If everything is on the table when it comes to the future of work, should we be talking about having workers own the company – or at least own a bit of it? To talk about that, Linda Nazareth is joined on this episode by Elspeth Murray, Director of the Centre for Innovation and Social Impact and CIBC Faculty Fellow in Entrepreneurship at the Smith School of Business at Queen’s University. They discuss why the benefits from employee ownership can go far beyond money and why this work model might be a good thing for workers and organizations and maybe for society as well.
Director of the Centre for Innovation and Social Impact and CIBC Faculty Fellow in Entrepreneurship at the Smith School of Business at Queen’s University
Elspeth Murray has served as the Associate Dean – MBA and Master’s Programs from 2012-2022 and has been a professor of Strategy and Entrepreneurship at Smith School of Business since 1996. She also holds the CIBC Fellowship in Entrepreneurship, and founded Smith’s Centre for Business Venturing. She is the Director of the Centre for Entrepreneurship, Innovation & Social Impact.
Prior to joining Smith, she worked in industry for 7 years for several firms including IBM, and Canadian Tire. As an integral part of her work in the strategy and new venture fields, Dr. Murray specializes in the management of change.
In 2002, she co-authored a best-selling book, Fast Forward: Organizational Change in 100 Days, Oxford University Press, with Dr. Peter Richardson. She has recently co-developed (with Dr. David Saunders) the Analytics Climate Assessment Tool (ACAT), which is used to assess organizations technological capacity, skill sets, and analytics culture. Current research is focused on best practices in leading and managing change to create an analytics culture.
Dr. Murray teaches on many MBA and Executive Education programs, and consults widely with a diversity of firms including BMW, Detour Gold, Wawanesa Insurance, Versacold Logistics and the Auditor General for Canada.
She serves as a Director for several firms and is an advisor to several start-ups and CEO’s. Dr. Murray received an undergraduate degree in computer science and mathematics, and an MBA, both from Queen’s University. Her doctorate in Strategy and Management Information Systems was completed at the Richard Ivey School of Business.
https://smith.queensu.ca/faculty_and_research/faculty_list/murray-elspeth.php
Well, hello, and thank you for joining us today. Now, we’ve talked in this show
about different forms of work, and one of them is old -fashioned employment, being a
full -time employee of a company, not a freelancer, not a contractor, but just
working for that company. But should we maybe go further than that? If everything is
on the table when it comes to the future of work, should we talking about having
workers own the company or at least own a bit of it?
Well, my guest today is a fan of employee ownership. Her name is Elspeth Murray, and she’s the director of the Center for Innovation and Social Impact and CIBC Faculty Fellow in Entrepreneurship at the Smith School of Business at Queen’s University in Kingston, Ontario, Canada.
Elspeth has research written a lot about employee ownership and she sees benefits that go beyond monetary ones. She thinks that if this is done right, both workers and organizations will benefit and maybe society will as well. I had a great conversation with Elspeth. Please stay with us to hear it.
Linda: Well, should we be encouraging employee ownership? To talk about that, I’m joined by Elspeth Murray. She’s director of the Center for Innovation and Social Impact at the Smith School of Business at Queens University. Elspeth, thank you so much for doing this. – My pleasure. – You know, it’s a really interesting topic because I’ve been talking a lot on this podcast about what motivates people, what we can do to make people happier. So So I’d like to get into all of that, but first I always like to ask people about their own careers. How you ended up in this area?
Elspeth: Well, I have a, this is my third career, so I haven’t always been an academic at the business school at Queens. I worked for IBM as a systems engineer at a marketing rep, went back to school, did my MBA, was fortunate enough to work with a very iconic business in Canada, Canadian Tire at a store level for about seven years, so learned a lot about operations and people. Then my life circumstances
changed and I went back to school again and did my PhD in strategy and I was lucky enough to get a job at Queens and that’s what my day job is at the moment And so part of my interest in the whole topic of employee ownership is really rooted in my Canadian tire experience where the stores are independently owned by individuals.
Linda: That’s really interesting. I love hearing about people reinventing themselves.
Elspeth: We’re gonna hear a lot more. Twice I did that. Well, maybe this is it.
