How employee ownership culture reinvigorates small businesses

Creating an ownership culture starts from the top down. In an interview with small business president Colleen V., she discusses how employee ownership has reinvigorated the business and the steps to create a sense of ownership across any organization.
woman describing ownership culture sitting on camera in front of blurred background

An ownership culture aligns personal goals with organizational goals by incentivizing employees to take initiative, solve problems, and demonstrate leadership in individual roles. Creating a strong and engaged organizational culture is one of the most important and unique challenges for a small business, especially those that are employee-owned. Ownership culture is built on mutual trust, but it starts from the top down.

At Teamshares, our philosophy of ownership culture starts with our co-founders and extends to our 84+ employee-owned companies which will be 80% employee-owned within 20 years.

We spoke to Colleen V., a Teamshares network company president, to get her insights on how ownership culture has reinvigorated both small businesses and how other leaders can create a similar culture of ownership in their organizations.

From being a professor to owning her own small business and working in the makeup industry, Colleen’s journey has spanned countless industries, team sizes, company cultures, and positions. With 20 years of experience and a diverse set of skills in new business development, strategy formulation, and team building, she offers valuable insight into creating an ownership culture.

What is ownership culture?

“Ownership culture is the space where individual purpose aligns with organizational purpose,” says Colleen.

When asked what ownership culture means to her and how she would describe its value in small businesses, especially ones that have been recently sold or where the owner is preparing to retire and building a succession plan, Colleen highlights a quote by Richard Branson: “If you take care of your people, they’ll take care of your customers.”

“I see [ownership culture] as an opportunity to experience autonomy, mastery, and purpose—three key motivators for humans.”

To Colleen, this is where the rubber hits the road when it comes to employee ownership. When employees think like this, every customer becomes not just the business owner’s customer, but also the employee owner’s customer. When employee owners take ownership of “their” customers, they feel a sense of ownership over the business as a whole.

“I see it as an opportunity to experience autonomy, mastery, and purpose—three key motivators for humans,” explains Colleen. “Employee ownership is also an opportunity to generate individual wealth that didn’t exist before, and to increase efficiencies for the business,” as employee owners care more about operational efficiency than they otherwise would.”

How to create an ownership culture

We know ownership culture is important. So how do leaders create an ownership culture within their organizations?

General advice suggests that empowering employees to be accountable, involving employee owners in decision making, and fostering a culture of participation are all key aspects of a culture of ownership. In addition to these baseline requirements, Colleen offers unique advice on how to build an ownership culture based on her first-hand experience.

In her mind, ownership culture has six key components:

  • Knowing who you are and what you value as a leader
  • Giving employee owners permission to be creative, take risks, and own their results
  • Giving employee owners recognition often, and in the moment
  • Giving employees the freedom to do their jobs within their specific area of expertise, and creating space for candid feedback
  • Placing value in work-life balance
  • Being transparent at all levels of the organization

Give permission to be creative, take risks, and own results

Colleen believes that fostering a risk-taking mindset for employee owners is a crucial part of leadership. Of course, this isn’t a shift that happens overnight and, in any organization, there’s always room for growth—even if an ownership culture has already been established.

Colleen explains that one of the biggest changes in her organizations is giving people permission to be creative and take risks.

“At every opportunity, I remind my colleagues that they are industry experts,” she explains. “So they are best positioned to make the right decision.”

“They know more than I do because they've been in the industry for longer than I have. Giving people permission to be creative and take risks has huge dividends.”

For Colleen, trusting in employees has paid off. “They know more than I do because they’ve been in the industry for longer than I have. Giving people permission to be creative and take risks has huge dividends.”

Employee owners who have permission to be creative, take risks, and find solutions on their own can solve a lot of problems for a company. While both companies she runs are in the same industry, they operate very differently. But she’s found that creativity from employee owners helps both companies run efficiently.

“In the high season, there are a lot of small things that need to be solved on a regular basis. When I see that we’re juggling too many balls, some which could be put down, I start asking the team questions,” says Colleen.

“Although I’m the president, I’m not afraid to ask stupid questions.”

“I tell the team that ‘while the questions may feel inconsequential to you because you know what you’re doing, they don’t feel that way to me because I don’t know what you’re doing. If you just humor me and answer them, then I can learn what you know, and we can solve problems together,’” she continues.

By creating a collaborative culture, Colleen encourages her teams and uses her leadership position as an opportunity to play a coaching role.

