open workspace, this business consultancy exemplifies how best to harness innovation.
7. Trish Karter, CEO, Dancing Deer Baking Company.  Street cred: Dancing Deer is often cited as a model company when it comes to pursuing a double bottom line.  And for good reason: from economic development in their hometown of Boston to using product sales to end family homelessness, few organizations better demonstate that you can do well while doing good in the world.
8. Mike Faith, CEO, Headsets.com.  Street cred: Faith's company, only 11 years old, is a major player in the $2 billion U.S. headsets industry.  In large part this is because their people have taken the Jim Collins approach and do one thing really well: listening.  This includes to employees as much as customers.
9. Graham Weston, Chairman, Rackspace Hosting.  Street cred: The story of Rackspace's phenomenal growth based on delivering "Fanatical Support" to its customers is even more astonishing when you realize Weston has career roots in the decidedly non-tech space of real estate.  Customer satisfaction is a must in both fields, of course, and Rackspace continues to define it in their industry.
10. Tensie Whelan, Executive Director, The Rainforest Alliance.  Street cred: Whelan leads the only nonprofit on this list, but its an instructive one when it comes to running one like a business, and defining and serving an unmet niche.  They've fulfilled their mission and kept turnover low by helping to improve the sustainable practices – and profitability – of brands such as Chiquita.

For more info on all 10 of these small business thought leaders, visit our website and enter any of their names or companies in the search box.

Workplace democracy emerged briefly as a topic on Friday's episode of HBO's Real Time with Bill Maher.  On it, former New York Gov. Eliot Spitzer updated the wage of the typical CEO versus the typical worker: CEOs make about 550 times what the average employee makes.  (Last I heard, it was about 400 times more.)

It's easy for workers to get bogged down with statistics like this, especially in an economic environment that has led to double-digit unemployment in a number of states.  Many employees think they have no voice in the organization, much less a hand in directing it to greater success in the future – and ensuring job security in the process.

Combating this syndrome is our Top Small Workplaces' tendency for creating a culture of ownership.  Consider:

• Employees share in ownership in 10 of the 14 privately held 2008 winning firms.
• They share in ownership in 10 of the 13 privately held 2009 winning firms.

Notably, though, while the number of organizations among our total pool of winners the last two years that have employee ownership has stayed pretty constant, there has been a sizable change in the portion of shares employees hold in these enterprises compared with the CEO.  See the table below:

*Of the companies that share ownership with employees

I don't know what to make of this trend – we're still analyzing the data from this year's winners and applicants – other than to think it must be part of the long-term employee engagement model of the associated firms, to improve commitment, retention, productivity, and other relevant metrics.

Your thoughts?

For a series of meetings this week back at our Chicago HQ, I flew on Southwest Airlines for the first time ever.  While it was a little weird to choose your own seat, I think it actually made for a better flight experience because it got people talking to each other a little more than usually happens.

When a passenger dropped her water bottle and it slid back several rows, I don't think there would have been nearly as many smiles among people passing it back up to her (including yours truly) as there were if the airline didn't set a casual, "it's just air travel, folks" attitude from the get-go.

But really making the difference were Southwest's caring, exuberant flight crew.  Attendants did more checks on passengers on the first leg of my roundtrip flight than I've seen them do on multiple roundtrips on other carriers.  On arrival at Chicago Midway Airport the captain even joked, "Don't forget any of your belongings, including husbands and wives."

How does Southwest get seemingly more commitment out of their employees than do other airlines?  Colleen Barrett, their President Emeritus who still works closely with the Texas-based company on employee development strategies, told us it boils down to two things: creating a culture of ownership and hiring people who are servant leaders.

