Tag: Co-operative Development Scotland (Page 1 of 6)

COLLABORATION PRIZE WINNER SPOTLIGHT – Healthworks

We’ll be taking a closer look at each of our Collaboration Prize winners and learning more about their plans for the future. Next up is Healthworks…

Healthworks Consortium, L-R Niall Gosman, Marney Ackroyd, Karen Davidson, Kevin Dewar

Healthworks members Niall Gosman, Marney Ackroyd, Karen Davidson, Kevin Dewar

Healthworks is a new consortium formed of health and wellbeing professionals based in East Lothian.  It works in partnership with businesses to optimise their employees’ physical, psychological and personal wellbeing,

Comprising four member businesses, Healthworks offers a range of expertise in areas including physiotherapy, nutrition, psychological therapies and counselling, fitness training, behavioural risk management training and employee health assessments.  Working with businesses to identify the health and behavioural risks and barriers that prevent them from getting the best from their employees, Healthworks develops innovative, integrated health and wellbeing services and solutions that clients can ‘own’.  Each service is designed to address the unique needs and culture of the individual business and delivered in the way that best meets their needs.

Karen Davison from Healthworks spoke to us about winning the Prize:  “We are thrilled to have been selected as one of the winners and are looking forward to working together to develop programmes which will have a wide-reaching benefit for both employees and their employers. The generous prize will help us brand, package and promote our offering to get it in front of the right people, as well as enable us to develop new resources and tools to boost the services we can deliver, both face to face and online.

“Working together in this manner is beneficial for many reasons – not only does it allow us to access more opportunities and secure larger scale contracts, it also gives us all an excellent degree of professional satisfaction. Delivering a truly comprehensive service that reflects the many intricate aspects of an individual’s health and wellbeing requires a tailored approach incorporating expert knowledge and experience across a range of disciplines. We believe collaboration is the most effective way of providing this, and are hopeful that we can continue to develop our offering as we are joined by members in further areas of expertise.”

Healthworks Consortium, L-R Kevin Dewar, Karen Davidson, Niall Gosman, Marney Ackroyd

The member businesses in Healthworks are:

  • Dovetail Partnerships (North) Ltd, East Lothian
  • First for Fitness, East Lothian
  • Midlothian Physiotherapy LLP, Midlothian
  • Marney Ackroyd, Edinburgh

Employee ownership is the perfect fit for Bentleys

Bespoke joinery manufacturer and interior fit-out specialist, Bentleys Shopfitting Ltd, is the latest business in Scotland to adopt an employee ownership model.

Established in 1987, the Dundee-based company specialises in the management and completion of interior fit-out projects, creating high quality bespoke furnishings at its in-house manufacturing facility.

Bentleys Shopfitting Ltd, Dundee

Bentleys Shopfitting Ltd, Dundee

It has evolved from specialising in the retail sector to expanding its expertise across the education, leisure, hospitality, corporate, residential and oil and gas sectors, with notable projects including The Old Course Hotel and Spa in St Andrews, Gleneagles Hotel in Auchterarder and the Balmoral and Sheraton Grand Hotels in Edinburgh.

With turnover in the current financial year expected to exceed £8m, Bentleys’ three directors were keen to continue the trend in growth since the recession.

CDS guided and supported Bentley’s transition to employee ownership, providing expert advice on the implementation of the new ownership structure. Director Sarah Deas said: “2016 has been a tremendous year for transitions to employee ownership as more companies recognise its effectiveness in harnessing the effort of employees, preserving company ethos and rooting businesses in the local area. It’s an exciting time for Bentleys and I wish the company well as it joins the thriving and dynamic EO community.”

Managing director Alan Walker discussed why the company decided make its transition to EO:  “We wanted a succession plan which would allow us to continue in the business over a period of years whilst supporting a management team that will continue to drive the business forward.

“The involvement of all employees in the ownership of the business will be a major boost going forward.  In addition to our 50 staff we have a network of local suppliers and subcontractors who rely on our business. Other options were considered but the priority of the board was to ensure the business remained local.

