From EO sceptic to EO evangelist

1. A Shot in the Dark

Engineering is in my blood, and I enjoyed a challenging and fulfilling career in manufacturing.  I joined a Yorkshire manufacturing business as Operations Director. The owner sometimes talked of “giving the company to its employees”. A meeting was called one October, telling us that the plan was to proceed with a transition to employee ownership in a very short timescale.  Some of us felt the valuation was “ambitious” although not as ambitious as the planned completion payment.  The deal was done with little engagement with employees.

Not directly connected, but possibly related, the company plunged into a financial crisis, resulting in redundancies, pay cuts and short-term working.  There was no coming back from that; we never managed to capture that employee ownership culture.

We expected to find a magic EO bullet, but we couldn’t find one.

2. The Graduate

I was not impressed with this employee ownership idea.  I was talked into attending a residential leadership course at Kellogg College at the University of Oxford organised by Carole Leslie from Ownership Associates.

What an experience! I met the great and the good of the EO world. The speakers were inspiring; business leaders from employee-owned companies who shared their knowledge and experience with us. The clouds parted and I could see how employee ownership should work.

I returned to my company, armed with this new insight and motivation and shared what I had learned.

It was too late,  EO had been an event and there wasn’t any real appetite to go back and recreate what we’d lost.

3. A New Hope

I was disenchanted with my role and accepted that things weren’t going to change; I wasn’t going to make a difference. Frustratingly, I knew employee ownership could work!  I heard of a company, Union Industries, who were at the planning stage of a move to employee ownership. Part of that planning was to find a new Managing Director to allow the founders to step away. I threw my hat in the ring, and, after 9 interviews (it certainly seemed that every employee in the company had a say in the appointment- and I liked that!) I was lucky enough to get the job. The company had properly explored the possible options – an MBO, a trade sale, venture capital investment – and none of these were deemed a good fit.

The owners felt this would lead to Union being someone else’s brand and all that was unique about the company would be lost.  Everything was considered.  The move to employee ownership was a properly informed choice. It wasn’t about money; it was about legacy and protecting the company moving forward.

4. Pillars of Stone

So we started to design an EO structure. We worked to 2 pillars: fairness and transparency. Fairness is a perspective, so we coined and used the phrase “least unfair” as a test of our decision making.

For us, transparency means that we share all the news, good and bad, and put it into context. Former owners had protected employees from the bad news.  That couldn’t continue in our new into our new world of employee ownership; we had to be honest about cause and effect. The outcome is that we share all news. If it’s bad news, we give a plan to get us back into good news territory.

We didn’t set a deadline for our completion; we could wait until we’d done all the engagement and felt that folks were on board.

5. Field of Dreams

“if you build it, they will come”

We did loads of presentations. We had people in big groups, small groups and we talked to people individually if they wanted that. We answered questions, compared models, explained the financials.

We talked of rights and responsibilities and started sharing data so people would get used to it.  We strived to create a safe space that encouraged people to ask questions. We planned a whole 12 months of post transition events to keep EO alive and to bake it into people’s way of thinking.

We picked a transition date, made transition day a real event followed by a party deep into the night.

We devised an EO bonus model that would pay the same number of pounds to everyone. Our salary reflects the job we do so we should share in the success equally.

6. As good as it gets

Five of the last nine years have broken company records in their own right for both profitability and turnover.  Every year since transition has far eclipsed the years before. Bear in mind we are talking about the same people and same product. We just set everyone free and let them believe in themselves. The biggest win is people development, much more important than financial performance.  The people deliver our outstanding financial performance.

We don’t rest on our laurels, we know we can do better and are determined to do so, as long as it’s good for our people.

7. The Final Frontier

We owe a huge debt of gratitude to the vision of our founders, Paul and Isobel Spencer-Schofield.  They built up an exceptional business with an incredible team. They took a tremendous leap of faith in moving to employee ownership and demonstrated tremendous confidence in me. They appointed me (with a little help from 80 recruiter’s aka Union Industries’ employee owners!) and allowed me the freedom to do my job.  It’s been a huge privilege to lead Union Industries. Proudly employee-owned.

For more information about the learning journey please read our recent blog article.