Quintessa has been employee owned since its inception over 20 years ago, and since 2014 has been wholly owned by an Employee Ownership Trust. For many people, their only direct experience of employee ownership is shopping in Waitrose or John Lewis. But what does employee ownership really mean for a company like Quintessa, and how do our employee owners balance being an employee with the responsibilities of being an owner?
First, a bit about the employee ownership model used at Quintessa. We have a Company Board and a Managing Director who have ultimate responsibility for the day-to-day running of the company. Like many companies, the Board is held to account by its shareholders; but in our case the one and only shareholder is the Employee Ownership Trust. The Trust Directors are legally bound to ensure compliance with the Trust Deed, the main purpose of which is to guarantee that Quintessa continues as a “successful, independent and professionally managed trading enterprise with an Employee Ownership ethos”. In particular, this implies that Quintessa will not be sold to a third party, now or in the future.
The Trust Board is currently comprised of six members: two appointed by the Company Board; two elected directly by employees; and two external or independent directors. It meets twice a year and is involved in all decisions that require shareholder input such as the appointment or removal of Company Directors and oversight of the financial accounts. The Trust Board is not responsible for the management of Quintessa, but its directors may provide suggestions for the consideration of the Company Board, and indeed have proven to be a useful sounding board in the past.
Although employees at Quintessa do not hold physical shares in the company, the Trust ensures that the company is run for the benefit of the employees, upholding the vision of our Founder. This model allows those at an earlier stage in their careers to be part of that, which may not be possible with other models such as share options.
While the Company Board has the ultimate responsibility for the running of the company, in practice it delegates a very significant fraction of its responsibilities to the collective of employee owners. This means that all decisions other than certain legal, financial, insurance and employment matters are taken as a collective via 4-monthly management meetings, to which all current permanent employees are invited (and generally attend). This model works for us in particular because Quintessa remains a small company with a flat management structure, allowing everyone who wishes to do so to contribute effectively to discussions. A fundamental belief at Quintessa is that better decisions are made by drawing on the diverse knowledge and experience of all employees. Of course, to facilitate this the employees need to be informed and therefore all relevant company information (such as the financial accounts) is made available to everyone. Forward strategy, budgeting, recruitment and resource planning are all typical examples of collective decision making at Quintessa.
Less formal modes of engagement are also commonplace, such as feedback during appraisals, ad hoc one-to-one discussions with a director, and employee ownership “surgeries”. The surgeries are led by the employee-elected Trustees, one at each of our two sites, and provide a more relaxed format than management meetings for employee owners to voice opinions and concerns. Topics covered by surgeries have ranged from choices for office furniture to strategies for maintaining good mental health, and the agenda is decided by the employees.
Being an Employee Owner
What does this mean for an employee at Quintessa? How is it different to working elsewhere? A key value of our company is that we, the employees, are the primary asset. The company is run for our benefit, so that we (largely) get to do what we enjoy and are fulfilled intellectually, whilst making a living to support ourselves and our families. This means that, while profit is important (the company must be viable), it is not the sole driving force behind many of the decisions we take. As employees, we take comfort in the fact that Quintessa is very unlikely to be sold or consumed by another entity; knowing that redundancies will always be the very last port of call in a crisis; and seeing our own values and ethics reflected in those of the company. To a certain extent we are able to pick and choose the areas we pursue, and we work in a team of like-minded individuals (our Quintessa family!) who we trust and are supported by. This allows us to get on with our jobs in a very efficient and effective manner, without added pressures from external shareholders, resulting in a flexible and stable business.
This means that, as is the case for most other employee-owned businesses, we are more likely to stay at Quintessa for longer and tend to feel more appreciated, driving our motivation to produce the best for our clients. This does not come without cost, however; as employees we share responsibility for the company, and must participate and engage actively in decision making, ensuring we are aware of all the issues and contributing to both technical and non-technical areas – some of which may be beyond our comfort zone or outside our normal roles.
As owners, we need to think about things from a different perspective. Not only must we consider the longer-term when making decisions, but we must see things from the point of view of the collective, rather than the individual. This typically leads to better decisions, and makes it easier for us to make ethical choices, work collaboratively, and do business “the right way”. This is also appreciated by our clients, who can see that we care greatly about what we produce for them and are willing to take responsibility for it. Profit therefore simply becomes a consequence of doing enjoyable work; and we are rewarded by each receiving a share of that profit. Dividends that would normally be paid to shareholders become our annual bonuses, a proportion of which can be gifted tax-free via the Trust. We are also able to contribute a proportion of our profit to charities selected by the employees.
Of course, there will always be some downsides; perhaps we expend more resources making decisions than others, and sometimes it might be hard to find common ground resulting in compromise solutions that might not fully satisfy anyone. It may be difficult if your opinion differs from the majority, and decisions are not made in your favour. It is also possible to take employee ownership for granted at a company like Quintessa, where it surrounds us every day. Some of us may even feel so invested in the company that we possibly work a bit too hard! However, most of us feel that the advantages greatly outweigh the disadvantages.
A Balancing Act
Being an employee owner is a balancing act. What may be good for the company may not be good for you as an individual. Decisions need to be made about personal gain versus internal investment, prioritisation of profit-making or strategic tasks, and the level of commitment each individual is willing to make to the company. Room needs to be made for those who may be less vociferous, and those who might naturally lead may sometimes need to step back while others may need to step forward. There is benefit to be had from seeing arguments from all sides, and being accepting when things do not go your way. We are lucky at Quintessa that we have never had to face the most difficult decisions, when times are hard, and work is scarce – and we hope that we never do. However, we feel confident that our structure and ethos will help us get through anything, emerging stronger on the other side.
This article was produced with input from Quintessa's employee owners.