Writing this piece to mark Employee Ownership Week, has proved to be harder than expected. Initially,
approaching it from quite an academic perspective, I thought of all the areas
that differentiate employee ownership from other forms of business ownership. I
quoted a number of respected reports from the Employee Ownership Association,
The White Rose Centre at Leeds University and Ownership at Work. All material
I’m comfortable with and have used as evidence before when explaining what
employee ownership is all about.
But the piece just never got off the ground. It felt clunky.
And I think the reason for that was my consciousness of writing this as part of
the week where we celebrate employee ownership and the benefits it brings to workers,
a time where we recognise our emotional connection to those many fantastic
businesses and the opportunities they create for their teams.
A Personal View
So, this isn’t going to be another intellectual article
making the case for employee ownership. It’s going to be a personal piece about
how I think such businesses separate themselves from more traditional forms of
ownership.
For me, my experience was shaped hugely by the 29 years
spent working for the John Lewis Partnership. Venerated in the UK as the
“founding father” of employee ownership, over the years, I became immersed in
its values. In my final few years, I read a lot more about its founder, John
Spedan Lewis (known always as Spedan, to differentiate him from his dad, who
opened the first shop in Oxford Street in 1864). What really struck a chord for
me was his belief in “partnership’ (employee ownership) as a force for good in
the broader community, a way of reducing inequality and offering opportunities,
through good employment, that people would not otherwise have had access to.
In the 1920s and 1930s, when Spedan formulated his ideas and
put them into practice, this was pretty revolutionary stuff. As was handing
your successful and growing business over to the people who worked in it.
We
often felt we were “a Partnership first and a retailer second”, because
Spedan’s ideas transcended the sector we operated in. Nowadays, we are all much
more familiar with businesses that have a purpose, that seek to be good members
of their communities, but employee ownership still sits apart for its belief
that the staff should have a direct, tangible say in the running of their
business, share in the responsibility for making it better, and receive a
degree of reward that would normally flow out of the business.
Employee Ownership in Practice
And it does work. The number of times, as President of the
John Lewis Council, when I felt privileged, as a member of staff – elected by
their peers – stood in front of a board director, giving them specific,
valuable feedback, and seeing how those directors responded, was to be
persuaded as to the value of employee participation.
That spirit exists in so many other employee-owned
businesses. I think of the enthusiasm I witnessed among employees of 3P
innovation, as they started their journey into employee ownership, thinking of
the ways it could enhance their business success, what areas of their operation
and employee experience would benefit from more direct methods for sharing
feedback with directors. The employee stakeholders at The 1:1 Diet by Cambridge
Weight Plan have also made numerous contributions to their own employee
experience, especially in relation to pay and benefits.
Humanity and Consideration
In my experience, employee ownership also differentiates
itself in its humanity and consideration for employees. That was apparent in
the way John Lewis helped Partners in genuine need of financial support,
emerging from the belief that a company could be more than just a place of
work, but a support in the bad times. It was also apparent in a company I spoke
to recently, on the cusp of employee ownership. Their website referred to a
culture of kindness; when I asked why they identified that as being important,
their founders told me they recognised they had a highly demanding clientele, and
so ensuring their staff were well supported was important to them.
Humanity and consideration aren’t simple acts of altruism in
an employee-owned business. They form part of the psychological contract
between employer and employee which strengthens the emotional connection, in
turn driving discretionary effort. The same is true of sharing in the financial
success of your business. I remember talking to Partners in a Waitrose shop,
acquired a few years before from another supermarket chain. They talked of
broken promises in relation to reward made by their previous employer and were
highly sceptical about the Partnership’s promise of an annual bonus. They
admitted to being cynical and of doing no more than was absolutely necessary.
They also talked honestly of the impact the bonus being paid to them had made,
moving them from cynics to evangelists for the Partnership in very short order!
Employee Centricity
None of the points I have made in here need be the exclusive
preserve of employee-owned businesses. They can all be seen as enlightened good
practice, and not as radical now as when Spedan Lewis was formulating his plans
over 100 years ago.
However, there is one aspect critical to employee ownership
that does truly set it apart. As a leader in an employee-owned business, your
primary purpose is to take decisions in the best interests of the Trust
beneficiaries, rather than external shareholders. This changes fundamentally
the dynamic around decision making, giving their impact far greater immediacy. I’ve
already touched on the emotional connection employees feel, and for me, this is
the reciprocal end of the deal for leaders, knowing they have a responsibility
to create a culture befitting of an employee-owned business and
generating
value that can be shared for the benefit of staff.
There you have my personal take on what sets employee
ownership apart. There will be some employee-owned businesses who fall short of
my ideal. There will be some businesses under other ownership models who think,
“we do that!” Clearly, none of these ideals are the exclusive preserve of a
particular type of business. But it is possible to discern characteristics that
tend to set employee-owned organisations apart and an approach which is more
difficult to take when your first and last concern is short term shareholder
return.
Ian Hiscock is a consultant with Independent Directors and Trustees, an experienced Independent EO trustee, with a number of appointments to his name, as well as an EO employee communication expert and trained facilitator. The views expressed in this article have been shaped by his personal experience within John Lewis and subsequently with other employee owned businesses.
This
article was written for the lead up to EODay 2021 on 25th June 2021,
a day to celebrate employee ownership that is spearheaded by the Employee
Ownership Association of which IDT is proud to be a Supporter Member.
