Deb Oxley Address to the EOA Conference – 24/11/2015
Good morning ladies & gentlemen – and let me add my welcome to this year’s EOA Conference.
It’s fantastic to see so many of you here today – another record breaking year with more delegates, more conference sessions, and by the looks of it – more glasses of wine consumed last night too!
Of course this is a very special conference for me this year – as I am thrilled and honoured to be here today as the new CEO of the EOA.
After being with the EOA for 3 years, it’s incredibly reassuring for me to take over from my predecessor Iain Hasdell at a time when the EOA is in such a strong position being:
- The leading voice for employee ownership in the UK
- Highly influential, well connected and respected
- With a growing membership of almost 300 businesses
- And recognised as THE place to go for anyone interested in employee ownership
So it’s very humbling to have the opportunity to be the new guardian of the EOA – adding to the small group of others that have had that honour in the past.
You’ve probably noticed already that I have a different style to Iain – but the same passion, belief and commitment for EO and the role it can play in developing the UK economy.
Some of you may not know that before I joined the EOA I would regularly speak at events like this – as part of helping cities in the UK to address their own economic challenges. That work normally entailed visiting each place to get a sense of the assets and features in order to be able to assess their future opportunities.
It was a fascinating challenge because places and cities are really surprising when you look closer at them. No one owns a city, no one can make all the decisions and no one has ultimate power (which may surprise Boris!). Those places that work best do so through strong leadership, cooperation and collaboration, and having a shared sense of direction and ambition.
So as I set off on my new journey of leading the EOA, I thought I might share with you my observations of our place – the community that we might all call ‘Employee Ownership World’.
And this is particularly relevant now as I’ve just had the opportunity to speak to a number of members in the last 7 weeks since I took over as CEO, which has helped to inform these observations.
In Employee Ownership World, I can see a landscape that is very diverse with different sizes, shapes and ages of businesses.
One group of businesses are Affiliate members of the EOA, those who are just starting their transition into employee ownership. This group is looking for support, information, advice, introductions and signposting to the next stage of their journey. They want to network with other EO businesses and have access to expert advice. And once they have made the move to EO, they ideally would like a bit of hand holding or buddying-up with a mentor organisation during their early years.
Around the corner is a group of seasoned and more experienced EO businesses – EOA Partner and Trustee members whose businesses have been employee owned for a while. This group want to give something back – to share their learning and insights – but are also keen to keep developing their own ownership cultures to support their ongoing growth and development. They have the confidence to speak for the place and are keen to support others, meeting new businesses, hosting visits or giving interviews to the media.
And then there is another really valuable group that lives in Employee Ownership World – the EOA Supporters. They are present around every corner, offering expert advice and help on topics including law, tax, recruitment, governance, communications and engagement. They stay up to date with current legislation and offer specialist advice to every size of business.
And finally Employee Ownership World is supported by representatives of the wider community – the EOA Board and its Executive Team. They represent the place and all the businesses in it – set a vision and direction, create connections with other similar places and are active and passionate ambassadors, banging the drum for employee ownership.
And all of these communities happily coexist, collaborating and supporting each other and celebrating their successes. And most importantly, they share a common view that being part of Employee Ownership World is a better place to be and a better way to run a business.
Oh and last year, Employee Ownership World opened its newest attraction – EOT Business Park – a brand new facility that’s attracting lots of new businesses who are keen to benefit from tax incentives for both owners and staff.
So overall my assessment of life in Employee Ownership World is very positive and that it feels pretty good.
Maybe the biggest frustration that does exist in Employee Ownership World is that whilst the place has many accolades such as – the most productive place – the most sustainable and resilient place – and a more profitable place to be – it’s still attracts too few visitors and not enough business owners are aware of its existence.
So if I were advising Employee Ownership World I would say that it has a brilliant proposition – supported by a great group of ambassadors who have a shared ambition and narrative – and has lots to celebrate. But it does need to work harder at getting its offer heard and attracting attention.
Before I get carried away with my analogy and storytelling – which I could easily do – I think you’ve got my point!
