Employee Ownership Insights

"Our engineers shipped that feature in HOURS, not weeks." That's what a former AWS engineer told me about building their CLI system with almost no product management involvement. While most companies struggle with endless requirements docs and slow feedback loops, his team was responding to customer needs same-day. The difference? They eliminated the barriers between engineers and users. Here are 5 warning signs your product-engineering relationship is fundamentally broken: 🚩 Your engineers have ZERO direct customer contact When developers can't talk to users, they build what they THINK people want, not what they NEED. My most successful teams have engineers who regularly interact with customers. 🚩 Your product team has become a "feature factory" I've seen this countless times - PMs feel they need to justify their existence by constantly shipping new features. This leads to what engineers call "enshittification" - making a product WORSE through over-iteration. 🚩 Engineers wait for spoon-fed requirements If your developers just sit around waiting for detailed PRDs, you're wasting their problem-solving ability. Great engineers have ideas and opinions about what should be built. 🚩 The feedback loop is painfully slow When customer pain → product manager → engineering → solution takes weeks instead of hours, you're killing innovation. The fastest teams cut out these unnecessary layers. 🚩 Engineers have zero creativity or ownership When I hear "the PM didn't prioritize it" as an excuse for not fixing obvious problems, I know the culture is broken. Ownership matters more than process. What actually works? → Engineers talking DIRECTLY to customers → PMs focused on strategy, not micromanagement → Engineers with true ownership → One PM over MULTIPLE teams (forces devs to step up) The secret to those mythical "10x developers" isn't finding unicorns - it's removing the barriers between engineers and users. What other signs have you seen of broken product-engineering relationships?

"An owner never says 'that's not my job.'" When I added these words to the Amazon Ownership leadership principle, I was talking about the mental attitude of taking responsibility for things. There is a second type of ownership at work, actual employee ownership within the company. Real financial ownership is essential if you want to see mental ownership from employees. If you work at a company with good ownership, here is how you can leverage it. If you do not, you may want to move. If you are the founder, realize that one of the best tools to increase your own equity is to share generously with others. Working together to make the pie bigger is a much better strategy than hoarding a small pie to yourself. At Amazon, when I wrote the "not my job" words, all office employees got stock and were thus employee owners. On my second day at the TED Conference, I listened to Pete Stavros, from the private equity firm KKR, talk about how they try to ensure all their portfolio companies provide this second kind of ownership, actual equity in the company, to their employees. Stock ownership is relatively common in Silicon Valley and high tech, although even that is changing somewhat. But Pete's firm invests in companies where it is very uncommon. He gave one example of a company that made overhead garage doors. In that company when they bought it, 18 leaders had equity, but the rest of the 800 employees had nothing. Pete found that 18% of employees in such situations actively "hate" the company they work for. They stay at a job only because they feel they must. How productive can a company be when nearly 1 in 5 workers actually hates the company, and a majority are ambivalent or disengaged? Pete works with the leadership of target companies to give every employee *free* stock ownership, on top of their existing pay, that is targeted to increase their compensation by 20%. They also allocate money for the employees to spend on company improvements. In his example, over time the company used the money to add a nice break room, a cafeteria with healthy food, and a medical clinic to the factory. Some might say, wait, this company was so bad it didn't have a break room or a cafe? Remember, this was a small garage door manufacturer in the US Midwest, not the Google Campus! We in high tech and other wealthy, high education industries can still learn from this example: 1) Ownership reduces turnover 2) Ownership increases engagement 3) Ownership aligns missions (making money together) If you are at a company with a strong real ownership practice, then lean into treating your team and teammates as owners. If you are not at such a company, plan to make your next move to a place with real ownership. And if you are (or want to be) a founder, start thinking now about how to share ownership... *for your own good*. Pete and KKR have shared their model: https://buff.ly/4aVOKMR Readers - are you an owner where you work?

Whether you are attracting, developing or retaining the best talent, the key differentiator is someone to have an ownership mindset, i.e. team members who take initiative, act in the business's best interest, treat challenges as their own. In the #biotechnology & #lifesciences sectors, where projects often involve complex, interdisciplinary collaboration, fostering an ownership mindset is particularly valuable. Team members who proactively address challenges, adapt to evolving scientific landscapes & align their efforts with organizational goals can drive innovation & efficiency. While technical expertise is essential, cultivating an ownership mindset within teams leads to more resilient, adaptable & high-performing organizations. Leaders should prioritize this trait in hiring & team development to achieve sustained success.