Bentleys Shopfitting Ltd, Dundee photographer Fraser Band     07984 163 256 www.fraserband.co.uk

An Employee Ownership Trust will now buy the shares from the shareholders and hold these on behalf of the employees.  Tax incentives will be available to allow the employees to invest in the company.

If you would like to learn more about how employee ownership could benefit your business, please get in touch and have a chat with our expert advisers.

Collaborate to access new markets

Karen McLeod manages the export advisory service at Scottish Development International (SDI), the international arm of Scottish Enterprise.  SDI offers support to help Scottish Businesses trade overseas

Last year a record number of Scottish businesses, large and small, started thinking globally and branched out overseas.  We spoke to Karen to find out why it’s important to consider selling internationally and the ways in which you can do it successfully.

Why is exporting important? 

Overseas markets have become increasingly important to the Scottish economy and in 2014 Scotland’s international exports were valued at £27.5 billion*, a 17.3% increase from 2010.

Our research shows that many overseas markets are underserved and there is demand for Scottish products and services internationally. This, paired with the fact that SDI supported 2,500 businesses to export last year, shows that there is opportunity and the ambition for exporting to continue to grow.

What are the benefits?

Trading abroad can boost your profile, credibility and bottom line.  That applies whether you’re trading with established markets such as the EU and USA, or high-growth markets like Brazil, China, India, Colombia and Vietnam.

International markets like these offer you access to new customers, revenue and ideas. Crucially, they enable you to spread your business risk, increase the commercial lifespan of your products and services and secure economies of scale which are not always possible at home. In fact, exporting is now considered essential for Scottish businesses that want to safeguard future growth.

The figures are compelling, showing that those firms that choose to export become 34% more productive in their first year** while those already exporting achieve 59% faster productivity growth than non-exporters**, positively impacting on staffing and financial performance.

Doing business overseas brings further benefits such as fostering ideas for new products and services. Once a company has ‘dipped their toe’ into a new market this in turn tends to increase confidence and ambition and provides the momentum for further growth through exporting.

What are the barriers and how can you overcome them?

Exporting can seem daunting to smaller businesses and the thought of going it alone can often be off putting and seen as high risk.  Collaborating with others can be a way to address those risks and make the most of the opportunities that exporting brings.

Collaboration for international markets

Businesses can collaborate using the consortium co-operative business model. This model allows businesses to come together for a shared purpose; to buy or sell in scale, market more effectively, share facilities or jointly bid for contracts.

There are good examples of Scottish consortiums already collaborating on international strategy.  Examples of shared activities include creation of a portfolio brand for export, consolidated shipping and a joint e-commerce activity.

Winning support with the Collaboration Prize

We are supporting this year’s Collaboration Prize which encourages firms to think collaboratively and pitch an idea for a new collaborative enterprise that will help them to access new markets. This could be a new sector or a geographical market including international markets.

The winners selected by the judging panel will receive £5,000 (to implement their collaborative idea), support to set up as a consortium co-operative, up to £5,000 business support (delivered by Scottish Enterprise or Highlands and Islands Enterprise) and access to export advisor support from my team.  This includes a wide variety of services such as:

  • an export advisory service, backed by international trade advisers, offering tailored support and guidance;
  • online tools to help you create an export plan;
  • and business intelligence from 43 global offices as well as events to explore opportunities and network with valuable contacts.

The Collaboration Prize is being delivered by Co-operative Development Scotland on behalf of Scottish Enterprise and Highlands and Island Enterprise in partnership with Business Gateway and the Scottish Chambers of Commerce.

 

Sources:

*Scottish Government Export Statistics Scotland 2014 publication – click here to read.

**UK Government UK Trade & Investment research publication – Bringing home the benefits: how to grow through exporting click here to read.

Collaboration: a step-by-step guide

Jaye Martin, CDS specialist advisor

Collaborating with others can be a highly effective way for a business to achieve growth, access new markets and drive innovation whilst sharing the associated costs and risks.

The Scottish Enterprise Collaboration Prize 2016/17 is currently open for entries and aims to raise awareness of the collaboration route among Scottish businesses.

The Prize is a fantastic opportunity for aspiring collaborators, and exploring the prospective benefits of forming or joining a consortium is highly encouraged in order to help businesses of all sizes reach their full potential.

