Tag: Tullis Russell

Shared learnings as Basque Country visits Scotland

Sarah Deas resizedScotland is home to a growing number of employee-owned businesses and recently played host to a Spanish delegation keen to learn about promoting the ownership model.

Here, CDS chief executive Sarah Deas discusses the visit and the insights gained.

A few weeks ago I was delighted to host a visit by the Provincial Council (government) of Gipuzkoa, an area of the Basque Country to the east of Bilbao in northern Spain. The delegation was seeking to learn from our experience in promoting employee ownership.  With Gipuzkoa being home to the world famous Mondragon Corporation , it was an honour to host such a visit!

The Provincial Council aspires to create a ‘socially responsible territory’. It believes that economic and social development is increasingly dependent on talent, creativity and innovation. As such, the council is focusing on ‘workplace innovation’. This is the development of new relationship models based on participation – as a driver of productivity and quality employment.

In developing policy to promote worker participation, they are researching the relationship between participatory business models and regional socio-economic health indicators. And, through international visits, such as this one to the UK, they are looking to identify best practice from both a policy and business perspective.  This will inform the design of tax incentives and wider support.

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Sarah, third from left, with members of the delegation

Oscar Usetxi Blanco, Director for the Promotion of Innovation and Knowledge, Gipuzkoako Foru Aldundia was accompanied by colleagues from the innovation agency and ASLE (lead organisation for worker owned companies).  The study visit was organised by Ann Tyler, a UK solicitor with extensive experience of employee ownership.

The delegation visited two of Scotland’s most well established employee owned businesses; Aberdeen manufacturer Woollard & Henry and Fife paper producer Tullis Russell. Here theygained valuable insights into workplace culture and practices. Our Spanish friends very much appreciated the opportunity to see employee ownership in action, and I thank both Woollard & Henry and Tullis Russell for welcoming them.

Reflecting on this visit, it really is interesting to see the growing interest in employee ownership across Europe.  However, the driver is different to that which inspired Mondragon Corporation. Today, ownership succession is the trigger, with sustainability, productivity and socially responsible employment being the goals. These are becoming priorities across the developed world.

Hopefully the delegation from Gipuzkoa found the visit a valuable one and I look forward to seeing employee ownership flourish in the region.

Scottish success stories at employee ownership conference

????????????The Employee Ownership Association held its annual conference in Nottingham last month, with over 500 delegates attending.

Here, CDS specialist adviser Glen Dott takes a look back at the event and recounts some of the highlights.

This year CDS took seven clients to the Employee Ownership Association Conference. No sightings of Robin Hood – or even a forest – but it was a great learning experience for those considering employee ownership. Who better to ask than those who have ‘been there done that’? With over 500 delegates in attendance there were plenty of ‘doers’ and our contingent had a number of networking possibilities.

On the Monday evening we attended the Philip Baxendale Awards, where ‘the best employee-owned organisations are recognised in a tremendous celebration of excellence’. From a Scottish perspective, Page\Park Architects was Highly Commended as an Employee Ownership Rising Star while Fred Bowden Snr, chairman of Tullis Russell was awarded the The Philip Baxendale Fellowship for his outstanding contribution to employee ownership.

Employee Ownership AssociationIain Hasdell, chief executive of the EOA, welcomed us to the conference and illustrated how far employee ownership has come in a relatively short time. The icing on the cake for ‘Team EO’ in 2014 has been the tax breaks afforded to owners selling into Employee Ownership Trusts (EOTs) and the tax-free bonuses now payable to employees of EOT-controlled businesses. In Scotland we are already seeing the fruits of this legislation with EOTs in operation at Mike Stoane Lighting and David Narro Associates and more deals in the pipeline.

Two strands of sessions followed for ‘newbies’ and those already in employee ownership.  In between, we took the opportunity to link up our guests with relevant advisers and like-minded businesses, before keynote speaker Mike Thompson of Childbase explained why his company is moving to a Trust-only model. Surprisingly, external investors currently share most of the profits but a deal has been struck where an employee trust will buy out external investors and also the founding family. The primary advantage will be that future profits will be shared exclusively by employee owners via the recently introduced tax-free bonus.

The conference came to an end with John Lupton of 150-year old Tayport firm Scott & Fyfe telling us of their remarkable transition from family-owned jute business to a modern, outward looking, innovation led employee-owned industrial textile manufacturer.

This story illustrates that Scotland has much to be proud of and we certainly lead the UK charge in adoption of the EO model. We have every reason to believe our clients will join the employee ownership fold and we aim to bring an even bigger contingent next year.