What if your company's untapped potential was hiding in plain sight? Employee ownership isn't just a perk. It's a powerful lever for growth. Here's a 5-step framework to transform your team into invested partners: 𝟭. 𝗘𝗾𝘂𝗶𝘁𝘆 𝗘𝗺𝗽𝗼𝘄𝗲𝗿𝗺𝗲𝗻𝘁 - Grant shares. - Create stakeholders. When employees own a piece of the business, their perspective shifts. Suddenly, every decision matters more. 𝟮. 𝗣𝗿𝗼𝗳𝗶𝘁 𝗦𝗵𝗮𝗿𝗶𝗻𝗴 - Link effort to reward. - Directly. Watch motivation grow when success is shared. Clear metrics keep everyone focused on what truly drives growth. 𝟯. 𝗩𝗼𝗶𝗰𝗲 𝗔𝗺𝗽𝗹𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻 - Create channels for input. - Great ideas can come from anywhere. - Are you listening? Balance open dialogue with efficient decision-making. 𝟰. 𝗖𝘂𝗹𝘁𝘂𝗿𝗲 𝗖𝘂𝗹𝘁𝗶𝘃𝗮𝘁𝗶𝗼𝗻 Build an environment where ownership thrives. - Transparency. - Collaboration. - Mutual respect. These aren't just words. They're the foundation of shared success. 𝟱. 𝗦𝗰𝗮𝗹𝗮𝗯𝗹𝗲 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲𝘀 Design for growth from day one. As you expand, keep the ownership spirit alive. What works for 10 must evolve for 100, then 1000. 𝙏𝙝𝙚 𝙙𝙖𝙩𝙖 𝙨𝙥𝙚𝙖𝙠𝙨 𝙫𝙤𝙡𝙪𝙢𝙚𝙨: - 30% lower turnover (NCEO) - 2x faster revenue growth (NCEO) - 72% of employees feel truly empowered (NCEO) Employee ownership isn't just feel-good policy. It's smart business. - It transforms clock-watchers into innovators. - Complainers into problem-solvers. - Bystanders into drivers of change. Your team isn't just your workforce. They're your most valuable asset. Invest in them through ownership, and they'll invest their all in your success. Are you ready to unlock your company's full potential? The key might already be in your employees' hands. What's your experience with employee ownership? Have you thought about it? If so, has it changed your workplace?

How Texas Roadhouse turns managers into owners and why it fuels profits and loyalty 𝗚𝗲𝗻𝗲𝗿𝗮𝗹 𝗠𝗮𝗻𝗮𝗴𝗲𝗿𝘀 𝗶𝗻𝘃𝗲𝘀𝘁 $𝟮𝟱𝗞 (loan forgivable after 5 yrs), so they can earn $𝟰𝟱𝗞 𝗯𝗮𝘀𝗲 & 𝟭𝟬% 𝗼𝗳 𝗻𝗲𝘁 𝗽𝗿𝗼𝗳𝗶𝘁 With the average net profit being $663,000, on average, 𝘁𝗵𝗲𝘆 𝗲𝗮𝗿𝗻 𝗼𝘃𝗲𝗿 $𝟭𝟬𝟬𝗞 𝗮𝗻𝗻𝘂𝗮𝗹𝗹𝘆. The psychology backs up this “skin in the game” model.  𝗔 𝗺𝗲𝘁𝗮-𝗮𝗻𝗮𝗹𝘆𝘀𝗶𝘀 𝗼𝗳 𝟭𝟬𝟮 𝘀𝗮𝗺𝗽𝗹𝗲𝘀 (𝗰𝗼𝘃𝗲𝗿𝗶𝗻𝗴 𝗻𝗲𝗮𝗿𝗹𝘆 𝟱𝟳,𝟬𝟬𝟬 𝗳𝗶𝗿𝗺𝘀) 𝘀𝗵𝗼𝘄𝗲𝗱 𝘁𝗵𝗮𝘁 𝗴𝗶𝘃𝗶𝗻𝗴 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀 𝗼𝘄𝗻𝗲𝗿𝘀𝗵𝗶𝗽 𝗿𝗲𝘀𝘂𝗹𝘁𝘀 𝗶𝗻: 1. Higher productivity & performance 2. Greater motivation & effort 3. Improved stability & survival 4. Enhanced pay & wealth The same model applies to Market Partners — one level above GMs. 𝗧𝗵𝗲𝘆 𝗶𝗻𝘃𝗲𝘀𝘁 $𝟱𝟬–𝟭𝟮𝟬𝗞 𝗮𝗻𝗱 𝗰𝗼𝗹𝗹𝗲𝗰𝘁 𝗮 𝟳–𝟵% 𝗽𝗿𝗼𝗳𝗶𝘁 𝘀𝗵𝗮𝗿𝗲 𝗮𝗰𝗿𝗼𝘀𝘀 𝟭𝟬–𝟭𝟱 𝘂𝗻𝗶𝘁𝘀. 𝗛𝗼𝘄 𝗧𝗵𝗶𝘀 𝗖𝗼𝗺𝗽𝗮𝗿𝗲𝘀: Most peers cap bonuses at 10–20% of salary. Today, Texas Roadhouse spans 792 restaurants across 49 states, one U.S. territory, and 10 countries. 𝗦𝗶𝗻𝗰𝗲 𝟮𝟬𝟬𝟰, 𝗧𝗫𝗥𝗛 𝘀𝘁𝗼𝗰𝗸 𝗶𝘀 𝘂𝗽 𝟭,𝟱𝟱𝟮% 🚀 Could this be the future of hospitality leadership? Source: Douglas Kruse (2024), “Does employee ownership improve performance?”, IZA World of Labour.

