Tag: 2015 (Page 1 of 2)

Collaboration: A step-by-step guide

Jaye Martin 03

Collaboration brings a number of benefits – including business growth, reduced costs and extra resources –but when should a business join or form a consortium? How does it go about doing so? And what specific benefits can it deliver?

Here, CDS specialist advisor Jaye Martin shares a brief step-by-step guide to consortium working.

Step 1: Identify barriers to growth
For many small and micro-enterprises, lack of scale, time, finance or resources can be a barrier to accessing new markets, tendering for larger contracts or simply marketing services. These challenges will be familiar to many businesses, particularly those with small teams or those who provide unique or niche products and services.

Step 2: Look for a potential solution
Teaming up with other like-minded businesses and forming a consortium is an excellent way to break down these barriers. Suitable for businesses of all sizes operating in any sector, this model can help businesses grow by reducing the costs and risks associated with tackling new markets and investing in new products and services. It can also enable businesses to share resources such as back office functions and premises. Meanwhile, member businesses are able to retain their own brands, independence and control. You can find out more here.

Step 3: Find collaborators
Carefully identifying like-minded businesses to work with is crucial. Trust is a key factor. It can help if the businesses have worked together informally before. In most cases, member businesses operate in similar or complementary fields, although a lot will depend on the rationale for collaboration. You can read about the experience of a number of successful consortia here.

Step 4: Choose the right structure
The consortium co-operative model is an effective collaborative business structure. In simple terms it is an organisation run in a shared and equal way by and for the benefit of its members. Members are independent businesses and the consortium can be for any purpose which supports them, for example marketing, tendering, innovating or exporting. Co-operative Development Scotland has a track record in helping businesses and we’d be happy to help you explore the options. You can contact us here.

Step 5: Benefit from your collaboration
Collaborating can be a real game-changer for businesses. Collaborating can be a real game-changer for businesses. For example, through collaboration, Adventures in Light – an Edinburgh-based consortium which brings together a 3D artist, a film-maker and a carpenter – have been able to invest in essential new kit which has supported them to keep experimenting and inventing. This, in turn, has helped them work on bigger projects such as the International Science Festival and the Kelburn Garden Party.

As well as supporting businesses to access new markets, share risks and costs and develop new products or services, many businesses involved in consortium working also report increased confidence, better business connections, improved knowledge-sharing and an enhanced profile.

The benefits are tangible and numerous – and definitely worth exploring when considering the future of your business.

CDS can help you to explore the options, structure the consortium, and get more members involved. 

If you would like to find out more about collaborative business models, or if you would like to get in touch, visit here.

 

Why working for an employee-owned company makes a real difference

sAt Aquascot’s ‘Successful Succession’ event on Employee Ownership Day, training assistant Sylwia Goluda described her experiences at the Alness-based company.

Her presentation provided real insight into an employee’s journey towards employee ownership and here she provides us with a summary of the talk that so many enjoyed on the day.

I arrived in Scotland from Poland in July 2006. It was a scary prospect coming to a strange country, having left behind my family, friends and job. Thankfully, everyone was so nice and friendly which made everything so much easier.

I came to work at Aquascot and immediately noticed a difference from how companies work in Poland. What struck me most was the attitude of the managers – they were open and helpful and told us how much they appreciated our hard work. They care for employees and this makes Aquascot a great place to work.

In 2008, the three directors announced at our annual conference that the company was moving to employee ownership. It was an exciting time and we all felt we were part of something bigger and better. A Partnership Council was formed and I was delighted to be elected to this with nine of my colleagues.

We meet on a monthly basis to discuss employee views and to propose ideas and suggestions for our business to grow and be successful. We have been involved in lots of projects including organising social events, charity initiatives, conferences and celebrations, such as the company’s 25th birthday party.

We are almost at the end of our journey to become 100 per cent employee-owned. You can tell that everybody is waiting for that milestone with great excitement. Personally, I can’t wait to see what’s going to happen and how it can lead to even more success.

I feel very proud to work here and I’m glad I have the opportunity to grow and be recognised and appreciated for going that extra mile. I believe that Aquascot’s future is very bright – not simply because we are employee-owned but because we have a great team of people who will make success happen.

Employee ownership – the key to a stronger Highland economy?

AquaScot Dennis Overton 94Earlier this month, Alness-based sustainable seafood company Aquascot opened its doors to the local business community for a ‘Successful Succession’ event jointly hosted with Co-operative Development Scotland.

Here, Aquascot chairman Dennis Overton reflects on the day and the company’s experience of employee ownership.

