Management theory and employee ownership

So, today, 4 July, is Employee Ownership Day. It’s the UK’s first annual celebration of employee owned businesses, led by government with support from the mutual sector.

It’s aim is to raise awareness of the employee owned business model which is already quite sizable, turning over around £30 billion and accounting for around 3 % of GDP.

There are pros and cons to ‘days’ like this. But one thing is for certain, now is a time to highlight the benefits of employee owned businesses.

A quick overview of recent management and businesses thinking (from people like Gary Hamel, Linda Gratton, Michael Porter, Bo Burlingham and others) brings to light some key ideas that are coming to define the way we think about, and do, business:

  •  To be productive, a business doesn’t just need good processes – it needs engaged employees who care about the business and share its vision
  •  As employees’ expectations change, leaders need to be adopt a more collaborative and participative style
  •  Innovation and product development should be welcome not only from the management and R&D  teams, but also from the wider workforce who have ideas and experience others don’t
  •  Long-term sustainability comes from putting the interests of stakeholders with an interest in the future of the business at its heart – the employees are the most significant stakeholders any business has, in this respect

Although it’s not said often enough, it’s blindingly obvious: employee owned businesses put these and many other new management ideas into practice, and have been doing for years.

Workshops and artists

A review of The Craftsman by Richard Sennett, 2008

Richard Sennett’s ‘The Craftsman’ is not a management or business book in any conventional sense. It reflects on the history, sociology and philosophy of what a craftsman is. It doesn’t claim that it can revolutionise your business, or offer easy solutions.

But it does provide a thought provoking argument about the importance of teams and co-operation in the workplace.

Sennett begins by pointing out, through detailed analysis, that a functioning workshop is a place where a team works together under the leadership of experienced masters who pass on their skills and knowledge, developed over time, to their apprentices.

And this, of course, applies as much to medieval goldsmiths as to nurses or computer programmers – working units where teams specialising in an area work closely and learn together.

Sennett then goes on to look at some of the benefits of workshops, drawing them out through an analysis of the difference between the lone artist and the craftsman in the workshop.

Sennett says that the two are distinguished by three things:

– By agency: the work of the lone artist is guided by that one person’s ideas and drive, whereas the workshop is guided by the acquired history, skills and knowledge developed by the master and shared collaboratively with the team.

– By time: artists have a flash of inspiration, it’s intuitive, not tested, whereas workshops craft products that have been developed and passed down over hundreds of years, doing the work slowly and carefully.

– By autonomy, but surprisingly so: the lone, original artist has less autonomy, is more dependent on the whims and fancies of funders and customers and so is more vulnerable than craftsman who are working in a tried and tested area, with others who together can share ideas.

The individual artist has historically, and is today, elevated above more common place crafts. Craft is viewed as unoriginal, somehow less valuable than art. And in the modern workplace the sudden bursts of creativity of an individual are celebrated above team crafted products.

But what is clear from Sennett’s analysis is that the more durable framework for a sustainable business is the workshop, where the workers work together, develop common and enduring skills in similar areas, rather than competing on who can be the best and most successful, creative individual. Let’s look at the distinguishing features again:

– Agency: in a workshop, it’s the team as a whole through close working and engagement which develops ideas or products, rather than one or two people, meaning that it’s better tested, understood and supported than those developed by a striving, competitive executive or individual.

– Time: new ideas or products or strategies are developed based on experience, testing what works, not a sudden burst of inspiration by an individual aiming for a bonus

– Autonomy: members of the team have a sense of control over their part of the work, stability and confidence that they will have employment in the future and so feel a much bigger commitment to the organisation than a group of individuals competing against one another for promotion or demotion.

We sometimes hear in management theory and business that individual competition rather than collaboration most effectively motivates people to work well.

But what’s clear from Richard Sennett’s analysis is that the successful, sustainable business provides, to some extent, a structure to engage and involve teams, enabling them to spend time learning and developing tested products, rather than a structure where individual creativity, inspiration and action is rewarded.

The examples he cites are Japanese factories, but you might also mention Gore, Nokia, John Lewis, Google . . . The examples of the importance of the craftsman and workshops to business success are everywhere and growing.