Whether you’re a small business owner, managing a team within an organization, or leading a large corporation, getting the most out of your people is critical to success. We all dream of employees who are just as passionate about helping a company thrive as the owner, but that passion is difficult to cultivate. If we treat competitive salaries and benefits as table stakes, we’re left seeking other ways to differentiate our companies, and retain and motivate our teams.
The benefits of an engaged and motivated team are countless. Employees who find joy in their work go the extra mile, sharing great ideas and doing their utmost to help the company.
At Riverside, some of our portfolio companies have participated in a program called Ownership Works, a nonprofit organization designed to expand shared ownership to create financial opportunity for all employees, while cultivating stronger cultures to build higher performing businesses in the process. As a founding partner of Ownership Works, Riverside is excited that our first participant has already delivered remarkable results.
PFB Corporation makes energy-efficient insulation products for commercial and residential buildings. Riverside sold the majority of PFB this year after an investment period of just over three years. Because it was a new initiative, we had only implemented Ownership Works early last year, nine months before the sale. But during that small window of time, the Ownership Works program contributed meaningfully, and the sale in turn provided meaningful financial rewards to PFB’s employees. And when tracking some key performance indicators, we saw that those employees really earned the value they received from their PFB equity, generating:
- A 75 percent improvement in PFB’s safety record.
- A 50 percent decline in absenteeism, from 10 to 5 percent.
- Considerable cost-savings and innovations generated by PFB employees.
Broad-based employee ownership may take different forms at different businesses, but the core principles are the same: to create alignment among team members, management and investors through improved transparency, open (and regular) communication, a shared sense of purpose, and company-wide participation in the economic value created and delivered in the business. Here are a few other ways to build employee loyalty, reward great staff and drive value:
- Recognize employees’ achievements. This can be in the form of salary and bonuses, but public recognition — whether it’s formal or a simple “thank you” — can go a long way.
- Prioritize communication and transparency. Share where your organization is, good and bad, and your vision for where it’s going. People want to “be on the bus” when they know the destination.
- Help team members find the “why” in their work. Martin Luther King, Jr. put it this way: “No work is insignificant. All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.”
- Connect each job to the overall objectives of the company. This helps each employee understand the importance of his or her role and how it helps the organization succeed.
- Empower team members to share ideas and participate in decision-making when it comes to their specific roles.
- Lead by example, with a servant mentality. Invest in getting to know your key leaders; they will likely do the same with their teams.
The idea is to create an environment in which employees can flourish. And ideally, part of that flourishing includes participating in the financial reward alongside owners. ●
Sean Ozbolt is a Managing Partner at The Riverside Co.
