Carole Leslie

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  1. Enterprising Scotland : for the long term

    May 22, 2013

    I was privileged last night to be invited to the Glasgow area meeting of the Institute of Chartered Accountants for Scotland to hear John Anderson of the Entrepreneurial Exchange. What an inspirational speaker! John, an accountant to trade, described how he developed a passion for nurturing entrepreneurship, and the measures his organisation put in place to build an entrepreneurial culture in Scotland.

    John doesn’t think our young people are the “lost generation”. It’s their parents who lost their way. Overly reliant on public sector or large corporate employers, ambition was stifled. Entrepreneurs were viewed as Arthur Daley type characters – not a role model to aspire to. For the good of Scotland’s indigenous economy, this had to change.

    Working with US business guru Rosabeth Moss Kanter, John saw the need to o get a real understanding of what makes an entrepreneur. The result of this was “Local Heroes” – a study of Scotland’s successful business leaders. Interestingly, few were graduates. Many had held sales roles within corporates, and started a business in the belief they could do it better. Having profiled these individuals, the challenge was to make entrepreneurs heroic.

    John’s vision was of an “Entrepreneur Eco-System” – a self sustaining infrastructure that would breed, nurture and support successful business. Education is central to this, and John described a primary school where the P7s not only initiated and ran their own social enterprise, but also had succession planning in place to hand over to the P6s! The Young Enterprise Scotland programme gives many young people a taste of running a business, and many universities have programmes in place to foster entrepreneurship. Some local authorities see entrepreneurialism as the key to unlocking potential in our non academic young people and John mentioned Renfrewshire as being particularly proactive. John observes that there is good support out there for pre start and startup business, and would like to see more for growing businesses. The Scottish entrepreneurs who comprise the Exchange’s Hall of Fame are testament to the quality of business in Scotland: Charan Gill, Maitland Mackie, Michelle Mone…it’s a long and varied list.

    This is all great. Scotland has a vibrant enterprising economy with many examples of successful growing businesses. The elephant in the room remains. What happens next? When these entrepreneurs and families sell on, many of these firms will leave Scotland, taking the jobs and skills and wealth with them. The Entrepreneurial Exchange is doing fantastic work in creating a prosperous Scotland. We have to find a way to root these businesses in our economy ensuring a better future for generations to come.

    Selling to employees as an exit option is one way to deliver this sustainability. Many of Scotland’s employee-owned businesses are demonstrating stellar growth driven by entrepreneurial employees. Should we be making employee ownership “heroic” and putting more effort into embedding collaborative working into the curricula of schools and colleges? As John told a captivated audience last night, Scotland is in a better place now than 30 years ago. I see the challenge as making this success sustainable.

  2. The danger behind “Shares for Rights” proposal

    May 1, 2013

    Many of us in the employee ownership sector are rather bemused at the government’s intent to push through the much decried “Shares for Rights” legislation. This is a proposal in the Infrastructure Bill which creates a class of employee where certain employment rights are compromised (e.g. on redundancy and dismissal) in return for a negligible shareholding in the business. The government’s own consultation was dismissive of the idea, and the House of Lords rejected the idea on the first two readings, with an eventual passing last week. I was with one of Scotland’s leading lawyers last week who dismissed the notion as “irrelevant” -take up will be less than negligible. There might be a limited application for small high tech startups, but the reality is that models already exist which fit with these organisations which are probably more tax effective.

    I agree with almost all of that. There is little danger that hundreds of employees will lose employment status in return for shares which might be worthless because the policy won’t get off the ground in the first place. A non event? Yes. Irrelevant? No.

    The idea came from nowhere at a time progress on employee ownership was gathering pace. Following a comprehensive consultation, and led by expert Graeme Nuttall, the Nuttall report had been published in July making many recommendations to promote the employee owned business model. “Employee shareholder status” was not one of them. In April this year, the Chancellor announced a £50m annual budget for the development of employee ownership. Some of this money is to be allocated to tax incentives for owners who sell to their employees – a policy we have been pushing for a long time.

    The whole nonsense idea has at best been a distraction to much of the good work going on to promote a business model that is better for our economy, our communities and our workers. At worst, it has tainted employee ownership with the tawdry brush of exploitation. Employee owned businesses tend to be better employers, with enhanced terms and conditions in comparison to conventionally structured firms.

    “Shares for Rights” is not employee ownership. It is far removed from what our growing sector is trying to achieve. Let’s put the idea to sleep and focus on positive moves that will create and sustain good jobs and shared wealth.