However, when it comes to forming or joining a consortium, what should a business consider? How does the process work and what are the specific benefits that can be delivered?

Here, CDS specialist advisor Jaye Martin shares a brief step-by-step guide to consortium working to help you determine whether or not collaboration is right for your business.

Step 1: Identify barriers to growth

For many small and micro-enterprises, lack of scale, time, finance or resources can all be barriers to accessing new markets, tendering for larger contracts or simply marketing services, and therefore barriers to growth.  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. For example, one of last year’s Collaboration Prize winners, Ecosse from Above, was founded by three aerial photography companies and a web developer who wanted to create an online library providing high-quality aerial footage and images of Scotland at a reduced cost. Ecosse from Above has since built a library of over 5,000 high quality images and 500 affordable films from across the Scottish landscape which has grabbed the attention of tourism bodies such as VisitScotland as well as television and video production companies from all over the world.

Fellow winner ArchBlue Ltd, was founded by four organisations involved in providing complementary services to the heritage sector including 3D measuring and modelling, archaeological recording and visualisation, conservation planning and 3D printing. Working collaboratively has enabled the businesses to provide customers with a comprehensive approach to heritage site management as well as engaging methods of communicating a site’s story to the public. The consortium used its prize winnings to add strength to tender submissions and establish a brand identity.

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.

For more information about the Collaboration Prize, including how to enter and requesting an application pack, visit here.

Climbing to success with employee ownership

Peter Will, managing director of Tayplay

Scotland’s latest business to become employee-owned is Perth-based Tayplay, a manufacturer of rope, playground and climbing equipment for the playground and leisure industry. Since it was founded in 1994, it has developed into the UK’s leading supplier of rope playground equipment, shipping hundreds of products worldwide and turning over £2million annually.

Last month’s move to an employee-ownership model has seen Tayplay’s 14 members of staff given the opportunity to become owners in the business. Managing director Peter Will discusses why the company decided to go down the EO route and shares his experiences of the transition process. 

Following the recession we experienced a difficult trading period and we were considering a trade sale.  However, we could not agree terms and after a strategic review we decided to look more closely at the employee ownership business model.  Co-operative Development Scotland then conducted a feasibility study and we quickly discovered employee ownership ticked all of our boxes.  No other options were even seriously considered at that stage.

Our EO journey started in 2014 and so far we have been able to meet all of our targets in terms of the sale price, timescales and the fact we’ve been able to retain the business in Perth.  EO is the ideal solution for retiring owners who want to preserve the ethos of the business and retain employment locally.  It is also a reward for the staff as we wanted to recognise the contribution and commitment they’ve made to the company’s success.

An Employee Ownership Trust has acquired a controlling interest in the company and will hold these shares on behalf of the employees, with the view that our employees will eventually own 100% of the company.

We spent quite a bit of time working with specialist advisors at CDS, undertaking meetings with the staff to help them understand the concept of employee ownership.  Our employees now really believe in the new model and we expect the degree of buy-in to increase now that the deal has gone through.  As the employees begin to see and feel the reality of EO we expect their commitment to the company will grow and it will make recruitment easier.

The Tayplay team

CDS guided and supported Tayplay’s transition to employee ownership, providing expert advice on the implementation of the new ownership structure. If you would like to learn more about how employee-ownership could benefit your business, please get in touch and our expert advisers will be happy to chat with you.

Happy partners make for better business at John Lewis Partnership

David Jones started working for John Lewis Partnership as a Graduate Trainee in 1982. Since then he has held a number of roles, including running several Waitrose stores and some time as Waitrose’s Supply Chain Director.  His current role is Partnership Registrar, in which he is tasked with ensuring the business upholds the principles of the partnership. David gives some background to the Partnership’s employee ownership model, and how putting the happiness of the partners first makes for better business.

david-jones-by-jeff-hopkins-resized

David Jones, John Lewis Partnership

“John Lewis Partnership has not always been employee-owned.  The son of the founder, John Spedan Lewis, decided it was unacceptable that his family made more from the business than all other employees combined. His objection wasn’t just moral; he felt it was bad for business.