With 185 employees operating from two sites in the town, Aquascot is currently 85 per cent employee-owned and is set to complete the transition to 100 per cent employee ownership by 2017. As an enterprise, we have a 12 per cent share of the UK’s ‘ready to cook’ salmon market.

On 3 July – Employee Ownership Day – we welcomed employee owners, local business people and local MSP, Rob Gibson to our premises. We focused on how employee ownership has been a successful model for Aquascot, and how it can make a significant contribution to economic growth.

I believe the UK economy would be in a much healthier position if there were more employee-owned companies. At present, I feel we are overly focused on short-term gain to the detriment of long-term value creation.

Employee-owned firms are different. In ‘conventional’ businesses there is often disconnect between shareholders and the company they part own. This can be because shareholders have different, and often more immediate, objectives than the people inside the company who have its long-term success at heart.

In an employee-owned company, the employees control the shares. They are more likely to be concerned about the longevity of the business and know that innovation, productivity and profitability are key to achieving that. Indeed, as Aquascot partner Donald Beaton put it so articulately: “This isn’t just about creating good jobs for us, it’s about jobs being there for our children and their children.”

In the Highlands, succession is a concern. In a survey we conducted in 2005, we looked at what happens to non-family, first generation businesses when it comes to considering succession. The findings were not encouraging:

  • There were few independent businesses of any scale in the Highlands
  • The most common form of exit was a trade sale to a buyer out with the region
  • In the majority of cases , the acquired company no longer had a presence in the Highlands after five years

When our founders came to consider Aquascot’s future, they knew that the final decision had to consider the contribution made by its employees. We have exceptional staff and they have made the company the success it is today.

By selling to employees, our founders have enabled this success to continue, and Aquascot will remain in Alness providing jobs and opportunities for years to come.

Friday’s event encouraged several businesses to explore employee ownership more closely, and with Aquascot as an example, this can only be good news for the local economy and the people of the Highlands.

Innovation and how employee ownership can unlock it

eodayWith today marking Employee Ownership (EO) Day, we asked our EO ambassadors how important innovation is to growing your business and how EO can offer an advantage.

Here, a number of ambassadors from a range of sectors – including manufacturing, oil and gas, textiles and agriculture – offer us their thoughts on the subject.

Nick Kuenssberg, Scott & Fyfe: “Recent findings from an employee survey have confirmed the intuitive belief that a sense of ownership and a genuine understanding of and commitment to the revised innovation-led strategy would enhance performance and thus the longer term future of the company. In parallel a visit from an internationally respected textiles consultant in April said that he had been impressed by such an innovative and vigorous company. Simultaneous innovation and ownership change was perhaps a risk but it is already proving to be well worth taking.”

Alan Spence, Accord Energy: “At Accord, we believe that investing in people and giving them space to think outside the box not only benefits them but also the company. Over the past five years, our employees have developed and presented a number of new and exciting approaches to oil and gas allocation. Our innovative work has helped clients by improving their systems of allocation, while we have benefited through wider industry exposure, higher levels of activity and improved recognition and satisfaction for our engineers.”

John Housego, WL Gore: “Bringing a continued stream of innovative products is the only way to keep your business alive and fresh in the marketplace. The benefit of an employee owned business is large in this arena because of the increased engagement EO businesses often demonstrate with their teams. Innovation comes from passionate associates who can use their knowledge of the capabilities available and the culture to have their ideas more readily heard, and so leveraging a larger proportion of the team in innovation. That feeling of ownership and joint reward really helps this process.

Ralph MacLeod, Galloway & MacLeod: “When structured correctly, employee ownership can unlock innovators within the business and reward them correctly. This is having a huge impact – differentiating us from competitors, identifying new markets and improving margins for stakeholders and customers in a responsible and sustainable manner.”

Dick Philbrick, Clansman Dynamics: “Cynics predicted that in an employee-owned business there would be a cautious attitude to technical development. The cynics were wrong – 2014 was our busiest year for technical developments. Nothing is guaranteed in engineering but if there are problems the Employee Owners will bust the proverbial gut to fix them.”

Five points from Italy’s co-operative capital

Jaye Martin 03CDS specialist advisor Jaye Martin recently took part in a study trip to Emilia Romagna, the area of northern Italy with probably the richest co-operative history in the world.

Here, she reflects on the visit and looks at how Scotland can learn from the region.

The tour I was lucky enough to be part of was a collaboration between the University of Bologna and Saint Mary’s University (SMU) in Halifax, Canada. I joined a group of students undertaking a part-time Master’s Degree in Co-operative Management at SMU, all of whom are managers at co-operatives across Canada and the United States. Their organisations include food co-ops, insurance co-ops, credit unions and co-op development and their experiences provided me with valuable insight.

