About Sarah Deas

Sarah leads the strategic and operational development of CDS. She proactively promotes co-operative business models by engaging with stakeholders and the media.

My Letter from America…by Sarah Deas, Chief Executive, Co-operative Development Scotland

There is a question which has puzzled me for a while – why are there so many more employee owned businesses in America? 

So I was thrilled to be invited to the National Center for Employee Ownership’s Annual Conference in Minneapolis – the perfect opportunity to go in search of the answer!

This year’s conference attracted a record attendance – over 1000 delegates. It even had a waiting list of 250 people!  The conference was buzzing with people sharing their experiences, from how to structure an Employee Stock Ownership Plan (ESOP) to how to involve the most employees.  There were lots of different breakout sessions – each equally interesting which made it quite a challenge to decide which ones to attend!

Some of you might not have come across ESOPs before.  It was an area I was particularly fascinated in, especially how it has helped the American economy.

An ESOP is the mechanism – operating under US retirement law – which encourages capital expansion and economic equality.  It provides a means by which employees can build personal wealth that is realised upon retirement.  To policy makers, it is also an effective way of addressing the challenges of financing an aging population.

Recognising these benefits the US government introduced tax incentives to stimulate the creation of ESOPs.  Owners that sell more than30 per cent of their shares to an ESOP can defer capital gains tax by investing the proceeds in stocks and bonds. This legislation has proved a real catalyst – 30 years ago there were only 200 ESOPs and now there are 11,500! 

So, could tax incentives have a similar impact in the UK?  It seems many believe they could. HM Treasury is currently considering the options and we eagerly wait to see what is announced in the 2013 Budget.

However, I shouldn’t give the impression that ESOPs only occur at the time of ownership succession.  They are also an effective mechanism for financing investment and are a very tax-efficient model of ownership.  There is strong evidence that this form of ownership is working – more than 100 studies have shown ESOPs can perform between eight and 11 per cent better than conventional businesses.  And, ESOP retirees generally have three to four times the retirement assets of those in non-ESOP companies. These are pretty convincing statistics.

For me though, the key learning from the conference was the importance of developing an ownership culture.  Employee engagement is the key to achieving performance benefits and maximising value, with staff feeling involved and able to influence business decisions and outcomes. 

This statement sums it up well … ‘It is not pixie dust … owning stock is the foundation, with the solution lying in communications, education and trust.’ A mantra with meaning.

Of course I never miss an opportunity to see business models in action so while in Minneapolis I visited a few employee owned businesses – just to see if we could learn any more from our American friends. 

Peggy Hansen, PSB

I enjoyed a fascinating visit to Padilla Speer Beardsley, a PR company with 125 employees.  It (like many employee owned businesses) is a proud winner of the ‘Best Companies to Work For’ Awards.  Peggy Hansen provided me with valuable insights to the methods that they use to engage staff including  the ESOPulator – which sounded an effective and fun way of helping staff value their future benefits! 

Ray Robbel, Janis Negratti-Samuel & Joe Stewart, Braas

The importance of investing in an ownership culture was reinforced at Braas, distributor of industrial automation products.  Here I was instantly aware of the positive energy generated by open communications.  Joe Stewart, Ray Robbel and Janis Negratti-Samuel highlighted the high levels of business awareness that exist across the company. They captured it beautifully for me with the question ‘how many other warehouse managers would know their stock: equity ratio?’

Martin Bassett & Missy McManigle, Walman Optical

Walman Optical is a large company with 860 employees across 40 locations.  It has achieved productivity improvements and increases in stock price every year since it started focusing on building an ownership culture.  Martin Bassett and Missy McManigle described how this has involved education, communications and participatory management.  Their ‘New Visions’ initiative results in between 20 and 30 staff ideas being adopted each year, with those that put them forward getting 10 per cent of the first two years’ financial benefit.  One lucky person received a $42,000 cheque!   

So, lots to take in from my visit stateside. And as ever many lessons for Scotland. 

A very big ‘thank you’ to everyone who made me so welcome and shared their stories.   And, a special thanks to Loren Rodgers and Corey Rosen, NCEO, for inviting me to participate in their conference.   

Employee ownership is well established in the US with an expected increase of 300% by 2020 – we have a long way to go to come close to our American friends. However, from beginning to end, this trip has given me, and Scotland, much to aspire to – onwards and upwards!

 

Co-operative Development Scotland is a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise.

