Stronger Together: Why You Should Consider Employee Ownership For Your Business
Grow Your Business, Not Your Inbox
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
There is nothing more satisfying in life than creating something, and watching it grow. In business, we are immersed in this process every day. We all see the cycle of ideas that lead to actions, and actions that lead to growth. Growth means more than adding numbers to a bottom line. It means growing your people, and developing a culture that separates you from the competition.
American author Ralph Nader once noted that “the function of leadership is to produce more leaders, not more followers.’’ When I co-founded Emperor 25 years ago, I had no idea how far it would go. We’re now the UK’s largest corporate reporting agency, with over 200 people working across six offices, and have built the business through strong organic growth and acquisitions. More importantly, we have a strong culture of collaboration, care, and support.
I’m immensely proud of what we have achieved. So, when questioning our plans for the future of the business, we wanted to find an answer that ensured we could put it in the hands of the people who know us best: our people. We decided to adopt the employee ownership trust (EOT) form of employee ownership, giving our staff ownership of the business, and a right to have a say about the running of the company, its future plans, and opportunities- as well as allowing all staff to potentially benefit financially from the future success of the company.
Employee ownership has accelerated in the UK following the Finance Act 2014, which enabled current and future employees to participate. We are now one of around 350 companies that have taken advantage of this legislation as a route to employee ownership- and there are many more considering it.
So, what are the benefits of adopting employee ownership as a business model? Here’s an explainer.
1. Independence to maintain agility and entrepreneurialism A huge reason behind the success of our business is in our ability to think and act quickly, balanced with working towards our long-term goals. If the business was sold, it would probably be to a competitor, a large media group, a private equity house, or we could even float on the stock market. Many of our existing colleagues have witnessed what happens when a business changes ownership- there would be a risk of losing long-term focus for short-term gain. Pursuing short-term goals is not an issue in itself.
For many agencies, acquisition may be the right move for their business strategy, but for Emperor, the ability to react quickly to the right opportunities, rather than reacting quickly for the sake of a quarterly report, was important. This applies to many business models beyond our own- and it means that the business can fully consider the broader socialimpact of any action, helping prioritize sustainable success.
The arguments for EOTs are underlined by the fact that, in a rare display of solidarity, all the major political parties in the UK fully endorse employee-owned business models. Analysis of the top 50 employeeowned companies in the UK showed an overall increase of 4.4% in YoY sales, and an increase in YoY operating profit of 25.5%, alongside increases in employees and productivity. The research suggests that employee ownership drives better business performance, employee commitment and engagement, as well as innovation and efficiency.
2. Attracting talent is important for client services and creativity Maintaining the innate creativity of an organization, and the ability to foster long-term client relationships both require the same thing: talent. People who know how to think, and understand what to say. Attracting and keeping this talent is an ongoing challenge for businesses around the world- but employee ownership can help tackle this in a number of ways.
By 2027, most marketplaces will for the first time see five generations working flexibly together. This means businesses need to provide a framework that satisfies the diverse needs across demographics. Having a clear culture and business ethos appeals to both existing and emerging talent. People want to work for businesses that share their beliefs and values.
At Emperor, we have introduced a charter, which helps foster this sense of unity, acting as a template which guides our everyday behaviors, activities, and decisions. People appreciate the value of a culture that puts their needs first. Employee-owned businesses appeal to talent searching for a long-term fit. By having their purpose baked-in to their business strategy, employee-owned businesses are well placed to attract and retain the right people.
3. Employee-ownership secures a positive internal culture Employee ownership is also the best way to ensure our people remain engaged, but more than this, it allows us to protect what we have made. It protects our ethos and culture, and ensures that we can keep developing and doing good along the way. Employee-owned models allow employees to connect with a business on a fundamental level. There is a sense of shared purpose that gives employees something greater to work towards.
Because they’re co-owners, staff in employee-owned businesses tend to be more committed to the company and its success.
Similarly, because they have high employment standards, involve staff, and give everyone a stake, employee-owned businesses are better at recruiting and retaining people that are the best fit.
Finally, because they’re run an open way, employee-owned businesses tend to have a strong commitment to corporate social responsibility and involvement with the communities they operate in.
When I look back on my career, I think I find most pride in the future we have helped secure as much as the history we have created. Employee ownership has given me the greatest opportunity available as a business owner: to work in a team full of leaders.