Chapter 21
For Executives: Create Functional Ownership
Let's break down how you start and create functional Ownership in your teams.
If you're an employee and this stuff doesn't interest you, feel free to skip ahead to Part 7: Define Your Destiny, which is just for you.
A Simple Survey
It's best to start out with a fresh pulse check on the morale of your teams. If you have any moral or trust issues, you need to know about them in more detail, or else they can derail everything else. Employees that don't trust management don't listen, care, or follow through. If they don't feel the company is investing in them, they're not going to invest in helping the company.
A Simple Survey: Six Questions
- Context: What's your role? Who's your manager?
- Likes: What do you like about [working here | your job | your manager | our product | how we sell…]? Please include details or specific examples.
- Dislikes: What don't you like about [working here | your job | your manager | our product | how we sell…]? Please include details or specific examples.
- The twist: If you ran things, what would you do differently? Please include details or specific examples.
- Catch-all: What else is on your mind? Anything else we should know?
- Optional: How do we contact you if we have follow-up questions about your answers?
Notice how by focusing the “Likes” and “Dislikes” questions, you can target any specific or general topic.
You want honest feedback from people, and so you need to make it optional, but not required, to include their identifying information.
You want honest feedback from people, and so you need to make it optional, but not required, to include their identifying information.
Now, if you're sending this to one or two employees/partners, obviously it won't be anonymous. They may not be 100% forthcoming. Do your best to reassure yourself and whoever is taking this survey that the answers will be used only to improve the business, not against them. Right?
Why You May Not Want to Send It
It's natural for people to have a fear of getting honest feedback from others. It can feel easier to hide, but it's better to find out now than in the exit interview.
They might say something critical about you and the business, and that never feels good. If you find this fear's stopping you from sending this out, focus on how (a) you will have people saying many positive things, too, and (b) if there are problems festering beneath the surface, it is better to find out about them now and deal with them, rather than remaining ignorant and allowing them to grow into a bigger time bomb that will explode someday in your face, probably at the worst possible time.
Your Job
When you get this information back, you need to act on it, even if a first step is acknowledging that you received it. Ideally, in the announcement or survey itself, publish the date by which you'll acknowledge you've received the answers.
If you don't acknowledge your respondents quickly, you're reinforcing any feelings of “I knew this was pointless, they never listen to us or do anything anyway.”
Tips
- To get honest feedback, consider asking an outside person to act as a neutral party.
- Don't survey more often than you can communicate back what you have received and reviewed, and can act on something and show that you listen.
- Pick one or two things to focus on to fix each time so that you can prove your progress quickly.
- Have a team or employee meeting to review problems, suggest ideas, volunteer owners, and come up with Forcing Functions.
Don't try to fix or respond to or improve everything at once.
“No Surprises”
Changing a company's culture can be hard. That's why there are probably thousands of books and millions of articles written about it. How many of those ideas have created any impact at your company? It's challenging to create cultural change—cultures and people are made up of habits, and habits are hard to change.
Let's begin with one simple idea, transparency: If you stick with developing it, transparency will help to increase trust, inform employees, and move things forward quickly. Because once you get the ball rolling with a first few “wins,” it's easier to keep up the improvements.
Why People Hate Surprises
First, consider how many happy surprises happen at work or with money. Can you think of any? Our guess is they're much rarer than unhappy surprises at work.
Customers hate surprises from salespeople. Salespeople hate surprises from customers. VP Sales hate surprises from their salespeople. CEOs hate surprises from their executive team. Boards hate surprises from the CEO.
How can you create a culture of “No Surprises”? Consider what it would take to eliminate surprises.
It'd force you to improve how your company runs internally: how teams such as marketing, sales, and customer support work, communicate, and improve together. Let's take just customers: how can you make sure customers aren't surprised by proposals? Product changes? Downtime? Personnel changes?
What it would take to eliminate surprises—across employees, customers, investors, and the management team?
How Far HubSpot Goes
Even when it was a private company, HubSpot shared with everyone company financial information normally carefully guarded by execs: details on the cash balance, burn rate, P&L, board meeting decks, management meeting decks, and strategic topics. Their goal was to support smarter behavior and better decisions.
They only protect information when (a) it's legally required, or (b) it's not completely theirs to share.
Where to Begin
Walk the halls and ask employees about their priorities. What do they feel blind about, and most want to know? Whether or not you think it's needed or helpful to them to know, consider how they may be kept out of the loop.