Spedan’s view was that if he created a more successful business that reinvested in itself, took a long term view, gave everybody a voice in how it was run, and actively contributed more to community and society, then more people would want to spend money in his shops.   In 1929, he sold his shares to a trust, that would hold the shares on the employees’ behalf, and he was repaid for these shares over the next 30 years.

John Lewis Partnership now has almost 400 shops, 90,000 employees and gross annual sales of over £11 billion.  The Partnership employs 3200 people in Scotland. There are seven Waitrose stores as well as John Lewis shops in Aberdeen, Edinburgh and Glasgow.  We also have a customer contact centre in Hamilton.  We support many Scottish companies in our supply chain.  Quality of produce is paramount for Waitrose, and we are pleased to support many Scottish producers. Indeed, Stoat’s Porridge and Mo’s Cookie Dough are two Scottish companies who started out selling products in Waitrose, and have gone on to be national businesses.  We build long term strategic partnerships with our suppliers, and are proud to have been working closely with Aquascot so closely for many years.  I’m thrilled the firm has also adopted the employee ownership model.

As Partners in the business, our employees share the rights and responsibilities that employee ownership entails. This doesn’t mean that everyone is involved in every decision the business makes – we couldn’t function like that.  What it means is that they hold our leadership to account for the decisions they take.  We have 5 employees elected to our Partnership Board. These employees do not have management or executive responsibilities; they are there to provide the link with our partners and to test and probe the management. We have a democratically elected Partnership Council that ensures the business is run for and on behalf of the partners. The Council shares the views of the Partners on key issues and makes recommendations on policy.   The Partnership Council has the authority to remove the Chairman – although I’m pleased to say this has never happened!

Our Partners are rewarded for their commitment. The Partnership’s profit , after investment is distributed to Partners. This can be through pay, discounts subsidised leisure or learning. Each year we announce our annual bonus, which in 2016 amounted to 5 weeks’ salary for each Partner. Fairness is a key value and each member of staff receives the same percentage of salary in their company bonus. The same bonus is paid to employees whether they work in John Lewis, Waitrose or one of the other companies.  If John Lewis has a bad year, and Waitrose do exceptionally well, one balances the other.  This is the dual strength of our model.

John Lewis Partnership can never be sold, which gives us a powerful competitive advantage.  Because we have no option to sell our shares and invest elsewhere, each of our 90,000 partners has a strong incentive to throw all their energy and passion into making this year better than the last.

And it works. In a ferociously competitive sector, where we’ve seen the demise of high street brands such as Woolworths, BHS, Comet and others, we have not only survived, we’ve thrived.  Employee ownership is fundamental to our commercial success.  If we are to build a more diverse, sustainable and inclusive economy, we need to see more companies choose employee ownership.“

David Jones is speaking at a breakfast seminar on 20th October 2016 hosted by Highlands and Islands Enterprise at their Inverness offices. More information can be found here.

The Collaboration Prize is now open for entries


collabprize-1617-logo
Scottish Enterprise director Sarah Deas discusses the Collaboration Prize and why businesses should enter.

We are pleased to announce that the Collaboration Prize 2016/17 in partnership with Business Gateway and Scottish Chamber of Commerce is now open for entries.

We want to encourage firms to think collaboratively and pitch an idea for a new enterprise that will help them to access new markets. This could be a new sector or a geographical market including international markets. With the winning entrants receiving £5,000 cash and up to £5,000 business support to bring their idea to life.

To be eligible to win businesses must be based in Scotland, have an innovative idea they would like to implement by setting up a consortium co-operative and have identified other like-minded members for the consortium.

Consortia are established when businesses come together for a shared purpose; to buy or sell in scale, market more effectively, share facilities or jointly bid for contracts.  By collaborating businesses can reduce costs, share risks and create new platforms for growth.  Members could be businesses, partnerships or individuals, and the co-operative may be for any purpose which supports the members.

The competition this year has a particular focus on consortia accessing new and international markets. Two of the five prizes will be awarded to those consortia who demonstrate strong international ambitions to be delivered using collaboration. As part of their prize the winners will be able to access export advisor support where appropriate.

