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Leadership in Employee Owned Companies – The 4 Ps

Leadership in employee owned companies is different. Or is it?

I would argue that there’s certainly more of an expectation that leadership will be good but what is good leadership? You’ve no doubt heard of the Marketing Mix which involves 4Ps. I would suggest that there are also 4Ps of Leadership that current and future leaders of EO companies need to concentrate on;

  • Purpose
  • Participation
  • People
  • Potential

PURPOSE

Having a clear sense of purpose can be transformative in terms of increasing enthusiasm, intrinsic motivation and resilience. It also has amazing health benefits. Indeed a 1% improvement in one’s sense of purpose will substantially reduce the risk of you dying over the next decade. So its certainly worth considering!

Leaders need to help their people understand the purpose of the company and also help them experience a personal sense of purpose in terms of their role – understanding how what they do helps achieve the overall purpose. Basically, they need to move employees from thinking about howthey do their job to whythey do their job.

Simon Sinek puts forward this idea of “Start with Why” in his book of the same name and his  YouTube video is worth watching.

The CIPD have recently published a report on Purposeful Leadershipand its importance in terms of winning hearts and minds in the workplace. People are looking for leaders who care not just about themselves but wider society, who have strong morals and ethics and who behave with purpose.

Note that this focus on purpose needs to be authentic. You need to genuinely believe in what the organisation is trying to do because that’s the only way that you’ll take others with you.

Is purpose clearly defined for your company and do those who work there understand the purpose and how they contribute to it?

PARTICIPATION 

A key focus for a leader within an employee owned company should be on building a participative workforce.

Participatory Leadership encourages the involvement of stakeholders at all levels of an organisation in the analysis of problems, development of strategies, and implementation of solutions. This is basically tapping into the collective intelligence within the company.

Often the only means of employees putting forward their thoughts is through a Suggestion Box but this often fails miserably. People will only contribute if they feel that their ideas are being considered seriously and there is a possibility of them being implemented. Too often people put forward suggestions and then hear nothing. If you do want to implement a Suggestion Box scheme then here’s an example of a marketing agency who have a great process for dealing with employees’ ideas.

Perhaps rather than simply asking for ideas, employees should take responsibility for developing proposals where they have to quantify the cost of implementing an idea and the expected benefit that this will bring. Leaders would then need to provide feedback and explain why a proposal is or isn’t going to be taken forward.

Another great way of building a participatory organisation is just through active listening. Recognise that as a leader you’re not an expert in everything and often those at on the front line have the best ideas. So, spend as much time as possible with these employees whether you are going on a walkabout or inviting small groups of employees to be involved in discussions. 

I highly recommend reading the book Humble Inquiry; The Gentle Art of Asking rather than Telling. The author, Ed Schein defines Humble Inquiry as “the fine art of drawing someone out and of asking questions to which you do not know the answer”.

A final consideration is decision making. Do the people who are affected by a certain decision have input into that decision? There are some more radical organisations that allow anyone to make a decision provided they consult with those who have expertise as far as the decision is concerned and those who are affected by the decision!

If people believe that they have more control and autonomy over their work, then they will perform better.

Do employee owners in your company just do what they’re told or are there opportunities for them to participate in the running of the company?

PEOPLE

Building great relationships is the foundation for great leadership and the focus for leaders of employee owned companies should absolutely be on the people because they are the owners of the company.

Ken Blanchard the author of “The One Minute Manager” has recently written a book called Servant Leadership in Actionin which he talks about a shift from leadership that is self-focused to one that is others-focused.

Servant Leadershipis particularly appropriate for employee owned companies- A servant-leader focuses primarily on the growth and well-being of people and the communities to which they belong. While traditional leadership generally involves the accumulation and exercise of power by one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible.

I like Ken Blanchard’s explanation of this type of leadership. He says that there are two aspects of servant leadership. The leadership aspect is about vision, direction and goals and its your responsibility to make sure that these are clear. The servant aspect is that you basically work for your people which should absolutely be the case in employee owned companies. 

Other writers such as Dan Cable call this  Humble Leadership. He suggests three ways in which you can start practising this type of leadership;

  • Ask how you can help employees do their own jobs better — then listen
  • Create low-risk spaces for employees to think of new ideas
  • Be humble

Robert Greiner suggests the following 5 qualities of people focused leaders;

  • Encourage others
  • Appreciate others
  • Forgive others
  • Listen to others
  • Understand others

Do you have great relationships with those who report to you? When was the last time you spent time with employees on an individual basis to find out a little more about what’s important to them? Do you focus on the well-being, growth and development of those who report to you?

POTENTIAL

The final P is all about enabling potential.  The best leaders are those that can identify and appreciate the differences that someone brings to the table and knows how to put them to full use. These leaders are emotionally intelligent enough to connect the dots and the opportunities within each dot to enable the full potential in each of their employees.

Employee owned companies should have a learning culture and provide opportunities for the people who work there to flourish.

Strengths

Too often we focus on what employees don’t do well and train them in these areas when what we should really do is try to uncover their natural talents and enable them to be even better at these!

Leaders should focus on the strengths and passions of individuals. Employee engagement will increase if managers focus on people’s strengths.

Tools such as StrengthsFInderand  Strengths Profilecan assist you to uncover these strengths.

Coaching 

Leader should encourage coaching throughout the organisation to help people improve their performance. They should essentially be helping people to learn. Many leaders however don’t really understand what coaching is or how to do this – its not providing people with advice or a solution!

Experimentation 

People will only reach their potential if they are encouraged to experiment and they have a “safe zone” in which they can try and fail. Ideas should be encouraged and if they are tested and fail then its just an opportunity for reflection and a chance to test something else.

Job Descriptions

Finally, if leaders are serious about enabling people to reach their full potential then they need to allow people to work out with their job descriptions or indeed not to have a job description at all. Again, this is all about encouraging freedom and creativity.

Are the people who work in your company able to reach their potential? What do you need to do to ensure that they can fully develop and put their strengths to use? How can you ensure your organisation is a learning one?

Hopefully this article has made you think about how you and your organisation can become more purposeful, participative, people focused and potential enabling.

If you’re interested in finding out more about this and having opportunity to discuss the 4Ps with fellow leaders then why not contact us. The 4Ps will also be a focus of the workshop on Developing the Next Generation of Leaders at the EOA Annual Conferencein November.