As we continue our tour of the nations and regions of the UK, this week saw the Ownership Effect Inquiry arrive in Cardiff, followed immediately the next day by our third hearing at BEIS in London.
Across the two locations we were fortunate again to hear evidence from an amazing collection of 15 different employee owned businesses and 10 professional advisors. And whilst geography may have divided the locations, the main topic discussed in both hearings was the same; the opportunity of employee ownership to support business succession and growth.
The Panels heard that most businesses that have recently transitioned to employee ownership did so as part of planning business succession or growth, and what was most striking was the similarity in the business owner’s motivations. With a universal and profound concern and care about the long-term future of the business, their motivations were driven by place, prosperity and potential.
Especially in Cardiff, we heard the same profound message as we had heard in Manchester and Edinburgh; employee ownership delivers a legacy in the place in which the business is based by securing the future jobs, talent and skills. Regardless of sector, from professional service businesses to manufacturing, we heard the same message – that a trade sale would have been a threat to the continuity of the business, and hence the security of the jobs. Regional economic growth is critical and an essential part of the UK’s Industrial Strategy, and our emerging evidence reinforces again the important role employee ownership can play in delivering this key government policy.
The desire to deliver more prosperity through better staff engagement, giving employees more influence and a greater voice, was also a strong message about why employee ownership was the chosen route. The concept of ‘self-investment’ created by employee ownership was described as a powerful motivator for increased effort by staff, resulting in higher sales turnover over, lowering of costs and therefore higher levels of productivity. With the release this week of Matthew Taylor’s Review into ‘good work’ and the launch of the new campaign to drive higher levels of productivity, employee ownership’s role in contributing to both could not be more relevant.
And in each case the founding owners talked of their pride in their staff as they could see the future potential of the business in their hands. How the employee ownership structure, combined with a culture of engagement, was enabling employees to take ownership, take responsibility and to become truly connected with the future of the business. At a time when the UK faces economic uncertainty, the opportunity for more resilient, ambitious businesses, driven by the collective effort and passion of their employee owners could also not be any more relevant.
With a growing base of positive evidence it would be easy to think that our task of growing the sector should be simple. However, the voice of the advisers was clear – if there is to be greater take up of employee ownership, there needs to be a profound step change in both awareness and availability of advice. From accountants to lawyers, corporate finance to banks, it is clear that we still have a long way to go until employee ownership is naturally considered alongside the other options at the points at which owners consider succession, growth or even start up.
With one final hearing in Birmingham next week, and a few more days for us to collect contributions to the online questionnaire – the evidence is becoming ever more compelling; employee ownership has the potential to contribute far more to the UK economy and especially in ensuring the successful succession of more productive and resilient businesses.
The closing date for submissions of written evidence has been extended to 5pm on Friday 28st July 2017. Please click the following link here to submit your entry.