Equity Doesn’t Create Owners. Psychological Ownership Does.

AUDIO Psychological Ownership. Why Your People Don't Feel It the Way You Do.

VIDEO Why Your People Don't Feel Ownership the Way You Do

0:00 Why Your People Don't Feel Ownership the Way You Do

The same business can mean something very different to different people.

When was the last time you met someone who took what they did so seriously that you could actually see it? Maybe it was their job. Maybe it was a side project, a hobby, a cause they cared about, or the parent-teacher organization at their kid's school. Whatever it was, you could see clearly that it meant something to them. When something good happened, they felt good.

When something went wrong, they felt bad. When there was an accomplishment, they took personal pride in it, and when something failed, They felt it as a personal failure. Maybe that person is you.

0:33 Who Acts Like the Place Is Theirs?

You can see the difference long before anyone talks about ownership.

Now, let me bring this closer to home. Whether you are a founder, a CEO, a manager, a team leader, or a contributor, think about the people in your organization and think of one person who acts like the place is theirs.

You probably didn't have to think very hard. You know exactly who that is. Now think of someone who doesn't. Someone who does the job and goes home and whatever happens to the business is not really their problem. You didn't have to think hard about that one either.

Same company, same building, same paycheck, or close enough, and 2 completely different relationships with the same business.

1:11 What's Your Biggest Problem?

The sentence a business owner used to name his biggest problem

Years ago, I was cold calling some business owners. At the end of one of those calls, I asked a throwaway question. I said, what's your biggest problem? And he said, I have people who don't feel ownership the way I do.

I've never forgotten that sentence because he said it in one line better than I had managed to say it in about 5 years. And here's the question I really want you to dig into, Mr. Founder, Madam Founder, and this one's going to pinch a little bit. When you started this business, how much did you feel like an owner and where are you today? Do you feel more of an ownership now than you did at that time, or do you feel less of an owner?

If having people in your organization who genuinely care about what happens to the business is important to you, and if you want people who think, feel, and act more like owners without becoming possessive or territorial, I have some good news for you. In this episode, we're going beneath the surface of ownership. We're going to look at what actually happens inside us when something becomes Ours. Why does it change the way we think, the way we feel, and the way we behave? And why can that same sense of ownership be so powerful in a business, yet sometimes turn into something unhealthy?

We're also going to look at why the usual way of creating ownership often don't work. Equity, bonuses, profit sharing, telling people to act like owners. Here's a clue. It has almost nothing to do with money. And I'm going to give you a simple action you can take today.

It looks almost too simple, but taken consistently and taken company-wide, it can build a culture of positive ownership across your whole organization. By the end, you'll have a different way of looking at ownership and perhaps a different way of looking at yourself, your people, and the organization you're building.

2:59 Do You Need All the Answers?

The questions you ask may reveal more than the answers you give.

This is The Business Philosopher Within You podcast. I'm your host, Bhavesh Nair. And a quick thank you to you, our listener.

Hey, listen, this podcast isn't about me telling you what to think. It's about helping you become your own best business philosopher. Great organizations aren't built by people who have all the answers. They're built by people who ask better questions. So as you listen, challenge these ideas, test them in your organization, like, subscribe, and follow.

But most important, ask and answer questions because the business philosopher that we're talking about is already there within you. Thank you for tuning in.

3:34 What If Money Were Off the Table?

Take the financial security away and something else starts to surface.

I promised you an action and I'm gonna give it to you right away so you don't have to watch the rest of this if you don't want to. Here it is. Pick one person who reports to you, not your best one, not your most difficult one, just one, and find 20 minutes with them in person if you can, on a call if you can't.

I'm going to give you a couple ways to start this conversation. You can do it the fun way or you can do it the more serious way. Let's start with the fun one. Ask them to pretend they just won a $100 million Lottery. Taxes are paid.

The money's in the bank, $50 million. Then ask them, how long would it take for you to come to me and tell me I quit? They'll laugh and say, 10 minutes. That's fine. You're not listening for the answer.

What that question does, however, is take money off the table, and that's exactly what you need for the next part. Now say, all right, same situation. You're fine. Your income is taken care of. Your health insurance is taken care of.

