Giving staff a slice of the pie is one proven method of encouraging people to commit to excelling in their own performance and enhancing the success of the organisation they work in. Sharing ownership of a business across the employee base is one of the most reliable methods of motivating your team and encouraging success.
In the commercial world there are many examples of profitable businesses that perform exceptionally, where employee share-ownership is at their heart. Within our sector, Child Base endeavours to lead the way in engaging employees in share-ownership. Over the years, Child Base has transformed its ownership structure away from one where the company was predominantly owned by its founders, to the position today, where Child Base is mainly owned by its staff.
Since the company's inception 20 years ago, the Thompson family, who started Child Base, have always been firmly committed to the idea that everyone who works for the business should share in its success. The goal has always been to build a culture where everybody contributes and everybody benefits. One of the ways of engendering this is to allow the team to be formal stakeholders in the business by owning a piece of it. As soon as it became practicable, an employee share-ownership plan - which gave qualifying staff the opportunity to buy shares at a discounted price, or even receive them for free - was introduced.
Success - both operative and commercial - is a prerequisite for a company to be able to offer free or discounted shares to its employees. Without a successful operation you cannot achieve a commercially robust business. As a result, teams understand that their opportunity to profit from a business's success depends on their ability to deliver a service that is in demand. When it is looked at in these terms, people easily recognise the importance of their own contribution. This is the most powerful incentive to deliver the highest levels of service possible and to truly behave as part of a team.
How employee ownership delivers
There is a wealth of independent data that details the success of employee-owned companies. In one survey of co-owned businesses, 72 per cent of respondents reported that staff worked harder, 81 per cent said staff willingly took on more responsibility, 49 per cent agreed that their competitiveness was enhanced, and 44 per cent stated that profits were higher. Of equal interest, when it comes to the all-important share price, the Employee Ownership Index (EOI) consistently out-performs the FTSE all-share index. In cash terms, an investment of £100 in the EOI in 1992 would have been worth £349 by June 2003, while the same investment in the FTSE all-share index was worth £161 over the same period.
As companies become more successful they are more able to share the fruits of that success, and I like to think that Child Base is a worthwhile example in our sector. As financial performance improves, the benefit is shared around the business. Child Base is able to invest in the share scheme and support its wider distribution among the team. Last year, it was also able to commit significant resources across a wide-ranging training programme for its people, extending the support it is able to give them to grow as professionals and individuals.
Within its wider operation, there is evidence that creating a culture of shared success works. Child Base is the only childcare company in The Times Top 100 companies to work for. It won the Sunday Times 'best company' award for training and development, it reached the City & Guilds awards Top Five companies of the year, and it has won four national training awards. Child Base was the first childcare company to achieve British Standards (BS5750), and the company has been an Investor in People since its introduction to the sector. Staff turnover is currently running at an industry low and average occupancy levels are solid.
Most important, the notion of shared success among the team is reflected in day-to-day practice and in the consistently high level of care provided across the nurseries, and this is borne out by independent review. Nearly 20 per cent of Child Base's Ofsted ratings are 'outstanding', compared with the national average of just 2 per cent.
Shared success starts and ends with the whole team. It is about the effort extended by everyone across the entire business, all the way from top to bottom. It is about recognising in the plainest terms that 'everyone contributes and everyone benefits'. Ensuring that everybody has the opportunity to be recognised and valued for their contribution is not something we should just talk about within the childcare sector - it is something we must act on.
There is evidence that this strategy works to deliver what we all truly wish to achieve - a service of which we can be proud, a career of first choice for its workforce, and a first-rate service on which parents and carers can rely.
