This month my co-owners and I have been celebrating a special anniversary – 30 years since our founder, Philip Baxendale, took his family owned business into employee ownership. Like most organisations we’ve seen our fair share of changes and challenges over the years, but our co-owned model has given us a freedom that most other traditional business models can’t offer. From our origins as a leading boiler manufacturer to the business advisory and investment specialists we are today, the Employee Benefits Trust at the heart of our Partnership has given our co-owners a voice and a share in the wealth we create for three decades. Just as we have benefited from the model, so too have a growing number of organisations in the UK and beyond. I’d like to reflect on some of those success stories, and the sustainable nature of employee owned business.
The Sunday Times recently published its 2013 ‘100 Best Companies to Work For’ list, and three out of the top ten are employee owned companies. This outstanding news is hardly surprising considering the overwhelming evidence which shows that staff working in employee owned companies are happier, healthier and more secure than those without a stake in their company. As a result, employee owned firms have shown on average, 4-5% higher productivity than other businesses and 98% of co-operative start-ups are still trading after their first three years, compared to 65% of all businesses.
In light of this compelling data, the UK’s Employee Ownership Association argues the model is key to lifting the UK out of the economic downturn and is calling on the government to make employee ownership “prominent in UK industrial strategy from both a macroeconomic and a competitiveness perspective”. The government is responding to such calls by introducing tax incentives and simplified legislation to make it easier for more people to have a meaningful stake in the organisations in which they work.
Employee ownership is not a new development. The UK and US were early pioneers of the model, with John Lewis becoming a legal Partnership through the creation of the first Trust Settlement in 1929, and leading US corporations such as Procter & Gamble, Railway Express and Sears & Roebuck opting to create employee stock ownership programmes in the mid-19th century. This early desire for a fairer and more responsible form of capitalism and a drive to encourage personal responsibility among employees has developed, over time, into a growing modern consensus that the PLC model is not always the best way to maximise long-term value for shareholders or the health of the economy.
Today, employee ownership is flourishing, with £30billion of UK GDP coming from employee owned businesses. Examples of thriving employee owned companies abound across the globe, from Spain’s Mondragon co-operative network to New Belgium Brewing in the US. The latter also happens to be one of the companies profiled in “We the Owners”, a thought-provoking US documentary film on employee ownership that had its London premiere at Baxi Partnership’s recent 30th anniversary celebrations, held at Cass Business School.
“We the Owners” highlights stories from the founders and employees of leading US-based employee owned firms New Belgium Brewing, Namasté Solar, and DPR Construction, showcasing the workers’ perspectives on shared ownership models, employee engagement and innovation. A palpable demonstration of the social and economic benefits of handing employees a stake in their places of work, it also argues that employee owned companies are intrinsically more aware of their responsibility towards the environment and society at large.
This ‘triple bottom line’ approach – or people, planet, profit, as many call it – is a modern-day interpretation of what our founder, Philip took steps to achieve 30 years ago. I’m proud to say that this very sensible philosophy forms the heart of our strategy at Baxi Partnership today. Since 2000, Baxi Partnership has helped more than 80 organisations at various stages of their journeys into employee ownership through specialist advice and funding, led investments of £72 million in maximising their social and economic impact and created over 2500 employee owners in the process. Increasingly we are focusing on social investment, leveraging our funding capability to support high-growth ventures with a positive social impact. In addition, our carbon and energy management consultancy, Verco provides green solutions and expertise to a wide range of public and private sector clients.
These are exciting times for both employee ownership and social investment, and for many businesses and employees this is uncharted territory. For my co-owners and I, Baxi Partnership‘s anniversary is a reminder of the importance of sustainable business models and the values and benefits that underpin them. I can’t wait to see what the future holds.
By Peter Stocks, Managing Partner, Baxi Partnership
This article was published in Pioneers Post on 28th March 2013.
 Making it Mutual: The ownership revolution that Britain needs. Published by ResPublica.