In his 1999 letter to Amazon shareholders, Jeff Bezos shared a story relevant to every employee-owned company:
“At a recent event at the Stanford University campus, a young woman came to the microphone and asked me a great question: ‘I have one hundred shares of Amazon.com. What do I own?’ I was surprised I hadn’t heard it before, at least not so simply put. What do you own?”
A similar question is probably on the mind of your employees when you tell them that they’re owners. Everyone has had a job, but few people have had the opportunity to own a piece of their employer. Employee ownership is a unique experience, and workers learning about it for the first time are likely asking themselves: “you say I’m an employee-owner, what do I own?”
There’s a direct answer to this question: legally, ownership is a claim on the future earnings of a business. The ownership of a company is broken down into fractional pieces called shares of stock. The owners of the stock, also known as the shareholders, are entitled to the current and future profits of the company. So as an employee-owner, you own a piece of the future success of your company.
This answer is a great starting point, but it can be improved by integrating your company’s vision for success. This is the approach Bezos took when he answered the student by saying, “you own a piece of the leading e-commerce platform,” and then detailing his vision for Amazon. With the benefit of hindsight this answer might seem obvious, but in 1999 it was not clear that Amazon would become a ubiquitous everything store that is one of the five most valuable companies in the world.
Bezos’s answer is powerful because it expresses a clear vision for the long-term future of Amazon. The lesson for employee-owned businesses is that you can help your employees get excited about ownership by helping them understand your company’s vision. In other words, by showing them what they own.
But there’s a deeper level to this question when it’s asked by an employee-owner. Unlike the student who was a shareholder of Amazon, an employee-owner has a direct influence on the value of their investment. The harder they work, the more they delight your customers, and the more they contribute ideas to improve the company, the better they will do financially as an owner.
Of course, a single individual’s actions might have a limited impact on the bottom line profits of their company. It’s common for employees to think, “sure I can work harder, but I’m just one employee out of hundreds, can I really make a difference?” The answer is that ultimately a company’s performance is driven by the sum of all the actions taken by its employees each day. Small improvements add up to big impact when everyone is on board.
In addition to owning a piece of the change they create, an employee-owner also owns a piece of the impact of every other employee at the company. This means that employee ownership creates alignment. Employee-owners have an incentive not just to work hard themselves, but to collaborate, to be a great team member, and to ensure that everyone else is doing everything possible to make the company successful.
Every company will have a different answer to the title question. A great answer will combine the insights in this article to provide a simple articulation of the vision of the company as well as a compelling elaboration of the consequences of broad-based employee ownership. It will touch on the direct financial aspects of ownership. It will help employee-owners understand the long-term vision of the company. And it will help them understand their individual role in the company’s success while also emphasizing that, as employee-owners, we’re all in this together.
If you’re thinking about how to build an ownership culture, start by thinking about how you would answer if someone at your company asked this question: I’m an employee-owner, what do I own?
