Taking Stock in the Future

The emotions in the comments were almost palpable.

“What is wrong with these guys?” bemoaned the 60-year-old exec. “When I was their age, I worked 60 hours a week, raised my family, and still bought into the company. These guys, though—they aren’t stepping up and buying stock. What’s up with that?”

Thus, the generational issue raises its head again--particularly with Boomers eyeing retirement. They are the primary stockholders in their firms, and the firms need staff to step up and buy company stock so the Boomers can leave.

The Boomers see the issue as one of loyalty. Truth be told, some also want to see that stock price go up so they will take home more when they do cash out.

For the staff, though, it’s a leadership issue. I’ve been hearing this from clients for some time. Now Watson Wyatt, an international consulting firm, has documented it. The data is for Canada, but I think it is significant enough that we can use it here.

Let the data speak

Watson Wyatt put employees in groups according to age: Under 30, 30-39, 40-49, 50-59, 60 and over. Here is what they found.

• No. 1 driver for all age groups except 30-39 is Strategic Direction and Leadership. No. 1 driver for ages 30-39 is Rewards (pay and benefits). That’s hardly surprising since this is the group most likely raising young families.
• No. 2 driver for all groups except 30-39 is Rewards (pay and benefits). For the 30-39 group, it’s Strategic Direction and Leadership.
• No. 3 driver for all three groups is Communication.

The message is clear: If you want staff to buy stock, you have to tell them what future they’re buying into. And you’d better be making a profit.

Strategic Direction and Communication

You, company leaders, need to provide and communicate strategic direction for your firm. Putting together an annual strategic plan and handing out copies is not enough. One firm has a schedule for who is going to communicate what strategy-related message, when, to whom, and by what means. They let staff know what progress they’re making on their goals.

Teach Them What You Had to Learn

You need to identify the folks you want to step into leadership roles and educate them about the job. One 40-something client made this point last week: “They keep calling us the future leaders, but we are leading now.” In his case, he’s right. Just like you, they didn’t learn how to run a company in engineering school. Help them learn what you didn’t know.

Share Your Thinking

Once you identify those leaders, you need to get into the financials and history for your firm. These 40-somethings need to understand why you make the financial decisions that you do. They probably don’t have your decades of experience with the firm, so, for example, they need background on why you got out of a particular market 10 years ago. You have 20, 30, maybe 40 years of knowledge about your firm in your head. You need to share it.

Be Creative in Stock-Buying Plans

The 40-somethings are likely raising a family, looking at ever-looming college costs, and starting to deal with their own aging parents. Taking out a sizable loan to buy stock in the company isn’t going to happen. Thus, you need to get creative in offering ways to buy stock. Some firms are giving stock as a bonus. Others encourage staff to use bonuses as a means to buying stock. Another firm has a payment plan.

ON A SIDE NOTE

The exec in this tale talked about how he and his partners all grew up as a family as they built the firm. Thinking out loud, he said maybe the company should have a cookout or some other get-togethers so folks could get to know each other better. That’s typical Boomer thinking.

When I relayed that comment to a 40-something, he said, “I don’t need to get to know those guys any better. I know them well enough.” That’s typical Gen-Xer thinking.

Boomers need to recognize that Gen-Xers are focused on their families, not the company. In our tight labor market, a top-quality engineer can quit in the morning and find another job before the day is out. Their priority is taking care of their families.

What’s a Boomer exec to do? Provide that Strategic Direction they want, demonstrate leadership and grow new leaders. Be creative in ways for the staff to buy stock.