The sector and the EOA are both in a very good place – and there are far more opportunities than barriers to our future growth and development:
Employee ownership has moved from being an ideology about ‘nicer’ businesses to being a necessary and important business model that has the potential to help build a new, revitalised and rebalanced UK economy;
There is now an effective promotional campaign, speared by the EOA and its members, to raise awareness of employee ownership – through the media, events, awards and ambassadors;
We have the evidence and the research to back up the economic case for employee ownership – including the annual Top 50 index published with our partners RM2 and the tracking research being managed by the White Rose Centre for Employee Ownership;
We have Government support – most noticeably in the form of the recent tax reforms that the EOA and its members campaigned hard for. And you will hear later today that the most recent evidence about the success of these incentives means that around 40 new businesses have made the move to employee ownership this year because of these tax incentives;
And finally, the EOA now has the scale, capacity and reputation to lead, represent and influence the development of the sector in a way which has not being previously possible.
So the sector and the EOA are both in an undeniable position of strength.
However, ambition is everything and so let me share with you my thoughts on the opportunity for the continued growth of both and why we have possibly the best chance for substantial step-change growth of both now – because of three immediate factors:
Firstly concern about the current undermining of the moral compass of some institutions.
Secondly, the challenge of the current malaise in the UK economy.
And thirdly, the opportunity created by the voice and critical mass of the EOA and the employee ownership sector.
Starting with behaviours, it would seem that the moral compass of many leading, global institutions and businesses is broken.
Trust and confidence is undermined on what seems like a weekly basis – and there’s growing confusion about why so many organisations are behaving so badly.
LIBOR rigging, phone hacking, the scandal at VW, and the shocking events that are unfolding in the sporting worlds of FIFA and athletics are sadly only a few of a group of incidents that have caused many of us to ask ‘how on earth could these things have happened?’ And more importantly, what are the organisational cultures that allowed the people behind these incidents to behave in such a way?
And whilst the earliest scandals were shocking – increasingly we are becoming all too used to hearing about the yet another scandal – and at risk of becoming desensitised to each new headline.
However, employee ownership offers an antidote to these behaviours.
Evidence provided by the MoralDNA report into employee owned businesses reveal these to be organisations where the culture, values and ethics are stronger – and where managers are more likely to apply personal ethics to their professional lives than their counterparts working for companies with other forms of ownership.
According to the recent survey of over 1000 workers in employee-owned companies, managers are less likely to make business decisions based on ‘blind’ obedience to corporate rules and are more likely to take into account the interests of their colleagues, customers and communities.
These are the same EO businesses, many of them here today, that demonstrate transparency and openness at the very heart of their operations. They encourage and enable staff to act responsibly – to the company and their colleagues, as well as society at large.
They focus effort on delivering more engagement and better communication with employees – to support this transparency and responsibility.
So culturally these organisations are shining lights in a world where there are an increasing number of examples of very dark behaviours.
That’s why more employee ownership is good for the UK and why the sector must take the moral high ground at a time when the very essence of responsibility is disappearing before our eyes in a small but high profile group of businesses.
Our opportunity therefore is to continue to influence the thinking and awareness of leading commentators, advisers and journalists – to awaken their understanding of employee ownership and its role in contributing to future UK economic success – in a more ethical and responsible way.
Another major opportunity for employee ownership – is the current malaise in the UK economy.
Whilst technically out of recession, most of us would agree that the economy feels like it is teetering on the edge of either moving forwards to sustainable growth and future success or falling backwards.
Growth, inflation and interest rates are low and we exist in a low wage economy – all indications that the economy is struggling to fully recover its pre-2008 levels.
And more worryingly, productivity is still way behind that of our major western competitors.
However, an opportunity for employee ownership is that the concept of ‘ownership’ in its widest sense is now firmly back on the agenda.
At a political level there is the debate, reignited by the new Labour leader, about public or private ownership of UK infrastructure and resources.
And of course we are familiar with the continuing debate about home ownership – seemingly caused by a lack of supply and an inflated housing market.
And the subject of business ownership is also starting to gain some traction.
A recent report claims that during the 30-year period of 1985 to 2015 individual share ownership halved. This means that now only 11% of public traded shares in the hands of individual shareholders.
Some esteemed commentators including Andy Haldane, the Chief Economist of the Bank of England have expressed their concerns about this, citing the challenge of ‘ownerless corporations’ – those businesses owned by the markets rather than by people.
Outside of these macro topics, ownership of organisations by those that work in them is of course an implicit trait of the employee ownership sector.
This is a group of businesses where having a ‘stake in the firm’, or ‘some skin in the game’, delivered by an employee ownership structure, combined with the emotional ownership delivered through high levels of engagement and extended governance – is proven to deliver economic benefits.
Businesses that have employee ownership in them are more profitable – as proven through the consistent high performance of the annual EO Index.