Your family's fine. Nothing about your financial or physical security is threatened. But this time the business is gone. And ask them 2 questions in this order. First, what's the first thing you would think about?

Let them answer, get into it a little bit. Then ask, how would you feel? Now, the order is important. If you open with, how do you feel? Most people aren't going to know what to do with that question, or they'll just give you an answer they think that you want to hear.

If you ask it second after they've already said something out loud, you'll get something different. So let them talk. Don't help them out. Let them get into it a little bit. Then run it the other way.

Same rules. They're fine no matter what, but this time the business doubles. Twice the revenues, twice the profit. Everything you and they care about is moving in the right direction and they played a meaningful role in making it happen. Now ask the same 2 questions.

What's the first thing you would think about and how would you feel?

5:29 What Are You Actually Watching For?

The answer matters, but so does everything that happens while someone gives it.

Now here's the most important part of the whole thing. It's not the words you're looking for. You ask them how they would feel. Don't take the feeling word they give you at its face value.

That's not really what the question is for. The question is there to get them to look inside themselves. And what you're watching is them looking. Watch what happens while they answer. The pause before anything comes out, whether they look at you or look away, whether their voice changes, whether they answer quickly just to get past the question, whether they give you far more detail than the question needed.

Somebody can tell you, I feel terrible, and be completely unmoved while they say it. Somebody else might say, I don't know, and you can watch the whole thing land on them. You're not collecting answers. You're watching what happens to them. How they react as they answer the question.

That's the action. One person, 20 minutes. If it goes well, do the same thing with the rest of your direct reports and ask that first person to do the same thing with one of theirs. If that goes well, you can facilitate the process and let the conversation move through the whole organization. And if you want to know why any of this works, stay with me because that's the rest of this episode.

That exercise gives you a reading, not a number and not a score. It's a reading, a reading of how much of your business someone actually feels is theirs. And I want to explain why the reading is worth paying attention to and why it's almost never the thing we go after first.

7:01 Can Equity Create Ownership?

Why equity, bonuses and profit sharing do not create ownership

But before I go any further, let me be clear about something. If you've given people equity, that's a good thing.

Shares, options, profit sharing, a bonus tied to the numbers. A plan where people participate in what the company earns. None of that is a mistake, and I'm not going to tell you to undo any of this. Those things are fair. They're often the right thing to do.

And let's face it, in a lot of companies, they're long overdue. Also, if you've stood in front of your team and asked them to act like owners, I understand exactly why. I've done it. We've all done it. Here's the problem.

Every one of those things exists. Outside the person. A share certificate is a legal fact. A bonus is a financial fact. The building, the equipment, the laptop, the keys, that physical possession of things, all of it is real.

All of it matters, but none of it is what we were looking at in the beginning of this episode. Nobody at that parent-teacher organization had equity. So there's another kind of ownership and it is stronger than the legal kind. Now that sounds like an odd thing to say, so let me earn it.

8:07 Does This Feeling Have a Name? 

What psychological ownership is, and where the term comes from

That other kind of ownership has a name, and I want to be transparent about that.

I've been calling this psychological ownership for a few years. It's the term I came up with to describe what I was saying. Then I went looking more carefully and I discovered there was already a body of research using the same term to describe a similar phenomenon in their own way. They've been studying psychological ownership for years, going back to the early 2000s. Now, I didn't get the idea from that research.

I wasn't even aware of it when I started developing my own thinking around this. I arrived at it independently. And honestly, I like the fact that the research is there because it gives us something useful. What we are talking about isn't just a metaphor I've invented to explain something I've observed. Other people have observed it too.

They've studied it. They've given it a name, which happens to be the same name that I gave it, psychological ownership. That's the term I'm going to use. And what I want to do in this episode is explore it from the perspective I've developed through my own work, because what I'm interested in is what happens when something becomes psychologically ours. What changes inside us?

How does it change the way we think, the way we feel, and the way we behave. And what happens when that experience exists across an organization?

9:29 Do You Still Own It the Way You Did in Year One?

The legal relationship may stay the same while the psychological relationship changes.

Now check this against yourself because this is where it stops being academic. You legally own your company.

