Making it mutual is a timely and thought provoking collection of 40 concise essays on mutual (including employee ownership) business models. As I said at the launch event in the House of Commons, this is an amazing resource - it helps answer the question "What Does a Mutual Economy Really Look Like?"
These essays consider the impact of mutuality and co-operation on society and business generally, and on the retail sector, banking, financial services, energy, infrastructure, culture, health and social care, education, local councils and housing. They include the case for a new national co-operation policy (The Case for a Co-operation Policy by Ed Mayo) and cover speculative topics such as Mutual Rail Companies: A key to unlocking a rebalanced economy (George Freeman MP), Mutualising the BBC (Dame Tessa Jowell MP) and Mutual Prisons? (Cliff Mills and others) and case studies including success stories from Field Fisher Waterhouse LLP clients such as City Health Care Partnership CIC: Health Care Mutuals – a view from the frontline (Andrew Burnell) and Sunderland Home Care Services: The case for expanding mutuality in social care (Margaret Elliott).
Phillip Blond, Caroline Julian and the rest of the team at ResPublica have got their timing right. There is increasing recognition that conventional solutions are not always fit for purpose. The FFW tax and structuring group has long recognised that one size does not fit all. Sometimes, so-called, alternative business models work best, including models where consumers, employees or both own all or a significant part of the business. But few are aware of this simple truth. This is why the by-line of ResPublica's essay collection is "The ownership revolution that Britain needs" and why Charlie Mayfield's contribution to the essay collection is called Achieving the Economic Benefits of a More Plural Economy.
The Government is alive to the need for change. In his recent Oakeshott Speech, the Deputy Prime Minister, Nick Clegg confirmed "We know our economy needs to be rewired to properly assess and share risk, to properly motivate and reward workers and to think for the long term". He welcomed progress on the proposed new cross-sector Institute for Mutual and Employee Ownership to promote employee, mutual and co-operative ownership. Department for Business, Innovation and Skills (BIS) Minister Jo Swinson, said that “The evidence shows that employee ownership can make an important difference in building a stronger economy and a fairer society.” Cabinet Minister Francis Maude also makes it clear in his Foreword that "There are clear advantages to diversifying ownership and freeing people to work together, for each other and for their communities". In particular, in relation to the public sector, "The evidence is clear; mutuals raise productivity by unleashing the dedication and innovation of frontline staff" and more generally "The conditions are right for a resurgence of co-operative, mutual and reciprocal activity".
Public service mutuals feature strongly in Making it mutual. Professor Julian Le Grand's essay The Public Service Mutual: A revolution in the making? explains that "experience indicates that public service mutuals are generally staffed by knights rather than knaves" meaning "Mutuals can be trusted to perform well in the delivery of public services, both because of their staff motivation, and because of the freedoms they give to staff to exercise that motivation".
There are so many good points made in this essay collection. One of these, concerning how best to achieve employee engagement, is at the heart of Ruth Yeoman's essay Governance and Voice: How mutuals and employee-owned businesses create stability, resilience and legitimacy. She explains that "As part of their change agenda, many organisations seek to create high performance work systems (HPWS) which elevate levels of employee engagement, but fail to sustain such systems because they do not pay attention to a shared sense of legitimacy, grounded in mutual entitlements and obligations". Mutual and employee ownership offers a solution because "co-ownership enables workers to share in making the rules which govern the form and implementation of high performance work bundles, generating higher levels of trust as a result of perceived fairness. Furthermore, since they will be reaping the rewards of their own efforts, workers will have new and motivating reasons for the expenditure of discretionary effort."
Making it mutual also highlights the benefits of employee ownership. In keeping with the growth of Government policy on employee ownership Iain Hasdell, Chief Executive of the Employee Ownership Association (EOA) explains why Employee-ownership is our Industrial Future. He writes that "Employee ownership is now the most prominent and popular alternative to conventional forms of business ownership in the UK ... It is currently growing at an annual rate of around 10%". An Employee Ownership Impact Report published on 28 March 2013 by the EOA calls for a threefold increase in the value of employee owned firms to UK GDP by 2020.
The essay Seizing the Decade for Employee Ownership provides an update on progress since the Nuttall Review and challenges all those interested in growing employee ownership to concentrate on implementation: they need to recognise just how well ideas coalesced in 2012, understand what was achieved and build on this, rather than go back over old ground. Employee ownership in private companies has moved from a lobbying topic into Government policy. This means old priorities and concerns can be forgotten. Instead, a new mindset is needed, one aimed at effective and timely implementation.
Mutuals are not the answer in every situation but they have much more to contribute to the UK economy than they currently do. Making it mutual sets the scene for both broader debate, and for action, especially in relation to implementing the recommendations of the Nuttall Review.
Making it mutual - The ownership revolution that Britain needs (ResPublica, 2013)
Tags: francis maude, jo swinson, john lewis partnership plc, nick clegg, nuttall review, robert oakeshott