RampUp Solutions Launches Option Sanity

Aug. 6, 2010 - PRLog -- Why stock? Why Option Sanity™?

Popular wisdom says that 90% of the work is done by 10% of the people; therefore, the trick would be to hire nothing but 10%ers. Since that is impossible, you want to motivate your people to act like 10%ers by encouraging them to find ethical, creative ways to meet the company’s goals while continually improving their own performance.

Stock has long been a top incentive for startups and private companies to motivate their employees. Whether the stock is in the form of options, restricted, or phantom shares, a strong, well-thought out stock program remains essential to attract, acquire, motivate and retain people.

Option Sanity™ is a web-based software as a service (SaaS) stock allocation system that is easy to set up, simple to use, and so economical that it is relatively painless for even boot-strapped startups to use the technology.

To entice today's workers an allocation system must
   be authentic and transparent;
   support the company's stated values and culture; and
   create an environment perceived as truly fair and therefore worth supporting.

Option Sanity™ meets all three requirements while pleasing investors because it
   makes the best use of equity;
   focuses employee efforts squarely on the goals of the company;
   accurately predicts dilution;
   provides an audit trail; and
   saves CEO time by providing one-click reports for monthly board meetings, employees, etc.

Option Sanity™ corrects a basic flaw in the way most companies allocate stock, i.e., the majority of options are granted at the time of hire. This means that candidates receive stock based on their past efforts, charm, negotiating skill, and the manager's expectations. In other words, the manager is betting on history and hope instead of action and accomplishment.

Option Sanity™ avoids this by giving smaller initial awards when a person joins, significant ongoing annual awards based on company performance as measured against well-defined annual goals and special awards for extraordinary performance.

The 21st Century brings with it the need for a true shift in stock allocation and to create that shift two completely different desires must be satisfied:
   The company’s desire to have an organization comprised of highly motivated, highly productive people whose efforts are focused directly on achieving the company's objectives.
   Employees’ desire to be treated fairly and rewarded for their real efforts.

Option Sanity™ satisfies both needs. Initial awards are by position, not personality.  Annual awards are based on accomplishment as measured against the company's well-defined goals, which has the added benefit of making backstabbing and politics unprofitable.  The rules of the system are transparent, not secret, although exact individual awards are not disclosed.

Changing the typical stock option allocation plan to one that recognizes that people's past efforts and interviewing skills are no guarantee of their future performance sounds simple, but if that is true, why has it not been done sooner? There are three basic reasons:
   Changing a time-honored, standard approach requires serious management effort, since people rarely take kindly to change, including management.
   It can mean passing on a demanding candidate in order to maintain the integrity of the plan (although Option Sanity™ is flexible enough to allow a higher-than-normal initial award when there is general agreement that it makes sense).
   Talking fair is impossible without walking public, a notion so radical that most companies are not willing to try it, which is why true transparency is often more of a goal than an accomplishment.

Option Sanity™ is designed for founders and CEOs who are serious about creating a truly fair environment based on their publicly stated values and want to support the ensuing culture in a tangible way.

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RampUp Solutions is an 11 year old consulting and coaching firm that just launched Option Sanity™, a web-based system (SaaS) that allocates stock based on the company's values and culture.