Do you psychologically own it the same way you did in the first year? Most founders I talk to say no. The psychological ownership of a business goes through its ebbs and flows. Sometimes you feel more of an owner and other times less. Either way, the legal fact Hasn't moved.

The psychological one has. And that's the point. Psychological ownership moves. It has been moving the whole time you've been running the business. And the more you can see it in yourself, the better you are able to see it in other people.

Which brings us back to the question I was asking you at the beginning. Are you more of an owner today than you were then or less? There's no right or wrong answer, but now you know There's a question that's worth asking.

10:21 What Happens When Something Becomes Yours? 

How ownership forms: the thought, the feeling, then the action

So why is the psychological ownership stronger than the legal or financial ownership? Let me take you through what actually happens inside a person because it is the same basic process in all of us.

It starts with something that is always there, a sense of me, of I, this person. You have it right now listening to this. Nobody gave it to you. You don't have to maintain it. It's the thing everybody else attaches to.

Then comes the thought, this is mine. That's the first move. And it's a thought, not a feeling. Something crosses the line from out there to mine, a project, a team, a problem, a company. Now I know you may be pushing back here a little bit because in your experience, it started with the doing.

You didn't sit down one day and think, this is mine. You just found yourself working on it. That's fair. But go back one step. Before the hand moves, a thought has formed.

Most of the time you don't catch it because it takes a fraction of a second and it doesn't announce itself. That thought is subconscious, but it still happened. You can act before you are consciously aware of the thought. Once that thought is in place, a feeling follows it. You start to care what happens to the thing.

And I mean actually care, not professionally care. And when you care what happens to something, you do something about it. You behave differently towards it. You stay with the problem 20 minutes longer. You notice the thing that wasn't your job to notice.

You send the message on a Sunday that nobody asked you to send. Me, this is mine. I care what happens to it. I will do something about it.

11:52 When Does Mine Become… Me?

The loop that turns "this is mine" into "this is me"

And here's the part that makes it so powerful.

It's a loop. The action feeds the thought. You act as though it was yours. That becomes evidence that it is yours. The feeling gets stronger.

The next action gets easier, and it comes around again. And again until the relationship becomes increasingly automatic. You're not deciding to care. You're not consciously choosing to stay. You just do.

And somewhere along the way, this is mine can become this is me. That is ownership, not the certificate. That. And this is where the beginning of this episode comes back. When something good happened, they felt good.

When something went wrong, They felt bad. When there was an accomplishment, they took personal pride in it. And when something failed, they took it as a personal failure. We watched that from the outside and called it caring. And it was caring.

But underneath that caring was a loop that had run so many times that the person and the thing had stopped feeling like 2 separate things, which is also why it can be stronger than a share certificate. I want to land this one properly. When something becomes part of who you are, You defend it the way you defend yourself. This is so important. We hold our own lives very dear.

All of us do. And whatever has become a part of our own sense of self gets some of that same protection, some of that same energy. Nobody has ever defended a share certificate like that.

13:22 Formidable… or Territorial?

When ownership turns territorial, defensive or impossible to hand over

Now, everything I've just described can go wrong, and it can go wrong at every one of those steps. Not just at the end.

This is mine is something that someone takes responsibility for, even though nobody assigned it to them. That same thought can also show up as, that's my turf, and it could mean stay out of it. Caring can enable someone to notice the thing that was about to break. That same caring can interpret a simple question about their work as a personal attack. Acting as though it's yours is what gets the extra done.

It can also make someone refuse to hand a task over because nobody else will do it properly. And then there is, this is me. That's the strongest one. And it can be the most expensive because now a decision about the business can feel like a decision about yourself. Criticism of the work can feel like criticism of you.

Changing direction can feel like self-betrayal and letting go of a piece of it. Can feel like losing a piece of yourself. That's why letting go can be so much harder than anyone admits. Every step has 2 faces. The thing that makes somebody formidable can also make them territorial.

The thing that makes somebody care deeply can also make them defensive. The thing that makes somebody take ownership can also make it difficult for them to let go.

14:43 What Changes When You Can See It? 

Seeing the pattern is what gives you a choice about it

So what do you do with all of this? The first thing is not an action. It's a shift.

