Lessons That Linger: 14. Creating An Ownership Culture 05 09 2025

Creating An Ownership Culture 05 09 2025

Ever wondered why the ownership spirit is not more widespread in organisations? Puzzled by the high ownership shown by relatively junior staff positions like the CEO’s secretary or driver in contrast to the attitude of many senior managers? Financial benefits alone do not seem to create ownership. But what else does?

My four decades plus experience made me realise that ownership has two distinct elements, the rights and the responsibilities. On the rights front it is being acknowledged as owner and to receive periodic income and on asset sales, the proceeds. In businesses, especially start-ups, ownership culture is sought to be created using ESOPs by creating these rights.

Sharing economic benefits is a great beginning, but has a limited role. Further, sharing economic benefits is not possible in a social or political organisation, nor is it feasible in loss-making economic units. Here ownership can only be created using responsibilities.  Counter intuitively, entrusting individuals with responsibilities creates a stronger sense of ownership, making individuals “own” their roles and their organisations, making the organisation successful.  Even profitable entities combine both elements of rights and responsibilities in creating effective ownership culture.

I have seen three distinct elements contribute to creating ownership culture:  

1. Confidant: Trust is best demonstrated in access to confidential information. By exposing confidential information to an individual, implicit trust is demonstrated that goes far beyond what economic rights can create. Is it the Pygmalion effect of trust begetting trust?
2. Delegation: A higher level of trust is in giving individual a decision makers role. Involvement can be at multiple levels. Presence in decisions making meetings, or being consulted, or the right to decide, or assigning execution responsibility. Each one plays a pivotal role in creating ownership. As etymology suggests, to create ownership, it must be owned; like artists own their creation, owners own what they create, be it a task or a decision and through it the organisation. 
3. Partnership-spirit: In many situations it may not be feasible to involve an individual in decision making or execution. Here creating the ownership spirit lies in how quickly and proactively the information is shared. Ownership culture is created when the partnership-spirit of “want to share” replaces the principle of “need to know” as the default communication mode. 

Beneficial interest is the legal term for ownership rights, and ownership responsibilities are clubbed under fiduciary duties. The need to recognize this difference in ownership rights arose when the care of a property was entrusted to a non-owner, like guardians appointed to manage a minor’s assets, or in companies’ board of directors entrusted with decision making powers on behalf of shareholders. In summary trust, delegation, and proactively communicate to creates ownership culture. Is your experience the same or any different?