EOA Network Scotland gets off to successful start

Deb OxleyThis week marked the inaugural meeting of the Employee Ownership Association Network Scotland, with representatives of employee-owned businesses discussing how they can work together.

Here, Deb Oxley, Director of Membership at the EOA, reflects on a successful day for the network.

As an organisation that champions the virtues of engagement and communication, it is only appropriate that this week the EOA facilitated the launch of a new EOA member network in Scotland, as part of a UK-wide roll out across its membership.

With more members than ever, increased demand to network and a universal desire to learn and improve – these networks have the potential to offer significant added value to EOA members – and the wider employee ownership community.

Of course any network is only as strong as those that support it and so we launched this network in Scotland clear that it has to be member-led – just like the businesses that are part of it, which are, in the main, employee-led.

So it was great that not only was this launch hosted by EOA member Tullis Russell, and supported through facilitation by EOA member The Coverdale Organisation, but that we had eager volunteers from other EOA members offering their facilities and time to take forward the network.

But of course this new network must seek to fill a gap and to add more value to what already exists. And so it was great that the group affirmed that as it delivers the agreed shared objectives for the network, that these will aim to complement the existing activity of the EOA including the Annual Conference, EO Day and other learning events – as well as the awareness raising activity of CDS.

Probably of most importance is that there was keen support for this network to be a channel to inspire and enthuse the thousands of ordinary employee owners across Scotland.  It was agreed by everyone that it is these people that are essential  to businesses realising the many benefits that employee ownership can deliver, from increased productivity and profitability to improved engagement and staff wellbeing.

A member-led network that enables improved networking and trading, provides a route for more learning and problem solving and which inspires and enthuses employee owners – a challenging task but definitely achievable in a sector of the economy renowned for its innovation and resilience.

Network to bring employee-owned companies closer together

Sarah Deas resizedThis week sees representatives of employee-owned businesses and other parties gather at Tullis Russell for the first-ever Employee Ownership Association Network Scotland, part of a national rollout by the EOA.

Here, Co-operative Development Scotland chief executive Sarah Deas discusses the potential benefits of the Network.

Scotland’s first-ever EOA Network Scotland is an exciting prospect which will allow businesses operating with a similar ethos to gather, share common problems and work towards common goals – regardless of the industry each individual business represents.

This first gathering of the Network, held tomorrow morning at Tullis Russell’s paper mill, is an important step. Deb Oxley, director of membership at the EOA, will chair the event and lead discussions on the day, with the overall goal being to agree the purpose of the Network and decide how it will develop in years to come.

Staff at Tullis Russell

Staff at Tullis Russell

To those attending on Wednesday, remember this is your chance to have your say and influence how the network will work for you.

Just as exciting is the venue. Not only is Tullis Russell an employee-owned company, but the first EOA gathering will be held at the company’s recently opened eco-education building, the Tullis Russell Environmental Education Centre – or TREE, for short.

TREE acts as a terrific education space, designed to motivate the local community to take action to help secure a more sustainable future, as well as provide a first-class conference and meeting space for local businesses. It’s a fitting venue.

Employee Ownership Association

Co-operative Development Scotland will be there – and we are delighted to be. The establishment of the EOA Network Scotland is an important step towards providing a solid foundation for existing employee-owned companies. It will also provide further reassurance to those organisations considering employee ownership as a business model that it works and help is there for them.

Most of all though, it will strengthen the voice of employee-owned businesses and that can only help drive policy and influence decision makers in future years.

New Year Message

Sarah Deas resizedFrom Sarah Deas, Chief Executive, Co-operative Development Scotland

The eyes of the world will be on Scotland in 2014 as we host the Commonwealth Games, Ryder Cup and Homecoming. It’s a fantastic opportunity to showcase our country on the global stage.

Whilst we wish our sportsmen and women every success, 2014 is much more than medals – it’s a catalyst for regeneration, innovation and sustainable economic growth. An opportunity to build international business relationships, demonstrate our capability to host major events and present Scotland as a leading tourism destination. 

Commonwealth-Games-2014For Co-operative Development Scotland it’s an opportunity to shine a light on the positive contribution that co-operative and employee ownership models are playing in the Scottish economy. Working with the Supplier Development Programme, we’ve been helping businesses to tender together to compete for Games related procurement contracts – capacity building that will have long term legacy benefits. 

One co-operative that will play a key role in helping visitors discover the best places to stay, eat and drink is the Merchant City Tourism & Marketing Co-operative. The Merchant City will be a hive of activity during Games time, including hosting the venue for high profile business events. 