Or if there's a main challenge you're dealing with—yes, especially a financial one—begin by sharing updates on it or other top issues, in person, by phone, web, and email, whatever line of communication is easiest to maintain, because you have to keep it up, as regularly as possible for the first few months. Over time, regular updates will evolve to change style and pace, but in the beginning, you need to establish that you are serious about keeping everyone informed. If you have a board, turn board presentations around and use the same one for a regular company update.
This helps prevent “surprises”: Employees who normally feel left out of the loop will be more engaged and have a better feeling for areas where they can contribute.
Over time, regular updates will evolve to change style and pace, but in the beginning, you need to establish how serious you are about it.
Example: Financial Transparency
Do you keep your finances mostly secret? If so, why? Is there a specific business reason to keep them secret, or do you keep them secret out of habit? To learn how to help the company make money, employees need to also learn how the company makes (and loses) money today, and why. Educate your employees on your finances.
You don't need to begin by suddenly springing (or dumping) the complete information on everyone. Make whatever you share helpful to people.
Educate your employees on understanding finances.
Example: Career Transparency
Are there proven career paths in the company that people can look forward to? How are promotions or job changes decided? Are new job openings publicized within the company in addition to outside the company, and are internal people allowed to apply? If not, why not?
Example: Sales Transparency
Do you have a sales process? Why not update it a bit, and then begin to share it with prospects, so they can see the roadmap you and they should follow to determine if there's a fit or not here?
For example, here's a simple outline of a process that aligns both buyer and seller:
- Initial “Are We A Fit” call: Determine if this is a waste of time or not, before moving forward. This may include a first simple demo to the buyer, so they can decide if a next call is appropriate, and who to invite from their team.
- Demo or discovery call: Include several people from the buyer's team, including a decision-maker, so again we can make a decision whether a deal is worth pursuing.
- Proposal: Lay out the terms so the buyer can see all the details regarding how it would work to meet their expectations, pricing, options, and terms. Offer alternatives—honestly presented!—to the seller's products (including “do nothing” or “competitor 1”) to help the buyer make the best decision.
- Executive buy-off: The decision-maker gets all questions and objections answered. What would it take to get them excited for the project?
- Finalize terms: The word “negotiation” implies a “win-lose” situation for most people, when in reality, both sides are trying to finalize the details in ways that make sense for each other.
- Sign contracts (or paperwork): Both sides celebrate today, and then get back to work tomorrow on delivering on the promises made.
- Kickoff/implement/begin: The customer on boards the new product or service.
- Track success: Help the customer measure and gauge their results to date, and how successful the project has been compared to their expectations.
Do you see how this kind of joint buyer-seller process can help both sides navigate their way to a successful outcome?
Functional Ownership
The previous two sections were about setting your people up for success in whatever comes next. But if you got stuck in doing (or avoiding) them, you can skip them for now and jump in here.
There's an enormous difference between being an owner and helping an owner, just as there's a difference between owning and renting. When someone owns something emotionally, the way they think about it, work on it, and commit to it is far deeper than when they're just a part-time player. When they can dabble. It's like the difference between being a parent and being a babysitter.
Answering the question “Who owns marketing?” is easy if you have a VP of Marketing. And usually, they own everything in marketing, with all important decisions being made or affirmed by them.
But who runs the blog? That's not the VP Marketing, unless they are a one-man marketing team and run everything themselves. Whoever runs the blog on the team should own it. That means the head of marketing would defer to that person on decisions about the blog, which could include decisions about the visuals, rhythm, format, content, and style. And that person would own it and be 100% responsible for the metrics related to the blog.
Rather than having people coming to you with options all the time and asking you to decide, they are coming to you for advice when they need it and then they decide. It's made an enormous difference in the management load at Carb.io to have decisions spread out across the team, rather than funneled up (and bottlenecked) at the top.
Remember, we're concerned with two kinds of ownership (well, what we truly care about is emotional ownership, but that's a side effect of implementing these others):
- Functional Ownership: Who owns which responsibilities—Sales? Leads? IT?
- Financial Ownership: Who are the equity owners of the company? How are commissions made or profits shared?
Executives often have both. But many employees have neither, or have only token amounts.
Financial Ownership's important, but it's more complex, and normally an incentive for people to exceed at their regular job rather than go beyond to improve the company. It's easier to compensate employees for what they are doing, then what they could do. Functional Ownership at the employee level—how we define it—is less common.
To encourage your people to take charge of their lives and be more entrepreneurial, they need to own something, anything, even if it's the kitchen refrigerator.