My flight back to Los Angeles was further enriched by Southwest's in-house magazine, Spirit.  Their September issue just so happens to feature a lengthy cover story on entrepreneurship.  Two highlighted small business facts in particular stood out to me:

• Average years a small business survives: 11.2
• Average annual revenue of a small business: $3.6 million

As I've noted here before, our Top Small Workplaces, which use employee engagement best practices as a means to improve business metrics, leave these stats in the dust (or maybe, in keeping with the theme here, on the ground):

• Average years a Top Small Workplace (2008) survives: 42
• Average annual revenue of a Top Small Workplace (2008): $36 million

Have you flown Southwest?  What's your experience been like?

Photo credit: World of Airline news blog

There have been a slew of recent headlines, such as this one from the AP from today, which suggest that the climbing stock market is once again a leading indicator for an economy that seems to be slowly emerging from the current recession.

Yet, as good as the stock market is doing at any given time, there are a handful of companies you can count on to outperform it: those that allow employees to purchase stock in them, or otherwise share ownership in the business.  This is the takeaway from The One-Stop ESOP Blog, which reported this week on the results of the ESOP Association's 18th annual survey of its 1,400+ member companies.

CPA and ESOP consultant Aaron Juckett shared that the association's data show that almost 89% of ESOP companies outperformed the stock market in 2008.  What's more, 65% of survey respondents indicated the ESOP positively affected the overall productivity of the employees.

This makes total sense based on the most recent data we have on winners of our Top Small Workplaces project with The Wall Street Journal.  The 6 of our 15 winning firms for 2008 that have an ESOP or similar plan as part of their employee benefits posted higher average revenues for the most recent year of reporting (2007) than the 9 that do not include such plans:

As you can see, in the case of our sample companies, average annual revenue of those with ESOPs is 31% greater than those without them.

Now, granted, there are many, many other factors that lead some companies to perform better than others – everything from the sum total of their team building and employee engagement activities and benefit packages, to the strength of their leadership teams and of their industries.  Still, our data reveal that companies with ESOPs perform better than those without them on some other key metrics:

While ESOPs are not for every organization, you may want to consider implementing one to increase the commitment and productivity of your workforce, and create a culture of ownership.

Related Posts:

• Six Elements of a Strong Employee Ownership Culture
• How to Ensure Your Culture Remains Intact After Selling Your Business

I came down pretty hard recently on Jack Welch for his comment at the latest SHRM annual conference that there's no such thing as work-life balance.  This is not to say, though, that the former GE CEO doesn't ever say things indicative of organizations that have mastered the art of successful team building in the workplace (such as our Top Small Workplaces).

As the good folks at Chicago-based accounting firm Blackman Kallick pointed out yesterday on their Strategy Insights blog, Welch, along with his wife, Suzy, say in no uncertain terms in a recent issue of BusinessWeek that small is not just the new big – it's the new green.

Here's BK's take on the Welch editorial in BW:

Here, in Jack and Suzy Welch, we have two of the best-known business leaders and sages, advising business leaders to take a page from the book of smaller companies "by acting in ways that appeal to entrepreneurial types of employees," concluding that in the "'revised economy' of the future, speed, flexibility and innovation will be more crucial than ever."

The firm uses this as the the jumping-off point for its advice that

It's critically important that business owners carefully think through what it will take to create a long-term sustainable environment of open communication, innovation, job satisfaction and, yes, excitement.

I really couldn't agree with or emphasize this point more.  Leaders have an absolute imperative, especially in this shaky economy, to do all they can to bring people in who fit the ideal culture of ownership they see in their heads, and then train them to be both managers and supervisees who work well with each other, see how their work moves the business forward, and always carry the utmost respect for the company's customers or clients.

Big companies can certainly do this.  The Container Store and Southwest Airlines, among many others, offer living proof.  But as books by Bo Burlingham and Doug Tatum (and our own research) make clear, smaller, more nimble – and more in tune with their people – organizations are often better equipped to do it best.

What are your thoughts on the Welch BW article, or on the BK blog post?

I read in the Chicago Tribune's Red Eye today that Amazon has agreed to purchase Zappos.com with over $800 million in stock.

