Au-ton-o-my: freedom from external control or influence; independence
An-ar-chy: absence of government and absolute freedom of the individual
Perhaps I should have titled this “Ownership without leadership is almost certainly doomed.” A business near me was recently sold to a new owner. The place ran like a top for more than a decade. It had established procedures, great service, and great products. The owners regularly spent time on site, and in the mix of day to day activities. Then it was sold as a “turnkey” operation.
The suppliers remained the same. Nearly all of the staff remained the same. The new owner put a long-time employee in charge as manager and delegated duty. The staff raved about their new opportunities and new responsibilities. They were excited, motivated and exuded confidence. But it was not as rosy as it appeared.
The products were the first to decline. Mostly the problem was inventory, but sometimes quality suffered as well. The next to fall was the “feel” of the establishment. With less happy customers came less happy employees. It’s a vicious circle. Less happy employees make for annoyed clientele. The cycle accelerates quickly.
The staff seem to have the same control over the destiny of the shop, but they just haven’t been able to execute on the processes that worked for so many years. At the same time, the new owner made a logical attempt to modernize their payment systems. But the new systems had more rules, less fudging and removed the ease with which people corrected (or made) mistakes. Misunderstandings have been common and have exacerbated the already tense environment.
So, how does pay play into this story?
Imagine if a compensation consultant walked into this situation. Without fully understanding every detail of how it came to be, they would probably point out that the staff is paid below market (probably a fact). They may recommend some kind of an incentive plan to reward better behavior (it might not be a bad idea). They may even provide some thoughts on performance reviews, training, and accountability. They may not ever mention better leadership (it can be uncomfortable calling out the person that hired you).
But, as I have said before, “Pay cannot fix anything.” Pay can only support the decisions you make, the behaviors you value and the results you crave. Ownership is much the same. Even the best professional athletes need coaches. Even the best CEOs have Boards or mentors to keep them on track. Even bad leadership may accomplish more, at least in the short run, than no leadership. Great leadership would quickly get this particular business back to its stellar levels of past achievement.
This is where the whole “autonomy movement” misses the boat. Yes, people want the independence and control to perform their jobs well, but few want the accountability that comes with the requirement to consistently achieve. A leader who can balance these two things is often worth more than any pay raise, incentive plan or communication program.
Ownership without leadership isn’t autonomy, it’s anarchy.
Dan Walter is a CECP and CEP and works as Managing Consultant for FutureSense. He is passionately committed to aligning pay with company strategy and culture and is considered a leading expert on equity compensation issues. Dan has written several industry resources including an issue brief on Performance-Based Equity Compensation than Dan refers to as informative written Ambien. He has co-authored ”Everything You Do In Compensation is Communication”, “The Decision Makers Guide to Equity Compensation”, “Equity Alternatives” and other books. Connect with Dan on LinkedIn. Or, follow him on Twitter at @DanFutureSense.
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