CEOs have had to think long and hard this year. They have discussed the finances of their companies with board members and reached decisions that have changed lives. There is no right or easy way to adapt to a new or significantly changed economic environment.
The toughest decisions take courage. Management teams must have the courage to stick to their principles even during the lean times. Belief in what you know will always work better than a flash decision to follow the route of a rival.
Five years ago, I started the first employee owned company from start-up in Scotland with my two fellow founder directors. Accord, a hydrocarbon accounting firm, was the result of our long-held ambitions to break away from industry norms and use a powerful model to shape a successful business.
As the third annual Employee Ownership Day approaches, the number of employee owned companies in the UK is 164 and increasing by almost ten per cent every year. The model means greater control in the hands of employees. For me this is a proven way of enhancing genuine connections between employees and the company, handing colleagues licence to strategise and create ideas to boost revenue.
The oil and gas industry has faced one of its greatest challenges over the last 12 months. At Accord, our employee ownership model remains at the core of everything we do. As many companies in the supply chain battle to find a very personal solution to industry wide problems, I believe the model’s underlying philosophies can be adopted by any business without wholesale change. A business does not have to be employee owned to communicate effectively with staff.
The power of people is both the engine room and the creative flair of a company. Handing control to the employees through greater engagement is beginning to show its merits on a large scale basis. UK internal communications body Melcrum recognised building society Nationwide in 2014 after it saw a 113% improvement in profit after empowering its staff to take the initiative.
Prior to implementing a new employee engagement regime, the firm reported that 61% of staff knew how they contributed to the business’ success. Five years later the figure was above 90%.
Introducing a new initiative is easy, encouraging staff to think differently is challenging. Some people come into a business used to rigid structures and orders from above. Generating their own workload and contributing to wider growth through ideas generation can be new concepts. Effective management should inspire confidence and the freedom to create. A more engaged employee is happier in their role and outwardly positive. This results in business success.
Two way communication between employees and employers increases knowledge and understanding. Regular staff meetings, social gatherings and shared learning can become part of the culture. Employees have more responsibility, while employers embrace the ideas such power generates.
I recently spoke at the Scottish Government’s National Economic Forum in Dundee, where I highlighted aspects of our business that are in the hands of employees. Accord staff control their personal development and have their own annual budget of £1800 to spend on the training they want. This helps to grow their skills which can be fed back into the business and broadens the overall capabilities within the company. We rely on all of our people and they can rely on Accord supporting them in their growth.
Employees are typically hired with the long-term plans of a company in mind. It is important that their aspirations are matched with the objectives of the business and that they play a part in key decisions. Our employees decided how bonuses should be paid and made their colleagues aware of how they see the business growing in line with their own goals as part of a recent away day. Our people are involved because they matter and because it is the right thing to do.
All business managers can make these breakthrough links. Ask your colleagues to think of ways to improve the offering to customers, undo the culture of ‘that’s not my job’ and be open to new ideas by sharing your plans for the future. You’ll be surprised by the results that come from those closest to the business.