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It takes more than money to foster an ownership culture

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It takes more than money to foster an ownership culture

I-Beam steel construction, on blue sky

Reward structures giving investment professionals a sense of ownership have long been used strategically as incentives to create alignment of objectives and outcomes and promote the long-term retention of talent.

However, in my experience, and as evidenced in more recent thinking, it takes a lot more than money and a stake in a business to sufficiently and sustainably motivate employees to achieve their best on behalf of the business. It is also arguable whether they encourage employees to stay.

In his bestselling book, Drive, Daniel Pink interrogates the belief that the best way to reward people is with money and instead says that true motivation comes from autonomy, mastery and purpose. He points out that if you want individuals who are influenced by intrinsic motivations to flourish they should be given the space to be autonomous and master their crafts, all while experiencing a sense of purpose.

If investment professionals are inherently self-driven and are, as Pink describes, people motivated by autonomy, mastery and purpose, it’s probably time for the investment industry to think long and hard about whether long-term incentives, like a staff share schemes, really encourage peak performance and act as retention mechanisms?

In an article in the Harvard Business Review, James Allen explores what he describes as “the curious downside of an owner’s mindset”, namely, when company’s attempt to align management compensation of public companies with shareholder returns.

Instead, Allen spells out three critical traits, including an owner’s mindset, that he believes need to be fostered if you want to achieve alignment between an employee and the company’s success. The other two include insurgency—”a bold mission, or a sense of being at war with the industry on behalf of underserved customers” and a frontline obsession — “a compulsive interest in every detail about how those customers are served.” 

Without all three of these components, he warns that ownership can have the unintended consequences of encouraging employees to become either bureaucrats or personal wealth maximisers – both of which will not benefit, and could damage, either the company, its clients or other stakeholders. 

Bureaucratic behaviour arises out of employees maximizing the resources under their control in order to achieve personal objectives at the expense of the greater business’s performance. Personal wealth maximisers, in turn, focus on the short term maximisation of their compensation at the expense of the long-term performance of the business.

By rewarding all three of these traits, employees develop a founder’s, rather than owner’s, mindset and become long-term owners “who would never jeopardize customer relationships for short-term revenue or cost-cutting gains, nor would they complacently allow those relationships to stagnate.”

Another commentator who has weighed in on how to create a broader culture of ownership than just material rewards is Scott Lippert, who has identified 10 ways to “create an environment where employees feel a personal stake in how the company performs and do their best work, even when no one is watching.”

These are:

  1. Give employees autonomy to explore – this aligns with Pink’s argument that autonomy is one of the three most important motivating factors for intrinsically driven employees, like investment professionals.
  2. Show them the why of their work – giving employees a purpose to work towards.
  3. Give them a direct connection to the project – Allen says while an overall purpose is crucial, an even more direct and tangible connection is important to ownership, too
  4. Stay generally connected – especially during a time when Covid-19 has disrupted office work routines, Allen emphasises how easy it is to lose touch and how feeling connected to the company’s mission and vision is critical to maintaining an ownership culture.
  5. Encourage opposing opinions – in an investment business like Prescient, where innovative thinking is critical to our success, so is encouraging and empowering employees to have opposing opinions and engage in robust debate.
  6. Encourage leadership to learn – Leaders truly listening to employees motivates them to do their best work – the ultimate goal of fostering an ownership culture.
  7. Teach them to think like an owner – Even though some leaders may fear this will result in them moving onto other opportunities, Allen highlights that “employees will be motivated by the fact that you trust them enough to invest in them.”
  8. Recognise quality and effort – acknowledging successes and the inevitable failures in an innovative business encourages employees to go on to do even greater things.
  9. Share feedback and be transparent – Allen reminds us that honesty, transparency and feedback are the true hallmarks of an ownership culture.
  10. Measure progress – Here, Allen means that metrics should be used as a way for employees “to keep themselves accountable” and on track in achieving their goals.

There’s no doubt that employees all want to be on a winning team and that the truest form of entrepreneurship is when each employee has a piece of the pie. Thus employee share schemes still serve a purpose in getting employee alignment in the business’s future performance, particularly when they believe that the company is going to win. 

However, share ownership is not sufficient and it is the greater sense of purpose – and ability to make an impact within a culture that allows you the freedom to make the most of your skills – that needs to be factored into any business’s efforts to build an ownership – or, even better, a founder’s – culture. DM/BM

Author: Cheree Dyers – Chief Executive Officer at Prescient Investment Management



  • This document is for information purposes only and does not constitute or form part of any offer to issue or sell or any solicitation of any offer to subscribe for or purchase any particular investments. Opinions expressed in this document may be changed without notice at any time after publication. We, therefore, disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable directly or indirectly to the use of or reliance upon the information,
  • Prescient Investment Management (Pty) Ltd is an authorised financial services provider (FSP 612).
  • The value of investments may go up as well as down and past performance is not necessarily a guide to future performance and there are no guarantees.
  • There are risks involved in buying or selling any financial product.



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