During a session entitled ‘Your role as leader in an employee owned (EO) business’ at the Employee Ownership Association Conference 2016, we explored:

  • how leadership in an EO business differs from other businesses
  • how people approached the task of strategic and business planning
  • how businesses are leveraging employee ownership to enable succession planning.

The conversation demonstrated that great leadership is great leadership whatever the business, but the ethos and principles behind co-ownership appear to provide EO leaders with the conditions to capture a leadership advantage and:

  • maintain, and inspire people with, the long-term view
  • establish fairer and more equitable relationships
  • nurture an ownership mind-set of accountability, belonging and enterprise
  • ensure consistency of transparency and participation
  • develop leaders at all levels to sustain the ethos and enable succession.

And, like most worthwhile causes, these things do not appear overnight, they require the energy, attention and commitment of leaders. Ultimately, it is not what you say but what you do that counts.

Three perspectives that were shared on leadership, include the functions of leadership, the styles of leadership and the transitions required for effective succession planning.

Functions of leadership

In order for leaders to create and sustain success they need to pay attention to three important aspects: managing the present; creating the future; and nurturing identity.

functions-of-leadership

 

A lack of attention to any of these areas will challenge and threaten the ability to be successful.

Styles of leadership

Leadership is specific to a context or a situation and so may require a different style or blend of styles. The framework below, developed by Daniel Goleman, provides a good overview of these styles, the context within which they work and their impact on the working climate.

leadership-styles

Great leaders have the ability to pick the right style for the right moment.

Succession planning

The ultimate test of a leaders’ success is the legacy that they leave when they are no longer in role or involved. The key factor to influence this is the people that they leave behind, their successors.

Many describe succession as passing on the relay baton, but we prefer to think of it as a dance where the key steps are stepping up, stepping in and stepping out. Like a good dance it is face to face, full of emotion and built on a bond of developing trust between those involved. Great dancing takes a lot of practice, so both parties need to understand and acknowledge that there will be plenty of wrong steps and stepping on toes.

The diagram below, whilst specific to the founder’s journey, highlights the steps and transitions that take place over many years to enable effective succession.

leadership-succession

The following discussion focused on:

  1. What is different about leading a co-owned business? For example, in comparison to a founder-owned business, a family owned business, a private equity owned business, a plc?
  2. How should and could leaders of employee owned businesses approach the task of strategic and business planning?
  3. How can you leverage employee ownership to build responsibility, accountability and momentum for succession planning?

The key themes that arose from the discussion highlighted that great leadership is great leadership whatever the business, but the ethos and principles behind co-ownership appear to provide EO leaders the conditions to capture a leadership advantage and:

  • maintain, and inspire people with, the long-term view
  • establish fairer and more equitable relationships
  • nurture an ownership mind-set of accountability, belonging and enterprise
  • ensure consistency of transparency and participation
  • develop leaders at all levels to sustain the ethos and enable succession.

Maintain, and inspire people with, the long-term view

The prime motivation for many employee-owned business is sustainability and legacy. This context, if used correctly, can provide EO leaders with the opportunity to inspire people with a vision that goes beyond doing a job, making a widget or hitting a profit target.

Establish fair and more equitable relationships

Most feelings of injustice and demotivation come with a sense of things not being fair – something or someone taking more than their fair share. It is easy to see how these feelings of unjust affect the productivity of individuals and businesses.

Maintaining an emphasis on distributed wealth and control, a key principle within Employee Owned business, appears to create a greater sense of fairness within the business and in-turn can unlock commitment and discretionary effort.

Nurture an ownership mind-set of belonging, accountability and enterprise

The phrase ‘rights and responsibilities’ was heard many times in this session and throughout the conference. Developing an ownership mind-set is far from an easy task, just because someone owns a share, does not make them feel, think or act like an owner.

Creating this mind-set is a leadership task. Installing an effective ‘eureka bath’ requires people to have the right context against which to make suggestions, the encouragement to make suggestions, the encouragement that their ideas will be valued and the belief that something will happen as a result. Leaders must work hard to create:

  • belonging: a sense of commitment to the purpose, values and culture of the business
  • accountability: making ownership relevant to the individual and demonstrating a clear link with their role and how value is created and shared
  • enterprise: a willingness to seek opportunity and improvement.

Ensure consistency of transparency and participation

It is not what you say but what you do. And the more that you do it, the more people believe it. Leaders need to be clear about what is happening in the business. And those in the business, need to be clear about what is happening strategically. Ensuring this consistent two-way flow of information and ensuring people feel participants and co-owners of the process is an essential component of success.

Develop leaders at all levels to sustain the ethos and enable succession

Three words provide the essence of this theme: attract, educate and grow. Recruitment must focus on seeking out those with the right values and mind-set to help a culture of shared ownership to survive and thrive. Continual effort needs to be made to educate people about the benefits of employee ownership, it should never be taken as a given. And finally, people need to be given the opportunity to explore and experience things that are outside of their current role and/or business.
In closing
As we brought the session to an end, three comments provided an apt summary to a discussion that could have lasted the entire two days.

  • “We need to work harder to create the future” – highlighting a need to ensure purpose and ethos remain relevant in a changing world
  • “Don’t be afraid to lead” – even co-owners need leaders
  • “It is not what you say but what you do that counts” – what impact are your leadership actions having in your business?

The insights shared within the discussion are relevant to all, however, the structure of EO businesses does appear to provide fair winds to those leaders willing and able to pay attention to these things.

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