At CDS we think the Prize offers a great opportunity for businesses to harness the benefits that emerge through collaboration. Working with others can help businesses grow, and reduce the costs and risks of tackling new markets or investing in new processes.

In our experience collaboration can make a company better at what it does. Whether it’s about sharing resources or finding new markets, collaboration can bring efficiency and lead to increased profits.

For more information about the Scottish Enterprise Collaboration Prize visit the website.

 

Learn more at our FREE event

We’re running a series of FREE events this Autumn on employee ownership for interested businesses.  Please find below details for our forthcoming event.

To book your place at any of our events, register online at www.scottish-enterprise.com/cds-events or call 0300 013 3385.

Sharing ownership: the employee stake

Date:                5 October 2016

Time:                9:30am to 1pm

Duration:          3 hours

Admission fee: Free

Venue:             Apex Waterloo Place Hotel, 23-27 Waterloo Place, Edinburgh EH1 3BH

Eligibility:         Open to all Scottish businesses and professional advisers with an                                   interest in employee ownership.

This event explores how to assess and improve employee engagement, and how shares can be used to reinforce and reward employee commitment and contribution.

Engaged employees make for a happier, more productive workforce.  Evidence demonstrates that company performance improves when employees have a stake in the firm.  Our workshop has been designed to help you improve employee engagement in your company.

Dean Hunter of Hunter Adams and Rodger Cairns of Shepherd & Wedderburn will lead a session on how to create the right scheme for your company and the pitfalls and success factors to consider.

What’s covered?

  • Ways to assess and improve employee engagement
  • How shares can be used to reinforce and reward your employees efforts

Speakers

Lirrie Craig, a member of Scottish Enterprise’s workplace innovation team, will explain the factors that enhance employee engagement within companies.

Dean Hunter, founder and managing director of Hunter Adams, will talk through why he divested 30% of his shareholding into the hands of employees.

Dean Hunter, founder and managing director of Hunter Adams

Dean Hunter, founder and managing director of Hunter Adams

 

Rodger Cairns, Scotland’s leading expert on share schemes, will explain the variety of options available and how to decide which scheme fits for you. Rodger will also talk about the importance of effective communication to the workforce when launching any kind of share plan.

Agenda

9.30am Registration and coffee
10am Welcome
10.15am Achieving employee engagement – Lirrie Craig, Scottish Enterprise
10.35am Giving employees a stake in the business – Dean Hunter, Hunter Adams
10.55am Shares as an engagement tool – Rodger Cairns, Shepherd & Wedderburn
11.30am Q&A
12pm Networking lunch
1pm Close

Register for this event

 

Engaging employees through innovative approaches to governance

11/12/15 - 15112301 - SCOTTISH ENTERPRISEGLASGOWSarah Deas

Scottish Enterprise director Sarah Deas discusses how boosting employee engagement can help drive business success.

When a business changes ownership, major changes can sometimes be expected.  The new owners may want to do things differently and fresh insight combined with new ambitions and goals can lead to significant restructure within a company. This can present a great opportunity to assess how well the company functions and drive changes that can lead to a more effective and efficient operation.

A good example of this is market-leading search and selection firm, Saxton Bampfylde, which undertook a radical shift when it switched to an employee ownership model. We spoke to Peta Hay, the managing director for Scotland, about the company’s experiences since.

“The traditional ways of making decisions and exercising authority didn’t fit with who we are as a business.  Now we’re owned by our employees, everyone has a right and an interest in how the business is governed and led. That had to be reflected in our governance framework.”

Peta Hay

Peta Hay, managing director for Saxton Bampfylde in Scotland

The company’s shares are held in an Employee Ownership Trust; a shareholding vehicle designed specifically for employee-owned firms.  The employees are effectively the beneficiaries of that trust and the trust becomes the major shareholder in the business.  This Trust is controlled by Trustees, and three of these Trustees are elected by the employees.  The company’s Board appoints the rest of the Trustees.

Another business that has embraced employee ownership is award-winning architecture practice Page\Park, which transitioned from a traditional partnership model to an employee ownership one in 2014. Since then, the company has recruited twelve new staff. We spoke to Karen Pickering, chair of Page\Park’s Board of Directors, for some insight into how the model has rejuvenated the business.

