It’s called “Ownership Thinking” among employees and one Jacksonville business president who practices it says it’s effective.
“They really all understand how business works,” said E. Zimmermann Boulos, president of Office Environments & Services Inc., based in San Marco.
As he describes it, the theory leads to the proverbial win-win with a company’s owner and employees.
Boulos was the keynote presenter Wednesday at a meeting of the IMA Jacksonville Chapter of management accountants and financial professionals in Northeast Florida.
OE&S, as his company is called, employs 24 people and Boulos said they all benefit from the increased collective knowledge. His father founded the company in 1955 to offer high-quality furniture and services to businesses in Northeast Florida.
Ownership Thinking LLC is a consultant and training firm established by Brad Hams in 1995. It is based in Lakewood, Colo., and its focus is to “eradicate entitlement.”
Its website, www.ownershipthinking.com, reports that the goal is “to create an organization of employees who think and act like owners toward creating wealth.”
Hams “believes that human beings do not gain self-esteem through unearned compensation, empty praise or false security, but rather through achievement.”
He contends that companies practicing the theory retain employees at a 200 percent better rate than companies that don’t. Its model calls for companies to retain the right people, giving them the right education, focusing on the right performance measures and providing the right incentives.
Hams developed the theory in the early 1990s when he was the president of Mrs. Fields Cookies in Mexico, according to the site.
Boulos attended the program and returned to test it.
He told the accountants at the meeting Wednesday that he first quizzed the employees about their estimates of the company’s profit, finding that the average response was 10 times higher than it was.
Then he walked them through the math.
He taught employees to produce a profit and loss statement, which summarizes revenues, costs and expenses for a specific period of time. They learned more than that, as well.
The bottom line for Boulos, using “Ownership Thinking,” was to provide the employees a profit goal beyond the standard.
“I don’t want to reward for average performance,” he said.
Another goal is for employees to control costs, also a benefit to the bottom line. “More employees can affect cost than sales,” he said.
The employees receive a portion of the increased profit. Now in its 10th year, the effort returns what Boulos considers “meaningful” bonuses to each employee.
“It takes time coaching, reinforcing and teaching people how the company works, how the industry works,” he said.
Boulos understands that some owners of private businesses might be reluctant to test the theory because it allows employees a greater insight into the company, but he also contends that transparency can be helpful to employees’ drive.
Boulos said that when employees understand the business and the industry, they realize their individual contributions to it. When they realize they will benefit from making an effort to control costs and improve sales, they do it.
The Ownership Thinking website reports that the effort “creates an environment that promotes learning and development, while at the same time increasing visibility and accountability. Your best people will excel, and your poorest performers are generally self-selected out by their peers.”
Boulos said he was surprised to see that happen.
Boulos also said that when the company had to adjust to the recession, the employees understood the reasons.
“Unless you’re an accounting major, you never really learn that,” he said.
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