One of our clients recently had a bad experience at a hotel where they were holding a management meeting. To make matters worse, the meeting had been planned by the president of the company, and he was leading it himself. The next day he wrote a “strongly worded” letter to the local general manager of the facility, which is part of a well-known chain. He outlined the transgressions in detail and told the manager that the company would not be doing business with them in the future.
You can draw different lessons and conclusions from that story.
Some might say that the employees just didn’t care, and they should be reprimanded or even fired. I tend to be of the opinion that crap rolls downhill. I’ll wager that if guests and clients at that hotel are being treated with disregard and lack of respect, that’s what employees are experiencing all along the chain of command from the top down.
When people get past the usual finger-pointing and blame-pinning for problems like that, they sometimes step back and realize it’s not an isolated incident. Then management says it’s time to “change the culture.” Before long, they spout the next management bromide about needing to “create an ownership mentality among employees.”
Truth is, you either own something or you don’t.
It’s not a state of mind, and it has nothing to do with feelings. Owners have a unique stake in the outcome of a business. The more money the business makes, the more they get to put into the bank. On the flipside, when times get tough, they’re the ones who take it in the chops. It’s also up to them to take responsibility for getting the business back on track.
That’s not the typical employee compact. Some companies have backed up their “ownership” expectations by creating profit sharing or gain sharing programs for employees that go down to the front line. But it’s still not the same as being an owner. As a practical matter, it’s not always feasible to build employee compensation around a true ownership model. More to the point, though, programs like that aren’t needed in order to get the performance and behavior that actual owners want from employees.
It’s more an issue of respect and responsibility.
The hotel industry is notorious for poor employee treatment and high turnover. A notable exception is Baldrige Award winner, The Ritz-Carlton, whose legendary motto about employees is “We are Ladies and Gentlemen serving Ladies and Gentlemen.” That statement is backed up by the company’s remarkable policy that permits every employee to spend up to $2,000 without approval from their supervisor to make any single guest satisfied. That’s not exactly the same as ownership, but it’s a strong sign of the trust and responsibility that management places in the company’s employees – and their outstanding reputation proves it works.
Still, there is something special about actually being an owner, and some companies operate with employee-owned models that have remarkable impact when done right. A story ran on ABC a few months ago (see video below) about a business owner who was retiring and decided to give the company to his employees instead of selling it. Why? He said it was because he tried to make all of his business decisions based on what was good for employees – not what was going to make him the most money. Of course, that’s indeed what made him money because it turned out to be a place where employees loved to work – and customers loved doing business. Doesn’t get much better than that.
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