<< Please click on a topic to the left to learn more about what Praxis can do to educate your company about employee ownership.

Strategy and Planning

An Integrated Strategy for Improving Performance

Developing an ownership culture that will optimize company performance is a long term process involving complementary changes in many areas of the company. Every company requires a unique combination of initiatives that are aimed at achieving its particular objectives.

Strategic ownership planning: Linking ownership strategy with business strategy

Praxis will work with your company to:

• Assess your current organizational culture and opportunities for improvement based on shared ownership;
• Design and facilitate a strategic planning process that is matched to your company's employee involvement goals;
• Develop a vision and specific ownership objectives for an ownership culture that supports your company's business plan;
• Establish specific targets, measurement tools, and time lines against which to evaluate your progress in each area;
• Design a comprehensive plan for combining and implementing strategies appropriate to your company's circumstances.

Implementing ownership strategy

Praxis will work with your company to:

• Prepare an initial announcement plan to introduce your ownership plan to your company;
• Design and deliver customized ownership and business education programs for employees at all levels of your organization;
• Develop strategies, skills, and structures for improving operational performance;
• Design and establish employee participation mechanisms that capture all of the resources employees bring to their work as well as reinforces the company's ownership vision;
• Design and implement communications initiatives to improve the flow of information throughout the company and to focus employees' attention on critical profitability challenges;
• Design and deliver leadership development programs to enhance managers' skills to support effective shared ownership behaviors among their employees;
• Develop short-term incentives that reward profitability and productivity improvements and that reinforces long-term ownership culture and business goals;
• Provide ongoing consultation to management and/or employee groups to facilitate the continued development of your ownership culture over time;
• Develop your company's internal capacity for the ongoing development of its high performance ownership culture and continuous improvement.

Leadership Development

Effective leadership is essential to the success of any organization. Creating an organizational culture in which people feel and act like owners and which therefore results in performance improvements presents particular leadership challenges. Having worked with leaders in more than 100 employee-owned firms, we are familiar with the issues faced by leaders in employee-owned companies and the skills that are needed to be effective.

Praxis works with employee-owned firms to assist them in developing both general leadership skills as well as the particular leadership skills necessary for creating and maintaining a high performance ownership culture. Our staff consists of individuals who have significant leadership development and coaching experience, including coaching in Wharton's executive education program.

We have the capability to assist you in building your leadership capacity through several different routes:

• Customized Leadership Development Programs
• Leadership Team Development
• Individual Coaching
• Mentoring Systems
• Management Skills Training for Middle Managers
• Team Development and Communication Skills Training
• Project Management Skills Training
• Performance Assessment Systems and Skills
• Succession Planning

Communications

Communications Goals & Services

Successful employee-owned companies have open, fluid communication systems that provide people at all levels of the organization with the information they need to maximize individual and company performance. A strong communication system encourages the flow of ideas, information, and feedback both horizontally and vertically throughout the company, and it allows employee owners to easily track the productivity of their work group, department, and the company as a whole.

Each company has its own communications goals

Some companies seek to clearly communicate the potential risks and benefits of employee ownership before the ownership transaction takes place. Some need to find a way to simply yet accurately explain the complex rules and possibilities of their stock ownership plan without patronizing employee owners. Some need to design easy-to-understand financial information that can be distributed on a regular basis. Some want to use communication tools to keep employee ownership a visible concept in the minds of employees and customers. Some want to communicate the basics of the stock ownership to new employees as a recruitment strategy or to motivate performance.
Some want to provide ongoing focused information about the achievement of company productivity goals in a format that employees can use to evaluate their own, their department's, or the company's progress.

Praxis will:

• Assess your communication needs in the context of your ownership vision and business objectives;
• Determine which media and what formats will best reach your employees;
• Develop programs and materials that make important information both accessible and useful to employee owners;
• Work with your company's leadership team, HR department and/or
• Communications committee to define communication goals and develop a long-term communication plan;
• Design communication materials for new employees as part of your orientation program;
• Design communication programs to inform owners about specific company issues or decisions.

Communications Tools

Many different tools can be customized to meet your company's specific goals

Each goal requires a specific understanding of the dynamics of the company, employees' experience, the media and tools available, and appropriate elements of communication design. Through our experience with manufacturing, service and retail businesses in many sectors of the economy, Praxis has developed the ability to work with company personnel to design strategic communication tools and programs that can achieve your goals effectively in a shared ownership context. Praxis' clients have won the prestigious national ESOP Association Annual Awards for Communications Excellence (AACE) every year since 1993.

Praxis will work with your company to prepare:

• Written materials distributed in print and/or electronic form:
  • Employee ownership Q&A Pamphlet: 10-page plain-language overview in 20-question format;
  • Newsletters: overall design and delivery and/or article preparation;
  • Presentations: materials for company-wide, division, and department meetings;
  • ESOP and Business Literacy Training Manuals;
  • Library of "Frequently Asked Questions" (FAQ).
• Videos: design, development, production, for purposes ranging from initial ownership plan introduction, to ownership and/or financial training, to other corporate events and announcements.
• Ownership Committees: chartering, selection, training, evaluation.
• Computer-based employee ownership training and communications:
  • Ownership Disc(tm) all your ownership documents in one place (accessible by CD-ROM, company network, intranet, or internet) all cross-referenced with easy-to-use web-browser access;
  • Ownership Illustrator(tm) user-friendly interactive program that permits employees to see the potential value of their individual ownership accounts based on their own assumptions about the future.
• Communications services:
  • Hotline (telephone and email): set up, training and monitoring of systems and people;
  • Meeting design: materials to integrate ownership into the recruitment process, new employee orientation, staff meetings, benefit statement distribution, and other company activities;
  • Ongoing communications planning: targeted intervention to set up and insure continued effective implementation;
  • Strategic plan communication: getting the word out across the organization in a consistent and ongoing manner.
• Multilingual services:
  • All ownership communication services are currently offered in English and Spanish;
  • Other language translations are available upon request.