These same businesses are more productive – as the latest figures from the Top 50 EO businesses demonstrate with productivity in employee owned businesses growing at an annual rate of 4.5% at a time when it is flat for all other parts of the economy.
And these are businesses that are more resilient in times of recession – taking a longer term view of their investments and not needing to make knee jerk reactions to the demands of an external and absent shareholder group.
Every political party talks about ownership from time to time – but none has yet made it a consistent theme when in government.
Therefore our opportunity is to lead a dialogue around ownership – in the media, with Government and with think tanks and other influencers, collaborating with those that have a shared interest and belief in its power – and ensuring that employee ownership is embedded as one of the main delivery models.
Moving on to the good news – and my last point – the opportunity that is now provided by a 300-strong, growing membership organisation.
300 members provides a critical mass and a major opportunity for the EOA’s voice to be heard, listened to and acted upon in a more meaningful way than may have been previously possible.
The EOA is now a serious player – an organisation of scale and importance.
And it is with the ongoing support of your membership that we have the resources to organise and host national celebrations, awards and events such as Employee Ownership Day, to ensure that the media in particular hear our voice and become interested in what we have to say.
It is with your own stories of brilliant business performance that the economic power of employee ownership is understood and brought to life.
And it is with your own ambassadorial efforts with your suppliers, customers and networks that we can collectively educate and inspire other businesses to want to find out more.
So these are what I see as three core opportunities for us use to continue to grow the sector and the EOA – and I have every confidence that together we can capitalise on these opportunities.
In order to do this, I see the focus being in three main areas.
Firstly the ambition we all must share to move employee ownership into the mainstream.
When things are mainstream, they don’t require explaining, they are a natural thing to do, and are expected, without surprise.
So in the same way that other previously new ideas have been widley embraced and become the norm – recycling, healthy eating, hot-desking, – we need to get employee ownership into the mainstream – for it is only when then happens that the sector will grow at a faster pace.
This will need us to educate the majority of UK accountants, lawyers, bankers and business advisers so that employee ownership is embedded in the language of their advice to clients.
For it is they who have the ear of business owners and the entrepreneurs. It’s they who introduce the idea of employee ownership – or have the conversations about a succession strategy or a growth plan.
We will also need to ensure that FE and HE institutions and business education syllabus’ feature employee ownership – at every level from GCSE business studies to an MBA.
And we need to do this with confidence – using the economic case for employee ownership as our basis, exploiting the niche it provides – but then casting aside this niche to become part of mainstream business structures.
And of course in order to have the resources to achieve this, our second priority is to continue to grow and develop the EOA.
Growing the EOA means us becoming an organisation of more than 500+ happy, engaged and externally proactive members over the next 3 years.
And as the EOA grows, the membership proposition needs to develop. In particular I believe that we will need a greater regional footprint across the UK, providing members with a greater opportunity to network and learn from neighbouring members.
We need a more sophisticated approach to membership engagement that allows members to actively shape the services we deliver.
And we need to keep pace with technology by providing even better communications channels that allow effective member-to-member contact and networking and more ‘self servicing’.
We will also need to listen more – both to what members want and, by benchmarking ourselves against other leading business membership organisations – how other leading membership organisations work.
And finally, my third priority is for us to collaborate more – both within and without the membership of the EOA.
So we will reach out further and more often to engage with a wider group of stakeholders.
We will collaborate with other professional bodies so that employee ownership enters the mainstream business language.
We will collaborate around the ownership agenda with other representative groups – in order to influence political thinking – as I firmly believe that we are stronger together as one voice.
And we will collaborate with the many voices of the employee ownership sector to deliver a purposeful and focused voice for the sector with government.
And as part of that I am delighted to confirm that in the new year the EOA will lead the first gathering of a new industry group for employee ownership – building on the fine work delivered by the Nuttall Review and Implementation Group.
And finally we will collaborate with our members – to seek your input, ideas and resources to help shape YOUR membership organisation.
Two immediate opportunities for this are our desire to continue to grow and develop this Conference and the development of new online communications platforms to allow more effective member to member communication.
Anyone who wants to be involved in providing ideas, support, sponsorship or people to help with either of those tasks please do drop me an email or grab me during today.
Finally ladies and gentlemen, I think that Employee Ownership World looks like an inspiring, ambitious and highly fulfilling place to be and I’m immensely proud to be part of it.
I very much look forward to working with all of you to continue to deliver great value and benefit to you membership and to collectively help to grow this sector.
Thank you for your time and I look forward to speaking to many of your throughout the day.