FREE FIRST USE Lenny Warren / Warren Media 07860 830050  01355 229700 lenny@warrenmedia.co.uk www.warrenmedia.co.uk All images © Warren Media 2016. Free first use only for editorial in connection with the commissioning client's press-released story. All other rights are reserved. Use in any other context is expressly prohibited without prior permission.

Scottish Enterprise director Sarah Deas (centre) with Andrew Bateman, managing director, and Karen Pickering, chair of the board of directors, at Page\Park

“Sustainability is a key feature of our architecture and that sustainability is what we wanted to replicate in our business model.  I believe we have. Our model has allowed our people to exercise their creativity and we are seeing greater innovation that is being driven by the team as a whole rather than coming from the top down.  Our employees are real owners and that brings with it greater engagement, productivity and energy.”

It is clear that there is no universal solution when it comes to good governance, and the key lies in implementing what works best for the specific needs of an individual business. However, something that all businesses should get on board with is the practice of periodically reviewing the company’s structure to ensure that the existing model is the most beneficial to the business and its employees.

Getting this right is integral to enhancing engagement among employees and harnessing their collective talents, a strong foundation from which a business can build lasting success.

If you would like more information on how you can improve employee engagement within your organisation, Scottish Enterprise will be running the below free events. To book your place, register here or call 0300 013 3385. Alternatively, give us a call and we can arrange a chat with one of our expert advisors.

SE Events table 2

Click to expand

 

 

 

Sarah Deas discusses EO Day 2016

Today (1 July) is EO Day (Employee Ownership Day) and with 16,000 employers in Scotland looking to transfer ownership in the next five years, we’re urging business owners to explore employee ownership as a viable succession route.

Throughout Scotland’s business community, the benefits of employee ownership (EO) as a driver for growth are becoming increasingly recognised.  EO can be implemented not just as a succession solution for long-term stability, but as a catalyst for sustainable business growth.

The advantages of employee ownership have been proven in Employee Ownership Association-led research, and include improving employee health and wellbeing, increasing productivity and fostering creativity and innovation across an array of industry sectors.

By having a stake in the business, employees have a vested interest in increasing productivity and driving innovation.  This sense of ownership leads to employees being more willing to contribute ideas, from developing new products to identifying new markets.

Many employee owned businesses in Scotland chose to sell to an employee ownership trust with the vendors being paid the value of their business from current and future earnings.  That way business owners receive a fair price for the company and employees don’t have to dig deep into their own pockets.

Co-operative Development Scotland (CDS) can help you decide on the best model of employee ownership for your business.

One of the organisations that sought the support of CDS during its transition to employee ownership is Black Light Ltd. The company, which specialises in lighting, staging, sound and audio visual solutions, became fully employee owned just last month (June 2016) and in this blog for Scottish Enterprise, its founder Gavin Stewart explains the process and his experiences.

Gavin also kindly gave up his time today to join us in a live, interactive webinar to discuss Black Light’s journey to EO. If you missed the out on this the full recording will soon be available on the Scottish Enterprise website.

Today, another employee owned Scottish business is also celebrating success. Computer Application Services (CAS) has achieved the silver ‘Investors in People’ award in recognition of its excellent team engagement and management practice.  Ken Naismith, CAS chief executive, believes this success is down to its talented and motivated workforce who are highly engaged in the business thanks to its EO model. You can read more about this fantastic accolade on the CAS website.

The number of employee-owned firms based in Scotland has doubled in the past six years and this growth is forecast to accelerate.  Currently there are 78 employee-owned businesses operating in Scotland, with approximately 6,500 employees and a combined turnover of around £900million.

Our aspiration is to achieve a tenfold increase in employee ownership in Scotland over a ten year period.

If you would like more information about employee ownership and how it could potentially benefit your business, please do get in touch and our expert advisers will be happy to chat with you.

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.