Training and Education

Most employees do not understand stock, much less the structure of their company's employee ownership plan, with its complex system of financial allocations and benefits. Many have never before seen a corporate financial statement, much less understood it.

To become effective employee owners, employees need to learn what owners usually know:

• They need to learn about their employee ownership plan in order to understand the change from "employee" to "employee owner" and how that change can benefit them.
• They need to learn about basic financial and business concepts, their company as a whole, and the industry in which their company operates.
• They need to understand the new role requirements that come with active employee ownership and to develop the necessary skills to effectively fulfill those roles.

An effective education program results in employees understanding the links between their individual actions, the company's success, and their rewards through enhanced share value.

Praxis will:

• Assess your company's training needs;
• Design a carefully planned and well-integrated series of training modules that focus on achieving your company's strategic improvement targets;
• Conduct training for all ESOP participants;
• Develop your internal capacity to create and deliver your own ownership education, by consulting to your training staff and/or through our intensive "Train-the-Trainers" programs;
• Facilitate planning of an ongoing ownership education strategy.

Employee ownership education programs are only effective when implemented within the context of a broadly focused organizational development strategy that reflects a company's transition to a high performance ownership culture. This approach assures that the education efforts are appropriately linked to, and supportive of, other planned changes and significant business objectives.

Training Principles & Sample Training Modules

Praxis' ownership education principles:

• Simple: our materials are customized to be accessible to employees at all levels, from entry-level / low literacy level to those with post-graduate degrees.
• Concrete: we use actual employee experiences and real day-to-day operating challenges.
• Interactive: people learn by doing - we involve employees actively in the learning process by building all learning around participative exercises.
• Enjoyable: learning is more effective when it is fun - we work hard so your employee-owners will enjoy themselves and learn more.
• Strategically integrated: training by itself does not change behavior - we tie training exercises to specific short-medium term company activities that give participants the opportunity to use what they have learned to help improve company performance.
• Developmental: our training materials include gradually more complex information over time.
• Just-in-Time: you don't have to do everything all at once. Add new information and provide incremental training as new issues arise, employees absorb more when they have the opportunity to use new information day-to-day.

Educational Tools available from Praxis:

• Interactive training modules for small groups, samples include:
  • Business Concepts for Employee Owners
  • Your Employee Ownership Plan and You
  • Understanding Your Company's Finances
  • Ownership Behaviors
  • Board Training for Employee-Owned Companies
  • ESOP Committee Training
• Leadership Development training programs
• One-on-one Leadership Coaching

Participation

Participation Goals & Services

Research consistently shows that improved company growth and productivity result from effectively combining employee ownership with participation. To think of themselves as owners, employees must have more responsibility for decision making and problem solving at appropriate levels and they must be held accountable for the outcomes. Employee involvement mechanisms provide a structural means of employees contributing to their company's improvement beyond their individual job performance.

Participation takes different forms

Each company must design its own system of employee involvement and a plan for implementing it based on the particular operational and personnel needs of the company.

In some companies, participation may begin by creating ad hoc problem solving groups. In other companies, employees may become involved in setting department goals and objectives and developing action plans. In still others, employees may become involved in efforts to re-structure the entire company.

Praxis assists your company in designing participation strategies that are linked with both your company's strategic business plan and your vision of a high performance ownership culture.

Praxis will work with your company to:

• Clarify how employee participation can help the company achieve its business objectives;
• Set clear boundaries and expectations by defining the kinds of decisions in which different representatives or groups of employees will or will not be involved;
• Define the nature of employees' involvement, the extent and limits of employees' authority in different situations, and structures for effective participation;
• Develop effective structures though which employees at various levels can participate in appropriate decisions;
• Map a time frame for introducing different kinds of participation;
• Determine the kind of training and preparation that employees and managers will need to effectively participate in different decision-making forums;
• Create missions and guidelines for your different forums for employee participation;
• Charter, select, train, and monitor steering committees and participation committees at various levels to oversee and implement the participation plan.

Incentives

Incentive Design

Stock ownership by itself is often not enough

Stock ownership provides employee owners with a share of the company's long-term wealth through increased stock value. However, stock that can be cashed in only after leaving the company does not feel meaningful for many employees.

For younger employees, retirement is just too far away to feel real, even though they have the most to win from long-term growth and stability. For older employees who are close to retirement, there may not be enough time for the stock value to appreciate significantly so that stock ownership may not be perceived as having significant value. For most other employees, stock ownership does not feel real until they see tangible benefits, and these results typically require years to become apparent.

There are many incentive alternatives that can be combined with stock ownership

Near-term incentives such as gain sharing, profit sharing, and other cash or stock bonus systems based on profitability and specific operational improvement targets provide more immediate rewards and reinforcements for behaviors that lead to increased share value in the long-run. Non-cash rewards and recognition are essential components of an overall incentive strategy. An incentive system that is designed to focus on critical organizational issues (e.g., quality, scrap reduction, labor efficiency, customer satisfaction, etc.) and that rewards and reinforces the culture you want to create (individual, team, or company performance) will complement productivity improvement efforts.