> 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)
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.
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.
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.
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.
There are advantages to employee ownership. Preventing bad business decisions is not one of them.
Work for a salary. Invest in a diversified portfolio that's not tied to your employer.
Technically competent doesn't always mean empathetic.
The decisions can sometime look like the xkcd cartoon about scientists[1].
[1] - https://xkcd.com/242/
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.
Apple is only company that is allowed to get away with that.
Isn't that a contradictory position? Locking in raises the cost of disloyalty, loyal customers (by definition) don't need to be locked in.
You only need to lock in loyal customers if you are planning on turning customer hostile.
I think that can backfire spectacularly, as we're seeing with Synology, but I suspect that a non-trivial amount of the time, it simply happens and works, no revolt is staged, and profits flow (for better or worse).
The example coming to my mind right how is Pitney Bowes, which sells big envelope stamping and sealing machines. They sell a proprietary sealing fluid (wtf) that, as far as I can tell, is water with blue food coloring. And a costly proprietary red ink cartridge for stamping. But people sign the contracts and the world keeps on keeping on.
In this case, the customers were loyal to Synology for the NAS but not the hard drives.
By locking them in further, they thought they could capture their customers' hard drive purchasing, too. They thought the brand loyalty would allow it.
You see this a lot when a company’s founders leave and are replaced by MBAs. Customer goodwill isn’t a tangible asset, so the MBAs burn it to produce more quarterly revenue. It works great for a while until the customers wisely decide never to let that company burn them again.
By that stage the MBAs have scored even higher paying jobs at bigger companies based on how much they boosted profits, so I guess it continues to work for them afterwards too.
Sounds very much like "doing a Ratner": https://en.wikipedia.org/wiki/Gerald_Ratner
Vagueposting out of necessity: I worked at a different company that made popular consumer products and had leadership with technical backgrounds. That company also went through a period of trying to lock down the platform for profits, which everyone hated.
The root cause was that the technical leadership had started to think two things: That their customers were so loyal to the brand that they wouldn’t leave, and that the customers weren’t smart enough to recognize that the artificial restrictions had no real basis in reality.
I remember attending a meeting where the CEO bragged about a decision he made that arbitrarily worsened a product for consumers. He laughed that people still bought it and loved it. “Can you believe that? They’ll buy anything we tell them to.” was the paraphrased statement I remember.
Of course, the backlash came when they pushed too hard. Fortunately this company recognized what was going on and the CEO moved on to other matters, leaving product choices back to the teams. I wonder if something similar happened with Synology.
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.