This struck me as surprising, since Zappos' reportedly shy CEO, Tony Shieh, has lately been decidedly extroverted when it comes to the subject of creating an employee culture of ownership.

We got perhaps our most detailed look at the employee engagement best practices of Shieh's successful, footwear-focused e-commerce company in Max Chafkin's profile of the CEO in the May 2009 Inc. magazine.  This, of course, followed on the heels of the great buzz and press Zappos received after one of the company's innovative human capital strategies – its $2,000 "leaving bonus" – was made public last year.

Many organizations in a variety of industries have since adapted this and other employee engagement practices in use at Zappos, which comes across as extremely casual and easygoing even though it's now clearly in the midsize category with more than 1,500 employees.  By comparison, Amazon, which is five years older than Zappos, has over 20,000 employees.

Now I'm not saying that more employees necessarily means poorer workplace effectiveness.  However, we know that one of the long-term challenges swift company growth brings is maintaining the standard of internal and external communication that helped fuel that growth.  For a company like Zappos, which has earned both sales and HR cred from creating highly engaged employees, joining with the much larger and more ubiquitous Amazon could dilute the "secret sauce" that has made its workplace culture so effective up to this point.

So how do you see this news?

• Bad for Zappos' employee culture (although Shieh says their leadership will place a premium on retaining their uniqueness)
• A cultural assist for Amazon (see Seth Godin's post on this)
• Somewhere in between these two views
• Other – if so please comment below!

Related: Members of our LinkedIn group responded to my question on whether they would adopt Zappos' leaving bonus.  Read their feedback here.

In April I wrote about the small businesses we've honored and covered over the years that allow dogs in the workplace.  Add one more to the list.

I heard via Facebook last week that one of the newest additions to the workforce at Pinnacle Services (a Minnesota-based social service agency whose President & CEO, Nicolas Thomley, we named a Best Boss in 2006) is an English Bulldog the company aptly named Biggie Smalls.

Thomley shared with me the story of how Biggie came to join the firm:

Our COO mentioned one day that we should have an office dog.  It was more of a passing comment but I liked the idea.  I did a little research and while there are certainly issues with having animals at work the benefits seemed to be exactly what we needed at this time.

The impetus for getting her comes from a couple of things.  Our legislature authorized a 2.58% cut in our budget July 1st which is the equivalent of about $260,000 a year to us.  As a result we had to issue a 2% pay cut to some of our employees (we were able to absorb the .58% administratively).  We have never had to reduce wages before.  Additionally, we acquired another company at the beginning of June.  It was a very messy acquisition.  As a result staff members have been putting in extraordinary amounts of hours and unfortunately a couple of people have left the company.  We are better than where we were 6 weeks ago but morale is still below where I want it to be.

Essentially Biggie Smalls was brought in to the Pinnacle family to help reduce stress and boost morale.  It is not the only thing we are doing but it is one strategy to help make our office a better work environment.  She is a 6-month-old English Bulldog.  I did some research on dog breeds as well because I did not want one that was overly active, barked a lot or had other behaviors that would not be best for an office.  Even though Biggie is still a puppy and playful she tires easily and sleeps often.  She wanders around the office to say hi to various people and is incredibly friendly.  She never barks, I'm not sure if she even can?  We came up with "Biggie Smalls" because I said I thought a bulldog should have a gangster name.  The result was Biggie Smalls which is fitting for her stature.

There are firms that are OK with employees bringing their dogs into the workplace, and then there are office dogs like Biggie Smalls.  Which you do – or whether you allow it at all – is up to your leadership team, your employees, and the level of employee engagement you've developed.

This practice is not for every work environment.  But, like Pinnacle Services, your organization could benefit from the enhanced team building that can come from investing in your workplace by recruiting man's best friend.

Related: Thomley shared his thoughts on maintaining a culture of ownership as a business grows at our 2007 annual conference.