Linda: Let’s talk about employee ownership because there’s different definitions of this,
right? How would you define it? Or what are the different definitions of it? So there are many different ways in which employees can own a stake in a company. Many people will be familiar with stock options or stock plans in the startup world. This happens all the time, but there’s been a recent addition into the mix, which is something called an employee ownership trust, which is a different way of having a stake in a business and is relatively new in Canada, but it has been well -entrenched in the U .S. and in the U .K. for many years. So it’s just another way instead of owning stock outright and participating as a shareholder, you now participate more as an owner. So what happens with this legislation, again, borrowed from the US and the UK, is that there is a separate entity called a trust, which is set up, and employees actually own a piece of the business through the trust. Unlike owning shares directly in the company, you own shares in the trust, and the trust essentially runs the
company.
Linda: Okay, so if we look at the US to the UK, is there a large company that does this?
Elspeth: There are lots of large companies that do this. And for your listeners, I think one of the easiest ones to think about in terms of employee ownership,broadly speaking, not just through a trust, is a great grocery chain called Publix,which has had employees own the company for many years now.
It’s one of the most successful grocery retailers. There are tons of stories about how employees have benefited from that ownership. And it’s interesting, a student in one of my classes, I was using this example of Publix and he works in the US and he said, “You know what? We look to set up our businesses close to a Publix because it’s such a great company from a brand perspective, but more fundamentally, when employees own a business, the business tends to do a lot better.
Linda: Well, that sounds really nice because one of the things I’ve been wasting time on is work TikTok. And there are so many people who are so unhappy and feel so detached from their workplace. So how does it change if you feel like you have a stake in it? Is there ways we’ve measured this?
Elspeth: Yes, absolutely. So there’s about 50 years of research in the US about employee ownership and the many benefits of that. So the most important one is that you have a stake in the success of the enterprise. When you’re working your butt off, you see benefit, not just for the company, but you see benefit for you. So as the company does better, so do you. And that sort of sense of purpose that I’m not just plugging away working for somebody else, but I’m a real part of this amazing enterprise has many benefits. So you feel more empowered, you feel better about your job, you know, there’s that psychological ownership, but also that actual ownership. So, you know, the business does better, But employers are happier, they’re more engaged. And at the end of the day, back to publics, there are tons of examples of millionaires that are created. You’re stalking the shelves or you’re a cashier and you retire, well, guess what? The ownership stake that you have has real value. So there’s a real path to prosperity instead of just a paycheck. So those are just a few of the benefits.
Linda Well, that’s pretty enticing. We used to hear that about Walmart, right? Even despite those stories about people stocking shelves retiring millions, they didn’t end up really having that image. People seem unhappy. They feel it’s in many ways not a worker -centric company.
It has to be more than just giving people stock, right?
Elspeth: Yeah, so, you know, as an owner, you don’t necessarily participate in running the business. So that’s a big part of making any employee ownership work. And with employee ownership trust in particular, you know, you, you know, if I’m an employee and this is presented to me, I’m going to want to know who is going to run the business and how will I interact and how will I have say and how the
business is being run. So I think if you go back to kind of the Walmart example, yes, you have input, yes, they work on creating a culture, but at the end of the day, you don’t really own anything. Whereas if you have that ownership piece and you sort of see, yeah, I’m going to do something today, but I will benefit in the future. I will benefit not only today, but I will benefit in the future. that’s a much more compelling value proposition than trying to just have a great culture. I think the other thing, and you know this much better than I would, is this next generation, they want purpose, they want to feel they’re part of something. It’s not just about doing a thing and collecting a paycheck. So this notion of employee ownership just creates more purpose and meaning for people and you’re working
really hard.
Linda: That’s interesting that you bring that up. I was going to ask you
about purpose. When we hear about purpose in younger people, we tend to think they
want to see environmental attitudes that are in sync with what they believe, but
also actions, right? Plans and things like that. I don’t hear about this very much,
maybe because don’t think of people working at companies long -term anymore, especially
younger people. They tend to be on contracts or they come and go. This is clearly
a model that goes with traditional employment, right? Being there for some period of
time.
Elspeth: Right. But I would also say that part of the retention issue for many organizations is that people do see that there’s nothing in it for them in the long term. So I’m going to come, I’m going to do my thing, and then I’m going to look around for the next best opportunity. But in many ways, like who wouldn’t want to be part of a lasting enterprise? You You know, you build community, you get to,
you know, really enjoy what you’re doing, you build expertise, and, you know, to go back to your comment about the power of purpose. I mean, it’s really a purpose beyond profits.
