Before the Documents: How to explore Employee Ownership for Your Business?
When Kiwi business owners first start looking into Employee Ownership (EO), it is incredibly easy to get bogged down in the legal documents. You find yourself staring at legal jargon, tax, and complexity before you’ve even had a chance to breathe.
But before you jump into the paperwork, take a step back and explore why you are looking at EO. Employee ownership isn’t a one-size-fits-all, off-the-shelf product; it takes many different shapes and forms. To find the path that actually fits your business, you need to start with curiosity.
1. Be Inquisitive First
Give yourself permission to just learn for a bit. Before deciding what your EO scheme will look like, educate yourself on the broad spectrum of options available.
Look into different types of schemes and, crucially, focus on the practical elements of operating them day-to-day. For instance, how a voting share model may affect how decisions are made in your business. Or how a EO trust framework would handle profit distribution and share transfers. Reflect on short-term and longer-term practicalities.
Understanding the operational realities early on ensures you don’t build a beautiful theoretical model but that you have a clear understanding of the practical realities, and whether this align with what you want.
2. Lean on Peer Experiences
You don’t have to figure this out in a vacuum. One of the best ways to explore and learn about EO is from the community of business owners who have already taken the leap.
Reach out to peers who have established an existing scheme. Business leaders are often incredibly generous and happy to share their experiences with trusted colleagues.
Explore what worked for them – what are the outcomes they have seen. What caught them by surprise. What would they do differently if they started again today. And how sustainable there model is looking to the future. Learning from their lived experience is worth a dozen textbook case studies.
3. Align Drivers and Motivations
An EO scheme only works if it aligns and motivates everyone involved. Take the time to work through what is genuinely important to the stakeholders of your business, and what will matter to them in the short and long term.
This means exploring both the commercial and the personal career/life ambitions of key people in your business – the underlying drivers and motivations of your people and key stakeholders.
4. Weave EO into Your DNA
Your EO model shouldn’t feel like a bolt-on financial benefit to reward key people in your business. Rather your EO model should be an integral element of the design of your business; woven into what is important to you, what you want to see in the future and fundamentally driving the culture of your company.
Articulate clear, strategic aims and objectives for your EO scheme that tie it back to the core purpose and vision of your company. When your EO scheme is framed in this context it becomes part of your cultural identity and a powerful catalyst to fuel your company growth and success.
5. Assess the Model Fit
Once you are clear on your aims, objectives and your team’s motivations, you are then in a position to assess the respective merits, benefits, and implications of the different forms of EO models.
Broadly speaking, you’ll be weighing up direct share ownership models against collective share trust models. Each carries its own distinct legal, financial, and cultural implications. By holding these different models up against your specific aims and objectives the right strategic and operational fit will become clear.
How we help
Navigating the early stages of employee ownership is all about asking the right questions. At Owners Voice, we help you unpack these conversations, facilitate the essential alignment of your team, and design a model that fits your company’s unique DNA.
If you’re ready to explore what employee ownership could look like for your business, let’s start a conversation today.
