Paid To Quit, Allowed To Surf: 5 Ways to Empower Employees

Employees are the crux of your company.  Successful leaders have known this for years.

Take away my people and leave the factories, and soon there will be grass growing on the factory floors, but take away my factories and leave my people, and soon we will have bigger and better factories.  –Andrew Carnegie

When you enfranchise your employees to make a difference, you benefit your bottom line.  Valued, happy, trusted and relied on employees offer up great work and stick around.  Instinctively or experientially you know this is true, so I won’t spend time on Why but move straight to How some companies empower their employees with tremendous results.

Employee Ownership
220 year-old King Arthur Flour is 100% employee-owned.  Owners Frank and Brinna Sands staggered the transfer, beginning with 30%, then a 40% transfer several years later, eventually transferring the remaining 30% in 1996.  Since the change, sales and profitability have “been remarkable,” says Frank.  The company’s won numerous awards for employee satisfaction and social responsibility.

After one year of employment with New Belgium Brewing Company, co-workers (as employees are called) receive a stake in the company.  The company website prompts, “If it were your company, what would you do? Look for ways to be less wasteful, be more efficient, recycle and reuse? Yep. It’s infectious. Once you start thinking of ways to make your company better, you can’t stop.”

Open-book Management
Along with employee ownership, New Belgium practices open-book management and fiscal transparency throughout the company, which CEO Kim Jordan says encourages a community of trust and shared responsibility.  Fiscal transparency paired with employee ownership and participative decision-making gives New Belgium a 92% employee retention rate.

The National Center for Employee Ownership and Inc. magazine found that open-book companies grew 1.66% faster than their competitors, and companies that combined open-book management with an employee-stock ownership plan grew 2.2% faster.  Most interesting is that open-book management impacts profits more than sales, so companies are brining in more revenue with greater efficiency, not more hours.

Hire Me (again) or Fire Me
Linden Labs is creative in process and product (its signature product is Second Life).  Former CEO Philip Rosedale used to send out a quick questionnaire (via SurveyMonkdy) each quarter asking:

“Do you want to keep me or find a new CEO?”
“Over the last three months, did I get better at this job or worse?”

Pretty amazing. Voting was anonymous. Rosedale shared answers to the first two questions with the entire company.  Overtime, as responses indicated that it was becoming increasingly difficult for Rosedale to improve, he tapped a successor.  Rosedale’s quarterly surveys were just one of the mechanisms that Linden Labs uses to open up a community-wide dialogue.  Another, the rewarder (also a Rosedale invention) allowed employees to choose which employees were deserving of quarterly bonuses.

Tempus Liberum
Let My People Go Surfing” is the name of Patagonia founder Yvon Chouinard’s book and one of the company’s practiced tenets. Even Patagonia’s current CEO skips out three times a week for long bike-rides, often pulling over to write down ideas that come to him.  Sure, part of this experience is meant for employees to test out the clothing and gear they make; but the larger part is to satisfy their passion for the outdoors, which is probably what drew them to Patagonia in the first place.

Freedom to Act (and money to leave)
Zappos starts at the beginning, before employees are even handed business cards or assigned a phone by offering new hires $1,000 to quit.  “We do it to look for engaged employees,” says training manager Rachael Brown.  The action of refusing the offer (the decision most employees make) “definitely [gives them] a sense of commitment.”

Famously, Zappos employees are empowered to do anything for customers–from locating the nearest open pizza shop to sending flowers.  The company also has an open Twitter policy. All employees are encouraged to tweet freely, without scripts or restrictions.

This list is nowhere near complete, but by highlighting some practices from other companies, I hope to inspire a conversation and set you thinking less about management by-the-book and more about ways to turn your employees into collective entrepreneurs.

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Leave a comment
  1. Rob Caldwell May 26, 2010 at 4:12 pm #

    I think that what you’re saying is true; the more an employee invests into a company, the more responsibility he/she feels. I wish that more companies did something like this. If I make it my own, I take more care of it.

  2. admin May 26, 2010 at 5:37 pm #

    Rob, thanks for your comment. It seems so logical, right? It’s interesting to see more companies adopting policies like employee-ownership or open-book management, which do remove some control from the company heads in exchange for more engaged, dedicated, innovative employees. I find ‘new-age’ management fascinating!