We're All the Boss

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A 1993 survey of 188 companies conducted by the Washington State Office of Trade and Economic Development found that employee-owned firms grew no faster than conventional companies unless they gave workers a voice in management. Likewise, broader sharing of information and authority with workers didn't boost growth unless that was combined with ownership. But firms that put the three together grew about 12% faster than their competitors.

To see the difference between merely giving stock and letting workers shape their destiny, look at the airline industry. In return for lower wages in 1994, United Airlines pilots and mechanics got more than half the company's stock. But life inside the cockpit and at loading ramps barely changed. By contrast, Southwest Airlines employees own only about 11% of the company's stock, but the company works to encourage and implement workers' suggestions, in part through town hall-style forums with top management. While there are other important differences between the carriers, workplace culture is a big reason United posted record losses last year while Southwest made a healthy profit--as it has for 29 years.

Corey Rosen, executive director of the National Center for Employee Ownership, says workers "don't necessarily have to have a vote on the board. What's really important is to have an influence on the way you do your day-to-day job." In exchange for that little bit of power and a stake in using it well, most workers will do whatever they can for their company.