“I’ve coached people to be risk-taking and creative, which has created a heightened sense of responsibility and accountability,” she explains.

“At our companies, there’s no attitude of ‘that’s not my job,’ which is really cool.”

Recognize employee owners

When creating a culture of ownership, Colleen focuses on the value of recognizing employee owners. This is especially important when they come up with a creative idea or solution to a problem, regardless of implementation. Colleen believes that recognition is valuable on its own, and that it doesn’t necessarily have to have a monetary value attached to it.

“I consistently recognize people in public and thank them for their ideas,” she says. In Colleen’s experience, public recognition can go a long way in acknowledging the hard work of employee owners.

On occasions when she does give monetary bonuses, she explains that she prefers to do so very quietly.

“I’ve given them when we’ve been short-staffed or when individuals have picked up more work than they normally would,” Colleen explains, emphasizing the importance of fair compensation.

“I regularly recognize employee owners at our monthly meetings, including what they’ve done and how they’ve done it. I thank people in public for what they’re doing, and usually, there’s an impromptu round of applause. People are delighted to see that things are changing and are very encouraging to their colleagues.”

“I just give them the freedom to be creative and take risks, because that’s a powerful incentive and that's how I work. I like to empower people.”

The bottom line is that appreciating your people and giving recognition is not always about money. It’s about acknowledgment.

Validating people and making them feel valuable is part of Colleen’s leadership style. While structured bonuses can certainly help, Colleen explains that it’s not her style to incentivize people with money. “I just give them the freedom to be creative and take risks because that’s a powerful incentive and that’s how I work. I like to empower people.”

Know who you are and your values

As a leader in an organization, Colleen emphasizes that knowing your personal values is crucial to creating an ownership culture.

“You have to know who you are,” she explains “Because when things hit the proverbial fan, you have to be able to step back and ask: Is this my perspective? Or is this a problem that’s actually going on? And how am I reacting to it?’”

Taking a mindset of self-reflection and self-awareness into employee owner interactions is crucial, especially when a business is undergoing a period of change or restructuring. As a leader, acknowledging that change is hard for your people and asking how you can help them goes a long way in creating an ownership culture.

Apply to become a small business president of an employee-owned company near you.

Colleen goes on to explain that change is hard for everybody. “Even as someone who embraces change, it gives me an uncomfortable feeling,” she says. “It makes me anxious. Recognizing that and acknowledging it openly is hard.”

“But it’s the mindset you need to be able to help people through any change, including restructuring to an employee ownership model,” she continues. “Humans are complex. They are unpredictable. They are fragile. And they need a lot of nurturing and a great deal of care.”

Give employee owners freedom to be an expert with space for feedback

Guiding a team through change, like when an owner sells their small business, takes a lot of finesse. As a leader, Colleen discussed the importance of getting out of each employee’s way and letting them do what they do best.

“Observe, take notes, and don’t interfere,” she says. “Save addressing things for one-on-one conversations, and be true to what you say.”

When people are dealing with change and they’re feeling upset, frustrated and anxious, they need to have a safe place where they can go to verbalize what’s going on. Colleen offers this through an open-door policy with all employee owners.

“It’s a place where I will hear what they have to say without judgment. I let people know that I don’t do inflammatory remarks, but if you’re angry and you need to vent, I’m here. You can say what you need to, respectfully, and I won’t hold you to it.”

She went on to explain the value of transparent one-on-ones. In them, she asks her employee owners questions about their processes and their clients, including:

  • What do you like about your clients?
  • What frustrates you about them?
  • What’s challenging for you?

These questions help employee owners open up and consider their relationship to clients and the company, which gives them a stronger sense of ownership and responsibility.

Placing value in work-life balance

For leaders, keeping tabs on the work-life balance of employee owners, especially during big changes, is crucial.

For Colleen, it’s a big part of what she values as a leader.

“I have a couple of key elements that guide all of my decisions,” she explains. “One of them is that I value family first, no matter what. Someone will always be available to pick up the slack if you have a family issue that you need to take care of.”

She continues, “It’s important to acknowledge that family issues range from needing to go watch your kid play sports to a parent taking ill and needing to work from the hospital, so you can be by their bedside.”

When Colleen stepped into her role as president, she explained to her employees how they’d be closed between Christmas and New Year’s and still be paid, living true to her value of putting family first.

She explains that, at first, people were skeptical. “People were suspicious,” she says “They were like ‘Okay, when’s the other shoe gonna drop? Because no one has ever done this.’”

