Winning Workplaces

As we get ready to host Mike Foley, CEO of 2007 Top Small Workplace Reflexite Corporation, for a webinar on "Two Perspectives on Succession" on May 27, I'm looking over my notes of a webinar that Mike presented for us a year ago, "Building an Ownership Mentality Among Employees."

In that session, in which Bill Marshall of fellow 2007 winner Phelps County Bank also lent his time and expertise, Mike revealed six elements that make up their ownership culture at Reflexite, a Connecticut-based manufacturer of optical components and film with over 500 employee-owners spread across 22 locations worldwide and over $80 million in annual revenues.

Here they are:

Share ownership with all employees, worldwide – employee stock ownership plan (ESOP) started in 1983; average ESOP account of $120,000; "international ESOP" phantom plan mirroring U.S. plan
Participative management – open-book management with training on the financials and monthly updates at all sites; engage employees on key decisions including Board elections and managing change
Specialized communication techniques – In addition to open-book: frequent meetings, monthly meetings at all sites by business leader, quarterly meetings in person at larger sites by CEO, web simulcasts, town meeting approach to major decisions, goal to answer all questions
Share rewards – includes both short term such as on-time delivery and reducing customer returns (continuous improvement) and long term: ESOP allocation tied to annual business performance
Confidential employee opinion surveys – leadership especially watches voluntary participation rate (historically at 90% or above) and comments for firm-wide improvement
Specialized training at average of 40 hours/year/employee – on areas including company quality system, personal financial management, effective communication, stress management, negotiation, and team leader skills

Notably, with the exception of the ESOP and open-book components necessitated by Reflexite's nature of ownership, virtually all of the above elements can be adopted by businesses that don't want to implement an ESOP, but yet still wish to enjoy the benefits of having employees think and act like owners. And isn't that every company?

For more employee engagement strategies from Mike Foley at Reflexite, tune in to our webinar next week on succession planning.

Photo credit: Reflexite

Comments for Six Elements of a Strong Employee Ownership Culture

Monday, May 18, 2009 by Martin Staubus:: The comment that any company can adopt the Reflexite approach - except for the employee ownership and open book management, is a bit like saying that any of us can be a major league baseball player - except for the part about hitting and throwing the ball. The fact that the people of Reflexite and Phelps County Bank get to keep the economic gains produced through their efforts (rather than working to make someone else richer) is central to what makes those workforces so committed and engaged.
Tuesday, May 19, 2009 by Mark:: Thanks for your comment, Martin. I like healthy discussions that include disagreements with what I write about. There are those who echo your perspective that an ownership culture is impossible to achieve if you don't use OBM -- see for example Rich Armstrong from The Great Game of Business' response to this post from March: http://bit.ly/4wq64 I guess I come from the other side because I've seen elements of an ownership culture, such as the ones I listed above, show up in non-OBM companies as well. Our 2008 Top Small Workplace, Lundberg Family Farms, is a great example of this. While they don't practice open-book, they have a number of mechanisms in place to empower employees to make on-the-spot decisions that leadership trusts are the right ones at the right time. Now that I think about it, responding to you, maybe I should have substituted "Engagement" for "Ownership" in the title of my post to avoid being misleading. This is great food for thought -- thanks, Martin.