Celebrating 110 years of building a successful co-operative…

It was an honour and a privilege to be invited to Italy by CMC di Ravenna.The company had invited me to speak at a conference to celebrate its 110th Anniversary.  The event also marked the Italian launch of the United Nation’s International Year of Co-operatives (IYC) 2012.  It was a wonderful experience to visit Emilia Romagna, which is world renowned for the prominence of co-operative enterprises, at such a important time.

CMC di Ravenna is an international business – a worker co-operative operating in the construction industry. The company was established in 1901 by bricklayers and cement masons to give them competitive strength. It delivers large projects – including the Singapore underground, Milan subway and the United Nations conference centre in Addis Ababa. It employs 9,000 people and has a €715 million turnover.

The company operates as a co-operative controlled group. There are three forms of members; staff, retired staff and financing members. Voting rights and board differs within these groups. By involving retired members the company benefits from their knowledge and goodwill and financing members enable access to external investment. Governance structures are designed to maximise member engagement and influence, while enabling effective decision making which involves an Assembly, Board and a Council of Delegates.

The anniversary celebrations took place in CMC’s conference centre – which had been recently upgraded to include a concert hall venue for the local community (an excellent example of the company’s commitment to the community).  Massimo Mattencci, chair of CMC, opened the event, reflecting on the company’s success and strengths citing the company’s philosophies of ‘act locally, think globally’ and ‘our strength is human resources – not capital’.

The event had been widely promoted – including posters visible on the streets – a format we in the UK would more typically align with concerts!  

Professor Zygmunt Bauman (Professor  of Sociology at Leeds University) was billed as the main act . And I was surprised to see my name listed as one of the supporting acts!  I think that is what they call an ‘Andy Warhol moment’. The advertising clearly worked with at least a 400-strong audience in attendance and the paparazzi at every turn!  

Professor Noreen Hertz (from Judge Business School, University of Cambridge) author of ‘The Rise of Co-op Capitalism’ was also on the bill and attracted much interest. Co-operatives UK recently published a paper summarises her work which is interesting reading click here to read. Perhaps terming the conventional system ‘Gucci Capitalism’ was not the best idea in front of this audience!  But her main message was clear – given all the challenges of the conventional system, it’s time for us to change to a system that values relationships and is based on collaboration – what she terms ‘Co-operative Capitalism’.

Other speakers included Vera Negri Zamagni, academic and author of a number of books on the history of co-operatives – including one on CMC di Ravenna which was launched at the conference. Dame Pauline Green, President of the International Co-operative Alliance spoke of the significance of IYC 2012 and the ‘once in a lifetime opportunity’ that it offers. Arantza Laskuran, Secretary General, Mondragon Co-operative, provided an overview of its business strategy and R. N. Pandey, Managing Director of the National Labour Co-operatives Federation in India spoke of developments in his country. And, I provided an overview of Scotland’s innovative approach to co-operative development. A very eclectic, insightful and thought-proviking line-up if I do say so myself!

So what were the final lessons we can take from this for Scotland?   CMC di Ravenna and Mondragon are both good examples of co-operatives that have achieved scale. New organisational structures and forms of finance have been utilised to enable this growth.  A key message for Scotland is the importance of business model innovation in enabling growth and international competiveness.

This is my final blog on my most enjoyable and informative visit to Emilia Romagna. I’d like to convey a very special thanks to Massimo Mattencci and Valda Miani, CMC di Ravenna, for inviting me to be part of their celebrations and to Stefania Marcone and Sara Vicari, Legacoop, who kindly organised my study tour. 

All that remains for me to say is a very sincere ‘grazie’ to all!

Until next time…

And remember…think ‘co-operatively’!

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise.

Spotlight on co-operative youth…

The UK faces constant challenges in terms of youth unemployment. I thought it would be interesting to share my experience of how our Italian friends have used the co-operative models to help address this issue. 

Over the years Italy has faced tight labour markets, with young people leaving the higher education system and finding it difficult to secure work.  Faced with unemployment, many of the forward thinking Italian youth have chosen to establish their own businesses – setting up a worker co-operative with other graduates.

I visited Atlantide – a tourism co-operative – established by environmental studies graduates who were struggling to find employment.  Their endeavours certainly paid off, establishing a business which has grown to 50 worker members, with temporary staff doubling that number during peak seasons.

