Think Like an Owner, Part II: Cultivating an Ownership Mindset at Scale 

As business cycles continually speed up, the recipe for longevity is becoming a premium. Their unique traits are worth exploring for any business owner or manager who wants to create a legacy. 

As businesses grow, their original purpose and values often become diluted. Often the founding vision can get lost in the shuffle of daily operations and changing of the tides. But long-lasting family firms have a unique advantage. They instill a sense of entrepreneurial purpose in their family successors from a young age.

This deep understanding of the family legacy and tradition ensures that the founding purpose remains relevant and guides future decisions.

Family descendants who inherit the business learn how to be effective owners by matching their relevant experiences to the assets in which they decide to invest in, governing the balance between personal-family and business goals, and mobilizing resources in response to emerging opportunities and threats. By deploying their ownership competencies, namely matching, governing and mobilizing, successful family owners can combine prudent and bold responses to environmental jolts, inject family resources into the firm to face environmental scarcity or rivalry, and use legacy as a lever for inertia-defying strategic change. 

By instilling a sense of purpose, and nurturing ownership mindset, businesses can create a legacy creating benefits that are not only numerous, but tangible.  

• Improved employee engagement. When employees feel a sense of ownership and understand how their work contributes to the overall success of the company, they are more likely to be motivated, engaged, and committed to their jobs. This translates into higher levels of productivity, job satisfaction, and retention rates. According to a recent study² by Gallup, highly engaged teams show a 17% increase in productivity and a 21% increase in profitability compared to disengaged teams, while also experiencing a 59% lower turnover rate. Employees are as well 52% more likely to feel fulfilled when there’s a clear sense of Purpose³. 
• Increased innovation. An ownership mindset encourages employees to think creatively and take smarter risks. When employees feel empowered to make decisions, they are more likely to generate new ideas and approaches that can lead to innovation and growth for the company. According to 49% of leaders, Clear Purpose is one of the crucial success factors for a successful transformation, particularly when Purpose, Strategy, and Culture are in harmony. This assertion is supported by the fact that among companies that have displayed sustained performance improvement following a transformation, 96% have consistently aligned these three elements⁴. 
• Long-term sustainability. When leaders and managers feel a sense of ownership over an organization’s success, they are more likely to take a long-term view of the company’s goals and strategies. This can help the company stay focused on its mission and values, while making decisions that are in the best interests of the company’s long-term success. Research⁵ conducted by BCG highlights the correlation between purposeful organizations and their propensity for achieving long-term success in transformative endeavors. The study categorizes companies into four clusters based on their levels of Purpose and Performance, revealing insights on the degree of success in these transformations. Notably, 56% of companies fall within the category of high Purpose and high Performance, establishing a clear connection between the two. 

To embrace an ownership mindset, one should look at those remarkable individuals who founded the business in the first place, and even more, those who came after them. The tradition of growing a family business and legacy over generations shows that ownership competences can be learned, developed, and refined over time, leading to a continuous improvement in performance. Embracing ownerships requires two key actions to create success.

• Empowerment: Companies need to promote a culture of accountability and empowerment that encourages managers and employees to take initiative and assume responsibility for achieving desired results. This requires a fundamental shift in the way people think and behave by focusing on delivering value and taking ownership of the business or project. In today’s business world, Employee Value Proposition is growing in focus as companies increasingly compete for talent. As companies embrace EVP, embedding empowerment and accountability is key.  
• Training: Individuals need to develop a variety of skills that enable them to solve problems, make decisions, communicate effectively, collaborate with others, and lead teams. These ownership competences are essential for success in any business, and they can be learned and developed with the right training, coaching, and support.

Does your organization embody an ownership mindset? 

It is essential for CEOs and business owners to recognize that an ownership mindset is not just a personal trait, but a set of competencies that can be developed and refined over time. By investing in training and development programs that promote ownership competencies and behaviors, as well as creating a culture that supports and rewards them, companies can foster an ownership mindset throughout the organization. 

To achieve this, companies can take actionable steps by fostering a sense of purpose and alignment, empower employees to take ownership, develop ownership competencies, and implement governance structures to measure and evaluate performance.  

Step 1 | Define the purpose and vision of the organization. 

To foster an ownership mindset within the company, defining the purpose of the organization is a crucial first step. Purpose is timeless and it’s the sole reason why an organization exists. It serves as a compass for decision making across culture, strategy, and branding, and provides direction and meaning for employees through a stronger culture, talent investment, cohesive strategic direction, and the collective power of the company. 

To get started business leaders should ask themselves the following questions: 

• How does the company’s purpose align with its founders’ beliefs and values? 
  This will help ensure that the company’s purpose is authentic and reflects the values of its founders. It will also create a sense of ownership among employees, as they will be more likely feel invested in a company that aligns with their own personal beliefs and values. 
• To what extent is the company’s purpose communicated and understood by everyone in the organization? 
  Clear communication is essential for creating a sense of ownership among employees. When everyone understands the company’s purpose, they are more likely to feel a sense of ownership and be motivated to contribute to the company’s success. 
• How is the company’s purpose integrated into decision-making processes and strategies? 
  Incorporating the company’s purpose into decision-making processes and strategies is not enough to survive on its own. As soon as leaders start embodying and championing purpose, it’s time to transform the entire organization’s culture, strategy, and branding through a purpose-driven lens. Purpose should be implemented by fully integrating it into ways of working, enabling employees to become more emotionally connected and to feel a deeper sense of meaning in their work.” 

Step 2 | Assess ownership mindset in the organization by evaluating how well your employees embody ownership-driven behaviors.

Behaviors should build from the target ownership culture that will work for the organization. Taking calculated risks will be different depending on the industry and the size of the organization, but the underlying behavior should be the same. Subsequently, behaviors should be integrated into recruiting, training, and performance evaluation to create a consistent experience which unlocks power.

Examples of behaviors include: 

• Accepting responsibility for outcomes and decisions 
• Taking calculated risks towards a shared and unifying purpose 
• Maximizing value creation by selecting, motivating, and monitoring management teams 
• Designing governance structures for effective decision-making and communication 
• Develop and maintain a succession plan for the next generation 

Step 3 | Align your stakeholders to your Purpose and set a shared Vision for the next 5-10 years 

Family companies can perform with a long-term mindset because the family is often running many layers of an organization. For organizations with diverse stakeholders, aligning on the shared sense of Purpose, and using that to define a shared long-term Vision is critical to being able to think like an owner.  

Key topics that a management team and board should be align on include:  

• Identifying valuable resource configurations that align with the organization’s purpose 
• Demonstrating an appropriate attitude toward risk-bearing 
• Selecting managers who can maximize value creation 
• Setting the appropriate incentives for maximizing value creation 
• Timing investments in resources for maximized value creation 
• Assessing whether the organization is still the best owner and adjusting as necessary