New paper reveals how employee ownership changes the art of leadership

Authored by eminent business and management writer, Stefan Stern, the paper is based on a series of interviews with the leaders of ten employee owned businesses. 

Currently turning over a combined £30 billion plus annually, employee owned organisations demonstrate exceptional productivity, performance and employee engagement.

The paper concludes that shared ownership, and what it takes to lead employee shareholders, are the critical ingredient in this sector’s impressive performance. This dynamic is also behind the growing number of business owners considering employee ownership as a succession option on retirement, the paper finds.

Key themes include:

• Where the business owners are also the workers, effective leadership needs to empower and embolden employees, making accountability in employee owned organisations a two-way street.
• Employee responsibility and accountability will drive superior performance. The challenge for the leader is how to create and foster this.
• Employee ownership is not leadership by committee. Leaders should deploy greater transparency and a greater level of consulting and listening, but clear lines need to be drawn between what gets decided by consultation and what is led from the top.
• Engaging employees in financial targets and enabling them to share in profits is a powerful motivator of growth.
• Trusting capable colleagues allows for flexible and speedy decision making.

Peter Cheese, Chief Executive of the Chartered Institute of Personnel Development, said:

“The UK’s continuing poor productivity makes the publication of a new paper about business leadership timely and important. The author of this paper suggests that the consensus on characteristics great leaders share is misplaced, and that employee ownership, an emerging model of leadership, has a lot to teach organisations of every kind.”

Justin Rix, Partner and Head of People Advisory at Grant Thornton UK LLP, said:

“As business advisers, we are seeing more organisations moving towards a culture of employee ownership: empowering people with open communication, transparent decision making and a genuine share in profits. Focussing on the development of managers into high performing leaders and driving a culture of employee ownership is fantastic way to improve organisation performance and deliver the best results.”

Ann Tyler, Chair of Ownership at Work, said:

“This paper shows employee owned firms really are changing what it means to be a good leader by generating remarkable performance coupled with exceptional employee engagement. The key ingredient, the paper confirms, is the ownership stake employees have in the business. With UK productivity still lagging, this paper has huge implications for policy makers.