Upstreet ESRP Fostering an Owner’s Mindset amongst Employees: A Case Study
I believe in hiring self-disciplined, self-motivated people. So, if you bring great people into your organisation, the real question is: what are you going to do to create an environment that they want to be part of, and stay a part of and contribute to for a long time?
– Brett Kelly, CEO and founder of KPG
In our previous blog posts, we’ve spoken about the importance of retention in the rapidly changing workplace culture, and how ESRP, by easily rewarding employees with company shares, is a great way to attract, retain and motivate employees. In this post, we’re excited to share the experience of our early adopter and motivator, Brett Kelly. Using a bottom-up management style, Kelly uses Upstreet ESRP to foster an owner’s mindset among his employees as a sustainable retention solution for the current market. We know it works, because we’ve seen the results at Kelly Partners Group (KPG), Kelly’s ASX-listed accounting firm that we’ve been working with over the past 16 months.
The Story of Brett Kelly and Upstreet
Upstreet and KPG started working together when Brett Kelly, the latter’s founder and CEO, was looking for a new way to reward his employees with KPG shares and build an owner’s mindset from the bottom up. Kelly believes in the “need to lead a business from a position where you’re doing the right thing for the right people,” as he says himself. Something in Kelly’s philosophy is clearly working, as KPG has seen 30% cumulative average growth rate every year for 16 years in a row, i.e., KPG’s value has doubled every 3 years five times in a row.
Following the belief in long-term employment with expectations of a 10-year investment from employees, Kelly was naturally looking for the best way to retain talent. When KPG IPO’d in 2017, he effectively gave all employees $1000 in KPG shares each at his own expense. However, he found that due to the complexities associated with accepting KPG shares no more than 50% of employees took the time to even register to receive the shares. With that disappointing outcome in mind, he turned to Upstreet as an innovator in the fractional share rewards industry to find an employee share solution that would meet the employees where they are at. He was looking for a fun, easy and mobile solution, saying “unless it can appear on their mobile, it doesn’t exist – because they live on their phone.” The result? Over 90% of KPG employees have claimed their KPG shares through Upstreet – and they love it, with many quoting how they prefer receiving shares over a cash bonus as it’s fun, engaging and gives them a stake in the company.
KPG Fostering an Employer’s Mindset among Employees with Upstreet
Time and time again, we’ve seen that it’s the employees that are the first customers of any organisation: unhappy and unsatisfied employees will never deliver performance-oriented results and help your company succeed. They are the face, the workforce, the ones who drive deliverables and the motivation of any company. Your firm is, in the end, just what your employees are. Brett Kelly knows that better than anyone, his recipe of success being to “get the right people, and treat them the right way.” That means choosing, nurturing and aligning the people who “have a much greater interest in solving your business problem and helping other people than they do in themselves. People who do what they say under all circumstances, and who believe they can do more as a team than as individuals.” Management needs therefore to lead from the bottom up: as he says himself, “most of the value in our businesses is created by all of our people working as a team, not just the executives.”
Bottom-up management is based in part on resolving the so-called “purpose hierarchy gap,” when the upper management is able to live their purpose in their work but not the rest of the employees. A 2020 McKinsey study of the purpose gap showed that in average, 85% of the upper management agree that they can live their purpose in their day-to-day work, while 85% of frontline employees are unsure or disagree that they can. So, executives are almost eight times more likely than other employees to feel fulfilled by their work. Resolving the purpose hierarchy gap therefore means aligning the employees and the company’s goals and purpose, and many researchers see this as the secret sauce to success. That necessitates creating a structure that does more than have a trickle-down engagement effect. You need to meet employees where they are and engage them directly. In other words, to foster an owner’s mindset among employees. Kelly’s way of achieving this was to actively choose to hire people whose goals were already aligned with the company’s. He was also choosing people who wanted to stay for a long period of time – 10 years, a shocker for the current high turnover market with the average Australian tenure being 3 years and 4 months. In order to then excite the new hires, Kelly realised that he had to think creatively and come up with innovative ways to keep employees engaged.
Kelly understood that employees enjoyed scheduled as well as unexpected acknowledgement and therefore decided to reward employees both regularly – for Christmas, Easter, birthdays, Father’s Days, Mother’s Days and Founders’ Day, when all KPG employees receive $25 in KPG shares – and occasionally, at company events, for reasons such as a commission for referring a new client or a new employee, or for a personal achievement in the business or outside of work. KPG has subsequently scheduled rewards according to their employees, rewarding them deliberately on the days they celebrate and for the results they want to acknowledge. As soon as rewards are scheduled, Upstreet handles the reward distribution to the employee, ensuring that the company reward program is tailored to employees. At KPG, Kelly decided that all “outside-the-base-package” rewards are given in KPG shares. This has successfully created an owner’s mindset among employees while giving direct, instant and personal motivation throughout the day-to-day. “It’s been incredibly successful,” Kelly says. “Because it sits on their phone and pings them, ‘Happy Birthday, here’s your 50 bucks.’”
Ultimately, there’s also a deeper reason to implement Upstreet ESRP at your company. As Kelly says, “What matters at the end of your life is the quality of the relationships you’ve built and how proud you can be of how you've treated people. I love the [Upstreet ESRP] tool because it gives us a great way to magnify the force and thoughtfulness behind making a genuine difference to our people. And it’s this internal drive and power from our people that ultimately propels the business forward."