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When Employees Become Owners

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When Employees Become Owners

August 4, 2015

by Beverly Flaxington

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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Dear Bev,

I hired a team member a couple of years ago who was very seasoned with an excellent background and a track record of success. He arrived, and all of a sudden he wasn’t motivated, didn’t return client calls in a timely fashion and had no fire in the belly. He wants ownership, but I need to see motivation to give it.


Dear M.R.,

I can sense the frustration in your note to me, but I can’t find the question. Are you asking whether you should give ownership to this individual or not? If so, this is a key question facing many advisors. The industry is aging, and determining how to expand ownership and create a succession process is a problem many face. It’s really important to have a clear plan for taking someone from employee status to ownership. A clear path to partnership – from the outset – is critical.

This includes everything from defining the roles, the time and process of moving from one role to another, the specific activities expected in each role and the measurements for success. You say this person is “not so motivated” and “doesn’t return client calls.” I’d ask what criteria you are using to determine motivated versus not-so-motivated and whether this person knows the calls are his responsibility and that there is an expected timeframe for returning them.

We see far too many cases where the lead advisor or owner of the firm is too vague in outlining expectations. Offering your advisors or other employees ownership is a big step. You might know in your own mind what needs to happen for these people to deserve the ownership, but if you haven’t very clearly outlined that for each person, they may believe they are doing what’s necessary and become frustrated that they aren’t earning the ownership in return.

If you haven’t done so, develop a list of roles, required actions and accountabilities for each role, timeframes and measurements. Sit down with this person and review where they are and what they need to do to move along the path to ownership with you. Set regular check-ins – either every other week or monthly – to review progress. My guess is that there is a disconnect in communication and understanding. If you can become clearer with this person, you’ll both understand where he/she stands.

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