Like many co-operatives, Atlantide collaborates with other businesses. I visited one venture that is operated by a consortium of four businesses; Atlantis plus two cultural co-operatives and an environmental services company. Together they have established a society co-operative providing educational services on ecological, environmental and cultural assets. 

The consortium has a contract to manage 14 country parks in Emilia Romagna and deliver environmental educational services to schools. My visit included a tour of one of these parks – which I will never forget as the park was home to the most amazing wild flamingos. And just to add a bit of trivia – did you know that the reason Flamingos are pink is because they eat red plankton? That is a fact!

I was also lucky enough to visit Ravenna’s Museum of Natural Science which the consortia manage on behalf of the municipality.

So it seems the young professionals of Italy can teach us Scots a few lessons. This example illustrates how young people can create their own successful business and by working together, they can pool knowledge and resources while sharing risks. 

Until next time…

And remember…think ‘co-operatively’!

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise

 

Sociable Italia…

Before departing for Italy, I was determined to find out more about social co-operatives – a model pioneered in the country in the late 1970s. It has had impressive growth, especially in recent years, with numbers doubling since 2005 to 15,000 businesses. 

So, why are social co-operatives so popular?

The answer lies in the co-operative model being central to Italy’s social services system. It is legally recognised and given preferential treatment in public procurement. It places civil society at the forefront of service reform. Most are worker co-operatives, however the multi-stakeholder model – where workers, beneficiaries & volunteers share control – is also popular. 

Principles of reciprocity, equality and accountability are important in the delivery of humane care and the organisational attributes of co-operatives offer such advantages. Other drivers include dissatisfaction with service quality and a perception that user involvement will ultimately enhance delivery. Also there is an expectation that social co-operatives will deliver at a lower cost and with a commitment by the government to ‘subsidiarity’, services delivered and controlled by organisations closely relate to citizens.

There are two types of social co-operative:

‘A’ Co-ops – account for seventy per cent of social co-operatives. They serve the elderly, children, and disabled people through the provision of health, education and social services. They operate as commercial businesses but have privileged relationships with the municipalities.

‘B’ Co-ops – account for thirty per cent of social co-operatives. They are similar to UK’s ‘social firms’. Their aim is to integrate disadvantaged people – referred by municipalities’ social services departments – into work.  Over thirty per cent of employees must be deemed ‘disadvantaged’. These groups typically undertake cleaning, landscape gardening, parks maintenance, laundry and packing/assembly work.  Disadvantaged employees can be compensated at lower pay rates (recognising a lower productivity) and there is no national insurance paid on wages. 

Social co-operatives, like other co-operatives, have beneficial tax arrangements and access to finance on good terms. This is balanced against restrictions on distribution of profits. The law ties social co-operatives to only serve a given municipality – although wider coverage is often achieved through collaborating in consortia.

During my stay in Emilia Romagna I visited Cadiai – a ‘category A’ social co-operative. It was established in 1974 to provide services to the elderly, handicapped and children, now employing 1,246 staff, primarily working in Bologna. Services include residential care, nursing care, day nurseries and home care. 

I visited one of its nurseries which is operating under a 28 year contract with the Bologna municipality. It is owned by a consortium of two social co-operatives, a construction co-operative (that built the facility) and a catering co-operative (that provides the meals). This enables an interesting financing model as investment can be spread over a long contractual period (enabled by both the contract period and a construction company being part of the consortium).

I was fascinated to see the thought that had gone into the design of the nursery. It was clearly based on a scientific understanding of a child’s development.

It was more client centric than any nursery that I’d visited back at home. The ethos that underlies co-operative ownership was explained as the reason. 

 

Some serious lessons for us here in Scotland. The potential role of mutual models in delivery of public services is currently being explored. Italian social co-operatives demonstrate that such models lead to reduction in costs, improved quality and higher job satisfaction. They also illustrate that legislation – put in place to promote a specific approach – can have far reaching effect.

Until next time…

And remember…think ‘co-operatively’!

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise

Collaboration Italian Style!

My recent visit to Emilia Romagna left me excited about the possibilities for co-operatives in Scotland. In this third instalment I share insights in how collaboration is core in this famous European co-operative region.

Before visiting Emilia Romagna I was very much aware that it is the ‘home’ of business consortia and industrial clusters. Robert Putman (Professor at Harvard University) identified culture as a key driver. I was keen to gain a deeper understanding of this and what else was driving this collective approach.

