This week, I welcome Chris Budd back to the show.
Chris has recently put his business, Ovation Finance, into an Employee Ownership Trust, a fantastic way of creating sustainable businesses owned by the employees.
We talk about the process Chris went through and the book he’s written on the subject, The Eternal Business.
Welcome to episode 186 of the Marketing and Finance Podcast.
What you’ll hear about in this episode
- How the Employee Ownership Trust model works
- The four stages of building a sustainable business
- Setting up collaborative decision-making
- How ‘the flag in the ground’ concept helps employees
- Who the Employee Ownership Trust model is for
- How the model benefits consumers – the John Lewis effect
Who is Chris Budd?
Chris has worked in the financial planning industry all his life.
Seven years ago, bored and trapped in his business, he started trying new things and being more creative. He wrote novels, played in a covers band and changed the business so he was the least important person in it.
This culminated in selling it to an Employee Ownership Trust.
He works now as a consultant and a writer of business guides. He has followed his first book, The Financial Wellbeing Book, with a second: The Eternal Business, about a different way to build a sustainable business.
Summary of our chat
The shares in the Employee Ownership Trust won’t get sold, so the beneficiaries are the employees, who get the profit. The focus moves from increasing share prices to long-term, sustainable profit. The business owner sells their controlling interest to the trust, who receives the future profit and pays the owner out over time. Chris identified four stages he considers vital for a sustainable business:
- ‘The flag in the ground’ is the sense of purpose and the why.
- ‘Collaborative decision-making’ is ensuring every employee has a say in what happens.
- ‘Engaged employees’ includes a combined career and financial plan to help them develop.
- An ‘ownership model’ allows you to walk away but the business keeps going.
Collaborative decision-making is a culture shift for a business, but it’s better than death by committee. There are other ways to organise companies and they don’t need stereotypical bosses. Employees need to have a say and a way to be heard. Chris set up working groups to administer budgets in different departments.
Chris says it’s tough to come up with their why, so he asks people to think about what a client might say, and why they’d choose them over a competitor. Defining values may alienate some people, and that’s fine. If everyone agrees with you, it’s not a sense of purpose.
The employee ownership trust model is ideal for owners who genuinely care about their clients and employees. They have a purpose and want to leave a legacy rather than the company disappearing when they leave. Building a business with an endpoint in mind should be fun and why they started in the first place. Consumers will have a different experience with a business run on an employee ownership trust model.
John Lewis adopted it years ago, and Chris says the staff are much more helpful than in other stores. They are more engaged and more invested in supporting customers.
Recommended business book
Chris recommends Reinventing Organizations by Frederic Laloux
and also Drive by Daniel Pink
Here are the books Chris has written.
Links and contact details
For more information about the employee ownership trust model, the Employee Ownership Association has a wealth of information on how to do it: . Chris recommends attending a regional meeting to learn more, and you can find details of the nearest meeting to you on their website. Chris also offers consultancy, although spaces are currently limited. His book will also soon be available as on online programme, with 12 modules to take you through the process to build a lasting business, webinars and blogs. The cohort option brings with business owners at a similar stage for a quarterly, facilitated day session: www.theeternalbusiness.com
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