Successful firms should treat managers like 'virtual owners'.
Proven managers appreciate this fact too, and, as a consequence, many are putting a higher price on the unique contributions they can make. Importantly, cash compensation and monetary benefits are not their only motivations. Managers know that in order to be successful--and to achieve personal fulfillment--they must share in the kinds of policy formulation and Decision-making that traditionally were the exclusive province of the owners of the enterprise.
As a result, managers worth their salt are demanding a place at the owner's table from the time policy is made to the point that the rewards are divvied up. Their demands are being met too. The prevailing tight labor market has given present-day talent-sellers a distinct advantage.
But even if this were not the case, business owners should be delighted to share their power and position with managers. In today's change-a-minute world opportunities come and go at warp speed, make-or-break challenges are ever-present, and competition is relentless. Therefore, companies need the best and brightest talent available. To attract it and retain it they must be willing to introduce some significant changes into the work environment and personal motivation they provide. The highest and best use of management talent will be achieved only if the provider of that talent enjoys the participation, perks and passion of ownership.
In a start-up venture, one just has to hang up a shingle to acquire ownership status. But in a larger, established company that depends on the services of salaried managers; the process of acquiring standing akin to ownership is a bit more challenging.
"Virtual Ownership: The Ultimate Energizer," a program offered by the Center for Business Ownership Inc., shows both the "givers" and "receivers" of ownership entitlements just what is required in order to reap the benefits of shared ownership.
The center contends that an enterprise must provide its managers--its virtual owners--with:
* Access to all of the financial and operating information that is critical to effective policy formulation and decision-making.
* A worthwhile mission that challenges managers' abilities. This mandate must make sense to both the firm and the managers who are expected to implement it.
* An opportunity to participate in the formulation of the strategies and goals that define that mission. Managers must become owners of the purpose they are pursuing. If they are there at the creation, and if the mission they produce reflects their personal insights and ambitions, they will be self-driven to deliver the desired outcomes.
* License to continually and aggressively seek and exploit new revenue streams to fuel the firm in the future. Since tomorrow's products are today's visions, managers must have the encouragement to forge and pursue those visions. They must also be allowed to assume and "own" the risk too.
* The resources--especially knowledge and technology--that are necessary to do the job.
* The right to eschew traditional lockstep planning in favor of pathfinding--or serendipitous opportunity exploitation--in the pursuit of tactical, short-term objectives. For a motivated, able and nimble manager, goals and guidelines are all that is needed.
* The right to grant opportunity and independence to energetic, innovative, and sometimes eccentric followers through mission contracts that convey broad delegation of authority and responsibility. Managers must be allowed to truly empower their employees to do what they want to do, not what the person who conveys the power wants them to do.
* Permission to mobilize into team-units or other types of organizational components that are part of a fluid flexible structure that facilitates communication, decision-making, proactive implementation, and rapid response to opportunity.
* Economic rewards commensurate with achievement. A piece of the action is essential for an individual who is expected to perform entrepreneurially. While the monetary payoffs of "ownership" can take many forms, they must transcend those afforded by traditional salary and benefit packages. They can take the form of actual equity' entitlements like stock awards, stock options or ESOPs, or virtual equity participation such as phantom stock, shared appreciation rights or profit sharing.
Shared ownership is a tall, but essential order. The success of an enterprise will be a direct result of the entrepreneurial talents of managers who feel like they own the joint.
Paul Willax is a professor of entrepreneurship and chairman of the Center for Business Ownership Inc, Amherst, N.Y. If you have a question or suggestion for his column or to receive a free, weekly e-mail newsletter, "Brass Tacks Brainfood," or Brass Tacks BrainFoodToGo audio PODDZ that can be listened to on computer, iPod or MP3 portable audio players, write to Willax@TheBrassTacks.com.
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|Title Annotation:||BRASS TACKS|
|Author:||Willax, Paul A.|
|Publication:||New Hampshire Business Review|
|Date:||Oct 12, 2007|
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