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One of the Towers of Bologna

Our chief executive, Sarah Deas, wrote a series of comprehensive blogs on her own experiences in Emilia Romagna a couple of years ago. With that in mind, I thought I’d simply touch on my highlights reel – although I can assure you that it was an intense eight days packed with visits to co-operatives and lectures on co-operative theory and economics!

So here’s my five most interesting points of learning:

1. Co-operatives are one of the most important tools in the reduction of inequality  Bologna – the capital of the Emilia Romagna region – has a lower unemployment  rate than other Italian cities. Emilia Romagna itself ranks first in Italy in terms of equality, evidenced by high average income and low income inequality.  Female participation in the workplace is significantly higher in Emilia Romagna (c65%) than in the rest of Italy (c45%). All of this can be linked back to the presence of co-operatives in the area.

IMG_01532. Social co-operatives… the future?

Legislation was introduced in Italy to create the legal and tax structure for the ‘social co-operative’ (what we might call a ‘social firm’).  At least 30% of employees must be categorised as disadvantaged (e.g. those affected by drug or alcohol addiction, physical or mental disabilities).  We visited some wonderful examples, such as Cooperativo Il Cammino e L’altro Giardino (‘The Alternative Garden’), a residence and gardens where herbs, fruit and vegetables are grown and used to make products such as jams and syrups.  Social co-operatives were oft-mentioned as the potential future growth area of the sector, but funding and support is increasingly hard to come by – so much will depend on the economic sustainability of projects and how they diversify and adapt to achieve this.

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Caseificio 4 Madonne

3. Caseificio 4 Madonne and the mix of the traditional and the innovative

My favourite visit – and not just because we got to taste all the lovely Parmigiano Reggiano cheese! Caseificio 4 Madonne is one of 350 Parmigiano Reggiano co-operatives in the region and together they form a huge consortium.  Caseificio 4 has 65-70 member farmers and produces 104 wheels of cheese each day.  We were shown the various stages of production and I was struck by the clever merging of traditional methods (e.g. use of muslin cloths and copper cauldrons) and innovative methods without the loss of the integrity and provenance of the product.  Perhaps something for Scottish food and drink companies to consider?

4. Co-operative funds – replicable here?

Co-operatives in Italy must pay 3% of their annual profits into one of three funds (each controlled by one of the three co-operative associations).  We visited Coopfond, the largest of the funds at 422m EUR and controlled by Legacoop.  The fund is used for the promotion of start-up co-operatives, growth capital for expansion and support for co-operatives in financial distress.  They will also help fund worker buyouts such as Greslab.  Given the issues around access to finance for employee-owned businesses and co-operatives in the UK, could a similar initiative be a potential game-changer?

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Our group outside University of Bologna

5. The importance of international connections

This study trip was important not just for the opportunity to see and hear about the strength of co-operative models in the region, but also to meet and discuss with fellow co-operators from Italy, Canada, USA and England.  Everyone in the group had a different interest or angle to their observations and questions and, for me, that was just as fascinating as the visits and lectures themselves. What is clear is that we should seek to build on these experiences, relationships and learning as far as possible as we continue to support company growth in Scotland using co-operative business models.

United States of Employee Ownership

Glen DottCDS specialist adviser Glen Dott has recently returned to Scotland after a fact-finding trip to the United States to learn about how employee ownership works there.

Here, he explores the differences in the systems across the Atlantic Ocean and why the American model of employee ownership has become so popular.

I have recently returned from the National Centre for Employee Ownership (NCEO) Conference held in Denver, Colorado. The NCEO is a membership body similar to the Employee Ownership Association in the UK. Both the United States and the conference were eye openers to me, having not seen either before.

Employee Ownership (EO) is big business in the USA. More than 11,300 firms exist there that use the Employee Stock Ownership Plan (ESOP). An ESOP is effectively an employee ownership trust which allows staff participation in corporate ownership and a share in the wealth these firms produce.

As in the UK, the company funds the purchase of shares from exiting owners, with the shares moving into the ESOP. Typically employees do not buy shares but are allocated a portion; in the UK a combination of both is common.

Purpose – retirement planning versus employee engagement

ESOPs were originally designed to provide for employee retirement. Companies would set aside stock to be given to employees when they decided it was time to collect their pension. This is still the case today. Countless US studies conclude share ownership combined with worker empowerment initiatives produce better financial results, but favourable tax treatment is a significant driver for ESOPs in the US.

Legislation driven

Even conferences in the USA are a little different.

Even conferences in the USA are a little different.

In the US, companies that adhere to a certain tax code and are 100 per cent owned by an ESOP pay no tax. Earnings are passed on to the shareholders (employees) within the corporation and these earnings are only taxed when liquidating the shares – at retirement or upon leaving the company.

