Our Employee Ownership Learning Journey covering Aberdeen, Tayport and Perth was the first face-to-face employee ownership event hosted by the Co-operative Scotland Team since the pandemic. Response was fantastic and very quickly all spaces were booked and we had to close registrations. Over 40 people attended at various parts of the two-day event: a good mix of current employee-owned companies, those considering employee ownership, advisers and other interested individuals. Seven employee-owned business shared their employee ownership story, in what has been described as an “invaluable and enjoyable” event
The event kicked off with a tour around Woollard & Henry based in Dyce, Aberdeen, one of the icons of employee ownership in Scotland. This year, the company celebrates its 150th anniversary and 21 years of being employee-owned. Attendees had the opportunity to see the company at work and also to speak to some of the employee owners, many with long service. We then relocated to the historic Stoneywood House for the presentations.
Stuart Robertson of Woollard & Henry talked of the company’s rocky road. There have been many challenges along the way, and the core commitment to the company’s employee ownership status has contributed strongly to today’s success. Stuart’s presentation led to an interesting discussion on the issues of employee involvement when a company grows and diversifies internationally, and also the impact of that growth on the Share Incentive Plan (SIP). A decision was taken to run down the SIP as the growth in share value had created a significant future liability for the company. In addition, it was felt that this resulted in inequality as the newer members of staff would never be able to see the same growth in share value that longer serving employees benefitted from.
The second presenter of the day was Accord Energy Solutions, based in Aberdeen and Scotland’s first start up employee-owned company. They described a quite different approach to their employee-owned status. Rebecca McKenzie and Gordon Inglis had been appointed as employee directors and were now executive directors of the company. They reported that employee ownership has proven to be an effective recruitment and retention pool to attract the best talent in the sector. The company had taken a conscious decision not to grow significantly – they wanted to keep the team at a size where communication and engagement was central. Interestingly, Accord finds the SIP to be an important feature of the company’s employee ownership.
The 3rd and final presenter of the day was Phil Jefferies of 20/20 Project Management based in Aberdeen but delivering services throughout the world, who described a business that hadn’t optimised the benefits of employee ownership in its early years. Following some interaction with other firms, Phil realised the company was missing out and since focusing more on employee ownership and integrating that into the branding, the results had been quite transformational. Attendees scribbled furiously as Phil shared his hints for building engagement and squashing toxicity in the company. He described the pitfalls of being too virtual as an organisation, and the company encouraged employees to meet either formally or informally, even picking up the tab for coffees and drinks! Overall, the company has experienced immense benefits including more innovation and less silo thinking.
The speaker over dinner was Andrew Lane of Union Industries, based in Leeds. What an entertaining, inspiring and honest speech it was. Andrew came from another employee-owned company that he felt hadn’t quite got it right. As he says, he knew how not to do it! He joined Union Industries just prior to the implementation of the Employee Ownership Trust (EOT). He described several challenges including managing the leadership transition from the two much loved founders to a more inclusive and progressive way of working.
Day 2 started off at Scott & Fyfe based in Tayport, a global provider of innovative textiles solutions for almost 150 years. This is another business that has been on a bit of a roller coaster. After a tour of the factory, Managing Director Michelle Quadrelli talked us through the company’s story. The central tenets of the business are Balance, Attitude and Collaboration. Company performance had improved following the move to employee ownership in 2013. However, it was difficult to say whether this could be attributed to the transition, or whether other factors were at play. Michelle reported that the company’s employee ownership was viewed as positive by both employees and customers. She gave some very useful pointers from their experience including not giving naysayers a platform and to focus on running the business as a business.
Stuart Mills of STAR-Dundee based in Dundee, gave a fascinating presentation of the company’s experience. Starting as a university spin out, the company has been employee-owned for 5 years. STAR-Dundee’s technology is used in some of the world’s most well-known space projects. Stuart talked about the importance of managing rewards; he believes it’s good to pay bonuses early in the employee ownership journey to reinforce benefits, but be careful not to set unrealistic expectations for future payments. He also emphasised the importance of educating employees on business matters and reinforce the need for confidentiality.
Conversations continued during a delicious buffet lunch produced by FreshJet, a local catering company which has been employee-owned since 2022.
The Learning Journey concluded at Merlin ERD’s offices in Perth. MD, Ron Ramage, gave a very honest appraisal of the successes and challenges of the business. He talked through what worked, what didn’t and what’s next for the drilling company. Many of the company’s employee owners are international and can’t benefit from the tax advantages of the UK EOT legislation. This did create headaches for the company; how to reward fairly and appropriately? He believes the SIP doesn’t work for them and was exploring other forms of share schemes and rewards.
Key Themes
Several key themes emerged from discussions:
Importance of good governance
There was a general lack of understanding of the roles in the governance structures, particularly when it came to the position of elected employees. This did create tensions and put heavy expectations on the individuals.
Considering the company future when structuring employee ownership
There were some concerns expressed that the employee perspective was not sufficiently represented during transactions. This led to suspicions that the valuation may not have been accurate, and the protections for sellers sometimes stand in the way of the company moving forward.
Leadership Succession
Appointing the next leader to take over the business is crucial. It was acknowledged that the skills required to found and grow a business is an entirely different set of skills required to manage a business with that has just transferred to employee ownership and take it to the next level.
Listening
Communication isn’t just about being told; managers need to listen to employee owners.
Ownership Culture
There’s not enough investment in getting the culture right within a business. Effort should be exerted into continuing to nurture the culture and if something isn’t working, try something else.
Learning Points
- Don’t worry about getting everyone on board. Focus on the champions and the majority of employees
- One size doesn’t fit all
- Need to have good, open communication between the board, the trust and the employees
- Direct ownership can be difficult to manage
Feedback suggests this event was a great success and we hope to run a similar Learning Journey in future.