Last year, I visited Minnesota-based Room & Board, which had recently transitioned to something called an ESOP (Employee Stock Ownership Plan); the furniture maker is now 100% owned by its employees. Not many companies have tried to make an ESOP work. But the structure deserves more attention and consideration than it’s getting. An ESOP can give employees a true stake in a company’s success, which yields more than warm, fuzzy feelings — it can lead to increased productivity and dramatically lower turnover. And if their efforts help the business thrive, it can put significant returns into employees’ pockets. (Just ask the so-called Publix Millionaires famously minted by the grocery chain’s ESOP.) Turning employees into shareholders also has the potential to chip away at the growing US wealth gap. Over the last 50 odd years, the top 0.01% has grown its wealth nearly six times as fast as the bottom 50%. One of biggest drivers of this disparity is the fact that some 40% of Americans own no stock. Most companies perpetuate the problem by granting stock only to those at the very top of the org chart; at an ESOP, all employees get shares in the company. Here's my deep dive into Room & Board and ESOPs for Bloomberg Opinion. https://lnkd.in/ePfXpkYz

There are two stats that really surprised me when I started getting into the employee ownership buyout space: First, according to a report from Morgan Stanley, a business subject to a private equity buyout is roughly 10x more likely to file for bankruptcy within a decade relative to a comparable company. Second, privately owned companies with employee ownership plans have a 50% LOWER risk of bankruptcy or closure in the same period compared to non-employee owned firms (Employee Ownership Foundation). These two stats taken together blew my mind. We work with business owners every day who are choosing employee ownership because it is right for them and it is right for their company, but the reality is that it is also better for all of us. Great products, great customer service and great jobs all sit on top of a foundation of great companies that are built to last. And as it turns out, when it comes to the question of what makes a business built to last – ownership matters. Over the next decade millions of small businesses are going to transition ownership, and looking at these two stats, it’s not hard to conclude that how and to whom these businesses sell represent two very different futures for our economy. At Common Trust our mission is to make employee ownership the exit of choice for small businesses across America. We think employee ownership is better for owners, better for workers and better for our communities -- and as it turns out, it may also be one of the best things we can do to build a long term small business economy.

🏭 What happens when heartland entrepreneurs become employee-owners? The results are transforming American communities. I'm incredibly proud to highlight the exceptional work of my colleague Margot Brandenburg at Ford Foundation, whose strategic investments in America's heartland are proving that when workers build wealth—not just wages—entire communities prosper. The challenge: Over half of U.S. business owners are aged 55+. When these founders retire, too many businesses leave town, taking jobs and prosperity with them. Margot's solution: Strategic partnerships supporting employee ownership, a time-tested American approach where workers become stakeholders in the companies they build. The impact is remarkable. → Employee-owned companies are about 50% less likely to disappear than traditional firms  → 3-4x better employee retention during the COVID-19 pandemic  → Workers achieve 92% higher median household net worth through ownership  → Independent businesses return 3x more money to their local communities From Bentonville's Gnargo Bike Co. transforming abandoned steel bikes into custom e-bikes, to Iowa manufacturers staying local through employee buyouts, Margot's work embodies the best of American entrepreneurship. This isn't about changing capitalism—it's about strengthening it. When every worker has skin in the game, businesses thrive, communities grow stronger, and the American dream becomes accessible to more families. Employee ownership represents free enterprise at its finest. Rewarding hard work with real ownership, keeping successful businesses rooted in their communities, and creating Main Street prosperity that lasts generations. Margot's energy, dedication, and strategic vision exemplify Ford Foundation's commitment to building opportunity for all Americans. Her catalytic investments are drawing other funders and investors to support this proven model across the heartland and beyond. The results speak for themselves: stronger businesses, wealthier workers, and more resilient communities. This is how we build an economy that works for everyone who's willing to work hard and contribute. Join me in celebrating Margot's exemplary leadership in strengthening America's economic foundation—one employee-owned business at a time. What would change if more American workers owned the companies they help build? Share your thoughts below 👇 https://bit.ly/44ieEde #EmployeeOwnership #AmericanManufacturing #HeartlandInnovation #MainStreetEconomy #CommunityInvestment

