We asked Spela, our Head of Customer Experience: what are some of the most important steps Ledgy customers can take to increase engagement and make ownership data work harder for the business?
Here's an inconvenient truth: even in companies that are growing fast, some processes only get harder over time.
Equity and ownership is a perfect example. Equity is a two-minute discussion for a couple of co-founders, but later on you have external investors with preferred shares, early employees whose contributions to building the company need to be fairly recognized, and new starters in different markets, who will have different regulations governing their share options.
Even though equity can quickly get very complicated, the benefits of offering share options to employees are clear: a more motivated team, stronger retention of top talent, and more engaged investors. But just buying an equity management product will not solve a complex and opaque ownership structure.
We see Ledgy customers use our software in many different ways and for various strategic purposes. So we asked Spela, our Head of Customer Experience: what are some of the early steps new Ledgy customers can take to increase engagement from all stakeholders? And thinking beyond the first few weeks and months, what are some of the most effective ways Ledgy users build frameworks for sustainable long-term equity management?
By investing in building an employee equity plan, you are committing to spending time and money making sure all stakeholders get fairly rewarded for their work. So why do so many companies roll out shares by issuing a brief announcement to the team, then spend a few minutes once a year talking about shares in annual reviews, and still expect employees to remain consistently engaged and motivated at all times?
Spela says, "There are a couple of key ways to make sure the whole company benefits from equity and ownership software. For instance, I love to see Ledgy customers empowering teams around the business with ownership data. And of course, there is the speed at which you roll out software to the whole company, which makes a real difference.
"Looking at our customer relationships, it's clear that the Ledgy customers getting these steps right benefit from higher-quality equity and ownership data that can then be used to iterate and enhance different operational processes. They also increase the likelihood of engaging their employees in a meaningful way, and this has new positive effects on key pillars like hiring and retention of talent."
Let's recap these points in more detail.
Equity, share ownership and cap tables can seem like the CFO's natural domain. Although many finance leaders are responsible for administrating equity management software, company ownership has impact far beyond the finance function, affecting the work of teams like people / talent, operations and legal. Spela says, "You should not see your equity as the finance team's baby. For example, if people and talent managers can go beyond an abstract number or percentage and actually give candidates different scenario forecasts for their equity packages, you will stand out in the battle for top talent by being clear with new hires about what their share options will mean to them."
Meanwhile, companies expanding internationally often have many new financial and operational challenges to overcome. "If a company is bringing employees on board in a new market, operations and legal teams have to handle those employees' ownership stakes in the right currency, taking into account all country-specific regulations that may affect those share options," says Spela.
Ledgy offers several key pieces of functionality that enhance the work of teams across the business:
"There is little point investing in technologies that democratize ownership if 90% of your stakeholders can't access meaningful insights from the platform," says Spela. The speed at which companies roll out equity software to their employees materially affects the whole company's long-term engagement with equity and ownership.
In Spela's view, companies that don't give their employees access to their ownership data quickly are taking an unecessary risk. "The reality is that your employees need information on equity and ownership at their fingertips, when they want it, not when you want it. Companies that don't open up access in this way risk creating an 'us versus them' culture, where some senior managers control what the rest of the company can see when it comes to their own share options.
"Think of it this way: if you said to employees that their payslips would now only show the number of hours they'd worked, and not their salary payments, they would be rightly frustrated and angry. Giving employees an abstract number of shares without telling them the value of those shares, or how that valuation might change over time, is not responsible stewardship. Ledgy customers taking steps to empower employees with these insights make me really happy!"
Companies adopting equity management software are positioning themselves to engage and motivate employees as the business scales. But investing in software is only half the story. Ledgy customers that quickly roll out access to all company stakeholders demonstrate to the whole team that fairness and equality of access matters. Meanwhile, when the wider business can leverage data on equity and ownership, products like Ledgy can turn into catalysts for all kinds of process improvements.
If you enjoyed Spela's insights on employee engagement, read her article on explaining share option plans to employees.
Find out how leading companies are using Ledgy to easily manage their options, warrants, virtual shares and more
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