Another co-operative that should benefit from the growth in tourism is the Scottish Mountain Bike Consortium. Set up to increase the range and quality of mountain bike experiences, it aspires to make mountain biking the ultimate family-friendly adventure activity.

roadshow

Scotland is leading the way in the adoption of innovative business models. The coming year offers an excellent opportunity to leverage this success. Businesses that are already successfully exporting, such as employee owned Tullis Russell, Clansman Dynamics and Scott & Fyfe, are well placed to use the flexibility and power of their business model to seize new opportunities for growth. 

As Scotland ‘Welcomes the World’, hopefully you too are considering what 2014 could mean for your business. Are you capturing this once in a lifetime opportunity to profile your business and build international relationships? 

Wishing you a successful 2014

Best wishes

Sarah

Why Scotland should take Employee Ownership seriously

Sarah Deas 05Co-operative Development Scotland’s (CDS) Advisory Board recently met to explore ways of increasing take up of employee ownership.

CDS is the arm of Scottish Enterprise (SE) that is charged with promoting employee ownership.

Here, Sarah Deas, chief executive of Co-operative Development Scotland, explains how they invited policy influencers and membership bodies to join the debate.

In order to bring participants up to speed the features and attributes of employee ownership (EO) were first described. Participants heard how Scott & Fyfe, Tullis Russell, Accord Energy Solutions and Galloway & MacLeod came to choose the model and the resulting benefits. With the exception of Accord, these were all long established family businesses that chose EO as a succession solution. Whilst their experiences differed, there was one common and positive result – long term sustainability of the business and its jobs. This offered a clear demonstration of ‘why we should take the model seriously.’

The benefits described by the participants included securing local employment, driving performance and generating socio-economic well-being. We heard that since 1992, the ‘Employee Ownership Index’ has outperformed the FTSE each year by an average of 10%. Also, EO businesses have a significant presence in the ‘Sunday Times Best Businesses to Work For’ – there are three in the top 10. Clearly the model won’t be appropriate in all cases, however, research shows that on balance it out-performs other models.

Scottish paper and board manufacturer Tullis Russell made the transition to employee ownership in 1994

Scottish paper and board manufacturer Tullis Russell made the transition to employee ownership in 1994

It was acknowledged that there is growing political interest in the model, both within Scotland and across the UK. The Nuttall Review generated 28 recommendations that are currently being taken forward. HM Treasury has committed £50million per annum to incentivise uptake and recently consulted on the best way to use this funding. CDS is promoting the model directly to businesses and via the media and professional advisers. 83 professional practices (lawyers, accountants and bankers) have met with CDS over the last year – and two are now even considering the model themselves!

 We also learned that 73% of Scottish businesses are family owned and account for 50% of private sector employment. However, evidence shows that only 9% progress into third generation family ownership. So, what is happening when the family sells out? Answer: trade sale, management buy-out, employee ownership or insolvency. EO is one of the options – but suffers from being little known and understood. It was acknowledged that the number of businesses being sold has reduced due to the recession – which may lead to what some call the ‘succession time-bomb’. 

So, what more could we be doing to position EO as an effective option?

It was now time to reflect on the wider policy and business environment. Who better to kick off this discussion than respected economist, Jeremy Peat? He described two lenses through which we could look at the economy: GDP (output) and ‘economic well-being’. Jeremy felt that there are signs that economic well-being is becoming more important to the Scottish public: ‘There is a change in tone … and EO is part of this’. 

Jeremy Peat OBE

Economist Jeremy Peat

In reflecting on finance, he worried that there is limited understanding of the model by banks resulting in a lack of mutual empathy. In his view, we need banks to take a longer term perspective, new forms of finance (eg patient, crowd) to be created and for equity investors to appreciate that longer term factors matter. On a positive note, Jeremy felt that this is starting to happen. Overall, he felt that more plurality of business models would be helpful in rebalancing the economy. A ‘let many flowers bloom’ approach.

Guests included representatives of the Institute of Directors, Confederation of British Industry and Royal Society for the encouragement of the Arts, Manufactures and Commerce, alongside members of SE’s regional and industry advisory boards. Some shared perceptions of what they had heard. Others focused on the process by which the model could be most effectively introduced to companies. 

Scottish Enterprise and Highlands & Islands Enterprise account managers were seen as crucial in this process. A focused approach was strongly recommended, enhanced by diagnostic tools and support from ambassadors.  An important message was that EO should be presented as one of the options – cautioning against a ‘one trick pony’ approach.

The rich and wide ranging discussion also explored the employees’ view and the role of unions. The model was shown to work well from all perspectives. In summing up, it was felt that the ‘quick buck era has gone’ and ‘people are increasingly questioning values and priorities’. Employee ownership is a model for ‘sustainable enterprise’ and, as such, has an important role to play.