Collaboration is the norm in this region, with companies collaborating while remaining competitors. The form of collaboration varies from relationships centred on a specific contract to fully constituted ventures established to enable on-going business. Firms are highly specialised and exist as part of a co-operative production system and as such, there is a genuine desire to work with others. Success of one firm is intimately connected to success of others – a recipe for success. 

Emilia Romagna is known for leadership in the production of specialised manufacturing machinery – expertise that builds upon its strengths in agriculture, ceramics, textiles and packaging. Collaboration lies at the core – creating vibrant industrial clusters.  Often businesses will be members of more than one consortium or industrial cluster. Similar practices exist within the service sector.

Throughout the world collaboration is well established in agriculture.  In Italy farmers owning vineyards are members of consortium co-operatives which harvest grapes on their behalf and the latter are members of secondary consortia that produce the wine. 

During my stay, I enjoyed a visit to one of the Cervico Group’s plants.

The co-operative was established in 1963 and is now number one producer in boxed wine and number two in packaged wine (bottles/Tetra Pak) in Italy.

 

 

The business is self-financing and has recently undertaken major capital investment. I was fascinated by the pallet storage system’s use of gravity to move the next pallet into position!

 

I was also interested in the finance and services consortia. These are a relatively recent development for the region. Legislation was passed in 1991 to encourage the creation of ‘business clusters’ and ‘inter-firm co-operation’ with three types of consortia emerging; credit guarantee, export and services.

Credit guarantee consortia operate like lending circles, with individual loans guaranteed by other firms in the consortium. Business members pay a fee, which may be supplemented by the government. The resulting ‘guarantee fund’ is deposited in a credit or banking institute, with which a specific agreement has been established. It is used as collateral for credit extended to members. By doing it this way the risk associated with lending is divided between the bank and the credit co-op, or borne completely by the latter.

The advantages to entrepreneurs is that they do not need to provide collateral based on personal assets and are able to access credit at relatively favourable terms. A positive aspect of this model is that the default rate is a fraction of that of a normal bank – due to the credit guarantee consortia’s role in monitoring. In Emilia Romagna the insolvency rate by firms guaranteed by the consortium is less than one per cent compared to a national average of ten per cent.

Export consortia promote members’ goods/services abroad and facilitate their export. The model is now well established with approximately 350 consortia. The high number is the result of the law establishing public funding for export consortia with more than eight members (small & medium sized enterprises). Government will contribute up to forty per cent annually to operating costs (higher level in first five years and for those based in Southern Italy).

Consortia comprise groups of firms that pay a one-off lump sum to underwrite the consortia’s capital and an annual membership fee for operating costs. Services vary and include market information, translation, secretarial, credit guarantees, merchandising, franchising and legal assistance. Consortia may also benefit from tax reductions – the ‘indivisible reserve’ is tax exempt and so too are the services rendered and acquired by the consortia. I was told about a textiles consortium in Prato that worked with its members to produce a new image, developed an export culture and other ventures to improve competiveness.

Services consortia play an important role in providing strategic advice, payroll, marketing, bidding and fundraising guidance to their members. They offer the advantage of access to skills and economies of scale.

So some further lessons for us in Scotland.  It was crystal clear that there is significant benefit to be gained from working with other businesses in order to achieve scale in buying, producing and selling. There is scope for much wider levels of adoption of this model in Scotland – especially for export purposes.

Until next time…

And remember…think ‘co-operatively’!

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise.

Italy provides some food for co-operative thought…

Welcome to the second instalment of my blog series on my recent Italian adventure in Emilia Romagna.

So what else did I learn from one of the richest and most developed regions in Europe? One of my early discoveries was how prominent worker co-operatives are in Italy (the term also refers to what we in the UK would call employee ownership).

My host in Emilia Romagna was CMC di Ravenna, a worker co-operative operating in the construction industry. The company was established in 1901 by bricklayers and cement masons.

It operates internationally delivering large projects, such as shopping centres and petro chemical plants.  CMC invited me to speak at its 110th Anniversary celebrations (details of which I will share in a later blog).

 

During my stay, I also visited another long established worker co-operative – Camst – the world’s largest catering co-operative. It is involved in restaurants, schools, hospitals, residences, as well as banqueting and eighty per cent of its 10,000 workers are members.

The company was established after WWII by unemployed waiters who spotted the opportunity to sell meals on railway platforms. It operates as a co-operative controlled group with 20 subsidiaries and employee ‘voice’ is promoted through regional and national assemblies.