But the change worked for the companies, and careful pre-planning allowed employee owners to enjoy their time off.

“Most of the people in our company had never had paid time off between Christmas and New Year’s,” she explains. “We shut down and had one team on standby in case there was an issue. We didn’t need to do anything but we made the necessary provisions and then I assured them that the business was not going to fail.”

With this change, Colleen has created a culture of work-life balance and putting family first, ensuring company culture aligns with her own core values as a leader.

Being transparent as a leader

Everyone, at every level of an organization, makes mistakes. When those mistakes are handled with transparency, it can help to create a culture of ownership.

Colleen recalls a scenario as a new president that required her to be transparent. “I had a watershed moment that was really challenging,” she says.

“Being vulnerable and honest with your team means they've seen what that looks like and gives them comfort to share their mistakes with me, knowing that I’m not going to judge but will help them fix the problem.”

While the companies had previously distributed dividends, they experienced a low season and couldn’t distribute to employee owners. Colleen shared the unfortunate news with the team during a meeting sharing open-book financials.

“Being vulnerable and honest with your team means they’ve seen what that looks like and gives them comfort to share their mistakes with me, knowing that I’m not going to judge but will help them fix the problem.”

Colleen believes that people can’t take risks if they don’t feel safe being creative, and that being creative is taking a risk. Building a culture of transparency and responsibility can help foster more creativity and productive risk-taking.

How ownership culture differs between industries

Not all industries have a strong sense of company culture. At our request, Colleen reflected on some of her previous work environments and shared how they have shaped what ownership culture means to her.

She’s been fortunate to have a great deal of autonomy across her career.

“I only had one previous work experience that was very disempowering,” she says. “I never ever wanted anybody to have that experience under my leadership or management and feel the way that I felt because of that culture.”

For Colleen, the desire for empowerment has been a driving force in her career path. “I value autonomy and mastery so much in my own career. So I strive to find opportunities for the people in the organizations that I run to have the same experience,” she explains. “Experiencing mastery is so important for humans. It’s such a key motivator.”

How employee ownership culture solves problems in the workplace

Employee ownership has the potential to solve some very common organizational problems, including destructive internal competition.

Companies often underestimate how destructive competition can be to culture. But in a capitalist environment, especially one driven by commission, employees are constantly competing for the best client or the biggest order or whatever the specific benchmark for success is in their industry.

“When you change that environment into one where everyone is working together as a team, suddenly it doesn’t matter who gets it right. The profitability that the customer generates is going to be shared by all in the form of dividend payouts,” she says.

“Employee ownership can inspire an important mindset shift. It has a large capacity for neutralizing destructive internal competition.”

How Teamshares helps foster ownership culture

Whether you’re a new or seasoned leader working to create a culture of ownership, having external resources to lean on can be extremely helpful.

Colleen explains the value that the Teamshares Leadership Accelerator has brought to her work, especially when it comes to sharing tips about creating an ownership culture. As part of a network of 65+ small business presidents, leaders like Colleen are encouraged to interact in person and online through industry-specific, geographic, and cohort-based president groups, and to regularly connect with a senior peer mentor.

“It helps you build a strong culture,” Colleen says. “I love that I can take all of my frustrations, issues, and heartache to a cohort of network presidents. No one is harmed by it. It’s really, really, really helpful.”

Colleen is especially grateful for holistic resources like the Slack channel. “It’s a great resource and sounding board, a place for encouragement and commiseration. You really say what’s on your mind without the unintended consequence of hurting someone’s feelings, which I really appreciate.”

For Colleen, the Teamshares Accelerator program helped make her transition to becoming president of two companies simultaneously a lot easier. “It’s visionary of the founders to build an intentional and active community,” she says. “I think it’s what ultimately will keep Teamshares being as successful as it is.”

Drawing on decades of research and experience, Teamshares has developed a model that supports ownership culture. We believe that this model of distributed leadership and inclusive ownership mindset, will transform the operations of the companies in our network, allowing them to improve and thrive.

If you’re a collaborative, growth-minded leader who wants to make an immediate impact, apply to become a president of a Teamshares network company.

Teamshares writers follow strict principles for sourcing credible information within articles. Any outside information including direct quotes, paraphrased information, and concepts that are derived from external sources adhere to our standards for accuracy and transparency.

  • V., Colleen. Interview. Conducted by Jessie Baker, 18 Aug. 2023.
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