To encourage your people to take charge of their lives and be more entrepreneurial, they need to own something, anything, even if it's the kitchen refrigerator.
At Carb.io, ownership of different subfunctions has been divided up across the team, not by rank or title, but by interest—volunteers—and logical fit:
- Software product and roadmap (Patrick, Product Management)
- Website (Alec, Account Strategist)
- The “Nail A Niche” Program (Rob, Account Strategist)
- The Product Handbook (Patrick, Product Management)
- Fundraising: Collin (CEO)
- Initial inbound lead response: Jeff (Associate)
- Outbound prospecting (Patrick, Product Management—yes, a product guy prospects: How else would he know what to design?)
- Application sales: Kay (Account Executive)
- Services sales: Shaun (Lead Coach)
- Lead generation: Aaron
Each person has a main job plus one to three smaller side projects they own, which may or may not be related to their main job.
Five Aspects of Ownership
Not everyone is a natural go-getter, and you're not going to magically create a team of Richard Bransons or Elon Musks. But change their environment, and you can move some people's Go-Getter Needle from a 5 to a 7.5 with:
- Single, public ownership—The CEO can't hide. Everyone knows who's ultimately responsible. For a function or project, who is the single owner everyone recognizes? Even if there's a committee or partnership involved, one person is the designated final decision-maker, which is not determined solely by seniority. An executive can be responsible for the whole puzzle (marketing), but others can own individual puzzle pieces (internal meetings and systems, playbooks, content, events, tools, reporting, campaigns, career path …).
Being an owner doesn't mean you have to do all the work, but you are responsible for seeing it gets done, whether it's by you or others.
- Forcing Functions—The CEO has obligations they can't hide from, like payroll. Public, specific deadlines drive progress like nothing else. What works better to get fit: (a) signing up for a gym membership or (b) announcing to your friends that you're going to run a marathon? Executives create Forcing Functions all the time: starting a business, raising money, taking on debt, or announcing a launch or publication date. The trick is pushing this down and across the organization, applying it with employees so that they have that same feeling of “having to meet payroll” too (the next section goes into the details on how).
- Decisions—The single owner makes and lives with all decisions, but gets advice from people as needed. Decision-making is a skill that gets easier with practice. People only get better at decision making when their boss lets them make decisions on their own, and then learn from the consequences.
People only get better at decision making when their boss lets them make decisions on their own, and then learn from the consequences.
- Tangible results—CEOs have inherent business results they can't ignore, like sales and cash flow goals. With an employee owner, what results are important to them and their domain, and how can we measure them? How do we know if this is working or not? What metrics, third-party ratings, or milestones can we use to measure progress?
- Learning loops—CEOs with boards of directors have a system to help them gauge results, receive feedback, avoid blind spots, and get pushed out of comfort zones. Internal owners need the same things. Functions must be delegated, not abdicated to people.
An Example
While I (Aaron) came up with most of the original content around the “Nail A Niche” topic, Rob Russell owns our Nail A Niche programming, such as workshops and customer workbooks. So:
- Owner: Rob.
- Forcing Functions: Usually these are committing to dates (a workshop, webinar, publication), or delivering the content as part of a bigger customer onsite. There's nothing like announcing an event date to energize people!
- Decisions: Rob decides where, how, and when standalone events will run, the format and order of content, and how to evolve it.
- Tangible results: For events, net promoter scores can be measured, as well as attendance and sales (if relevant). Customers rate their experience with the workbook.
- Learning loops: After workshops or other chances to share content, Rob gathers feedback from both customers and Predictable Revenue employees (like me).
Now, as an example, I'm going to create a Forcing Function for Rob right now, by telling you—the reader—that you can download a copy of our latest Nail A Niche workbook and read related articles at www.FromImpossible.com/niche.
On the day I wrote these words you're reading now, that link didn't exist. But by typing these words out, there's now an inescapable, public deadline to make it happen. (Rob, you're welcome!)
Start with Three Questions
- What needs an owner? Make a list: What's on your plate that you'd like someone else to own? What other things are in need of focused Ownership?
- Who should the owner be? With a few most important functions, who is the person who will own it? They can volunteer, be designated, or be selected by group consensus.
- What's the initial Forcing Function? The owner, with help as needed (or being challenged by a manager, as needed), should come up with what will be delivered next, and by what time. Keep up the Forcing Functions and they will keep driving everything that needs to get built: results, decisions, and learning loops.
