Tag: Aquascot

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.

Benefits of employee ownership are clear

ICAS members and their clients gathered in Inverness last month to hear about employee ownership as an exit solution. 

Here, ICAS member Peter Mitchell reflects on the day and looks at how the ownership model can benefit businesses in the Highlands.

As advisers we are careful not to direct our client towards any particular ownership model. It’s our job to provide them with sufficient, comprehensive information to enable them to make an informed choice.

One of my clients is employee-owned and I’m convinced of the benefits. It’s a model with particular relevance to the Highlands – independent, owner-managed and family businesses are a significant part of our economy.

Exit to a trade buyer from elsewhere places a threat on the future of the business in the local area. We need to sustain opportunities for our young people and retain quality jobs in the community.

ICAS logoCarole Leslie, a Co-operative Development Scotland (CDS) specialist adviser, reinforced the economic benefits of employee ownership in her presentation. Most of those present did not know how widespread employee ownership is; I didn’t know that the architects of the Eden Court Theatre were 100 per cent employee owned, or that the project managers of the Skye Bridge, Arup, have been employee-owned since 1974.

Chris Kerr, from Harper Macleod, is a leading authority on employee ownership and he talked the audience through the technical aspects of the model and the transition process. He stressed the importance of involving employees in the transaction as this helps shape a better outcome and wins greater engagement going forward.

The highlight of the session was the story of Aquascot, delivered so eloquently by ICAS member Robert Murray, a company founder and its finance director. Aquascot employs 150 people in Alness and has a turnover of £40m. The founders could have sold the business – and had some lucrative offers – but their commitment to Easter Ross and to an ethical way of doing business convinced them to look at other options.

Their main customer is Waitrose, and their employee ownership model fit what the founders were looking for. With some guidance from Waitrose, John Lewis Partnership and John Housego of employee owned WL Gore, the sustainable seafood company is looking to become fully employee-owned by 2016.

Chris Kerr summed it up well: “Employee ownership won’t fit with every business, but where it does, the results can be remarkable.”  It was encouraging to see so much interest in the model. CDS is doing a great job in raising awareness and I expect that a few more advisers and their clients will start to come forward.

The route to a successful succession – part two

????????????????Earlier this week, we heard from a business owner on his thoughts about employee ownership after visiting most recent “What’s Next” event at Aquascot. 

This week, he continues his thoughts on the meeting and discusses why he is seriously considering it as a potential succession strategy for his business.

Both Galloway & MacLeod and Aquascot  approached exit in a similar way, with the founder(s) selling a percentage of shares each year over a considerable time.  This reduces pressure on the business to finance the share purchase and can mean the vendor benefits by any growth in share value over the years.  However, it does mean the vendor does not get full value up front.

In both cases, the founders have remained with the business and that does seem to make for a smoother transition.  I can see this phased transfer makes for a smoother transition for the business and being able to control the pace of exit must be an attraction to vendors.

Employee Benefit Trusts are a feature in both companies. Aquascot is aiming for 100% of the shareholding to be held in Trust, whereas Galloway & MacLeod also operate a tax effective Share Incentive Plan.  The company admitted this had been slow to take off, but now has over 90% participation. Interestingly, productivity has increased in line with share purchase.

Both visits provided much food for thought.  They were very different businesses, but with many similarities.  Members of staff demonstrated a strong commitment to their company that was encouraging to see, and a level of commercial awareness I wouldn’t have expected from employees in non commercial roles.

Both businesses appear to operate very efficiently; there was no evidence of constant committees or protracted decision making. Both businesses are thriving and have ambitious plans for the future.  It was inspiring to see the commitment to the sustainability of the local community.

Seeing employee ownership in action is persuasive and it’s an option we’ll give serious consideration.  I’d certainly recommend any prospective business vendors take advantage of the Co-operative Development Scotland programme to explore whether a sale to employees might fit with their aspirations.

The next Successful Succession event takes place July 4 at Page\Park Architects in Glasgow.  For more information and to register, click here.

The route to a successful succession – part one

The second of our “What’s Next” events in our Successful Succession programme, was hosted by Aquascot in Alness. 

One local business owner currently considering a succession strategy for his business attended to see how employee ownership may work. Here, he sums up his thoughts from the day. 

I’m interested in ways to make our business more sustainable for the long term and provide an eventual exit solution for the current shareholders.  As a business, we are constantly looking at ways to improve and reviewing our ownership structure is part of that.

