From this month, Europa Communications - the company I started 23 years ago - begins its new journey as an Employee-Owned organisation. The company is now owned by a Trust –an Employee Owned Trust (EoT) – and those employees, are in the main, excited about their new acquisition.
I say ‘in the main’, because of course there is a little trepidation around the prospect of ownership. Employee Ownership is well established in some enterprise sectors, in some countries (the US tends to have most occurrences to date), but it is still a relatively new concept to SME’s, in the UK.
Not every employee has an ambition to ‘own’ a business. Their priorities might be – in no particular order but commonly: How can I earn more? How can I grow? How can I find more job security? So even if they don’t’ voice those questions directly, you know they are not far from their thoughts as they ponder the benefits of working for an ‘EoT’ (Employee owned Trust) as opposed to a conventional privately-owned enterprise.
In our recent launch presentation to the staff, it was a relief to receive questions that were –again the main – positive, energised and quite thought-provoking for all of us. Questions that we as directors had already spent months getting our own heads around; grilling various expert lawyers and other advisers, to ensure that this was a venture that made sense to all of us.
The staff wanted to know: what does an EoT mean to us? Why are we doing this? What is expected of them that may be new/uncharted…unwanted?... What are the potential benefits of this ‘windfall’ to them? What will our clients think? Where’s the catch?....
Now typically, for most owners/shareholders, it’s an alternative to selling the business to another owner. But the owners of Europa (me in particular I guess) didn’t want to do that. We’ve been there, gone through the courtship phases, jumped through those hoops with a number of corporate suitors over the years, and pulled out eventually.
And we are glad we did. Those prospective options might have meant more cash for the owners, accompanied by a hasty exit as soon as contracts allowed. They would probably also have meant staff ‘relocation’ (if not redundancies), office closures, client concerns etc. We didn’t want that. I hadn’t sweated all these years just to see that happen.
We wanted to prepare the business for its next evolutionary phase, give it the right foundation for further growth, build a leadership team capable of driving it forward…who wouldn’t want that?...Plenty owners, apparently. Their priorities - to get as much cash out as possible and buy a boat, play more golf, lie in of a morning, after all those years of blood sweat and tears.
Nothing wrong with that, but we wanted something more. This is a successful business with a business model that’s working even better for it now than it did 23 years ago. It’s values, its structure, its service offerings, its people…are still in the ascendancy and even more relevant to a changing market which has actually moved closer towards the solutions we deliver. We have a product people want even more. So, to facilitate its further growth was key to those of us who brought it into the world in the first place. The Employee Ownership option made absolute sense to us.
In the UK, people tend to know and respect the John Lewis Partnership model. They might not know why or how employee ownership has enabled John Lewis to build the respected brand it has, but it’s an example that works, when explaining our new structure. Employees in such organisations still come and go. There’s no complicated share structure to get embroiled in. Everyone shares in the profits. Proper ethics prevail. It’s brand certainly benefits from its corporate ethos. It doesn’t guarantee commercial success, but it’s a model that’s worked well for 150 years. So, despite the fact we have 89,800 fewer employees than JLP, we’re happy to even be associated with it, as a business model alone! (At least we share the same spiritual home, in Cookham).
Personally, I’m not on an exit here. I do want to see more new talent take responsibility for the business’s future. I do want fewer sleepless nights worrying like a parent worries about where the kids are. But I still need to earn a crust. Hopefully they still want me to help them too!
Exciting times for all of us. There’s still a lot to prove. I want to be part of this new adventure and prove that this is a business model that more entrepreneurs should be prepared to look at – not just for their own benefit but for their employees as well.
I’ve just realised I’ve not answered those questions from the paragraph in bold earlier here. If anyone’s still reading this, drop me a line and I will share…..