When you have a Forcing Function deadline that someone can't hide from, it drives everything else to get built as they go: results, decisions, and learning loops.
Get Started Even When You Have No Idea What to Do
If you want your people to start picking these ideas up, but someone's just plain stumped, then their first Forcing Function can be to find something to own (by a specific date). “On June 5th, I'm going to announce what I'm owning.” This can include making the rounds with the team to find the right project.
Then, the next Forcing Function could be to come up with another Forcing Function! “On June 12th, I'm going to announce what I/we're going to do next.”
Execs: Let Employees Decide
Every time an employee comes to you for a decision, you're stealing a chance for them to practice their own decision-making. You're teaching them to depend on you.
Every time an employee comes to you for a decision, you're stealing a chance for them to practice their own decision-making. You're teaching them to depend on you.
First, decide together if it is something that requires your decision or authority. If it's not required, then make it their decision, even if they don't want it! New responsibility can be exciting and intimidating. Decisions determine destiny. Owners need to improve their decisiveness and confidence, which comes from practice and coaching.
So as often as you can, find opportunities for them to make more of their own decisions, and live with them. One rule: they have only to ask for advice from someone else before they make it.
If what they decide “fails” or just doesn't work out, don't punish them. Punishment will teach them never to take another risk. Help them by coaching them on what to learn from the experience, so they can do better next time—and make sure there's a next time.
When you make a decision for an employee, you're robbing them of a chance to practice it themselves, to learn. Even if the decision ends up being a painful one, making mistakes is the cost of doing something new—especially when learning how to be entrepreneurial.
Push decisions down, to develop your people and reduce bottlenecks at the top.
Figure 21.1 Push decisions down to avoid executive bottlenecks and develop your people
How Does Functional Ownership Develop People?
As employees keep up the momentum in owning projects and creating Forcing Functions, they'll continue to pick up the habits of successful Ownership. Some will learn quickly, others slowly. Owning means:
- Learning how to deliver results, not excuses. When you're a CEO with a payroll to meet, you learn quickly what a waste of energy excuses are.
When you're a CEO with a payroll to meet, you learn quickly what a waste of energy excuses are.
- “Asking for advice, not the answer,” and gaining confidence in yourself, your ideas, and initiative. How did you end up in your current role? It was probably because you've always followed your own intuition and desires, instead of happening because other people thought you should do it or would be great at it.
- Making decisions as the authority, not deferring to others—and then avoiding responsibility for the results.
- Getting used to being uncomfortably honest and transparent, including dealing with problems now rather than pushing them off. Does someone on the team need to go or change? Is there a problem with a new product, leads, or sales that no one wants to admit because it'd cause an embarrassingly painful reforecasting for the CEO and board?
- Embracing and taking appropriate credit for your successes and responsibility for failures, and not denying or hiding from either one. And honestly giving credit where credit is due—again, whether people contributed or screwed up.
- Learning how to grow, improve from, and get used to inevitable disappointments and failures. If you're not failing, frustrated, or disappointed almost every day about something, you're too comfortable.
If you're not failing, frustrated, or disappointed almost every day about something, you're too comfortable.
- It means learning about sales, decisions, and customers' success—whether with external customers or internal ones—such as identifying a problem with the fridge system, selling a team on why change is needed, and ensuring change happens.
- It means developing self-awareness. As an owner, when you step into 100% responsibility for something and stop making excuses, then all that's left is you. For some, it's liberating; for others, it's frightening. You are the only person in your way; you're the one who can make the most of your opportunity at work and in life. Hate your boss? Change your own attitude, or change jobs—but don't complain or make excuses about it.
Ownership isn't about how “big” or “small” something is, as long as it's important to someone, and is appropriate to the owner (not too easy, not impossibly challenging). It can mean owning the fridge, the company blog, the phone system, fun team-building events, an internal wiki, a product launch, a multimillion dollar product line, or a conference.
Discover the latest case studies and examples of how other teams Embracing Employee Ownership at FromImpossible.com.
Now Do This …
After reading this section, get together with your people and talk about how you're going to apply this at your team or business.
Take what you like, leave what you don't.
Case Study: How a Struggling Team Turned into a Self-Managing Success
Lou Ciniglia managed a 13-person national sales team at TheLadders. This is an example of how he created Functional Ownership on the team, transforming results. Enter Lou:
I was a new manager, and my team was struggling with several issues.
- Few people ever hit quota.
