It was really interesting listening to Sean Colgan (owner of IMI – the largest distributor of raw materials in the world) yesterday talk about how he manages situations/ operations which – because of the large number of countries that his business interests are in – are largely outside of his ability to manage effectively remotely.

Fully understanding this difficulty, Sean chooses to instead empower others who possess the necessary competencies to manage/ govern each of IMI’s operating sites around the world, and he achieves this by providing each senior appointee with a generous (e.g. greater than 30 %) shareholding in the given business operation (e.g. aggregates refinery).

Why ? A few key reasons:

a) It nullifies – and protects against these employees – being tempted to steal from the business.

b) It creates a significant incentive for key personnel to remain with the company longer-term.

c) It invokes a real sense of ownership among these employees – which causes them to apply themselves thoroughly to driving the interests of the business forward. E.g.1 Contributing quality ideas as/ when asked to do so for the betterment of the company as a whole. E.g. 2 Ensuring that the compliance obligations in relation to the operation that they are charged with managing are in fact met in full. E.g. 3 Appropriately rewards these appointees for the intensive work that they perform managing the operation that is their responsibility  (i.e. human resource management, equipment management, etc).

In addition, to engender a further sense of “ownership” among all employees Sean authorises the distribution of over 20 % of EOY profits across all employees. This annual distribution is activated providing that no noncompliance events (e.g. breaches of Health & Safety standards) have occurred throughout the year. This condition encourages all employees to maintain a close watch over the activities/ actions of their peers – making sure that their colleagues don’t breach governing regulations and thereby jeopardise the opportunity for the entire team to receive a profit share at the end of the Financial Year. Clever !

Do you see the common theme here ? That being, the willingness of the business owner to truly empower their workforce through offering meaningful (substantial) tangible incentives. Concurrently, the owner is creating the opportunity to spend more of their time pursuing other interests – which may or may not be business related. In other words, empowerment creates the opportunity for business owners to release themselves from the “coalface” of hands-on managing their operation. I also talk about this commendable pursuit/ objective in my first book.