 

Transitioning to Employee Ownership – the Legal Perspective

andersonstrathern
In January 2014, software developers Computer Application Services Ltd (CAS) moved from owner management to employee ownership.  Bruce Farquhar and Bruce Harvie, from the corporate team at lawyers Anderson Strathern, advised on the process.  Here partner, Bruce Farquhar gives his views on the transaction:

“The Corporate team at Anderson Strathern work mainly with the larger end of the SME market, and although we have advised a number of cooperatives, this is our first true “employee ownership” transition.  It was an excellent deal to be part of and I would say I’m now an enthusiastic advocate for the model.

“The transaction was quite straightforward, certainly no more complicated than any other business transfer transaction.   There were two main parties to the deal, the former owners as the vendors and the employees of CASLtd as the buyers.  It was in no way an adversarial process – indeed it was very collaborative with all parties wanting what was in the best long-term interest of the company.  We also involved an accountancy firm, Johnston Carmichael, which was able to give specialist advice on the tax implications for the parties.

“Like most employee owned firms, the majority of the shareholding is held in an Employee Benefit Trust.  This Trust retains the shares for the long term and provides stability to the company.  There is also a portion of shares available to employees as options.  In this way, employees are able to see their value in the business grow as the company prospers.

“The chair and chief executive both invested in the business and this meant there was no need to source any external finance for the deal. The intention is that both chair and chief executive will sell their shares back to the employee trust in the future.

“The sale to employees was not the first intention of the vendors. They had been pursuing a trade sale which had fallen through. However, the employee ownership option provided a satisfactory exit for them as owners, and was well received by the employees of CAS.

“As an adviser, it is a model I see fitting well with the aspirations of a number of business owners. Many entrepreneurs are reluctant to see their firm in the hands of a competitor.  The grueling process of preparing a business for a trade sale can be uncomfortable for a seller.

“A sale to employees can be a much easier process. An additional attraction for the owner is that they are able to control the pace of the transaction, and can influence their role in the business going forward.  The former owners of CAS had decided they wanted to exit at the point of sale.  Many owners would prefer to remain involved in some way, perhaps in a non-executive role.  The collegiate nature of an employee ownership transaction enables the vendor to do that.

“The benefits for employees are clear.  There is continuity of employment, they have a stake in their business, and more say in how that business is run.

“We’re delighted that we are now working with another successful Scottish business making the move to employee ownership. As awareness grows, I’m confident there will be many more following suit.”

You can learn more about  CAS Ltd’s transition to employee ownership at an event hosted by CDS and CAS Ltd in Edinburgh on Thursday 3 September.

For more information or to register go to: http://bit.ly/1Vh9aUy

Scotland’s first software business back on track with employee ownership

CASStarted in 1969, Computer Application Services (CAS) Ltd is believed to be Scotland’s first software company.  A spin out from Heriot Watt University, two of the first products were a programme to schedule midwifery training and an application to control cremators – a real cradle to grave enterprise! Now the company has developed an enviable reputation in the niche space of case management and complaint handling.  In 2014, supported by Co-operative Development Scotland, the company became employee-owned.  Like many other employee owned companies, it didn’t start out on that path. Chief Executive, Ken Naismith tells the story.

“ CAS was an okay company with a lot of potential. That potential was not being realized.   It’s fair to say that in recent years, there had been little investment in the business infrastructure and its people.   The previous owners had planned to exit by selling the business to a PLC.  That sale fell through at the eleventh hour.

“I was invited by the chairman to get involved in identifying an alternative succession option.  Employee ownership as a concept always made sense to me – of course people will work harder and enjoy their job better if they own the business.  With the support of Co-operative Development Scotland, we arrived at a structure that gives the company a strong and stable platform for growth.   59% of the business is in broad employee ownership by trust and shareholding; the Chairman and I invested in the remainder of the business.  I plan to reduce my shareholding over time as the company gets on an even keel and this will release more ownership for employees.  We are in a tough, competitive market and our people are now energized and ready to face that head on.

“The employee owners call themselves CAStodians, reflecting their responsibilities to look after and grow the business.    We operate much more openly now.  Information is shared, board minutes are distributed and everyone contributes to our weekly staff meetings.

“We have just produced and distributed our first “Employee Owners Annual Report” which is a comprehensive reflection on our activities last year and our plans and objectives for the next few years.  We did forecast a loss in our first year post buy out, but it was good to report that this loss was much less than we expected.  The forecast for 2015/16 is good.  We have no debt and cash in the bank. There is a number of proposals out for some very lucrative and high profile pieces of business.  We are working on shortening our lead times and up scaling our marketing efforts.

