Investment is not a space I may ever deem myself to be any form of expert in, but there’s a form of equity that has recently caught my attention, and it is one we are all a little more well-versed in than we may first have imagined: Sweat Equity. It’s got nothing to do with the gym, thank goodness, and a whole lot more to do with hard work..According to Investopedia, sweat equity is the “contribution to a project or enterprise in the form of effort and toil. Sweat equity is the ownership interest, or increase in value, that is created as a direct result of hard work by the owner(s).” It is quite simply the blood, sweat and tears (only maybe not so dramatically) that goes into a business, which employees (or the owner) brings in. Modern businesses oftentimes take on a sweat equity partner, with their contribution being their time, effort and emotional bandwidth (maybe even connections and social goodwill), while other partners then front the cash investment. Both are equally legitimate and equally important in many ways. Habitat for Humanity makes use of the concept all over the world when helping build homes for others. In their model, sweat equity is the effort or work a future Habitat homeowner devotes helping to build their own home through the programme, as well as the homes of other future homeowners. Non-profit Nááts’íilid Initiative employs a twist on this model to empower Navajo families to build their own new homes..Though in somewhat different ways, we have all given a fair amount of effort, stress, passion and more in our daily vocations. It may not quite be the same thing, but …. should we be looking at it again with a different lens now? Should we perhaps be re-assessing how sweat equity works, and how we work it in any organisation? Given my obvious communications bias, should creative and communications agencies in particular adopt our sweat equity model perhaps to start to put real value beyond more traditional targets from employees? Or perhaps the reverse is true, and the lack of conversion from the “sweat” is a proof point of failed conversion to sale and revenue? Stick with me for a second and let’s explore the true value and worth of sweat equity in the communications space ….Sweat equity is about doing the work, the hard and real work, to bring an idea or concept to life. Is this not what creatives and communications professionals do on a daily basis? Ideate, conceptualise, and then transform to reality. Sweat equity breeding results. Victoria Knight-McDowell speaks briefly on this in Breathing New Life into a 142-Year Old Brand[1] in recounting the many hard decisions, chances taken, and a splash of good luck that often comes with life as an entrepreneur or the growth of a business or brand. Bringing campaigns, creative concepts and communications strategies from rhetoric or concept to action is an artform, and there is certainly a labour of love to getting the process right. The employer’s investment is of course the salary of the individual hired for the job, and that’s pretty fair and standard. But look at the flipside: late nights, endless hours spent in war rooms and boardrooms plotting and ideating relevant solutions to creative and communications conundrums. [1] https://hbr.org/2012/11/breathing-new-life-into-a-142.And so, given the recognised effort that goes in, are we really saying a pay cheque is enough? I mean, it could be, but as individuals continue to want and need more value in life beyond monetary gain, perhaps recognition of this non-formal form of sweat equity ought to be considered for genuine sweat equity, i.e., actual investment or tangible ownership into the business without the need for hard money put down by the employee. In some ways, similar to an Employee Share Ownership Plan / ESOP, and yet not quite. ESOPs are today being considered more than ever before, albeit more in financial services organisations but the basic principle stands strong. I am curious if a similar sweaty cousin may not fair just as well? If no reward or recognition beyond salary is given, do we perhaps stand to lose some of the very best gems in an organisation in favour of them going out on their own where their hard work perhaps more valued (literally and figuratively)? Bottom line, everyone doing a job well ought to be putting in some informal sweat equity, and I am suggesting merely that we reward and recognise this in time for legitimate sweat equity. It means retaining the best of talent, creating real shared value in the workplace, and futureproofing the business in a sustainable way..Back and forth for client approvals and iterations, pivoting the concept after focus groups or pressure tests. In the end, that precious concept, birthed and nurtured for weeks if not months on end, is so sacred to you because it stands as a veritable example of everything you have put in and invested – emotionally, physically, mentally. We’ve all been there…. no?.If you want to keep ascending the proverbial ladder in an agency or consultancy, beyond share ownership or having a monetary investment-led “skin in the game,” or maybe even when you’re wondering if that skin is worth having, an assessment of your current and historic sweat equity (undocumented but delivered) might be key. Chances are, you’d have invested a whole lot of it, and you’re already sitting at the table… just without the necessary formalities. Maybe it is time to make things official? My aversion to all forms of exercise and particular disdain for getting sweaty from said exercise aside, this might be a variety of sweat I’m a little more comfortable with, I must say.
