Setting the flywheel in motion, Creating an ambidextrous employee ownership company. Part one

It happened to a friend. It was the middle of the night (corporately speaking), sometime around Christmas and New Year’s.?In a series of town hall meetings held over several days everything changed for 1700 people, or perhaps for them nothing changed.?The hasty meetings were created to socialize to the company employees the selling of the corporation to a larger one (a merger for my friend, an acquisition for them).?Some of the employees had been with the company for years and weren’t even aware a sale was imminent; this was likely many peoples first notice.?The purchase price was 112 million dollars.?Overnight the company size went from 1700 employees to over 12 thousand and from a 180-million-dollar company to a 1.6 billion dollar one, incredibly great news, right? ?That would depend on whether you were the CEO and a few senior staff or an employee.?It happened so quickly for my friend, the emotions they felt were a mixture of surprise, excitement, and nervousness, but mostly excitement.?It wasn’t long however that their excitement turned to disillusion as they realized that the notification was little more than formality, it really wasn’t about them or their coworkers.?This organizational story is not unusual, as a matter of fact it’s so commonplace it’s practically blasé, to the point that we wouldn’t think it strange. ?We even have language for explaining and justifying such occurrences, “Its only business.”?Were any crimes committed in this story, any legal wrong doings? Absolutely not.?But it felt like a transgression none the less.?My friend and their coworkers had no warning, no say in the matter, and no share in the transaction, unless you count a dubious promise of continued employment as a share of the windfall.?They left the meeting feeling helpless, deflated, and anxious about the future. ?If there was a crime committed, then perhaps it was a crime against humanity.?One in which people didn’t consider the dispositions of their fellow teammates.?People whose associations benefited them and enabled their success, people with dreams, aspirations, hopes and feelings like theirs. ?What became of my friend and the company they invested years of effort into??They attended two of the town hall meetings, carefully listening to their leaders for clues about the future, and for reassurance.?Instead, they heard the CEO anthropomorphize the company as a living thing and objectify the employees as commodities.?There were no company bonuses given that Christmas.?In the end they concluded it all felt a little to tone deaf and disconnected, so they resigned from the company.?Everyone’s heard of this kind of thing but it’s different when it happens to you.?

But what if there were a type of company where this couldn’t happen??One in which effort given equaled vested interest which couldn’t be taken, ignored, or sold away? There is. Before the turn of the last century there was a saying: “I was hired for a pair of hands, but I would gladly give my head and my heart if asked.”?That saying has never been more salient than it is now and represents one of the underlying reasons for a groundswell of employee activism changing the nature of business in the wake of a post pandemic world. For most companies this represents a double threat in the face of revolutionary global change, but for a few unique and progressive companies, it’s a windfall.?

Muddled messages?????

Today in the 21st century, there’s a curious thing going on around this old sentiment.?In many traditional companies’ people are still regularly treated as if they were hired to be little more than a pair of hands yet are expected to contribute all three, heart, mind, and hands.?Frankly, in the 21st century we couldn’t work without contributing our reasoning, thoughts, and problem solving to our work, this is never truer than with knowledge workers.?Yet these contributions aren’t always well received and often dismissed or denied workers.?For many, there’s also an implicit message from leadership that “this (company) is mine, you just work here.” Messages quickly become muddled as people are asked to give 100% and then arbitrarily governed and regulated to some degree less.?There are incongruencies, something is amiss.??

Opting out

All around the country people are opting out of status quo companies with double speak, business as usual practices, and an outdated turn of the last century mindset.?The heart, mind, and hands truth for humanity since the beginning of organized work is that most of us want to contribute all these attributes to everything we do.?People want immersion, engagement, and to be a respected part of a team.?These things represent validation and together they show the highest forms of respect, inclusion, and attention.?We desire engagement.?The question becomes whether we are allowed to have it or not, and whether our contributions will be acknowledged and rewarded, or ignored and punished.?Our very best days as workers are ones in which we are called upon and able to contribute everything we have, all our talents.?This may sound strange to you because perhaps you’ve never thought of it before but there is something distressing going on when we don’t validate, respect, and support others to be everything they can be.?Our only greatest purpose in life should be, to be in the service of others.?Bottom line, reducing anyone to a “pair of hands” when they want to give more is tantamount to stealing or gaslighting, because they will give it regardless, until they give up.?Fred Rogers said the worst thing we can do to another person is diminish them.?

