Sunday, April 15, 2018

Of owning and belonging

"This is as much my company as it is your company", said the Organization Development (OD) Manager when he was having a courageous conversation with the CEO. While he was being deliberately provocative (safe under the 'Court Jester' immunity that he used to enjoy), what he said was factually correct, While the CEO was two levels higher than the OD Manager in the organization hierarchy, the CEO didn't have any other claim to ownership in the company that the OD Manager didn't have.

I do wonder if the OD Manager would have been able to make the same statement, if he was having this discussion with the head of a partnership firm (where the partner is both the owner and the manager) or if he was having the discussion with the CEO of a family-owned firm (where the CEO owns a large percentage of the shares of the company). In a way, this situation is ironic. The role and the mandate of the OD Manager is the same in all the three scenarios. The only difference is that in the second and third scenarios there is someone else in the organization who has an additional claim to ownership that the OD Manager doesn't have. So the question becomes, just because there is someone else who can say 'My company' in more ways than what you can, does the level of ownership you feel come down?

Let's push this thought experiment a bit more. What if the OD Manager doesn't have any interaction with the CEO and hence there is no way the CEO can convey this message (of having any special ownership claim) directly or indirectly? What if the owner gives up the CEO role and becomes purely an investor but holding the same large percentage of the shares of the company? What if the OD manager is given some shares of the company? Would the risk of the OD Manager feeling less ownership reduce in any of the last three scenarios? Again, if other things remain the same, would there be an impact on the level of  ownership based on whether the company in question is a public limited (listed) company or not?

This brings us to the question of what exactly is this 'ownership'. In business organizations, the phrase 'building ownership and accountability among the employees' is heard very frequently these days. To me, accountability is external (you are held accountable by somebody for something and it is usually reinforced with carrot and stick) whereas ownership is internal (it is something you feel). In a way, the relationship between accountability and ownership is similar to that between change (externally imposed) and transition (internal psychological transition that happens in your mind).

It is  interesting consider if 'ownership is a conscious decision that you take' or if 'ownership is a feeling that somehow develops in your mind'! It is also interesting to think about what exactly is the object of ownership. Is it your job? your team? your function? your organization or  some combination of the above with varying weightages? Yes, the answer can vary for different employees. It can also vary for the same individual across organizations or even within the same organization as one progresses in one's tenure in the organization.

While there can be a difference in opinion on whether ownership is a decision or a feeling, there is agreement on the behavioral manifestation/outcome of ownership. They include taking personal responsibility for the outcomes, going the extra mile, careful use of the resources and even passion for work or the group. These are obviously highly useful to the organization and hence the enormous amount of good press enjoyed by ownership.

In a way, the question of whether your sense of ownership would reduce just because someone else is around who has more claims to ownership is a funny one. It is like asking just because there is someone (nearby or far away) who is more attractive than you, would you feel that you are less attractive as compared what you feel about yourself when you are alone. In another way, this question is not trivial, because the degree of ownership you feel has important implications for your organization (in terms of your productivity on the job) and for yourself (your happiness and satisfaction).

In Economics, this issue of ownership and accountability is represented in terms of the ‘Principal-Agent problem’. The fundamental issue here is the lack of perfect alignment between the interests of the Principal (Owner/Employer) and the Agent (Employee). Hence, the proposed solutions under the ‘economics model’ are in terms of increasing the alignment by mechanisms like profit sharing, employee stock (option) plans, aligning the objectives of the employee to that of the employer through performance management system backed up by close supervision, performance linked incentives and the threat of termination of employment if the employee actions don’t align with what the employer wants. While these have their relevance, they run the risk of (further) shifting the employer-employee relationship to the transaction paradigm away from the relational paradigm and to extrinsic motivation away from intrinsic motivation. In a way, this makes the contents of the psychological contract very close to that of the employment contract and hence makes the degree of ownership essentially a matter of rational (and not emotional) choice! So, when we operate under this economic paradigm, the Organization Citizenship Behavior (employee behavior that is discretionary/not directly linked to the formal reward system, and that in the aggregate promotes the effective functioning of the organization) and/or Extra-role Behavior (behavior beyond the role-expectations that can benefit the organization, including whistle-blowing and principled dissent) might take a back seat!  

Now, let's look at another type of situation where we use the term 'my'. For example, when I say 'Kerala is my state', what I mean is that I belong Kerala (and not that I own Kerala!). So, ownership can also be about belonging. Another example is that of a 'family'. When I say it is 'my family', I mean that I belong to the family. Of course, if this belonging is sort of 'permanent' it is much easier to accomplish. So, I can say that 'it is my company' also in the sense that I belong to this company, especially if I am confident that this company will continue to be my company for the foreseeable future. Of course, I should also feel that there is a deeper connect between me and the company (in the sense of shared purpose and values), that I have a say in the organization, that I can make a significant contribution to the organization and that I am valued.

This also highlights the power and peril of using the 'family' metaphor in the organization context. If  a company uses the family metaphor ('we are all one big family') consistently, it can act as a 'nudge' to the employees to take higher degree of ownership. However, the other associations/assumptions that come with family metaphor (like somewhat unconditional and permanent membership) also gets generated in the minds of the employees. Hence, if the company does a downsizing after that, it would be much more painful (more like a divorce and not just termination of a contract that is economic/transactional in nature) and it is likely to be perceived to be unfair (you don't expect that you will be expelled from your family). 

From the above discussion, it is curious to note that in many of the family owned firms, while there is definitely a risk in creating 'ownership in the sense of possession' (the employees don't own the company and the owner-manager does), it is often compensated by a higher sense of 'ownership in the sense of belonging' (personal connect with the owner and the other employees, long tenures, job security etc.). 

Where does this leave us? This post is meant to facilitate a discussion and it raises more questions than it answers (and may be, there are no standard answers to many of these questions!). We can definitely say that ownership need not be in the sense of 'possession'. It can also be in the sense of belonging. Of course, these are not mutually exclusive and they can reinforce each other. Yes, the employees having a high degree of ownership is becoming increasingly important with taking initiative, creativity and discretionary effort becoming evermore critical for business success.

The sense of ownership is experienced in the context of a relationship and a mental model(or paradigm). There are some important aspects of this relationship like empowerment, trust, continuity of the relationship, managing the psychological contract throughout the tenure of the employees etc. Hence, this relationship needs to be nurtured in an ongoing and consistent manner! While the sense of ownership can be beneficial for both the organization and the employee, it often comes with expectations and attachment (anasakti is not so easy). Hence, appropriate metaphors should be used, with extreme care, to manage the mental models that govern the employment relationship. 

Now, over to you for your comments/ideas!


Ivan Rosario said...

Some food for thought - the concepts of being both an 'employee' and an 'owner' seem contradictory. You have addressed this fleetingly in your article, but this is as much about the degrees of power and control that are attached to an 'employee versus an 'owner'. And applying that rationale, it is foolish to expect an employee to take ownership when they know their time in an organisation is limited by tge power exercised by the man (owner) at thr top.

Prasad Kurian said...

Thank you Ivan. Let me just say that taking the appropriate level of ownership (appropriate degree and appropriate scope depending on the context), is also beneficial to the employee in terms of employee satisfaction and even happiness!