Our Interview with the HR Director at the 1:1 Diet by Cambridge Weight Plan
The following is the transcript of a fascinating interview conducted by Pam Anthony with Tyrone Douglas on Cambridge Weight Plan’s transition from a traditional company set-up to an employee-owned company:
1) What prompted the move from a traditional company set-up, to an employee-owned company?
“In 2009 our three Company Owners were retiring and considered various options for the existing business. They had bought the Company through a Management Buy Out (MBO) but a second MBO was not possible because the business had grown so substantially.
Various options were suggested by our company solicitors, and Employee Ownership came up as an exciting prospect because it would protect the employees and preserve the company ethos and culture.
The Employee Ownership Trust Model was chosen – similar to the John Lewis business model. In this indirect ownership model, 100% of all the employee shares are held by the Trust, meaning no individual in the business owns shares, however every employee has an equal stake in the business.
In 2010, CWP set up the Employee Benefit Trust and the Company bought 49% of the shares from the owners, secured through a bank loan. In December 2014, the remaining 51% shares were transferred and CWP became 100% employee-owned.
In June 2018 the complete bank loan was paid off ahead of schedule, and CWP Employees celebrated what we call ‘Financial Freedom Day’.”
2) Was it an ‘easy sell’ to your employees? Any doubts / reservations?
“At the start in 2010, when the 49% of the shares were bought – it didn’t make much difference, whilst the owners were still here. However, in 2014 – when the last owner, MD retired and CWP became 100% employee-owned, we had to re-evaluate what ownership actually meant for us.
We understood the employee ownership concept legally and financially, but culturally this was another matter!
The main thought was what would we do differently now that we were 100% employee- owned?
Our starting point was to conduct a Perception Survey: asking every single employee “What Employee Ownership means to them?” As part of this survey every employee had the opportunity to attend a workshop and have their say, we were then able to collate all the results and address any misunderstandings.
One of the findings was that employees found it difficult to be called an owner when they hadn’t paid for anything, in comparison to buying shares and obtaining a shares certificate. We therefore decided to call all staff ‘Employee Stakeholders’ (John Lewis ‘Partners’) and we issue everyone with an ‘Employee Ownership’ certificate, which has no monetary value but gives each Employee Stakeholder their individual recognition and gives everyone a voice and an equal stake in the business.
As ‘Employees’ we have different pay grades etc, but as ‘Stakeholders’ we all have an equal stake in the company and everyone has an equal say, which is a real mindset change. Transparency is key.”
3) What are the main benefits to the employees?
“There wasn’t much money to share in the early days as our main objective was to use profits to pay off the bank loan.
To encourage engagement, we started to define who we are by consulting with every Employee Stakeholder to define and agree who we are as owners.
For the first time ever, we had to decide what our Core Values should be, in line with the expectations of an Employee Stakeholder, and we defined 6 core values.
To further engage and empower our Employee Stakeholders, we set up 11 Voice Groups across the company – and this proved to be VERY engaging! Through the Voice Groups Employee Stakeholders discuss what is important to them, bring proposals to the Directors on improvements, and the leadership team within the business can also gain collective views from the groups on business direction that affects them.
On the contrary, earlier views that ‘Empowering’ people would lead to a revolution, have proven to be totally unfounded.
Employees are meeting and working in project teams across the business and are finding meaningful solutions to the way we work and add value to the business performance.
We are so proud to be Employee-Owned and as a result of engagement and shared ownership, all our Stakeholders have received fantastic financial and non-financial rewards.”
4) As a company, have you noticed a difference in performance and productivity since becoming employee-owned?
“It is difficult to measure the difference because the Company has always been successful and performance and productivity has always been high.
What we have noticed however is, that by providing more opportunities for engagement this has encouraged our Employee Stakeholders to have a different approach to their work. We have a common purpose/goal and we all share equally in the financial success that this success brings.
For the first time last year, we paid out an Employee Stakeholder dividend of £1500 per individual on ‘Financial Freedom Day’ and in the same year we were also able to give a 20% bonus on annual salary. In June 2019, 10% of Company profits were paid back to employees and every Employee Stakeholder received £4,488.10 – Collective engagement rewarded.
Another example of how our performance is also enhanced is by our collective commitment to our Employee Satisfaction Survey – results currently running at 75%. Each year the results are shared and 5 key areas that have scored the lowest are addressed. Voice groups and management teams form joint project teams and collectively come up with ideas of how to improve satisfaction. The new ideas and interaction are amazing – everyone has a say in making improvements.
It has been a big learning curve but people have acted very responsibly and have seen lots of wins and results.
Employee Ownership has also supported greatly in attracting and retaining talented Employee Stakeholders”
The 1:1 Diet by Cambridge Weight Plan in numbers
“Currently 230 Employees
Financials: – 31/3/19 – company went from £46M -> £55 million -in one year, a +23% increase
Profit – £10 million
Became a Real Living Wage employer in April 2019 (no one earns under £9 per hour)
Company introduced a recognition scheme for Direct Sales which has resulted in a +64% increase in direct sellers, bringing the numbers to 6,200 Consultants
Footprint of warehousing increased by 160k square feet which is a +12 % increase in warehousing space
Seen a 400% increase in new product development; with popular launches like our Step-Up Meals, Salted Caramel Bites and Breakfast Smoothie… to name just a few!”
“Employee Ownership Association is growing in the UK and the beauty is that it can be a bespoke to suit every company – additionally there are also fantastic tax incentives for business owners and employees – for more information contact the EOA directly https://employeeownership.co.uk/ “
Tyrone says that EDUCATION – ENGAGEMENT – ENTHUSIASM are the cornerstones for the Company’s success
With our grateful thanks to Tyrone Douglas and the 1:1 Diet by Cambridge Weight Plan for sharing this information and giving us such an illuminating insight into their Company.
Interview conducted by Pam Anthony