So, there’s little doubt over the last 18 months that you haven’t heard about people expressing “opting out “from traditional work.?You’ve seen it, you may have even done it yourself. They’re doing it in passive and active ways from choosing to unnecessarily telework instead of coming into the office or flat-out quitting, why? ?For far too many, work, for lack of a more eloquent description, stinks. In workplaces across the country what should be a joyous, energizing, and intrinsically motivating experiences instead drains people.?It makes them sick, fat, anxious, and ultimately diminished.?But why’s it so bad, and does it have to be? ?If they’re opting out of conventional business models, what are they opting into? The answers to these questions as well as some 21st century solutions will be the focus of the next three articles.?Strap in because you’re not going to want to miss these discussions!?

Opting back in

This is a time of deep reflection, and many are finding better, more productive ways to come back and balance the responsibilities of adult life and work.?For some that means partial telework and executing hybrid models, for others its coming back to work full time and still others its quitting conventional work models completely.?During this transitional time people have reflected on what they like best, and worst about employment, and then have gone out to look for or engineer something sustainable, customizable, and rewarding.

The company flywheel

I’m fortunate, after 14 years of working in my field I may have found a unicorn.?An ambidextrous (learning) company in a learning organization desert filled mostly with lather, rinse, and repeat consulting companies doing the same thing every year because they’re too risk averse to dream differently.?What makes this company an ambidextrous, learning organization, the definition being one able to exploit the market with their known expertise and simultaneously explore it, innovating and learning new things? ?For Avian Inc., it may lie in their ESOP flywheel.?I call it the “ESOP flywheel” but Avian company founders Kevin Switick and Jeff “Sherm” Sherman simply call it the Avian flywheel.?What’s an “ESOP”? It stands for employee stock ownership program and it’s a model which allows employees to gain ownership stock in their company. ?At present there are roughly 6,600 ESOP companies in the US and 14 million participants.?The US Congress likes ESOPs, calling them “wealth distribution” companies. ?Kevin says he and Sherm adopted the ESOP model because they were looking for a way to create a greater legacy for their employees, check out Kevin’s Tugboat Institute talk Here.?The goal of plans like these in addition to creating employee owners is to also get employees to think and act like owners. Because this model allows workers to own their company it promotes levels of intrinsic motivation and engagement not found in traditional companies.?Far from diminishment, this is a model for growth.?There are other advantages to ESOP’s.?Firms can receive favorable tax treatment on earnings earmarked for use in the ESOP.?Because ESOPs give employees a sense of ownership, they make better decisions that will benefit not only themselves but also the company.?They provide an opportunity for financial education and a voice in company matters regarding operations and decisions.?But perhaps even more exciting, a model like this might also be a novel way to promote and sustain something called organizational ambidexterity, the most powerful form of learning organization.?I’ve been writing about and researching ambidexterity for a long time and it’s a funny thing.?It needs both a catalyst to trigger it and a mechanism to sustain it (keep it going). ?In my research, I’ve encountered plenty of organizations that have occasionally acted ambidextrously, but few that sustained it, think Google, Toyota, and Apple. ?The ESOP flywheel and business model may provide both at once, spark and staying power.?What makes up the flywheel and how does it create a learning organization? Let’s look.

Principles and promises

There’s a simple little book your given when you first come into the company.?Part informal HR manual and part inspirational book, Principles and Promises covers the company’s vision and philosophy, their mission and purpose, and their flywheel. ?The five components of the flywheel: ?attract talent, create raving fans, gain customer confidence, design new solutions, and foster an entrepreneurial spirit and culture, all work together to turn the wheel.?Next month, we will focus in detail on some of the idea’s behind each of the five operational stages of the flywheel and talk more about how the Avian ESOP and its founders promote and sustain an ambidextrous (learning) organization and culture. You won’t want to miss these conversations. See you next month. Eric ?

Dr. Zabiegalski is available to talk to your organization or venue about ambidexterity research or speak informatively and eloquently about organizational culture, leadership, strategy, learning, complexity, business neuroscience, creativity, mindfulness, talent management, personal success, emotional intelligence, Action Learning, and storytelling. Contact Eric about a talk, keynote presentation, or workshop today!