- Little communication from executives—we were the last ones to know about comp or pricing changes.
- No career path.
- People were regularly laid off without warning.
Beyond my team, the whole company had communication and trust issues. Executive management was very busy and tight-lipped. Sales and marketing never talked. No one knew what was going on. Directives from top leadership would change regularly without warning. Frustrations went unacknowledged and festered. Trust in senior leadership was nonexistent. So whatever the company or executives said or directed, without the trust of the team, they were being ignored.
We didn't yet have a defined sales process, hiring system, or understanding of what was required to make a rep successful. There was no predictability.
To Turn Things Around
First: Two-way communication. We had a very top-down, command-and-control management approach here. The first thing we did was start communicating more often and more quickly with the team and actively listening to what they had to say and the changes they wanted, rather than thinking of their comments as complaints.
Second: Functional Ownership. Instead of creating and managing the new sales playbook by myself, I delegated the work to a volunteer who wanted to own it. They led the team in creating the content, we worked together on the format, and they trained themselves. It became an example for other teams in our company to emulate.
Instead of creating and managing the new sales playbookby myself, I delegated the work to a volunteer who wanted to own it.
Third: Transparency. We focused on transparency when decisions needed to be made, how our strategy to get there would be impacted by each one of the participants, and our commitment to it. Including goals, quotas, and comp, transparency helped the team feel engaged and energized—because they knew what was going on, and how they could contribute. Money, comp, and possible changes to them are sensitive topics. We were able to work through it successfully by being very upfront and honest about even these sensitive topics, and explain the process from the business's perspective. Being transparent before any changes happened made it a much simpler, smoother process for people. No one likes surprises at work.
Fourth: Meetings. Within weeks, my team began hosting their own meetings. Every single week someone from the floor hosts the meeting, creates an agenda, and includes people from within their team who are excelling in certain areas of the sales process. They include other people from the organization who can knowledge-share with us. “The old Lou” used to run the meetings as if they were all about him: his agenda, his system, and his expectations. And those meetings probably sucked for the team.
Now they create an agenda that's important to them. So they invest more energy in making it effective, and we get more variety.
Now that our team's actually hosting its own meetings, building their own sales playbook, and training each other in it, it's basically a self-managing team.
Competition in the Team
Another challenge that we originally faced was having a lot of reps who kept their best secrets, well, secret. We've changed the whole team attitude to “We're all in it together” rather than “If you win, I lose.” People are constantly helping each other.
Team Leads
One of the other changes that helped bring the team to life was the promotion of team leaders within this organization.
We were a team of only 13 people, but we had a couple of people who said, “I want to take on a new challenge. I want to push myself, to stretch myself, and learn a little about leadership.” And we've created opportunities for people to take on extra responsibility, particularly for tasks I don't need or want to do anymore, such as basic training of new reps.
We considered paying extra to the team leaders, but decided together against it. The people who volunteered to take this on are doing it not for pay, but for experience. They're excited about gaining some business acumen, maturity, or experience.
But How Are the Numbers?
You might be wondering: If everyone's doing their own thing, are they more motivated or are they sloppier? Coming in late, or goofing off? Too much freedom can create chaos. Did this experiment in freedom and empowerment end up hurting sales instead of helping?
If everyone's doing their own thing, are they more motivated?
The results that we've produced as a team have been impressive. We actually had some milestones last quarter that had never been hit on either individual or team levels. We can't share actual numbers, but here are two big milestones we saw happen.
- First, we originally wanted to be able to identify, hire, and promote new hires quickly. Our last three new hires exceeded their quarterly target significantly in the first three months onboard, which had never been done before. It sent an unmistakable message that “Hey, we've got something here that is really working.”
- Second, as a team, we had a record number of reps exceed their quarterly targets over the past three months. So, yeah, this change in team culture and my management approach made a huge difference in the sales numbers.
How It Affected My Ability to Lead
Having a more self-managed team means I've been able to get an enormous amount of time back. First of all, I can do a lot more one-on-one coaching and developing each person. Even with 13 people, they don't feel like I'm too busy to give them dedicated attention.
Instead of having to focus on minute team details and assembling weekly KPIs (which my team leads do), I had more time to focus on the strategy of our department and work with other organizations within TheLadders.
And our team and people have been in the limelight much more, because of our success and new methods. Success has added a lot of energy to the team.
All the new teamwork and ownership totally re-energized the team. There was a constant buzz here that even visitors commented on. There was a life, energy, and positivity to the team that was obvious.