Hacker News Reader

Comment by toomuchtodo | Hacker News Reader

Do you think more employee ownership and control, a "seat at the table," would've prevented technically competent leadership from testing customer hostile business decisions?

> Regarding employee morale: It was very depressing for me during this period to open Hacker News and see threads complaining about my employer. I can confirm that it spurred a job search for me.

Indeed. I believe that if you're a shareholder employee owner, you are likely incentivized to not kill the golden goose versus folks at the top making decisions unilaterally, but you also need some ability to say no to bad decisions. Like Costco, employee and customer happiness first, profits after.

(big fan of employee ownership and control contributors, aligning incentives and outcomes and all that jazz)

View on HN

> Do you think more employee ownership and control, a "seat at the table," would've prevented technically competent leadership from testing customer hostile business decisions?

The only peers at the company who were enthusiastic about the decision were the ones who were buying more company stock and wanted it to go up. They thought that anything that increased the bottom line would increase the stock price, and therefore they were on board.

So, no, I don't think increased employee ownership solves anything.

Absolutely agree. I'm a huge fan of co-op type ownership structures for this reason. They might not be moonshots or unicorns, but they always have longevity.

>They might not be moonshots or unicorns, but they always have longevity.

We're going to need a fact-check on this. I'll bet the failure rate of co-ops is well beyond those of standard business structures.

No, it's actually true, they are quite stable. What they lack though is outliers in terms of success. They tend to be quite conservative and as a consequence they are risk averse and tend to play it safe. For a high return you need a different appetite for risk. Of course the key to a different risk appetite is to be able to externalize the negatives of that risk but to be able to reap the rewards. Such asymmetric bets are at the root of most successful business empires, you'd never see them in a co-op.

And you'd lose that bet. Co-ops have a survival rate way higher than those standard business structures. Not marginally higher, a lot higher.

Where's the data?

Mondragon Corporation. Have a look, fascinating.

Not a fan of employee ownership. It's the antithesis of diversification. You're now depending on one company for both your salary and your investments.

Work for a salary. Invest in a diversified portfolio that's not tied to your employer.

Being a partial owner of the company you work at doesn't preclude you from managing your own investments. Employee ownership doesn't mean an ESPP.

Employees are just as stupid as the CEO. The CEO is an employee owner as well and has compensation very highly tied to company equity.

There are advantages to employee ownership. Preventing bad business decisions is not one of them.

>Do you think more employee ownership and control, a "seat at the table," would've prevented technically competent leadership from testing customer hostile business decisions?

Do you think there's some magical moral/ethical line that gets drawn between employees and executives, where the former are naturally "good" and the latter "bad"?

>Like Costco, employee and customer happiness first, profits after.

This is such a strange myth. Do you go to Costco? There's nothing great about the customer experience. It's a discount store of decent quality that pays the employees decent wages. It's better than Walmart and Amazon, but nobody dreams of working there.

> "Do you think more employee ownership and control, a "seat at the table," would've prevented technically competent leadership from testing customer hostile business decisions?"

Employee control doesn't reduce investor pressure for increased profitability. Employee ownership just means that the employees are now the ones exerting the investor pressure and if anyone thinks employees will be willing to take less total compensation (why? "Loyalty to the company"? "Solidarity"?) instead of hopping to a new job, well, good luck with that.

Careful about reading too much into "employee ownership". It can be and at least sometimes (I suspect usually, at least in the US) is structured such that it doesn't really work the way you might think.

1) The shares can be non-voting shares. LOL.

2) Only a relatively small portion of the overall "pie" has to go to employees for them to be able to say they're "employee owned". There can still be non-employee owners involved to a large degree.

3) That slice of the pie will tend to be weighted so heavily toward those near the top of the org chart that in practice it may be more like "upper-management owned" anyway.

I think the main reasons companies in the US choose it are:

1) Propaganda. "You're an owner!" It's a way to trick unwise employees into working harder for (effectively) nothing extra, and even into exhorting others to do the same.

2) Probably some kind of tax-avoidance reasons.

3) As a vehicle for a kind of stock-compensation system without having to take the company public or do occasional odd maneuvers with investors for that stock to be de facto liquid for employees.

IME there's zero percent more meaningful "ownership" involved than, say, Google folks who receive stock as part of their comp (and nobody calls Google "employee owned"). It's a misleading name for the structure.

As a self employed business owner I should definitely start billing us as “employee owned”.

I’m unaware of any tax avoidance advantages but I should ask my accountant (pretty sure he’ll say no though. :D )

I’ve actually considered various ways of assigning non-voting shares in the past as a way to grant employees some skin in the game without ceding control or permanently diluting ownership. It’s not a ‘startup’ in the HN sense so handing out shares willy nilly doesn’t make sense.

> would've prevented technically competent leadership from testing customer hostile business decisions?

Technically competent doesn't always mean empathetic.

The decisions can sometime look like the xkcd cartoon about scientists[1].

[1] - https://xkcd.com/242/

Reply on news.ycombinator.com