A more recent driver of employee ownership has been the Marcora Law, passed in 1985. This legislation provided state backing for two funding streams to support co-operatives; a general fund for the development of all types of co-operatives and a special fund to help companies in a crisis. The latter invests in the share capital of phoenix co-operatives, in proportion to employees’ own investment. The mutual funds are capitalised by the three per cent of annual surplus that co-operatives are required to invest in return for tax advantages.

The Government recognises worker co-operatives as an effective means of rescuing companies going into liquidation. They must be viable businesses (often re-engineered) and operating to an approved plan. Many were established in the economic crisis of the 1980s, although large numbers have also been formed in the last few years. There are currently five requests per week in Emilia Romagna and it has proved a successful model with eighty per cent of worker co-ops created in this way still trading.

I met with a number of phoenix co-operatives. Artlining manufacture textiles for neck ties, boasting leading fashion houses such as Armani as customers. The company fell into difficult times and was restructured, with 19 of the original 22 employees remaining after the transfer.

Similarly, Greslab – a ceramic tiles business – was restructured saving 57 jobs. Ownership of this business is now split between employees (seventy per cent) and investor members (thirty per cent). 

 

Aussametal – a metallurgy business – passionately recounted how they had transformed their business.  In all cases, what was most evident was the enthusiasm and energy of employees to save and transform their business. 

So what were the lessons for Scotland?  Quite a few!

Mutual funds provide a virtuous circle of investment within the co-operative sector. Worker co-operatives (employee owned businesses) unleash entrepreneurial spirit resulting in highly competitive businesses. And, the innovative use of subsidiary structures in order to achieve scale and access capital.

Until next time…

And remember…think ‘co-operatively’!

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise.

Bella Italia – learning from our co-operative friends in Southern Europe…

Recently I was fortunate to visit Emilia Romagna in the north of Italy – one of the richest, most developed regions in Europe and one famous for co-operative enterprise. What a wonderful learning experience – so I thought I would share!

With so much to tell, this is ‘numero uno’ in a series of blogs on my Italian adventure…

Hosted by Legacoop (apex organisation providing services to member co-operatives), I was invited to this wonderful part of the world to speak at the anniversary celebrations of CMC di Ravenna – a large construction co-operative. I was determined to use my time wisely and soak up the sunny success of co-operative models in Emilia Romagna.

The area itself spreads from Genoa in the west to Ravenna in the east, with Bologna as its capital. It is home to Ferrari, Parmesan cheese and Parma ham and has a rich history and culture. Ravenna is known for its mosaics and is an UNESCO World Heritage Site, with eight early Christian monuments inscribed on the World Heritage List (and of course I did manage to squeeze a visit to all of them).

 

Travelling along the motorway, we saw rolling agricultural land, interspersed with manufacturing plants. There are also many industrial districts, each specialised cluster focusing on specific industries.

The per capita income is high in this part of Italy and unemployment rates low. Amazingly this highly diversified small-firm economy has one enterprise for every 10 inhabitants – that’s 400,000 enterprises. Co-operatives actually account for more than 40 per cent of the GDP (Gross Domestic Product) – which I am sure you will agree is a very significant contribution.

I was keen to understand why this region is known as the ‘world’s most successful & sophisticated co-operative economy’. What were the drivers? What are the benefits?  Could they be replicated elsewhere?  This is what I discovered …

Culture is clearly an important factor.  Emilia Romagna has a strong sense of community – people helping each other. This spills over into business with enterprises collaborating, while remaining competitive. Robert Putman – Harvard academic and author of Making Democracy Work: civic traditions in modern Italy – correctly describes Emilia Romagna as ‘amongst the most modern, bustling, affluent, technically advanced societies on the face of the earth.’

Co-operative networks play an important role. Firms are highly specialised and exist as part of a co-operative production system with the success of one intimately connected to success of others. A reputation for quality, reliability and flexibility are crucial for survival in this ‘cluster’ system.

Legislation is also a factor.  The Italian constitution recognises the social contribution of co-operatives and directs that they should be promoted and favoured in legislation. This has resulted in high levels of adoption of certain models e.g. worker co-operatives and social co-operatives (this series will feature a blog on each). Recent legislation encouraged business clusters through enabling a supportive infrastructure resulting in the growth of credit guarantee co-operatives, service consortia and export consortia.

