Your company is a maximization machine—it wants to make the best use of its finite resources—so it is greatly interested in identifying precisely who to invest in, and how.

The problem with this stems from the way your company executes on these good intentions. Why, for example, does it assume that it will net a good return only from certain people? Surely, the cliché that “Our people are our greatest asset” applies to all of the people in the company. As we’ve seen, every human brain retains its ability to learn and grow throughout adulthood. For sure, each brain grows at a different speed and in a different way, but this implies only that each person learns differently, not that—categorically—some people do and some don’t. Therefore, the best course of action for any maximization machine worth its salt would be to figure out where and how each brain can grow the most, rather than zeroing in on only a select few brains and casting aside the others.

PROFIT SHARING FOR ALL. Nucor’s profit-sharing plan is another mechanism for building commitment. Each year, the company contributes at least 10 percent of its pretax earnings to the plan. In 2018, Nucor paid in $308 million, which worked out to about $12,000 per employee. Teammates receive a small portion in cash and the remainder goes into a retirement account, which, for many employees, constitutes their largest financial asset.

Each of these companies—Nucor, Haier, Handelsbanken, and Vinci— has built an organization that is, at its core, a league of owners. Over the decades, each company has demonstrated conclusively that distributed ownership…

• Reduces turnover and creates a smarter, more experienced workforce

• Unlocks reserves of discretionary effort

• Increases the incentives for innovation

• Creates more cohesion and camaraderie

• Strengthens the connection with customers

• Produces faster, better-informed decisions

• Leads to a flatter, leaner organization

• Yields above-average returns

The key to Handelsbanken’s unrivaled performance is its highly unorthodox organization model. In 1970, Jan Wallander, an economist 9 working at a regional bank in northern Sweden, was appointed as Handelsbanken’s CEO. At the time, the bank was losing money and was embroiled in a dispute with regulators. As Wallander analyzed the bank’s underperformance, he became convinced that overcentralization was the culprit. The bank’s bloated head office and rigid planning process made it unresponsive to shifts in economic conditions and customer needs. (At the time, loan approvals took two months to complete.) Moreover, senior bankers had made a spate of poor credit decisions that had imperiled the balance sheet.

You’ll notice that the bank’s SG&A expenses (selling, general, and administrative costs) average less than 40 percent of revenue, versus an average of 67 percent for its rivals. This massive efficiency advantage gives Handelsbanken the ability to resolve the high-touch/low-cost paradox. When compared to its competitors, Handelsbanken underinvests in bureaucrats and overinvests in customer service. In so doing, it rejects the black-and-white thinking that is typical of other big banks.