Since ESOPs are the only retirement plans allowed by law to borrow money, they are attractive to owners, managers and advisers, as they can be used to raise finance. There is also considerable legislation in place to ensure ESOPs have independent trustees. ESOP valuations are independently verifiable and trustees are truly acting in the employees’ best interests. As you might imagine America’s famed legal system comes fully into play, with the Department of Labor challenging some valuations on behalf of employees.

Governance

From a UK EO perspective, employees in US EO firms do not seem to have great formal influence. This system appears to lack the ‘checks and balances’ we have, where the operating board is overseen by trustees.  There are no employee-elected directors and no employee-elected trustees. Furthermore, the trustees are appointed by the board.

There is however a certain logic to this. Trustees are legally obliged to work in the best interests of employees and are able to remove the company’s board, although in practice this rarely happens. The two interdependent governance structures are required to ‘work things out’ in the best interest of all.

While the systems across the pond differ, there is no doubt the American ESOP structure allows employees to fully share in the fruits of their labour – and provides interesting food for thought when considering how UK businesses approach employee ownership.

What do Co-operatives mean to you?

What words spring to mind when you think of co-operatives? Do you think of a specific business model or company? Perhaps you think of the business benefits? Maybe you reflect on your own experience?

We asked our team for their suggestions and compiled the answers into this word cloud – which we think is a terrific summary.CDS word cloud

What would you add to the list?

 

Employee ownership on agenda for professional advisers

Graeme Nuttall smlA recent CDS seminar saw professional advisers gather in Glasgow to hear from Graeme Nuttall OBE, author of the Nuttall Review of Employee Ownership.

Here, Graeme – partner of Fieldfisher – discusses the growing enthusiasm for the model, the important role played by CDS, new tax reliefs and Scotland’s success stories.

I was delighted to be invited to speak to an audience of professional advisers in Glasgow and was hugely impressed at the level of interest and enthusiasm that exists for employee-owned business structures.

There can be no doubt – the case for employee ownership has been made. A few years ago, a company owner looking to explore employee ownership would likely have been dissuaded from this path by their adviser. Now, advisers are much more likely to present employee ownership as a feasible succession option for their clients.

Co-operative Development Scotland (CDS), under the leadership of Sarah Deas, must take some credit for this achievement. CDS has been instrumental in building the employee ownership community in Scotland, and engaging with professional advisers to help them recognise the role these individuals and firms play in the development of employee ownership.

Advisers will know about the tax advantaged share plans designed to increase individual share ownership amongst a firm’s employees. These have been around for almost 40 years. In the Nuttall Review, I wanted to give greater priority to the trust model of employee ownership.

This is a simple model and gives employees a collective ownership of the company. I was delighted that as a result of the findings of the Nuttall Review a new tax regime for “employee-ownership trusts” (EOTs) was introduced last year. Briefly, there are two main new tax exemptions:

  • From 6 April 2014 there is an exemption from Capital Gains Tax (CGT) on gains on certain disposals of shares in a trading company (or in a holding company of a trading group) that provides an EOT with a controlling interest in that company; and
  • From 1 October 2014 there is an exemption from Income Tax (but not National Insurance contributions) of £3,600 per employee per tax year for certain bonus payments made to all employees of a company or group where an EOT has a controlling interest.

The CGT exemption has attracted attention to employee buy outs as a succession solution. Instead of a sale of shares being taxed typically, for owner managers, at an effective rate of 10% after entrepreneurs’ relief, there is an unlimited exemption from CGT.

The Income Tax exemption means there can also be a tax benefit for staff in this business model. In most cases dividends otherwise payable to the EOT as a majority shareholder are waived by its trustee and are paid out instead as bonuses to all staff – tax free up to £3,600 per employee per tax year.

This is a key concept – instead of external shareholders receiving dividends and staff bonuses being paid simply at the discretion of a board of directors, the EOT model provides staff with an economic stake.

However, tax should not be the driver of employee ownership. It is important that attention is paid to the business case. Scotland has more than its fair share of success stories.

Page\Park Architects, recently appointed to restore the world-renowned Glasgow School of Art Mackintosh Building, is a superb example of a trust owned model of ownership. Stewart Buchanan Gauges, a business where 85% of the workforce live within a five mile radius, represents the hybrid model of trust and direct employee share ownership. There are many more, and increasing all the time.

It’s always rewarding working through a transaction to completion. With an employee ownership transition, there is an additional bonus in that the relationship extends beyond the deal. The average life of a Standard & Poor’s listed company was apparently 60 years in 1958, around 30 years in the 1970s and was down to 15 years by 2014. Obviously businesses have to evolve and markets change but I like the idea that companies I help convert to employee ownership many years ago are still in existence in contrast to their competitors.

