Download the ‘TR-Inveresk’ pdf file to read the case study:
Productivity: The Employee Ownership Effect
This case study tells the fate of two paper manufacturers in Scotland. They were similar in every way except one: their ownership strategies. Inveresk carried out an MBO – Management Buy Out – and then floated their shares on the stock exchange. Tullis Russell chose an EBO – an All-Employee Buy Out. Inveresk, which started well ahead in terms of productivity, slowly declined and eventually went bust. Tullis Russell’s employees – who all together had control of the company – increased their productivity dramatically year after year after year, as shown in the graph. Yet again, employee ownership showed itself to be better for all concerned than the plc-Stock Exchange route, which extracts wealth instead of building it.
Peasants of old right across Europe, and doubtless in most other parts of the inhabited world at the time, were ruled by rich and powerful lords and knights and bishops. And how did the lords and knights and bishops become rich? By taking stuff from the peasants they ruled. And when they wanted more, they took more. If the peasants objected they were thrown into prison, tortured and executed, often publicly, to encourage the others to be more obedient.
There is a new, cheaper version of the book originally published by Penguin as ‘Local Heroes: How Loch Fyne Oysters Embraced Employee Ownership and business success’. The new version looks like this, and is renamed ‘Local Heroes: The Liberation of Loch Fyne Oysters’.
The book tells the exciting entrepreneurial story of how this sustainable seafood company was founded and built, against the odds, in the wilds of Scotland. On the death of one of the two founders, the employees won control of the company in the teeth of other potential buyers. The employee-owners then worked to make a success of their business, and achieved huge uplifts in productivity.