Co-operative capital is critical for fuelling growth. Marcora Law – requiring all co-operatives to invest three per cent of surplus in a mutual fund – has created a unique form of investment capital for co-operatives. Credit guarantee consortia also play an important role in enabling access to loan finance. 

Apex organisations (e.g. Legacoop) provide a valuable support infrastructure, providing services and facilitating relationships.

And that’s not all! Co-operatives that conduct the majority of their business with members (>50 per cent employee members in a worker co-op and over 50 per cent sales in a consumer co-op) are eligible for tax exemptions. The quid pro quo is that 80 per cent of surplus must be invested in a reserve that may not be divided among members and this enhances capitalisation as well as acting as a bar to demutualisation.

Also, co-operatives are allowed to hold shares in and control joint stock companies. This allows the formation of co-operative controlled groups to achieve scale and raise capital in the markets. As such, co-operatives can then use their natural strengths to outperform their capitalist competitors.

This is learning from the best. Co-operatives are present in nearly all sectors and predominate in construction, agriculture, food processing, wine making, transport, retail, machine production, housing and social services – 85 per cent of social services are delivered by co-operatives in Bologna!

Interestingly, co-operatives are so pervasive that they are generally invisible. And other than the ‘Co-op’ retail stores, the business model is not branded, advertised or promoted.

It is clear that this region has developed a system which merges the values of civil society with the industrial requirements of small firm capitalism, innovatively applying co-operative models to address both economic and societal needs.

So what are the lessons?  Simple – the power of collaboration as a route to economic development. Emilia Romagna clearly demonstrates the valuable role of co-operative models in addressing specific economic and social issues (reinforced by legislation) and the potential for innovation in the design and application of co-operative models.

You can check out some of the beautiful sites of the area in this video   http://bit.ly/NjrStm

Until next time…

And remember…think ‘co-operatively’!

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise.

Blogging about new ways of doing business…

Hello, I’m Sarah Deas, chief executive of Co-operative Development Scotland and I’m delighted to welcome you to our new blog.

Over the coming weeks and months our blog will reflect on how organisations across Scotland can – and are – doing business better by thinking ‘co-operatively’. From insights captured from study trips abroad to key learnings from some of our successful businesses, there will be plenty of interesting posts to read.

2012 is a very exciting year for us. The United Nations has designated it the International Year of Co-operatives (IYC) in recognition of the socio-economic benefits of these business models.  Celebrations are taking place all across the world – the First Minister kicked off ours with a reception at Edinburgh Castle, followed by a road-show across Scotland. 

So quite a lot going on here in Scotland and beyond!

Some of you may be wondering what it is we actually do. Simply put, we promote three types of business models which offer people a real alternative to the status quo. And with over 578 co-operative businesses, employing 28,600 people and a combined turnover of more than £4bn – we know these models work!

So what are they? Well, the first model is employee ownership which encourages companies to empower their employees with them becoming, literarily, the heart of their company. With this model staff hold the majority of the shares either directly or through an employee benefit trust which helps preserve local jobs. Statistics show that employee owned businesses are typically five per cent more productive, mostly because staff feel they have a real say in the direction of their company and are motivated to succeed. This is a proven solution for those faced with ownership succession issues.  

The second is the consortium co-operative which allows individual firms to pool their collective expertise and trade as one bigger single entity. The consortium is run on an equal basis for its members. It may be set up to buy or sell in scale, market more effectively, share facilities or jointly bid for contracts. This boosts innovation and growth and the collective bargaining power of the new consortium aids market presence without compromising anyone’s independence.

And the third is a community co-operative which allows people to come together and invest in their local area. This plays well for renewables projects. For example Boyndie Wind Farm Co-operative was set up in 2005 to allow the community in Banffshire to own a share in the first wind farm co-operative in Scotland.

We want more people in Scotland to understand how these business models can work for them. Anyone interested should get in touch and work with our team of specialists to make the model a reality. We even have a competition – Collaboration Prize – to celebrate the International Year which is looking for the best idea for a new consortium business – package worth £30,000 up for grabs – so definitely something to think about.

Well that is me for now. Keep an eye out for the next post which will be up soon.

And remember…think ‘co-operatively’!

 

Sarah Deas is the chief executive of Co-operative Development Scotland, a Scottish Enterprise subsidiary, established to help companies grow by setting up consortium, employee-owned and community businesses. It works in partnership with Highlands and Islands Enterprise.