It was a real pleasure visiting Glasgow, especially speaking to so many advisers already convinced of the benefits of employee ownership. We do need more champions, and with advisers onside I trust we’ll see even more employee buyouts in Scotland over the next few years.

To read the speech Graeme gave during his presentation at Ernst & Young Glasgow, click here.

Avarix – a model approach?

Gavin Tosh1Inspired by a “Hackathon”, a novel consortium made up of IT students and business consultants is helping build fledgling careers and establish reputations across the world.

Linked to the University of Strathclyde, Avarix has already worked with some of the world’s largest companies. Here, Gavin Tosh of Clerwood Legal Services looks at how they’ve achieved that success.

Avarix is a consortium comprising computer science students at the University of Strathclyde and business consultants with their own companies who work part time for the university’s Enterprise Hub.

The initial idea for Avarix came from a cross-university “Hackathon”, where several universities collaborated to tackle a real-life technical challenge for an external organisation using video conferencing.

The success of this collaboration prompted an approach to Co-operative Development Scotland to form a formal consortium. With the help expert advisers – myself and Gill Joy of Intend Business Development – the consortium successfully formed and was incorporated on 31st January 2015.

This model helps Avarix capitalise on the significant technical talent amongst the computer science students by allying them with external business expertise in one commercial entity.

avarix logoWhile work for external customers was being undertaken by individuals already, including for big name companies such as JP Morgan, Barclays, VISA, Amazon, SkyScanner and the Mozilla Foundation, the experts did not have the capacity to handle multiple requests or more complex jobs. Being part of the consortium removes this constraint and offers greater capacity for work.

The consortium has already delivered several benefits for members. In the first three months of trading alone, Avarix secured orders worth over £150k.

Bringing together the varying skills of members means Avarix can pursue wider business opportunities and bid for different kinds of work. To help cope with peaks in demand and grow the customer base, the core group wanted to be able to formally involve other students in the business.

The consortium co-operative provided a flexible membership structure, allowing students to both carry out work and potentially join the consortium as associate or full members.

Inevitably some student members will need to leave for various reasons, such as gaining full-time employment out-with Scotland. The consortium cooperative makes this process easy, unlike say a company limited by shares.

Having access to funding and reduced operating costs provides a stable financial base and student members benefit from good business experience. Combining resources means members have a greater overall marketing budget, which has helped attract new business.

The external consultants will share in the commercial success of the team but can still manage and grow their own businesses independently.

With early signs of success, more clients in the pipeline and students keen to be a part of Avarix,

could this be a model which can be replicated in other Scottish universities and colleges in sectors other than IT/computer science?

Employee ownership could be the best thing for your business

SCTRecently, Alan Spence, a founder of hydrocarbon accounting firm Accord Energy Solutions, told us why he was eager to share his thoughts on employee ownership (EO) when he spoke at the National Economic Forum in Dundee last month.

Here, in the second of his two-part feature, Alan discusses how employee ownership and investing in staff has helped his company succeed.

As a company, Accord’s goals are very simple; we want to be a successful business with a long-term future. To achieve this we need to provide our clients with a quality service at a competitive price and we rely on all of our people to ensure this happens.

We pay competitive salaries and provide a good benefits package but we recognise that these things alone won’t necessarily allow us to attract, retain and develop the best people. There has to be something more.

For us, it all starts with knowledge and understanding. Every month we get together for a staff meeting. We meet in the office or join in by conferencing and desk-top sharing. We examine and discuss every aspect of the business.

From admin and IT, through to the monthly management accounts and new business opportunities, we take time to cover it all. I think it’s fair to say that every employee knows enough about the business to understand how we’re performing and why the management team makes the decisions it does.

We also believe our staff should have significant control over their own personal development. Each individual has their own annual training budget (currently £1,800) they can spend on whatever training they feel they need.

For some, the training can be job specific – developing a deeper understanding of a familiar concept or learning about a new technique or process. Others may want to know more about business processes; accounting and finance or benefits and taxation. Not only does this help the employee grow and develop it also benefits the business by increasing our overall capability in so many different ways.

As a company with aspirations for a long-term future and a strong presence in the local community, we believe it’s important to contribute to the community. We do this in two different ways; by sponsoring local sports organisations – such as Garioch Sports Trust, Curl Aberdeen, Aberdeenshire Cricket Club and Ride the North – and by supporting local and national charities that are nominated by employees.

Beyond this, we think it’s important that employees play a major part in the key decisions. Recently our employees determined how bonuses should be paid and they are now in the process of deciding how we develop the company so it meets their current and future aspirations.