Everything I've described to you is already happening in you and in every person who works for you. It has been running the whole time. It runs underneath your conscious attention. All I've done in the last few minutes is describe it to you, but describing it does something. When you bring awareness to a process like this, you create a little distance from it, some space, and from inside that space, you can watch it.

You couldn't do that when you were completely inside it. And the moment you can watch it, you have something you didn't have before, a choice. Because while the process is running underneath your awareness, it runs you. You're not choosing to be territorial about your business. You're not choosing to be unable to hand over the one thing you've been meaning to hand over for the last 3 years.

It's happening to you. The moment you can see what's happening, that changes. It doesn't disappear. You wouldn't want it to, but it stops being something that simply happens to you. You now have a say in it.

The ownership that was happening to you becomes something you can work with. The best word I have for this is discernment. Discernment is the ability to look at something without seeing it as good or bad, to observe it, to examine it, to turn it over. Point that at your own ownership of the business and you can begin to see where it is serving you and serving your people. And also where it's not serving anyone.

Now you can tell the difference between this is mine and this has become me. And knowing which one you've got in which part of the business today, that's a powerful place to stand because now you have some control over your own ownership of a project, of a piece of work, of an entity, of the whole company. And once you can see it in yourself, you can do something you couldn't do before. You can help the people around you see it in themselves, not by telling them to own it, but by helping them see their relationship with their work.

16:48 How Can Two Odd Questions Do Anything?

Two questions that make ownership visible, and the order they go in

Now, you're probably wondering how asking somebody 2 odd questions can actually do anything.

Here's why I think it works. When you ask those 2 questions, you're asking them to do something they almost never do out loud. You're asking them to look and to find an answer. They have to go and look where this business actually sits in relationship To them. Is this a place I work or is this mine?

That's the first move, the thought, this is mine. And once they see it, they can begin to notice what comes with it. What do I feel? What do I care about? What would I do?

The exercise isn't measuring the loop from the outside, it's making the loop visible. Nobody can hand somebody the thought, this is mine, and no amount of equity guarantees it. But a question can invite someone to look. Ask it once and you made ownership something that can be talked about. It stops being something that may be operating quietly in the background and becomes something 2 people have actually put into words.

Ask it regularly across the company and something else starts to happen. Your managers ask their people, their people ask theirs, and eventually people are talking about how they relate to their work without anyone having to tell them to take ownership around the water cooler, at the Friday happy hour. That's when you may have something bigger than an exercise. You have a culture of positive ownership. And there's a second thing that the exercise can reveal, the other face, someone whose ownership has become territorial, someone who can't let a piece of the business outta their hands, someone who hears a simple question as a threat.

That's important to see as well. Because healthy ownership isn't just about having more ownership. It's also about being able to see what kind of ownership you do have.

18:37 Who Asks You the Questions?

Sometimes the person closest to the business is the person least able to see it clearly.

One more, and this one is harder. Do it on yourself, except you probably can't.

You're too close to it. And that's not a criticism, it's just what being close to something does. So you'll need somebody else to ask you the questions. A coach, a counselor, your husband or your wife, someone who knows the business well enough that you don't have to explain it to them. And who you can trust enough to answer honestly in front of.

And that brings us back to the question I asked you at the beginning, the one I said would pinch. Are you more of an owner today than you were before or less? You now have a way to look.

19:16 Where Is the Performance You're Looking For?

What a culture of positive ownership is worth

And this is where I want to leave you because ownership isn't the end of the line. It changes how somebody thinks, how they feel, how they behave, and that can change what they can bring To the work, which brings me to something I've kept outta this entire episode, performance.

I don't think the performance you're looking for is outside your company waiting to be hired. I think much of it is already there. It's sitting in people who could bring far more than they're currently bringing. And sometimes what is missing isn't effort, it's the relationship that they have with the work. What's someone who genuinely owns what they're doing?

They don't always look like they're working harder. Sometimes they actually come alive doing it, like a dancer who has stopped thinking about every movement and is simply in it. The performance becomes almost effortless. And I think that's worth paying attention to because that's different from simply getting more out of people. That's a subject for another episode.

Until then, one person, 2 questions, and then watch happens as they answer. This is the Business Philosopher within you, and I'll see you next time.