How to make 400 ordinary people into millionaires


Corporate videos generally should be taken with a pinch of salt, but this one carries the ring of truth. WinCo is a supermarket chain that is owned by its 15,000 employees, many of whom have become millionaires. See the article at http://www.ryot.org/winco-foods-grocery-employees-millionaires-walmart/883593, which says “according to Forbes, WinCo has more than 400 front-line employees — cashiers, shelf-stockers, clerks, and others — who are already millionaires.” Employee ownership is one of the very few avenues to address the accelerating growth in inequality. And at the same time it transforms the working lives of ordinary people, and the experience of their customers.

Strengthening Democracy

StrengthenDemocHeaderThe first of four workshops was held recently in Glasgow, in the Scottish Universities Insight Institute, on the theme of Strengthening Democracy. The key topic was to look at the ways that employee ownership strengthens democracy in the communities around the employee owned firms. David Ellerman opened, with a survey of his search, when he was a young philosopher, for the intellectual basis on which capitalism is founded. He was at that time (1960s) convinced that capitalism was by far the best system in the world, and so set off on his quest for its philosophical foundations with some confidence. However, what he discovered was that there is no valid basis for the key relationship on which our current system depends: employment. Examined dispassionately, the employment contract is a fraud – a way to remove from people the wealth that they create through voluntary cooperation with their work-mates; and to force them into a subservient role instead of acknowledging their autonomy. By contrast, when a company is owned by its employees the business consistently outperforms similar businesses conventionally structured. Why? Because people cannot give up their autonomy, and when they are forced in the conventional employment relationship to pretend to do so, they perform less well: they don’t identify with the business to anything like the same extent, and so they don’t think about it, they don’t feel so confident, nor so cooperative, they end up competing with their colleagues for hierarchical position instead of cooperating to innovate. There is overwhelming evidence that employee-owned companies are more productive, and the reason is that they treat people as the partners they actually are, whatever contracts they have to sign to get a conventional job.

A Case Study: Employee Ownership worked, IPO led to failure, and why

Download the ‘TR-Inveresk’ pdf file to read the case study:

TR Inveresk

Productivity: The Employee Ownership Effect

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.

 

Kindle Version of ‘Local Heroes: The Liberation of Loch Fyne Oysters’

LocalHeroes eCoverThere 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.

Caring for Old People – or Bleeding them Dry

CaringForOldWhen financiers take over businesses, customers need to watch out. Look at Southern Cross. Rather than improving the care of the elderly residents of their care homes, Blackstone manipulated the financial structures and arrangements to extract over £1,000,000,000 – a billion pounds – in cash. The result? Suffering for the old people.

By contrast, when employees take over the company where they work, they strengthen the services, and invest. Sunderland Home Care, Highland Home Carers, Stewartry Care and several others are among the top rated carers for old people. In each case, the care is delivered by people who share in the ownership of the business. And in child care, the same story: by far the best provider of children’s nurseries in England is Childbase Partnership – owned by its employees.