Firms Advised To Evolve Ownership Plans For Staff

O'Toole was speaking to a select gathering of captains of industry at a seminar on Leading Change organised by the Confederation of Indian Industry.

Giving employees a greater share in the ownership of a company was a trend that was extremely popular in the US and UK, and is now proving to be the only option for smaller companies in China and Latin America.

O'Toole cited the example of a Chinese company of which he is a director. This company had been able to survive in the face of stiff competition from the multinationals, by giving its employees a gain sharing and stock option.

 

When a company extends this benefit to its employees, it creates a situation where the employee sees the growth of the company as his own growth, and thus continues to be attracted to the company, he said.

O'Toole cited the example of leaders of two global giants, General Motors and ABB. Although both the companies had been able to achieve spectacular results, Roger Smith of General Motors, had been able to do so by damaging the careers of a lot of employees.

On the other hand, Percy Barnwick of ABB, had achieved the results at no human cost and by creating a number of followers for himself who respected and trusted him.

The two cases represent two different models of leadership, says O'Toole.

The first is where the leader identifies his goal and gives the directive to the employees to carry out the task.

Those who change according to his wish are benefited, but those who don't are shown the door.

What happens in such a case is that the leader gets caught up in the details of removing the conflict among employees and in the bargain destroys the career and lives of a number of employees, aparttitutions and the details are being finalised, said James O'Toole, vice-president of the institute.