A Stake in the Outcome. . - Books in Brief - book review

HR Magazine, August, 2002 by Mike Frost

A Stake in the Outcome.

By Jack Stack and Bo Burlingham

Currency/Doubleday, 2002 272 pages

List Price: $24.95

ISBN: 0-385-50507-8

Employee stock ownership plans won't have their desired effect--making line employees feel as if they have as large a stake in the company's performance as senior executives do--unless companies foster a culture of ownership. "In a company with a strong culture of ownership, stock is more than compensation. First and foremost, it's a vehicle for change," write Jack Stack and Bo Burlingham in A Stake in the Outcome. "Equity is used to involve people in the process of making a difference."

Stack is president of SRC Holdings, a Springfield, Mo.-based company that became what Business Week magazine called "a management Mecca" for its innovative employee ownership program. Employers must retrain employees to think like owners for equity plans to work, Stack says. "Owners do not just follow a job description," write Stack and Burlingham (an editor at Inc. magazine). "They don't just put in their time. They have something bigger they are working toward."

Conversely, management must change the way it thinks about workers. "Most managers, for example, assume that a major part of their job is to manage people. But you can't manage owners," the authors say. "The alternative is to have a system that allows people to manage themselves."

To foster a culture of ownership, the authors suggest these steps:

* Identify performance targets.

* Educate all workers about the targets. Be sure everyone knows what the goals are, why they are important and how each worker contributes. Open-book management ensures that employees have access to the same deep background material executives have.

* Encourage people to come up with their own innovative ways to reach the goals.

* Celebrate successes. Then "you do it again, and again and again-steadily refining the process, adding new mechanisms, looking for ways to improve the system."

The authors provide a number of case studies that describe innovative programs employers have created, often after initial attempts at employee participation failed.

Mike Frost is a freelance writer based in Alexandria, Va.