“Our people have to wear two hats; as employees and as shareholders/owners.  We encourage open dialogue; if it’s small get it off your chest, if it’s big, put it on the agenda.

“There’s a palpable sense that the future is in our control now, and everyone has a part to play in making that future as good as it can possibly be.”

You can learn more about how employee ownership has been a catalyst for innovation and growth at CAS Ltd at an event hosted by CDS and CAS Ltd in Edinburgh on Thursday 3 September.

For more information or to register go to: http://bit.ly/1Vh9aUy

 

 

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.

Real Food, Real Folk – Celebrating Glasgow’s Flair for Good Food

LETS-EAT-GLASGOW logoA group of leading Glasgow chefs have formed a new co-operative – Real Food, Real Folk – which aims to promote the city as a culinary destination while also tackling issues relating to food poverty in the west of Scotland.

Here, CDS specialist advisor Ralph Leishman, who supported Real Food, Real Folk with the development of its consortium model, explains how through collaborative working, the newly formed company is benefitting the businesses involved and the wider community.

Initiated in Glasgow in 2014 by Colin Clydesdale and Carol Wright of the Ubiquitous Chip restaurant, Real Food, Real Folk is a not-for-profit consortium which counts chefs from renowned city eateries including Cail Bruich, The Crabshakk, The Gannet, Ox and Finch and Stravaigin among its members.

As a movement, it is underpinned by a founding ethos that chefs and producers who are truly passionate about food should share their expertise with more than just their customers.

And by working together to host major food events in the city the group aims to establish Glasgow’s place on the Scottish food map while building connections between local people and the fantastic produce available on their doorsteps.

As 2015 is Scotland’s Year of Food and Drink, this year provides Real Food, Real Folk with an ideal platform to launch its message. In September (5-6), the co-operative will host ‘Let’s Eat Glasgow!’ a pop-up market and restaurant festival in Finnieston developed around the theme of social inclusion.

Supported by £20,000 funding from Scottish Enterprise, with funding from other sources also currently being sought, the weekend will include a West of Scotland producers’ market, food demonstrations and meet-the-livestock events. During the day, a range of exciting dishes prepared by the co-operative’s well-known chefs will be on offer at just £5 per plate.

Real Food, Real Folk also plans to donate ten stalls at the event to established community groups involved in addressing food poverty in Glasgow, including Locavore, Plan Bee, The Freedom Bakery and Milk Cafe.

Proceeds from ‘Let’s Eat Glasgow!’ will fund the co-operative’s ongoing work in social inclusion and education. It is already working with children through after-school clubs and with mothers in deprived areas of the city.

The ambitious group also has exciting plans for 2016. The consortium’s next event – the BIG Table – will serve dishes from some of Glasgow’s most exciting restaurants and producers to 1000 people.

Guests will have the chance to purchase a ‘1 for 2’ ticket, which buys an additional place at The BIG Table for someone in the City suffering from food poverty.

To find out more about ‘Let’s Eat Glasgow!’ visit: www.letseatglasgow.co.uk

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.

SCDI Forum Focuses on Collaborating for Success

Sarah DeasCo-operative Development Scotland’s chief executive, Sarah Deas, was inspired by the optimism conveyed by Scottish business at the recent Scottish Council for Development and Industry (SCDI) Forum.

Entitled All Cylinders Firing, the event highlighted that new forms of collaboration are required in order to achieve business ambitions.

Writing for SCDI’s event blog, Sarah paid tribute to those employers who demonstrated that focusing on their staff helped their company succeed.

She said: “Several weeks have passed since the Forum but it continues to inspire and provoke discussion. While there has long been a focus on improving the customer/client experience, there is clearly growing evidence that investing in and engaging staff will lead to further gains.

“Most importantly, ensuring staff and partners feel they are part of a community can provide an important competitive edge – something that will help Scottish business thrive.”

To read Sarah’s thoughts in full, go to the SCDI website and follow the ‘Event Blog’ link on the right of the page.

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