The Secret Ingredient of Business Success | Pete Stavros | TED

Summary

The speaker, an experienced investor, recounts his first job at 24 and the profound impact of stock ownership on employees, from CEOs to mid-level staff. He shares a touching story of an assistant treasurer whose payout meant a college education for his children, sparking a vision of universal stock ownership. The speaker's father, a union worker, dreamed of worker ownership to address wealth inequality, lack of incentives, and voice in the workplace. Through his career, the speaker has promoted employee stock ownership, leading to significant improvements in company culture and performance. A case study of Chi Overhead Doors demonstrates how giving all employees stock ownership, coupled with transparency, education, and a voice in decision-making, can transform a company and community. The resulting wealth creation can have a lasting positive impact on local economies. The speaker's nonprofit, Ownership Works, aims to expand this model to a million workers, advocating for Employee Stock Ownership Plans (ESOPs) to foster an inclusive and sustainable form of capitalism.

Takeaways

• 🎓 The speaker's first job as an investor involved overseeing wire transfers for a business sale, highlighting the importance of shareholders receiving their money.
• 🏢 Companies of all sizes have shareholders, and as the company's value increases, so does the wealth of those who own shares.
• 🤝 The speaker's company extended stock ownership to employees from the CEO to mid-level roles, aiming to align employees' interests with the company's success.
• 📈 The emotional impact of stock ownership was evident when the assistant Treasurer, who received a smaller payout, was deeply moved by the potential for his children's college education.
• 👨‍👩‍👧‍👦 The idea of broad employee stock ownership can significantly impact employees' lives and the community, leading to a more inclusive and sustainable form of capitalism.
• 👷 The speaker's father, a union construction worker, dreamed of worker ownership to address wealth building, productivity focus, and a voice in the company.
• 📊 Stock ownership, or the lack thereof, is the primary driver of wealth inequality, with only a small percentage of workers granted ownership in their companies.
• 🌐 Globally, a significant number of employees are disengaged at work, which the speaker aims to change through broader employee stock ownership.
• 📚 The speaker has been researching and advocating for employee ownership for over 25 years, starting with a paper in 2002 and later implementing it in various companies.
• 🚀 A successful case study is Chi Overhead Doors, where all 800 employees were granted stock ownership, leading to improved productivity, quality, and a tenfold increase in company value.
• 💰 The financial success at Chi Overhead Doors resulted in life-changing payouts for employees, with the most tenured workers earning significant multiples of their annual income.
• 🏆 The speaker and his wife started a nonprofit called Ownership Works to promote employee ownership and help companies adopt this model, aiming to impact a million workers and create tens of billions in wealth for working families.

Q & A

At what age did the speaker start their first job as an investor?

The speaker started their first job as an investor when they were 24 years old.

What was the speaker's initial task related to company sale?

The speaker's initial task was to oversee wire transfers related to the sale of a business, ensuring all shareholders received their money.

What impact did the assistant Treasurer's ownership payout have on his family?

The assistant Treasurer's ownership payout meant college education for his kids, which was a significant emotional and financial impact for him.

What three issues did the speaker's father want to address with worker ownership?

The speaker's father wanted to address the inability to build wealth on $20 an hour, lack of incentive to care about productivity, and having no voice in the company.

What percentage of employees globally are disengaged on the job according to Gallup surveys?

According to Gallup surveys, 77% of employees globally are disengaged on the job.

What is the speaker's belief about broadening Employee Stock ownership?

The speaker believes that broadening Employee Stock ownership is the single most important thing that can be done to lift up workers and make companies stronger, potentially leading to an inclusive and sustainable form of capitalism.

What was the key takeaway from the speaker's early efforts in sharing stock ownership with employees?

The key takeaway from the speaker's early efforts was ensuring that stock ownership was free and incremental for workers, not a trade for wages or other benefits.

What was the name of the company the speaker invested in, which was based in Central Illinois?

The company the speaker invested in was called Chi Overhead Doors.

How did the company Chi Overhead Doors change its culture and improve employee engagement?

Chi Overhead Doors changed its culture by granting stock ownership to all 800 employees, educating them about the business, keeping them informed, sharing financial information transparently, and giving them a voice in company decisions.

What was the financial impact of the ownership program on the company Chi Overhead Doors?

The financial impact was significant, with the company being worth 10 times what it had been worth in 2015, making it the single best investment for KKR since the 1980s.

What was the community impact when Chi Overhead Doors was sold?

The community impact was substantial, with $340 million of wealth injected into the community, which could lead to more tax revenue, better schools, new business formations, and a more robust local economy.

What is the mission of the nonprofit 'Ownership Works' started by the speaker?

The mission of Ownership Works is to ignite a movement around employee ownership and to help CEOs and companies who want to implement such programs, with a goal to reach a million workers over the next 10 years and create tens of billions of wealth for working families.

What does the acronym ESOP stand for and what is the speaker's goal related to it?

ESOP stands for Employee Stock Ownership Plan. The speaker's goal through a new organization called Expanding ESOPs is to pass legislation in the United States to make ESOPs easier and faster to form, particularly with larger businesses.