Investment is not a space I may ever deem myself to be any form of expert in, but there’s a form of equity that has recently caught my attention, and it is one we are all a little more well-versed in than we may first have imagined: Sweat Equity. It’s got nothing to do with the gym, thank goodness, and a whole lot more to do with hard work..According to Investopedia, sweat equity is the “contribution to a project or enterprise in the form of effort and toil. Sweat equity is the ownership interest, or increase in value, that is created as a direct result of hard work by the owner(s).” It is quite simply the blood, sweat and tears (only maybe not so dramatically) that goes into a business, which employees (or the owner) brings in. Modern businesses oftentimes take on a sweat equity partner, with their contribution being their time, effort and emotional bandwidth (maybe even connections and social goodwill), while other partners then front the cash investment. Both are equally legitimate and equally important in many ways. Habitat for Humanity makes use of the concept all over the world when helping build homes for others. In their model, sweat equity is the effort or work a future Habitat homeowner devotes helping to build their own home through the programme, as well as the homes of other future homeowners. Non-profit Nááts’íilid Initiative employs a twist on this model to empower Navajo families to build their own new homes..Though in somewhat different ways, we have all given a fair amount of effort, stress, passion and more in our daily vocations. It may not quite be the same thing, but …. should we be looking at it again with a different lens now? Should we perhaps be re-assessing how sweat equity works, and how we work it in any organisation? Given my obvious communications bias, should creative and communications agencies in particular adopt our sweat equity model perhaps to start to put real value beyond more traditional targets from employees? Or perhaps the reverse is true, and the lack of conversion from the “sweat” is a proof point of failed conversion to sale and revenue? Stick with me for a second and let’s explore the true value and worth of sweat equity in the communications space ….Sweat equity is about doing the work, the hard and real work, to bring an idea or concept to life. Is this not what creatives and communications professionals do on a daily basis? Ideate, conceptualise, and then transform to reality. Sweat equity breeding results. Victoria Knight-McDowell speaks briefly on this in Breathing New Life into a 142-Year Old Brand[1] in recounting the many hard decisions, chances taken, and a splash of good luck that often comes with life as an entrepreneur or the growth of a business or brand. Bringing campaigns, creative concepts and communications strategies from rhetoric or concept to action is an artform, and there is certainly a labour of love to getting the process right. The employer’s investment is of course the salary of the individual hired for the job, and that’s pretty fair and standard. But look at the flipside: late nights, endless hours spent in war rooms and boardrooms plotting and ideating relevant solutions to creative and communications conundrums. [1] https://hbr.org/2012/11/breathing-new-life-into-a-142.And so, given the recognised effort that goes in, are we really saying a pay cheque is enough? I mean, it could be, but as individuals continue to want and need more value in life beyond monetary gain, perhaps recognition of this non-formal form of sweat equity ought to be considered for genuine sweat equity, i.e., actual investment or tangible ownership into the business without the need for hard money put down by the employee. In some ways, similar to an Employee Share Ownership Plan / ESOP, and yet not quite. ESOPs are today being considered more than ever before, albeit more in financial services organisations but the basic principle stands strong. I am curious if a similar sweaty cousin may not fair just as well? If no reward or recognition beyond salary is given, do we perhaps stand to lose some of the very best gems in an organisation in favour of them going out on their own where their hard work perhaps more valued (literally and figuratively)? Bottom line, everyone doing a job well ought to be putting in some informal sweat equity, and I am suggesting merely that we reward and recognise this in time for legitimate sweat equity. It means retaining the best of talent, creating real shared value in the workplace, and futureproofing the business in a sustainable way..Back and forth for client approvals and iterations, pivoting the concept after focus groups or pressure tests. In the end, that precious concept, birthed and nurtured for weeks if not months on end, is so sacred to you because it stands as a veritable example of everything you have put in and invested – emotionally, physically, mentally. We’ve all been there…. no?.If you want to keep ascending the proverbial ladder in an agency or consultancy, beyond share ownership or having a monetary investment-led “skin in the game,” or maybe even when you’re wondering if that skin is worth having, an assessment of your current and historic sweat equity (undocumented but delivered) might be key. Chances are, you’d have invested a whole lot of it, and you’re already sitting at the table… just without the necessary formalities. Maybe it is time to make things official? My aversion to all forms of exercise and particular disdain for getting sweaty from said exercise aside, this might be a variety of sweat I’m a little more comfortable with, I must say.