Rethinking Requirements in Hardware Engineering Requirements management isn’t just about checklists—it’s the difference between effective collaboration and costly missteps. Here are once-unconventional approaches to requirements now embraced by top teams 1. From “Requirements” to “Design Criteria” Early systems engineers were part engineer, part lawyer. Someone had to create “techno-legal documents” to manage external contracts. These evolved into requirements. Many cultural issues stem from using requirements incorrectly–as a weapon rather than tool for collaboration. Not all requirements need to be treated as commandments. Reframing lower-level requirements as design criteria reduces resistance among engineers, empowering them to see requirements as flexible guidelines open to questioning and adjustment. This is what you want to inspire. 2. Culture of Ownership and Accountability Drives Agility A strong requirements culture is built when engineers “own” their work. Engineers must take responsibility for the requirements they design against, creating a culture of ownership, responsibility, and systems-mindedness. Assigning a clear, single-point owner for each requirement, even across domains, encourages each engineer to think critically about their area’s requirements, establishing ownership and trust in the process. Encouraging information flow between teams helps engineers see how their work impacts others, leads to reduced and stronger system integration. Requirements should be viewed as evolving assets, not static documents. You want engineers to push back on requirements and eliminate unnecessary systems rather than add more requirements, complexity, or systems. 3. Requirements as Conversations, Not Just Checklists Requirements aren’t just specs or checklists—they’re starting points for cross-functional discussions. Every problem is a systems problem, and to solve complex challenges, engineers must be systems thinkers first and domain experts second. In traditional settings, requirements stay isolated in documents. But when teams understand why requirements exist, where they come from, and who owns them—and engage in continuous dialogue—they blur the lines between domains and foster a systems-oriented mindset. This collaborative environment accelerates problem-solving, enabling engineers to align quickly and tackle challenges together. Instead of siloed requirements for each subsystem, drawing dotted lines and encouraging information flow between teams helps engineers understand how their work affects others. This cross-functional awareness leads to fewer misalignments and stronger system integration. When you see engineers make sacrifices in their own area to benefit the overall system, you know you are on the right track. There you have it. The full guide goes into specifics on how to start implementing these ideas in tools.

My latest in Forbes summarizes the recent The Aspen Institute conference on employee ownership, explaining how it could be a double-dividend that counters income inequality and encourages upskilling. 🔍 📈 AI and Growing Income Inequality: A recent Gallup poll indicates a growing unease among Americans regarding AI's impact on employment, with 22% expressing concern in 2023, up from 13% in 2017. And much of these concerns are driven by the polarization we've seen take place in the labor market - the thinning of the middle class. But AI has the potential to generate different effects from automation. “You can think of automation as a machine that takes a job’s inputs and does it for the worker,” whereas “you can think of augmentation as a technology that increases the variety of things that people can do, the quality of things people can do, or their productivity,” David Autor explained to me. Upskilling remains a critical strategy for workers aiming to adapt to rapid technological changes. However, widespread low employee engagement levels pose a significant hurdle to this necessary evolution. Without the desire and drive to develop new skills, many workers may find themselves sidelined in the evolving economy. 🌟 Employee Ownership as a Catalyst: One innovative solution that's gaining bipartisan support is employee ownership. This approach not only boosts engagement by giving workers a stake in their company's success but also helps mitigate income disparities by aligning personal growth with organizational achievements. It is also one of few bipartisan topics in Washington. “Employee share ownership naturally interests conservatives who believe that more broad-based property ownership is good for democracy and naturally interests liberals who like the idea of more inclusive participation in the economy,” said Joseph Blasi. "The Employee Ownership Ideas Forum was an opportunity to bring together experts to highlight and explore what a more supportive policy environment could be, and what that would mean for expanding employee share ownership in the US... One of our priorities at this year's forum was to examine and celebrate some of the developments in state policy that we have seen in recent years," said Matt Helmer. 🔄 Evidence from StoneAge Waterblast Tools: StoneAge is a 100% ESOP owned company. “Our employee owners are here for more than a paycheck; they feel deeply responsible for the health and performance of the company because when the company does well, so do they... Because our employee owners are invested in the long term success of the company, they actively seek growth opportunities and are excited about learning new skills,” Kerry Siggins continued. Link in comments - read for more! #FutureOfWork #ArtificialIntelligence #IncomeInequality #EmployeeOwnership #Upskilling #EconomicGrowth