What does it mean to be an employee-owned business?

We are proud of our culture

We are proud of our culture and values at Clarasys. We, as teams, deliver excellence, trust underpins everything we do and we help each other grow. We can be who we want to be at work, with beautifully different perspectives and have the humility to reflect and learn, have courage to do the hard things and own our impact. We love our work. And while many organisations say they put clients and people first, the same organisations are ultimately answerable to their shareholders. For these companies, compromise and conflict can be a reality. For us, a majority employee-owned company, it’s very different.

Clarasys was founded in 2011 by Matt, Claudia, and Chris,

who had a vision of a different type of consultancy. After years of working for companies that didn’t look after their staff, offered minimal training, and needlessly upsold to clients, they were disillusioned. So, they got to work drawing up a vision for the type of business they really wanted to work for.

The company they envisaged was one that made the right decisions for its clients, looked after its people, offered coaching and training, promoted collaboration, celebrated small wins, encouraged enjoyment at work, empowered people to make the right choice, encouraged people to admit failures to allow others to learn from.

The vision became a reality, and from day one it was built on the proviso that, in the future, the directors would step aside to allow new talent to come through and help build on the foundations they had laid. There was one more caveat. Fundamentally, they wanted to ensure the business stayed firmly committed to its founding principles and culture they had created.

So, in 2018, to help cement those principles and enable the future of the company to remain people focused, our three founding members sold a majority of their shares. Not to another company that might slowly chip away at our culture, but to the Clarasys Employee Ownership Trust which was set up to own shares on behalf of employees. This Trust is the custodian of our culture and makes sure the company operates in the best interests of the entire team.

Employee Ownership Trust

I think of the Employee Ownership Trust as the equivalent of the House of Lords or the Supreme Court. It’s the gateway that protects our company culture.

There are three members on the board of trustees. An elected employee representative, one of the original shareholders, Claudia, and an independent representative – Pete Daykin, a talented entrepreneur filled to the brim with energy and good ideas, and most importantly really gets our business.

Together, we work with the Clarasys board to make sure Clarasys makes the right decisions.

Becoming an employee-owned business

Typically speaking, businesses that decide to become employee-owned often need to make considerable internal changes to the way they operate and to their culture. Being employee-owned effectively means every member of staff becomes an owner of the business, which means they have a say in the way it is run. For many companies, this means mechanisms need to be put in place to enable this and behaviours need to shift.

But Clarasys was different. Our business was already non-hierarchical, and decisions have always been made by the people best placed to make them, not just defaulted to a ‘management team’. We’ve always put people before policy, and from the get-go, we’ve all been empowered to make the right decisions. A great example is expenses – we have a ‘red-faced’ policy – if you feel you can justify an expense to your colleagues without getting red-faced, then go for it – no need to check another policy document or seek approval from someone more senior.  We trust our people to make the right decision, instead of assuming they won’t, and so don’t need to govern and manage with complex processes. Another thing we’ve done from the start is transparency around our numbers and the performance of the business; this information has always been shared with the entire company and discussed in the round. So, the leap into employee ownership wasn’t huge for Clarasys.

Benefits of being employee-owned

There are many benefits to being employee-owned, but perhaps the biggest one for me is we are all treated as equal voices, with no hierachy seen in other organisations – we all have a say in the business as we are all owners. In addition, we don’t have arbitrary revenue or profit targets set for us. This means we are masters of our own destiny when it comes to deciding what type of work we want to do, and means we can offer more pro bono work than other companies. This feels really empowering.

Employee-owned companies are often more competitive and sustainable and benefit from having high standards of employment and corporate responsibility. We believe that trust and transparency are the key building blocks that enable people to act as owners of any firm. Our 79% employee satisfaction rate speaks volumes. Employees also benefit personally from an annual income tax-free bonus of up to £3,600 (NI applies).

From a day-to-day perspective, employee ownership is a kick up the behind to make us all act like business owners and make decisions that benefit the organisation and fellow employees. We have created an advisory board, which is made up of people from across the business and acts as a focus group. This is useful for people who are on the fence about a proposal and means they can approach the advisory board for a steer.

The future for Clarasys

So, what is the future for Clarasys? We have every intention of becoming 100% employee-owned over the next few years, and whilst that won’t make a material impact on our culture or day-to-day working, it does pose an interesting question about the role and makeup of the Clarasys Board. We’ve got time to think about that, but one thing is for sure, the entire Clarasys workforce will have a say in the direction the business takes.

Want more?

READ: How do you create a culture that engages, satisfies, and empowers employees and customers?

READ: What makes Clarasys one of the best companies to work for?

READ: Flat hierarchy: what it means in practice

This post was originally written by: Oli Rodi