When I was a kid in communist Bulgaria, my father had a small plot of land where he grew a tiny vineyard. The plot – one of a dozen such privately owned plots – was on the south side of a hill, mostly occupied by a very large, state-owned vineyard. One summer, torrential rain carved massive gullies through the hill (despite all the terracing) and brought most of the exposed topsoil to the bottom of the slope and against any obstacle such as fences or cars that stood in the way. The damage was so bad that the state-owned winery abandoned the vineyard for several years until finally bulldozers took out all the vines and reshaped the hill.
The private owners of the small plots, using nothing but shovels and buckets (as no equipment was allowed to be privately owned), spent that very same summer weekend after the rain carrying thousands of cubic feet of topsoil back to their plots. One bucket at a time, they literally moved a hill. The private plots were restored within two weeks of the disaster.
There is a special power in ownership. We develop a strong attachment to the things we own. Indeed, they often become part of our identity and an extension of ourselves. Because of this connection, we are willing to devote an extraordinary amount of time and effort when we are owners. To continue the metaphor, we are willing to move mountains. If this were a daunting job or project in which we had less of a vested interest, we would (with good reason!) be more likely to just give up and say, “This is too much!”
So when we talk about how best to distribute ownership in an advisory firm, perhaps the answer is simple. Give everyone some shares and they will all grab a bucket, right? Unfortunately, in my experience, ownership doesn’t work like that. Just telling someone that they are now an owner does not cause them to feel like one. Creating a sense of “psychological ownership” is imperative.
I recently contributed a guest article to Kitces.com wherein I discuss the power of psychological ownership and how we can encourage it to develop in the minds of our most valuable team members. Visit the link below to read the full article.