Patrick Lewis: It’s time to harness the full potential of employee ownership
Whether it’s the inequality of unconstrained capitalism, the untapped capability and commitment of those in and out of work, or the unsustainability of our way of living – we all know that we need to find a better way.
We need to address many issues – and fast – and the obvious place to start is where many of us spend most of our time – in the workplace. The Government has a role to play – but each of us has a key part in striving to make the organisation we work for lead the way in its contribution to our community. Too often we have seen absent “shareholders” set the tone. Now, more than ever, we need to champion what we stand for.
Stepping into the role of President of the EOA has reinforced my belief that employee ownership has a much larger role to play. Sharing ownership is the very best sort of “levelling up”. Not only do you share reward, but you share decision making and knowledge. You nurture the sense of pride and responsibility that will put the mojo back in both the economy and the country.
The economic case for employee ownership is well drawn. It is widely evidenced that employee ownership delivers more engaged employees which in turn powers higher productivity and better performance for the business. And that a meaningful stake and a say in a business affords the ability to share reward, sustaining higher earning potential for all employees. These outcomes are even more marked when the economy or sector is going through recession or disruption
It is also evidenced that when employee ownership is used to deliver business succession, which has seen a 50% growth since 2017, businesses root jobs in a locality and their continued independence allows them to plan for the long term, enabling them to invest and make decisions with the future in mind, building resilience.
The incentive towards better income equality would be a significant contributor towards the government’s ‘Levelling up’ ambitions.
When talking to business owners who choose employee ownership, many of them talk of wanting to retain the cultural legacy and values of their businesses, reward those who have helped build it. They know that investing in people is the route to long term success. If labour employs capital, it naturally builds in a motivation to develop people and communities. If capital employs labour you get a much more one sided outcome. In becoming employee owned, employees become custodians of the business for future generations.
The effects of employee ownership on wider society are starting to stand out; a small but increasing trend of employee owned businesses are becoming BCorps; through their superior governance and employee focus there are more employee owned businesses with Investors In People Silver and Gold status; and when it comes to listening and taking a wide range of views into account from employees, suppliers and customers, there is growing evidence of greater focus of the businesses impact on society.
The ability of employee owned businesses to adapt, innovate and change tack, not just in a crisis, but when needed, comes from being united behind a common purpose and doing what is needed rather than what individual people want to do.
This ability provides the perfect prompt for the recent call, backed by the EOA, for employee owned businesses to deliver the solution for higher standards of ESG impact.
Considering the global challenge of achieving Net Zero and the desperate need to redress the impact of the human world on the natural world, employee owned businesses are ideally placed to make a positive contribution.
With the stewardship of many working in a business rather than the few, there is room to use these well-governed, productive businesses as a test of how wider stewardship can help deliver a more resilient economy and environment.
The EOA’s target is to achieve 3 million employee owners by 2030. The need has never been greater. That is millions more stewards with the ability to deliver value, to society and the economy, rather than just extracting value from it.
So what can you do to help us to grow employee ownership? Pledge your support to the 1 Million Owners campaign and write to your MP: https://www.uk.coop/1millionowners