I’d like to find a model that rewards and engages our staff for the contribution they make to the success of the business. I’m intrigued at how businesses owned by their employees appear to achieve much higher levels of staff engagement and productivity improvements.

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Our Scottish Enterprise account manager drew my attention to a programme run by Co-operative Development Scotland, which is showcasing employee owned firms around Scotland. I attended two events and found they greatly helped my thinking.

The first visit was to Galloway & MacLeod, who manufacture and sell agricultural feed. This is an impressive business.  It is innovative, high tech, and focused on growth.  A family firm, and significant employer in the area, a trade sale would have meant a likely relocation.

Selling to the employees means the business stays where it is, providing opportunities for local people.  The honesty was refreshing; they admitted that initially share uptake was low, but had now reached over 90%.

aquascot

The Aquascot visit was thought provoking.  This is an innovative company, very grounded in their values.  They strive to be a great place to work – and aim to have fun while “doing the right thing well”.  The MD, Dennis Overton, admitted a trade sale would have been quicker, simpler and easier, but did not fit with the strong partnership ethos.

It was good to hear the bankers who attended stress they are quite comfortable with employee owned business models; succession management is critically important, if the management team disappear, the business is exposed.  Employee ownership is a solution that promotes continuity.

Seafood Producer Serves Up Food For Thought…

Angela Wardrope hi resScotland has a thriving food and drink sector. Employee owned companies like seafood producers Aquascot are reaping the rewards of co-operation.

Angela Wardrope, project manager, Co-operative Development Scotland, shadowed Aquascot’s Dennis Overton when he went before the Scottish Parliament Cross Party Group on Food.

 

I had the opportunity to hear Employee Ownership Ambassador Dennis Overton from Aquascot address the Scottish Parliament Cross Party Group on Food in January. The experience provided an insight into Aquascot’s journey towards employee ownership and a fascinating bird’s eye view of Scotland’s food and drink sector. It got me thinking about the bigger role co-operation could play in this industry. AquaScot Dennis Overton 94

Aquascot is based in Alness and takes its inspiration from the 1920 pioneering profit sharing model of employee ownership set up by John Spedan Lewis. The seafood producing firm began its journey towards employee ownership in 2008, which it will complete 2016. 

AquaScot 02In 2008 the main driver was to sustain and grow the business for the future. The potential was huge: a strong team, accelerating health drivers, expertise in aquaculture and strong market demands. A business owned by the employees was the only solution to create long term value in a fairly remote part of Scotland.

Now, four years later turnover has reached £29m and total staff numbers are up to a healthy 135. Aquascot is also benefiting from a reduction in absenteeism and leaving rates – half that of the sector average. Staff are twice as productive as the sector average and feel they can bring forward ideas that are listened to and implemented.

AquaScot 05So what is the wider potential for this model in Scotland’s food and drink sector? The industry is made up of lots of micro-businesses, a few large family businesses such as Tunnock’s and Mackies and a few giants like Devro. The industry also has plenty of first generation entrepreneurs, who in my view would be a great fit for employee ownership. The challenge is how we ensure other companies take inspiration from the benefits enjoyed by Aquascot, and think about employee ownership themselves.

But back to our parliamentarians. A good debate took place amongst Cross Party Group members following Dennis’s address. They wanted to hear more about the risks when changing ownership structure and how businesses adapt to this change. Dennis responded by pointing out the difference between ownership and management. He conceded the transition process can add complexity to the mix, but a well run business is a well run business, irrespective of the ownership structure. 

A question was also raised around ‘co-opetition’, when businesses co-operate with competitors. At Co-operative Development Scotland (CDS), we are seeing a strong appetite for this. Especially where there is an opportunity for businesses to collaborate to help a sector grow.

For example Food from Argyll is a consortium of nine food producers that came together to sell their produce at events under its singular banner. Overall, the members all saw the co-operative as an opportunity to get into a market that would be really hard to crack on their own. A consortium co-operative allows single businesses to pool their resources in this way without compromising their independence as singular entities. They look at the bigger picture and will reap the benefits as a consequence. 

Best of Food Argyll 2So did the Cross Party Group members feel that co-operative business models were a good fit for Scotland’s food and drink businesses? Overall, there was a feeling that any form of co-operation would be beneficial. And that much more needed to be done to promote collaboration for the benefit of the sector.

CDS supports all businesses in Scotland, irrespective of sector or size. If you like the sound of accessing bigger markets through co-operation we can help you. We have produced a short paper on Scotland’s food and drink sector, so if you want to read more see: Co-operate for growth; Growing Scotland’s food and drink sector.

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.