Many employees, including myself, weren’t sure what to expect when Tim and John came to town with the “Ownership Thinking” roadshow. A full day conference with peers, flip charts, discussions (and of course some tasty food) wasn’t something that happened very often, so what was the purpose?
The meeting kicked off by talking about Edward deBono’s Six Thinking Hats and it set the tone for the day to take separate time to brainstorm new ideas, collect facts and look at the pros and cons of every suggestion. The first topic up was the Ian Martin Playbook which was created last fall, and we discussed how we were progressing against those goals. We then moved on to our Best Workplaces survey results and learned that the lowest scoring question was “I feel I receive a fair share of profits made by this organization”. This is what prompted Tim to introduce the concept from Brad Hams’ book Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit. For Hams, the purpose of Ownership Thinking is “to create cultures of employees who think and act like owners with the purpose of creating wealth.” For the Ian Martin Group, the book’s concept resonated with our value of entrepreneurship and how employees should be empowered to drive innovation.
Hams discusses in the book two key things that an organization must have in order to create a culture of Ownership Thinking; 1. The Right Education and 2. The Right Measures.
The Right Education
In the book, Hams writes that “If one wants an organization of employees who think and act like owners, then those employees had better have some understanding of how companies operate and make money, and how their jobs affect the company’s operations and financial performance.”
Since the Ian Martin Group is a privately held company, financial information isn’t as readily available to everyone as it would be at a public company. Depending on which department you are in, your knowledge of the business could vary. An Account Manager in Kitchener may understand how much revenue is coming in from placements, an IT Manager in Toronto would know the expenses for computer costs and a Payroll Administrator in Oakville would see the amounts being paid out to contractors each month. But most people didn’t have the complete, big picture.
That’s why Tim Masson took the time to take everyone through a detailed presentation of the Ian Martin Group financials. Previously when employees were asked “What percentage of IMG’s revenue do you think is profit?” almost seventy-five percent of those that responded thought that IMG’s profit was over 10% of our revenue. The reality is that our profits typically range between 2-4% of revenue, so there’s clearly an information gap. After a few hours of looking at income statements, cash flow statements and balance sheets we started to become a lot more financially literate. This new knowledge inspired those in the room to start brainstorming ideas to increase profit and reduce costs in their own departments.
The Right Measures
Once employees understood the financials, the next step was to figure out how to measure success. Since financial statements are reactive and non-engaging, Hams suggests creating something more focused on measurable activities that drive financial performance, which he calls Key Performance Indicators.
“It is critical to engage all employees in improving specific KPIs through the use of Rapid Improvement Plans,” Hams writes. “Why should you as the business owner or leader be the only one losing sleep” over the company’s performance?
Developing the KPIs was the hard part. John Breininger compared a KPI to being IMG’s “on base-percentage”, simply a way for us to predict how many runs are going to come in. How could we define what “on base” meant? Was it the number of client appointments? New accounts created? Sendouts? Handoffs? What we finally ended up on as a good common KPI for was Client Interviews. It indicated that we had found a well-suited candidate that our client was willing to take the time to interview them, and hopefully that would turn into a “run” down the road.
When discussing other metrics that could be measured on an on-going basis we realized that it would be very important to view these at “context” and not “control” as described by Netflix in their culture guide. We never want a focus on metrics at IMG to come across as trying to exert control over our people, but as a way to give employees context to inspire innovation and change.
From Pages into Practice
Since the conference, managers are now receiving a monthly Visibility Pack which contains a detailed report on each business unit’s productivity and profit along with a commentary from Tim. An idea to form a “Crazy Ideas Committee” focused on Rapid Improvement Plans is slated to begin this summer. And in order to keep the Financial Literacy high at the company, there will now be quarterly presentations of financial results by video conference – with local follow-up and discussion hosted by the Leadership team and business unit managers.
What I love about this company is that we don’t just read a business book and think “wow, that’s smart”, but then do nothing about it. As you can see, senior leadership has already started implementing changes aligned with this new philosophy. For some “Ownership Thinking” may feel like the addition of more stress and worries to their job. For me, I see it as something that is empowering. I can see my direct impact on our bottom line and share in the success of our company knowing that I played a role in it.
I’ve recently started to dig deeper into my marketing budget to understand where we are spending money. I want to find out how we can reduce costs in areas that aren’t driving revenue, so that we can invest more in areas that are going to help our account managers drive more profit. It’s my goal to switch the mindset of marketing from being a cost-center to that of a department that can reduce the costs of new business acquisition by automating lead generation.
How has “Ownership Thinking” changed your thinking since the sessions?