How plural-owned businesses can create a stronger and fairer economy
For more than 30 years, Scottish Enterprise has been working with companies to help them evolve. Recent events have made people realise we need a different approach to business to ensure everyone has the chance to grow and take on new challenges in the workplace.
Clare Alexander, Scottish Enterprise’s Head of Co-operative Development Scotland, has been heading the adoption of co-operative business models throughout the pandemic and has seen real success stories. “I genuinely believe that plural ownership – in the form of employee ownership, community ownership and consortium co-operatives – will play a key role in achieving a stronger and fairer future economy,” she says. “The economic and social potential of community business is significant and could be more widely adopted in Scotland.”
Alexander says there are different ways to introduce plural ownership: one is an employee-owned business, where the employees hold the majority of shares, either directly or through an employee ownership trust. Selling to employees allows owners to manage their exit and achieve fair value while preserving the company’s long-term future.
Growth during the pandemic
Scottish Enterprise’s recent research into the resilience of employee-owned companies during the pandemic found that a firm displaying a significant focus on people, job security, health, equality and wellbeing led to increased business turnover and improved staff retention at a time when many businesses have experienced the opposite. In research carried out by the University of St Andrews on behalf of Scottish Enterprise, over half of those surveyed experienced growth during the pandemic.
Further research also identified concern around the closure of local amenities such as shops and pubs. Co-operative models can help to address those concerns through their ethos and structure. “Setting up a community co-operative can be an effective way for people to safeguard public services, for instance, by coming together to take over a local shop or pub and prevent it from closing, which has real relevance in our current climate,” Alexander explains.
“Community businesses can have a significant positive impact on areas whether they provide a local service, deliver economic growth, or contribute towards the health and wellbeing of the local community – often all three. They’re important to the economy because they can retain jobs, bring economic opportunity and retain vital services and amenities.”
Collaboration should be a priority
According to the research, 33% of Scots say working collaboratively with other businesses should be a priority. Scottish Enterprise advises business owners to consider the advantages of formally joining together via the consortium co-operative model. These are established when businesses come together for a shared purpose: to buy or sell in scale, market more effectively, share facilities or jointly bid for contracts.
“Collaboration has been a vital part of the response to the pandemic, so formalising a consortium co-operative could be an effective, low-risk way for businesses to improve market presence and achieve new goals while retaining their independence,” says Alexander.
No matter the business model or preferred way of working, any successful business thrives on having a motivated workforce. Leaders must invest the effort to build workplace morale. Communication is key. If staff know that they are valued and supported, it will be pivotal to their wellbeing. Scottish Enterprise is expert in helping businesses, big and small, communicate with staff, improve working environments and support teams.
Read more about the support and funding available from Scottish Enterprise.
This blog is one of a series of articles from our commercial partners.
The views expressed are those of the author and not necessarily those of ICAS.
