A Better Way of Doing Business
As 2015 starts to take shape, employee ownership remains the fastest growing form of business in the UK. The number of companies owned by their workforces is increasing at an annual rate of 9%. We are very much on track to reach the target I first set out in 2012 and that has since been so widely endorsed, of 10% of UK GDP being produced by employee owned firms by 2020.
This is all tremendous news for our economy because employee owned businesses are, as a direct consequence of their ownership model, outperforming their competitors in every part of the economy. It is also wonderful for customers of public services with more than £2bn of high quality public services now being delivered by employee owned companies.
In addition, it is fantastic that employee ownership is now a sector on a similar scale to the aerospace industry and is starting to be treated just as seriously. If we avoid complacency and sustain the current momentum the legacy for the UK by 2020 will be a major restructuring of the economy. Through a dramatic increase in employee ownership this will achieve exactly the kind of diversification of business ownership that the Ownership Commission called for after the last financial crash.
The creation of this legacy will make a serious contribution to addressing two of the UK’s deepest seated economic challenges namely our chronically low productivity and the acute short termism that still dominates the behaviours of too many businesses. It continues to be a real privilege to be so centrally involved in this remoulding of the economy.
But whilst all this big picture thinking is very exciting I do want to shine a light for a moment on what is actually inside all this progress. Because the most compelling aspects of the relentless march of employee ownership in the UK are the real stories of the individual companies that have become employee owned.
A glance at some of the recent exemplars brings this to life. Take Alan Davidson, for instance, who has this month completed his management of the process that has seen the architectural visualisation studio Hayes Davidson move into employee ownership. Or Stephen Bampfylde under whose leadership recruitment firm Saxton Bampfylde has become employee owned. Alternatively the fascinating journey, under the guidance of Paul and Isobel Schofield, of Union Industries into employee ownership is equally inspiring and uplifting. So too the similar move by Mike Stoane Lighting. As is the recent conversion of Colchester Print Group into employee ownership through a transition led by its Chief Executive Philip Colchester. Or the shift into employee ownership of the highly innovative Glossop based Visilume.
I could go on to cite so many other examples but my point is that we should never lose sight of what the growth of employee ownership is all about. Yes it is about laying the foundations stones for a new economy. But at its heart it is about the on-going development of hundreds of highly productive, very profitable, ethical and long term businesses that engage their employees, and that invest in their local communities. Put simply it is about a better way of doing business.
And of course raising the profile of these stories of success is the most effective way of inspiring the next wave of businesses to be employee owned from inception or to transition into employee ownership.
Finally for now we are on the eve of launching a new initiative, the Employee Ownership Association Investment Award 2015. The Award is open to any entrepreneur who is about to create an employee owned business whether as a start up enterprise or through the conversion of an existing business. The Award is for the most stimulating example of an employee owned business that is being created. The winner will receive £10,000 towards the cost of professional fees incurred in building their employee ownership structure. So please look out for further details about this Award on the EOA web site from the middle of next month onwards.
Iain Hasdell is Chief Executive of the EOA