Measuring Employee Ownership

The EO advantage is difficult to encapsulate through internal metrics but shouldn't be avoided as a result.

Employee-owned businesses should, in principle, have a powerful advantage but realising that advantage depends on whether collective ownership is meaningfully embedded and leveraged, not simply whether employees feel more satisfied, engaged or positive about the organisation.

This is where reliance on traditional measures such as satisfaction, engagement or sentiment scores can mislead. While useful in their own right, they can risk overstating the strength of employee ownership by conflating how people feel with how ownership actually functions. 

• ownership goes beyond sentiment, it is evidenced through actions, not just feelings or language;

• the depth of ownership within an organisation cannot therefore be understood through measures of perception alone;

• in fact, sentiment indicators can be unreliable when employees are asked to assess their levels of awareness, influence or inclusion without any shared reference point for what ownership means;

• as a result, bottom-up measures on their own rarely provide a full or accurate picture.

A more fundamental judgement is philosophical as much as practical: would leadership and board discussions or decisions have been different if employee insight had been present?

However, this shifts focus squarely onto leadership teams who are responsible for enabling ownership and accountable to the trustee for leveraging it effectively to the company’s benefit.

The most meaningful performance indicators are therefore not about how strongly ownership is encouraged, but about how consistently, boldly and skillfully it is utilised and exploited.

That might include:

• the number and sorts of issues where employee insight has been called for, whether as a whole or through focused groups;

• the number and types of strategic or operational issues that have been informed by employee input before the leadership’s position on the subject has been formed;

• the number of examples of organisational value being created, protected, or improved as a direct result of employee involvement in shared ownership of the issue;

Viewed this way, employee ownership is not an end in itself, it is a doctrine for improving company performance, and the ultimate metrics are how that is judged in context and over time.

Employee satisfaction, ability to engage with internal communications and the existence of avenues to present ideas or feedback are often treated as markers rather than enablers of employee ownership. They all matter, but the real step change comes when collective insight is regularly translated into better decisions and outcomes, and when that level of capability becomes a sustained source of competitive advantage. 

This article was written by Simon Carter an experienced IDT independent trustee with content crafted from his own experiences within and outside Employee Owned companies.