[WATCH NOW] Create a culture of ownership to drive business growth

At a recent virtual event, experts discussed how business leaders can create a culture of ownership where employees feel valued and heard.

• At the recent event, "Driving Company Growth Through Creating a Culture of Ownership," experts in equity and talent management reflected on the significance of equity awards for fostering employee commitment to business success.
• Educating employees about the value of equity programs is critical to driving growth.
• Comprehensive equity strategies are an effective way to create a culture of ownership.
• Watch now and find out how you can establish a strong culture, prioritize transparency, and retain talent. 

In today's business climate, where attracting and retaining talent is growing increasingly complex, a strong company culture is more important than ever. 

"Communication and transparency with your employees are critical to creating this culture of ownership and to motivate employees," said Norwest Venture Partners Principal of Talent Teri McFadden at a recent virtual event sponsored by Morgan Stanley at Work. 

Prioritizing a transparent and open dialogue can facilitate a culture of ownership and community where employees understand the value they bring to the company and their role in business success. Not only does this lead to more satisfied employees, but it also helps drive sustainable business growth. 

The conversation, which was moderated by Rodney Bolden, vice president and head of Industry Engagement and Learning at Morgan Stanley at Work, highlighted multiple strategies for building a culture of ownership. Among them: Incorporating equity compensation into a broader compensation strategy that aligns with your company's values and culture. This empowers employees to become stakeholders in the company's success and fosters a more robust understanding of the organization's overarching goals.

Shawn Murphy, chief client officer and chief operating officer at Morgan Stanley at Work, cited a recent article in the Journal of Law, Economics, and Organization that examined employees' financial literacy around equity compensation. The researchers found that only a small fraction of employees have the financial knowledge to make informed decisions regarding equity.

"To ensure that these employees actually understand the value of the equity that you're giving them and make these appropriate financial decisions based upon their personal circumstances, we have to continue to not only educate at that initial time, but then regularly thereafter," Murphy said at the event. 

Laura St. Charles, senior paralegal, corporate and equity administration at Acorns, conducts an "Equity 101" workshop for employees to ensure they understand all the basics. 

"I encourage that everyone attend, and then from there, have them reach out to us and help them with any other questions they have, and sort of start from that base," she said. "I think assuming that people understand what a [stock] option is and how it works isn't always accurate, so you want to give them the opportunity to engage at the basic level, and then we can build from there."

Understanding the nuances of international expansion

When expanding into global markets, these considerations become even more complex. A one-size-fits-all approach won't suffice. 

In the US, for example, workplace financial benefits like equity compensation are often considered individual benefits for the employee. But in many other countries, these are typically considered a family benefit. It's important to ensure you fully understand cultural nuances, local regulations, and tax implications during expansion — and find ways to effectively communicate with potential employees and determine the right compensation strategies. 

Morgan Stanley at Work is one organization thinking about benefits on a global scale. HR leaders offer education to both employees and their families on topics like equity, taxation, and compliance.

"We encourage participants and employees to bring in their family members to also get educated so that we're providing a much more holistic experience for them to be making decisions as a collective unit," Murphy said. 

Find creative ways to retain top talent

At a time when companies are staying private longer, retaining key employees remains a challenge for business leaders. This makes benefits, raises, and salary adjustments all the more critical for companies that want to keep their top employees. 

So, how can organizations continue to reward their people and ensure they feel valued? One idea is to adjust compensation plans by offering retention equity — based on time with the company and performance — to keep top-performing employees motivated and engaged. 

But this type of compensation strategy isn't always the easiest to understand. McFadden said it's important to educate employees that there are time-based and performance components to retention equity. And typically, only the best-performing employees are rewarded.

"It isn't just a matter of how long [you have] been here … but there's also an element of your performance that goes into the decision," St. Charles said. And it's another way to motivate and reward employees for doing their best work.

Regardless of your employee retention strategy, communication with the workforce is paramount.

"Make sure that you're approaching your communication strategy using the lens of the employee and what they're feeling, experiencing, and thinking during that time," Murphy said.

Learn more about establishing a culture of ownership by watching the video below.

This post was created by Insider Studios with Morgan Stanley at Work.