Flowstore Logos and Flowstore to Become an Employee-Owned Business

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Flowstore to Become an Employee-Owned Business

A NEW chapter will open for Flowstore Systems Ltd and its staff on June 30, 2017, when it becomes an employee-owned organisation, joining the growing ranks of UK businesses and social enterprises in which staff have a stake. The date chosen for the transition is also national Employee Ownership (EO) Day, and Flowstore will celebrate its new status in style, alongside others in the sector such as the John Lewis Partnership.

Formed in 1984 with just two people, Flowstore has grown to 50 employees covering the UK, Ireland and Benelux countries. Now Simon Dennis, the managing director for 30 years, and his wife Alison will step away from ownership, with Simon remaining involved with the business as chairman. He officially stepped down as MD in January, succeeded by Austen Jonas, who is supported by finance director Adrian Baker.

As specialist manufacturers at the top end of their own market but with no natural successors in the family business, Simon and Alison had originally considered succession planning via a third-party sale or a management buy-out. However, Simon said these did not feel like the right option for either their business or their staff, who he said he has tried always to put at the centre of what the company does.

Simon said:

“We have an existing culture of encouraging employees to have a voice, suggest improvements and be rewarded for initiative. And we already operate a lean manufacturing philosophy in which continual improvement is sought.

“Employee Ownership seemed to be the natural partner and progression for our business, and for the staff, so as a management team we all agreed to bring the staff along on the EO journey.”

The benefits of employee ownership, including job satisfaction and increased productivity, have been shown in research led by the Employee Ownership Association. EO businesses are more resilient. They outperformed the market during the economic downturn and grew sales by 11.1 per cent in the recession compared to non-employee owned businesses which grew by only 0.6 per cent. The sector contributes £30bn GDP to the UK economy annually.

The Flowstore team brought in management consultants Baxendale to help with the process of transition. They have also been working with Ewan Hall, who worked with Union Industries, an EO company that highly impressed them.

Simon said:

“We were amazed at what their staff had to say about how they felt more valued, how they were able to make more of a difference. They said they gave that extra thought and effort to what they did, as they understood the impact, and also had a stake in the outcome. They told us that learning about EO at the beginning was a challenge, but had gained new skills and understanding about the finances, which was initially daunting for some, but just part of what they do now.”