‘Com­pany prof­its have more than dou­bled in the four years since EO’

The Herald Business - - Knowledge For Growth -

DICK PHILBRICK not only suc­cess­fully steered his own com­pany Clans­man Dy­nam­ics into em­ployee own­er­ship (EO), he now has a role as an Am­bas­sador of CDS, shar­ing the ben­e­fits of the busi­ness model with oth­ers.

He says: “I can of­fer to talk to any com­pany or in­di­vid­ual who is at all in­ter­ested in the idea of EO. They can come to Clans­man to see EO in ac­tion and dis­cuss how we did it. This is as­sisted by shar­ing our ex­cel­lent fi­nan­cial re­sults and ex­plor­ing the dramatic change in at­ti­tudes since we made the change.”

As man­ag­ing di­rec­tor of Clans­man Dy­nam­ics, Philbrick has seen his East Kil­bride-based com­pany, which man­u­fac­tures ro­botic foundry han­dling equip­ment, build an en­vi­able in­ter­na­tional client list. He de­cided to pur­sue em­ployee own­er­ship in 2009.

He re­calls: “I be­lieved that Clans­man was a healthy busi­ness with a good fu­ture and that it could pro­vide a pen­sion for me and a good in­vest­ment for all the em­ploy­ees over the com­ing years – it’s al­ways good when there is self-in­ter­est on both sides!

“I also be­lieved that em­ployee own­er­ship was a much bet­ter al­ter­na­tive than a trade sale to a com­peti­tor who might make warm noises and then move the busi­ness away, as hap­pens so of­ten.”

Philbrick and Clans­man were helped by CDS in the tran­si­tion. Philbrick says: “CDS in­tro­duced me to other com­pa­nies who have made the change and gave a pre­sen­ta­tion on EO at­tended by some of our em­ploy­ees – this gen­er­ated great en­thu­si­asm.”

Philbrick has since seen ma­jor ben­e­fits for him­self, the busi­ness and the em­ploy­ees.

“I’ve now been fully paid out and the em­ploy­ees have all re­cov­ered their in­vest­ment in Clans­man and a lot more,” he says. “All are now be­gin­ning to get a real un­der­stand­ing of our busi­ness and of just how many is­sues are not sim­ple black and white but grey. There is now a tre­men­dous level of par­tic­i­pa­tion in our com­pany meet­ings – from young and old, se­nior and not so se­nior.

“For me it is sim­ple – if I pre­fer to know what is hap­pen­ing, how much money is in the bank, who is not pay­ing and why etc, then there is a very good chance that all will feel more con­fi­dent and se­cure if they know what is hap­pen­ing – and that is how it’s turned out.”

For Philbrick, the equa­tion is sim­ple: if you have a mean­ing­ful stake in some­thing, you will want to be­come more in­volved.

He says: “Our prof­its have more than dou­bled in the four years. Em­ploy­ees are now mak­ing decisions for the long-term fu­ture of Clans­man and not for short­term Porsches to­mor­row. More tech­ni­cal de­vel­op­ment is go­ing on now.”

In a wider con­text, Philbrick be­lieves the EO model brings ben­e­fits to Scot­land. He says: “The EO struc­ture re­sponds to that quirky Scot­tish I-don’t-like­be­ing-told-what-to-do tem­per­a­ment. It glues the busi­ness to Scot­land be­cause that is where the em­ployee share­hold­ers work and want to live.”

With his Am­bas­sador head firmly on, Philbrick is keen to ar­gue the ben­e­fits of the EO model to any­one con­sid­er­ing the change for their own busi­ness.

He ad­vises: “If your busi­ness is healthy and if your em­ploy­ees un­der­stand this, work out what you need to get as a to­tal pay­ment for the busi­ness and work out a deal that al­lows your em­ploy­ees to buy without tak­ing on large debts.

“If the busi­ness is not healthy, em­ploy­ees will not want to buy. If it is healthy, you can af­ford to make the deal pos­si­ble by grant­ing ‘soft’ pay­ment terms and still not be tak­ing a large risk.

“And, if you can do that, you’ll be do­ing a great thing for the qual­ity of lives of your em­ploy­ees. It’s a model of own­er­ship for solid, long-term busi­ness de­vel­op­ment.”

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