We will all be meeting in Aberdeen next month to work through this process together. Our plan is to shape our company in a way that benefits all of us and stands the business in good stead both now and in the future.

Any or all of these things and many more can be done by any company – you don’t have to be employee owned – and will result in improvements across the board. I say this based on my experience in both small local and large multi-national companies, and after hearing first-hand the experience of people like John Reid at Michelin Dundee.

However, when you’re ready to take things beyond this to the next level you may want to consider employee ownership, it could be the best thing you do for your business.

Can Scotland learn from the Basque experience?

Jim_Maxwell,_Business_Development_Manager,_Co-operative_Development_Scotland_resizedThe Mondragon Corporation – based in Spain’s Basque region – has evolved from humble beginnings to become the country’s tenth largest company.

Here, Jim Maxwell of CDS discusses how a recent visit to the area highlighted the benefits of the worker co-operative model.

Equality and a fairer society are at the heart of our new economic strategy for Scotland so in a recent visit to Spain I was keen to see how those same goals are being addressed in the Basque Country.

Started in 1956 by a local priest motivated to reduce poverty in three narrow, steeply sided valleys south of Bilbao, the Mondragon Corporation has evolved into a ‘mega-co-operative’, providing work for 74,000 people in 110, mainly industrial, worker-owned co-operatives.

View over Mondragon’s many co-operatives

View over Mondragon’s many co-operatives

Mondragon’s mission is the creation of wealth in society, delivered through a system of membership, rather than just employment for its workers. In return for a small input of initial capital and monthly contributions, each member receives a good salary and an excellent range of social and welfare benefits.

Equality and fairness are central to this system. The highest salary is no more than six times that of the lowest, all are entitled to the same benefits and no-one is paid overtime.  At the end of each year resources are transferred between companies to help strengthen those in difficulty and preserve jobs.

Job security is a hot topic in Mondragon at present. Following the closure last year of one of the member co-ops, Fagor Electrodomestico, all but 223 of its 2,000 workers have now been redeployed to jobs elsewhere in the group or have taken early retirement. A supreme effort is being made to find posts for the remaining 223, all of whom continue to receive 80 per cent of their salary.

Most surprising is the speed at which all this has been achieved.  The Mondragon Corporation took its present form only in 1992. Its overarching structures – a bank (‘Caja Laboral’), nine technical research institutes, the Mondragon University and a central co-ordinating body – have all been created within just a few decades.

Such rapid growth has been possible because of the highly engaged workforce and Mondragon’s treatment of capital as primarily a resource for the creation of sustainable employment and the improvement of people’s lives.

Mondragon Corporation's Training and Development Centre

Mondragon Corporation’s Training and Development Centre

The visionary model is impressive, but Mondragon has to be judged by its achievements.  Collaboration between the member co-operative companies has enabled all, with one exception, to survive the recession.

There have been virtually no lob losses among members across the group and a good standard of living has been provided to all. The Mondragon Corporation’s focus on creating ‘wealth in society’ has resulted in the Basque area having the most equal redistribution of wealth in Europe, as measured by Eurostat.

But a word of caution, the Mondragon model may not transfer easily to other places. What evolved south of Bilbao was in direct response to local needs and opportunities – poverty, weak state services, a strong sense of ‘national’ identity and a collective will to expand underperforming industries when the Franco regime ended in 1975.

So what can Scotland learn from all this? In Mondragon we have the clearest possible view of how the worker-owned business model can succeed. More than this, it shows how striving for socio-economic (not simply economic) outcomes can help create a fairer and more equal society.

This might be just the right moment to consider how worker-ownership could play a bigger part in shaping the future Scottish economy.

Free workshops on tendering together

Gill headshot 2

A series of free workshops on Tendering Together will be held by the Supplier Development Programme (SDP) from next month.

Here, Gillian Cameron, programme manager at SDP describes why the workshops will be a major help to Scottish business.

Our two part course, starting in May, is designed for companies and third sector organisations which have a good level of tendering experience and are looking to increase their market through collaborative bids.

Businesses can choose to attend the first part of the course in May – either in Falkirk on May 19, Glasgow on May 21 or Edinburgh on May 28 – with all delegates then able to attend the second day in the Lighthouse, Glasgow on June 4.

Topics include:

  • Why collaborate – opportunities and barriers
  • Types of collaboration
  • Finding and assessing partners, early discussions
  • Preparing a joint proposal/tender – tips and templates
  • Consortium agreements, legal documents

This is a unique opportunity for SMEs to get expert training on what it means to work collaboratively together.

There are a number of fantastic business opportunities coming up in Scotland for 2015, including Glasgow’s City Deal. By working collaboratively SMEs can ensure they are best placed to benefit and compete within the market place.

