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From Impossible To Inevitable by Jason Lemkin, Aaron Ross

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Chapter 22Taking Ownership to the Next Level

More on Financial Ownership, moving people around, and understanding how to work with different types of employees.

Financial Ownership

A complement to Functional Ownership is Financial Ownership. We touched on this in Part 3: Make Sales Scalable, in the section in Chapter 13 titled “Jason's Advice to CEOs: Put Nonsales Leaders on Variable Comp Plans, Too.”

Not every employee is a fit for Financial Ownership (or Functional Ownership, for that matter). For those who are, there are infinite ways to pay employees in ways that are related to results. However you do it:

  1. Provide a meaningful (to them) stake or Financial opportunity. If it's too small, they won't care. It could be through bonuses, profit sharing, equity, commissions, variable comp plans, or other avenues.
  2. Train employees in what Financial Ownership means: How does the stock or commission plan work? If a person is confused about how it works, the ownership doesn't help! Whoever designed the Financial structure will vastly underestimate how complex it may appear to salespeople and employees. Earning 10,000 shares of stock might sound like a lot to a new employee, but they may not understand that it's only 0.01% of the company, and can easily end up being worthless depending on strike prices and liquidation preferences.
  3. Publish accurate results so that employees know exactly where they stand in relation to their compensation and ownership, and see the “cause and effect” ...

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