Ownership Thinking Keys to Commitment and Motivation in Closely Held Companies John G. Mathers

1. Ownership Thinking Keys to Commitment and Motivation in Closely Held Companies John G. Mathers 2014

2. Contents Motivation – Negative and Effective The Earning Environment Two Approaches to Growth Performance Plans and Work Reviews Systems Thinking The Task Grid Ownership Assumptions Ownership Thinking Model Building an Ownership Organization

3. “Negative” Motivation Creating Meaning Punishment Surviving (4Fs) PERFORMANCE Negative Feedback Advice TIME Sources: Federal Reserve Study 2009; MIT Incentives Study 2010; Wharton Study 2010 Stress from various negative stimuli … Diminishes frontal lobe activity Building an Ownership Organization

4. 3 Keys to Self-Motivation Sources: Drive: The Surprising Truth About What Motivates Us by Daniel Pink 2012 Autonomy Choosing what to do, when to do it, where to do it and how to do it - goals, tasks, work schedules and work methods Greater responsibility for work, investing more time and energy, developing more efficient and innovative processes ultimately leads to producing higher quality and quantity Mastery Developing specialized knowledge, skills and expertise Given opportunities for mastery, employees naturally pursue them in order to learn and contribute more Purpose: Contributing to a meaningful effort or cause When employees meet clients, customers or end users who benefit from their work, they gain a clearer understanding of the purpose of their jobs, which motivates them to work harder and smarter Building an Ownership Organization

5. Earning Environment Sources: Danger by Judith Bardwick Key ingredients: • Purposeful, disciplines energy • Requires realistic opportunities • Pressure to perform (parameters) • Preference for accountability • Respect as a result of accomplishments (from the outside world and within the company) Building an Ownership Organization

6. GOALS ROLES & RESPONSIBILITIES METHODS PERSONAL RELATIONSHIPS Approaches to Growth • CLASSIC • - Focus is on people • - Assumes independence • - Satisfying relationships is the key variable • TASK - ORIENTED • - Focus is on anoverarching goal • - Assumesinterdependence • - Ability to perform against the planis the key variable. GOALS PROCESSES PERSONAL RELATIONSHIPS Building an Ownership Organization

7. Performance Plan Work Review ORG Objectives Work Review . . 3 . . 3 . . 3 . 3 . . 3 . . Done/Not Done . 3 . 3 . 3 Staying on Track Building an Ownership Organization

8. The Systems Model Input Process Pace Feedback Quality Feedback Output Customers Internal/External Building an Ownership Organization

9. Measurements/Metrics Hi Routine Quantity Timeliness Completeness Accuracy Project Change Implemented Deadline Predictability Trouble-Shooting Response Time Average Solution Time First Pass Success Manner Negotiable Project or Trouble-shooting Lo Delay Tolerance Hi Building an Ownership Organization

10. Ownership Assumptions Characteristics of great companies: • They care about their people, community, environment and their product/service • They have fun • They have high expectations of performance Assumptions about People (Abraham Maslow): • Assume all your people have the impulse to achieve • Assume an active trend to self-actualization • Assume that people can take it (tough, stronger than most give credit for) • Assume that people are improvable Building an Ownership Organization

11. Ownership Thinking Powerful Results The Right Incentives The Right Measures The Right Education The Right People Sources: Ownership Thinking by Brad Hams 2012 Building an Ownership Organization

12. Partnership Contract We want and provide a work environment that is: • Enjoyable and rewarding • A place to learn and grow • Filled with continuous financial opportunities We are all adults who: • Respect each other rather than shooting one another • Help one another • Don’t hide problems and don’t argue with reality Building an Ownership Organization

13. Ownership Implementation • Discuss process with leadership team • Provide a current assessment • Survey employees/partners • Complete financial trend analysis – historical/near future • Develop KPIs – define value-driven organization • Design incentives • Implement a Rapid Improvement Plan (RIP) Building an Ownership Organization

14. Vision Mission Strategic Analysis Strategy Performance Plans Programs/Projects Resources A Model of Strategic Planning Adapted from Below, et. Al. Executive’s Guide to Strategic Planning, 1989 Building an Ownership Organization

15. System of Strategic Alignment Core Values & Beliefs Purpose Mission VISION • à Internal Assessment • àExternal Assessment • àStrategic Decisions & Objectives • Customers • Capabilities • Products and Services • Finance • People and Organization • Systems STRATEGY • Performance Plans • What is Going to Be Done by Whom by When • Work Reviews • Ahead, On Track, Behind or At Risk • Recommendations TACTICS Adapted from Below, et. Al. Executive’s Guide to Strategic Planning, 1989 Building an Ownership Organization

16. Strategy Development • Internal Assessment VISION ¦ Resources and Internal Capabilities ¦ Core Competencies ¦ Strengths and Weaknesses • External Assessment ¦ Industry, Market and Technological Trends ¦ Competitive Analysis ¦ Social, Demographic and Regulatory Environment ¦ Key Opportunities and Threats STRATEGY • Strategic Decisions ¦ Customers ¦ Capabilities ¦ Products /Services ¦ Finances ¦ People and Organization ¦ Systems • Strategic Objectives ¦ The Vital Few TACTICS Adapted from Below, et. Al. Executive’s Guide to Strategic Planning, 1989 Building an Ownership Organization

17. Huddle & Work Review Huddle: • This is not a results meeting but a forecasting meeting • Include as many as appropriate to size of company, assuring that those responsible for results are present • Schedule regularly based on normal workload • Key participants must attend and be prepared to contribute • Do not fill in forecasts before the meeting • Have specific agenda and short timeframe • Cop and scribe for each meeting Work Review: • Regular review of performance against goals – comparative • Issue focused and exception based • Graphically represented • Action oriented – all issues come with recommendations • 30 minutes or less Building an Ownership Organization

18. Speeding the natural evolution of your business 3020 Bridgeway, Suite 414, Sausalito CA 94965 Tel: 1 (415) 381-4660 Email: info@eVoassociates.comWeb: www.eVoassociates.com