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How to create an organization where people take more ownership?
Do's and don'ts for leaders
A short story on creating a culture of ownership and innovation 👇
Lu is a customer service agent at a large company that sells consumer laptops. She regularly hears complaints that their laptops aren’t working well when people want to play games. After looking at more data, she believes the company has a massive opportunity to enter the gaming laptop market.
She first talks to her manager, the head of customer service. He likes the idea and brings it to the head of product. After a few meetings, they believe they need senior management team members on board to get the idea funded. Weeks and months pass. Jill passionately pitched her idea to several senior managers, trying to convince them to support the new product. But eventually, the gaming laptops don’t get prioritized. Jill is left disappointed and demotivated. She will never try to be innovative again.
Lu's story actually happened within the Chinese technology company Haier. But instead of the painful process described above, she was able to pitch the story on an internal funding platform. Quickly, she got funding to build the first batch of gaming laptops - they sold out within days. This success allowed her to secure even more funding. Three years later, Haier's dedicated gaming laptop branch, Thunderobot, went public and became the largest gaming laptop manufacturer in China, with Lu as one of the biggest shareholders.
The need for more innovation was one reason Haier decided to eliminate all middle management and reorganize itself into 4,000 self-managing teams (micro-enterprises).
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Ownership by design
This story illustrates the need to create an organization that 'by design' allows ownership to flourish. It is not enough to tell someone they are empowered and that they 'own' something. Creating an environment where someone is happy to take ownership, takes time and effort.
Paradoxically, we must set boundaries to create more entrepreneurial behavior - we call them 'enabling constraints'. One study showed that kids play close to the teacher when the playground doesn't have a fence. When the boundaries are put in place, kids feel safe to explore all areas of the playground.
So, how do we create more ownership?
Ownership = explicit level of empowerment * an individual's emotional investment.
In other words, to what extent somebody feels ownership depends on two factors:
1. to what extent does somebody have the explicit mandate to make autonomous decisions,
2. to what extent does somebody care about the work they are supposed to 'own.'
After years of coaching leaders and teams to unlock more ownership, our Unblock colleague Koen de Boer created this Ownership Ladder:
It contains some practical do's and don'ts to create more ownership:
What blocks ownership:
inability to choose a task: when people are appointed tasks, they will say yes because they feel obliged to, not because they want to
someone takes ownership, but the leader(s) override as soon as something happens that isn't to their taste
a lack of psychological safety will reduce initiative-taking because it will feel risky
What unlocks ownership:
funding initiatives that people care about and allowing people to opt in or opt out of what initiatives they spend time on
enabling constraints & working agreements that create clarity of what is expected and allow leaders to let go
explicit decision rights so it is pre-authorized what people can decide alone without needing approval
transparency: if you want people to think and act like an owner, give them the big picture and skills to allow them to do that
A shift in leadership
We need leaders to shift from traffic controllers to road designers to enable ownership.
🚨 Ownership is the topic of our next Unblock Leadership Roundtable. If you are leading a team or are responsible for transforming your organization, register here.
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