Places are limited and companies interested in attending should reserve their free place via www.sdpscotland.co.uk.

For more information contact info@sdpscotland.co.uk

Bright future ahead for Collaboration Prize winners

Adventures in LightAt the end of March, we announced the winners of our Collaboration Prize. One of those winners was Adventures in Light, an Edinburgh-based consortium which triumphed in our tendering category.

Here, chairwoman Cristina Spiteri discusses the group’s excitement at being named a winner and how they plan to use the prize money.

This is a hugely exciting time for Adventures in Light. There are three individuals in our group – a 3D artist, filmmaker and carpenter – and we have big plans and are ready to shine.

While we are individual businesses, we have been collaborating together for two years. In fact, we’ve already enjoyed a number of successes and have so far worked with the Edinburgh Science Festival, T in the Park, The Tinderbox Orchestra and Scottish Dance Theatre.

Adventures in LightBut when we found out there was a way for us to form a business from our collaboration, we were really excited. It’s absolutely perfect for us and we were already naturally working in that way.

Winning the Collaboration Prize will open up so many doors for us. Our vision is to create dynamic projected installations for musical and cultural performances.

Adventures in LightWe also have a focus on utilising projection mapping for brand promotion and interior design, something which is currently not available from one company in Scotland. And thanks to CDS and the Collaboration Prize, we can engage more prospective clients.

By working as a consortium, we can pool our expertise to allow for seamless ideas from creation to execution. The prize money will allow us to purchase more advanced equipment and embark on more ambitious installations.

It makes sense for clients to talk to one body rather than three individual businesses. It also means we can grow to involve other companies and artists to go for bigger jobs. Forming our official consortium is so exciting and offers so much growth potential for us.

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Eyes on the Prize: Scottish Mountain Bike Consortium

The big day is almost here – next week, we will be announcing the winners of this year’s Collaboration Prize.

Over the past weeks, we have revisited some of our previous winners including The Wee Agency, Music Co-OPERAtive Scotland and Screen Facilities Scotland.

Now we turn our attention to the Scottish Mountain Bike Consortium, who won the prize in 2013 after submitting an idea to capture a slice of Scotland’s cycling tourism market.

Six businesses from the Tayside, Fife and Angus area make up the consortium, which aims to develop family friendly cycling events across the country.

They used the £10,000 prize to buy new equipment and fund marketing, copywriting, website development and the making of a promotional video.

Stay tuned to cdsblog.co.uk next week for full details on this year’s Collaboration Prize winners.

Eyes on the Prize: Screen Facilities Scotland

In just under two weeks, we’ll be announcing the winners of this year’s Collaboration Prize.

Over recent weeks, we’ve been looking at past winners including The Wee Agency and Music Co-OPERAtive Scotland. Now, our focus turns to Screen Facilities Scotland (SFS).

SFS, winners of the competition in 2012, is a collaboration of Scottish-based film, television and commercials facilities companies.

Before joining forces, members felt that many lucrative contracts were being won by businesses based outside Scotland – particularly in the south-east of the UK.

By forming a consortium co-operative, they would be able to pitch for work in a more efficient and cohesive way. In the process, they could increase core business and help to grow the Scottish film, TV and commercials production sector.

They would also become a voice for the industry, pressing the cause for more support and facilities for production companies across the country.

We’ll be looking at a previous winner of the Collaboration Prize each week on CDSblog.co.uk, ahead of our big announcement…

Eyes on the prize – Music Co-OPERAtive Scotland

As we inch closer to the announcement of this year’s Collaboration Prize winners, we’re looking back at past successes.

We first showcased The Wee Agency and this week we turn our attention to Music Co-OPERATIVE Scotland.

In 2011, the Orchestra of Scottish Opera moved from full-time to part-time working. Keen to ensure a positive future, members chose to form a consortium co-operative to sell their services.

They entered the Collaboration Prize in 2012 and were selected as one of the winners. And with our support, they were able to make their collaborative dream a reality.

We’ll be looking at a previous winner of the Collaboration Prize each week on CDSblog.co.uk, ahead of our big announcement…

Diversifying together could be the new way of working…

Jaye Martin 03A recent event, organised by the Energy Technology Partnership (ETP) in conjunction with Robert Gordon University’s Business School in Aberdeen, illustrated that the offshore wind market represents a big opportunity for Scottish SMEs who currently operate in oil and gas.

CDS specialist adviser Jaye Martin was there to share her expertise on how collaborative working could be the key to making a move in to this new area a reality…

The ETP – the largest power and energy research partnership in Europe – organised this event to help equip Scottish SMEs to make the move from oil and gas into offshore renewables.

