Sheffield is a hive of employee owned organisations and the place to embark on a learning journey to see what makes these places really tick.
Here Glen Dott, specialist advisor with Co-operative Development Scotland (CDS), reports back on his findings and offers plenty of food for thought.
‘Pigs might fly’ is the sort of cliché that applies to an idea that however well intended is unlikely to ever have any practical application. But when it comes to Pigs in the business world we have a model whose time has truly come and offers Scotland Plc. a dynamic alternative to growing the economy.
My role as a specialist advisor with CDS is to promote business ownership models which are Productive, Innovative, Growth-oriented and Sustainable. Pigs that fly in the commercial world…in other words!
With this in mind I was fortunate enough to be part of a trip to Sheffield to understand variations in ownership and governance models and their impact on performance. Sheffield happens to be a hive of Employee Owned organisations which exhibit diversity in structural and governance options and in their own way exhibit one or more of the ‘PIGS’ characteristics.
First port of call alongside tour leaders Andrew Harrison and Norman Watson from Co-ownership Solutions was Parfetts Cash and Carry. It’s a traditional cash and carry founded in 1980 by the Parfett family. Steve took over from his dad in 1989 and by 2006, when he started reviewing his own succession options, it had six depots and a £250m turnover.
Steve was heavily influenced by his time working as a management trainee at John Lewis which has galvanised him into pursuing an EO exit option. In 2008 55 per cent of the company shares were sold to an employee trust, with an option for the trust to take up the balance of the shares in future.
Employee engagement activities begun once the deal was concluded. Although it’s a fantastic result for 550 employees our advice generally is to engage with the workforce at the earlier opportunity available. Employees certainly now have their say, the business is growing and local jobs have been preserved.
After a gourmet lunch, courtesy of Parfetts, our next stop was Gripple, a model example of employee engagement and home of their eponymous and ingenious wire tensioning device. Charismatic and straight-talking founder Hugh Facey is one of the UKs foremost proponents of employee ownership and gave a fascinating account of his beliefs and the company.
A company limited by guarantee (GLIDE) has been set up as a holding company and will ultimately be the governing authority for Gripple and other operating companies and hold majority shares in the subsidiaries.
Employees are required to purchase shares and as demonstrated in the well attended communications meeting the returns, displayed publicly, are highly attractive. In addition to having a strong international focus, innovation and new product development are crucial with some 25 per cent of revenue being generated from products less than four years old.
I couldn’t help admire the way that all staff were immaculately turned out by choice in company uniform – a fantastic endorsement of any business. Fun certainly appeared to be part of the ethos with a screening of a corporate video involving many in the Old West Gun Works and espousing all Gripple’s principles including honesty, integrity, commitment, humour and passion. Gripple is certainly productive, innovative, growth oriented and sustainable.
That evening we were treated to an overview of the Employee Ownership Association’s vision to increase EO contribution to GDP from three to 10 per cent by 2020. David Daws, legal partner at Co-ownership Solutions and part time helicopter pilot, gave an eloquent description of the governance system options within EOBs. The message from David was clear: keep transitions simple and don’t let the tax tail wag the corporate dog.
Next stop was School Trends. The business was founded by Peter Beeby who sold the business to an employee trust in 2004 to preserve the ethos and maintain a community culture. Employees are also required to buy shares as a condition of employment. The 120 employees are consulted widely on many decisions and have influence within the business, not least on the governing council, board of directors and via trustees.
We then travelled a short distance to a very interesting business. SUMA is a true workers’ co-operative and the largest equal pay organisation in Europe. All workers receive a flat wage of £14/hour and rotate jobs on a regular basis.
But wait for it…no-one is a boss! Sounds crazy? Maybe so, but both myself and my colleagues were impressed since the business has 100 members and turns over £30m annually. Furthermore it is growing and has successfully penetrated the Chinese market.
That’s amazing I hear you ask…how does such a ‘flat’ structure like SUMA deliver growth at a time of widespread economic gloom?
In truth, they are a highly organised worker community with a clear vision of the value they provide. They maintain close contact with their clients whilst and do so in a highly competitive marketplace.
Over tea and home baked cake in the canteen personnel officer Bob Cannell talked us through facts and figures relating to the business. It was set up as a workers’ co-operative in 1975, as an Industrial and Provident Society. Policy and direction is decided by general meeting of members, and an elected management committee oversees the fulfilment of a democratically agreed business plan.
Conventional no, but effective yes, SUMA passes the PIGS test with flying colours. They are productive, innovative, growth oriented and definitely sustainable. Food for thought.