In any business, there are times when you'll hit a ceiling -- when growth slows and sales flatten. How do you get jumpstart your engine of growth and get your business moving again?

 

One of my clients is J. Robert Beyster, founder and former chairman and CEO of a company called Science Application International Corporation (SAIC) in La Jolla, California.  Today, the company employs more than 45,000 employees worldwide with annual revenues of more than $10 billion. Dr. Beyster's approach to growing his company was to distribute ownership to his employees. When Dr. Beyster founded SAIC in 1969, he owned 100 percent of the company's stock. He soon realized, however, that if he wanted to attract talented employees to his start-up business -- and encourage them to stay -- then he would need them to feel and act like owners. Beyster's approach was to offer company stock to new hires, and to employees who brought in significant business deals. By the time he retired in 2004, he owned less than 2 percent of the company.

 

There is a long history of American businesses sharing a piece of the pie with employees. In the 1880s, William Cooper Procter decided to share profits -- and, subsequently, stock ownership -- with the employees of Procter & Gamble. A number of other key leaders in the early history of American business thought seriously about these ideas, among them Alfred Dupont and J.C. Penney. And today, many of the companies on Fortune magazine’s 100 Best Companies to Work for In America list have some form of employee ownership, profit sharing, broad-based stock options -- or all three. Many of them combine these ideas with a problem-solving, innovation-driven culture.

 

In the case of SAIC, Dr. Beyster found that his employees were motivated to perform better (earning more stock in the process) and they tended to stick around longer (as their stock options vested over a number of years) than employees at our competitors that did not offer similar ownership opportunities. At least partly as a result of our compensation philosophy, SAIC became one of the most successful employee-owned companies in the United States, with 38-straight years of revenue growth and a stock price annualized compounded growth rate of 34 percent. An investment of just $100 in SAIC stock in 1969 would be worth more than $3.5 million today.

 

Many CEOs share ownership with their workers. Some are doing it quietly -- indeed, many of the best stories are flying well under the radar. But they may be worth telling, and they are certainly worth learning from. In my opinion, it is not good for shareholders to have the ownership pie divided only among a narrow group of executives and managers at the top. Enabling all employees to share in a company’s ownership is the best and most reliable way to create a highly motivated, engaged, and high-performing workforce.