With three new wind farms recently gaining consent and an imminent decision expected on the contract for a further wind farm, there has never been a better time to take advantage of this developing market.

Delegates at the workshop listened to first-hand experiences from Scottish businesses that have already successfully ‘straddled the divide’, such as Seaway Heavy Lifting and Ecosse Subsea Systems.

There were also discussions on the regulatory and contractual landscape of offshore renewables compared to oil and gas and the supply chains and alliances pertinent to the offshore wind sector.

The various funding opportunities available for SMEs looking to diversify were showcased, including Scottish Enterprise’s Offshore Wind Expert Support, Enterprise Europe Network Scotland, Interface and new SMART/R&D grant funding for alliances.

I featured as one of the workshop’s ‘three-minute wonders’ which gave me a small (but perfectly formed) opportunity to talk to the audience about CDS and the support we can provide for companies considering collaborative working as a means to enter new markets.

Throughout the afternoon words such as partnering, alliances, consortia were commonplace and it was clear the audience had an appetite for trying something new in an industry which has yet to standardise approach.

CDS looks forward to working with more SMEs in this sector as they look to conquer new markets, we can add real value with our business models to diversify for success.

Eyes on the Prize – The Wee Agency

It’s almost time to reveal this year’s Collaboration Prize winners!

But before we unveil the lucky consortia each receiving  £10,000 to make their collaborative dream a reality, we wanted to take a look at some of our past winners who have gone on to great things.

First up is The Wee Agency, a collaboration between design specialists 2bcreative, IT company Alchemy+ and PR and digital marketing consultancy, Muckle Media.

They won the Collaboration Prize in 2013 and have since gone from strength to strength, working together to tender for contracts under one banner.

We’ll be looking at a previous winner of the Collaboration Prize each week on CDSblog.co.uk, ahead of our big announcement…

The power of collaboration

Gavin Tosh1Working together can help businesses reach the next level, but the need to form a legal entity can sometimes be seen as off-putting.

Here, Gavin Tosh of Clerwood Legal Services discusses how forming a consortium is a simple option for companies looking to reap the benefits of collaboration.

Many businesses work together. This can be for a variety of reasons, but lack of formalisation can limit how far this goes.  Should they want to open a bank account for joint funds or enter into contracts, it is likely an identifiable legal entity will need to be created.

For some, this may sound like a costly commitment. However, there is a model which allows for the formation of the necessary legal entity with minimal financial or legal commitment:  the consortium co-operative.

Consortiums offer an ideal solution for businesses looking to collaborate while retaining their own independence. Members can be limited companies, partnerships or individuals, with membership any size from two upwards.

The benefits are numerous:

  • Reduce costs of doing business
  • Share the risks when exploring new markets
  • Jointly tender for contracts
  • Buy, sell or market on behalf of members
  • Share facilities such as back offices or premises
  • Attract funding
  • Employ staff

Clerwood Legal Services has worked in conjunction with CDS for a number of years, delivering training to SMEs on collaborative tendering techniques. Now, along with Intend Business Development, we are serving as specialist advisers, helping businesses through the process of forming consortium co-operatives.

Navigating towards employee ownership – now is the time to get on board

Glen DottThis week, law firm MacRoberts will host seminars in Dundee and Glasgow on how employee ownership (EO) can improve a business. CDS specialist advisers will be on hand to share their experiences of being a business’ ‘first mate’ on the EO voyage. 

Here Glen Dott shares his thoughts on sailing safely in to the unknown…

My job is to work with businesses in Scotland, helping them plot their journey to employee ownership and eventually sail off into the sunset.

Over the years I have worked with many different types of businesses on their transition to EO and one thing is most definitely true – EO is the perfect vessel to develop an entrepreneurial and innovative culture within a business.

When employees have a vested interest in the business as a whole they become enthused and engaged in finding ways to make it more successful.

Many EO businesses reap significant rewards from this increased participation, giving them an advantage over competitors which, in turn, leads to greater profit.

It is this camaraderie and entrepreneurial spirit that helps most EO businesses establish an inspiring ‘we’re in this together’ culture – charting the unknown in search of new successes.

Not unlike sailors navigating the open sea, each EO business needs a brave captain and a willing crew. Together they plot their course making sure the journey is safe and one which is filled with discovery.

At CDS, we welcome the captains and their crews with open arms. And I am honoured to be ‘first mate’ to help them navigate their way towards effective employee ownership of their business.

The MacRoberts’ seminars, Employee Ownership – Making Your Business Better, will be held in Dundee on Tuesday, 17 February and Glasgow on Wednesday, 18 February.

You can find more details on their events page.

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