Linda: And so this notion of community and longer -term well -being is all part of that grander purpose rather than just making a bunch of money thatyou’re going to give a way to shareholders? Maybe it’s not exactly part of this model, but how much of a voice do workers have in these organizations versus others? Is there a difference?
Elspeth: Yes, because there will be this– if we talk about employee ownership trust in particular, so you have this entity called a trust, and the trust will actually be the way in which you have ownership. So you get to ask a lot of questions as to how that trust is being run. What are the decisions? What is the strategy of the organization? You know, your access information is that much greaternwhen you have an ownership stake. So it’s a completely different dynamic. You know, ultimately, do you get to direct what the company does? No, but do you have a significant voice, the answer is yes, and do you have access to much more aboutwhat’s actually going on? The answer is categorically yes.
Linda Interesting. I know you’ve written about the income distribution part of this, so you’ve commented on this,which I found really interesting. Tell us a bit more about that.
Elspeth: Well, because with ownership becomes an opportunity for more distribution of the profits.
So in Canada, the way in which, and more generally, the way in which an employee
ownership trust works is that trust must own at least 51 % of the company. So that’s the majority ownership. So as the company does well, the profits get distributed, and the big chunk of them will get distributed by thoseowners and whoever other chunk, you know, the profits will get distributed there.
So that’s how you build wealth over time is, you know, the stock or the company does well, your ownership becomes more and more valuable. So that’s the wealth distribution end of things. And another thing that I think is really compelling in this day and age is sharing that wealth. I mean, the people who are really building the business, the lighting customers, keeping the shelves stocked in the public’s example, why shouldn’t they actually share in the wealth that they create?
Linda: And I think more and more, particularly in the younger generation, they’re starting
to ask those questions. Like, where’s my opportunity? I’m doing, I’m working hard.
So how come it’s a small group of people kind of at the top who are getting paid
a lot.
Elspeth: Oh, yeah, that gets asked a lot for sure. So if you’re an organization that wants this, what wants the benefits from this at least, where do you start? And is there legislation that we need? Yep. So
there’s there’s definitely legislation in the UK, in the US, and in Canada. So my best advice is always talk to an accountant and /or a lawyer, because they will be up -to -date. In particular, the accounts will be up -to -date on the legislation, so which businesses can qualify? And then there are a couple of steps. They’re sort of the, well, can I do this? Then there’s the, okay, yes, I want to do it, so how do I set it up? How do I think about enacting the whole thing, the not some bolts of setting that trust up.
And then there’s a last piece, which is how does the transition work? So you asked a great question about, well, you know, what does this mean for employees? So it’s like, well, how will employees have a voice? You know, what will the cadence be of sharing information, so on and so forth. You know, there’s one other thing that I meant to mention before too, one of the, I think the most awesome aspects of these employee trust is it’s another succession vehicle for business owners as they retire. And in North America, there’s a huge percentage of small business owners, small, medium -sized business owners who are going to be retiring in the next 10 years. The greatest generational transfer of wealth anywhere. So these employee ownership trust provide a different way for business owners to actually transition the business. Which means you don’t have to sell your business to a competitor or to a private equity firm or just shut it down, period. You can sell it to your employees. Your employees stay in the community in which you build the business. Ownership stays in the country in which you live. Those are huge considerations for people who want to set up these trusts. You have these business owners who now have another option. I think this is what’s exciting to me about talking about this topic. You’re going to retire and sell your business in 10 years. This is option number three for
creating legacy for seeing your business continue to thrive. It’s pretty cool.
Linda: And you said small and medium. So there’s no particular size that you need to
make this work.
Elspeth: There is a particular size. So again, there are other elements of qualification to be able to set up an EOT employee owned trust. So that’s why the first port of call here is talk to your accountant. There’s some good resources online. If you Google, if anyone Googles Employee Ownership Trusts,
there’s a great organization called Social Capital Partners that lobbied long and hard
for this sort of legislation. So that’s a terrific resource. But as I said,
I always suggest starting with, starting with an account.
Linda: Elspeth, really interesting topic. Thank you so much for joining me.
Elspeth: My pleasure, thank you for asking. and it’s a great new item in Canada and tried and trued in the US and the UK.
Linda: Thank you. – Elspeth Murray is director of the Center for Innovation and Social
Impact at the Smith School of Business at Queens University.
Well, that’s it for today. If you do want to know more about this topic, take a look at our show
notes. You’ll find some links there. If you’d like to connect with on Twitter or X
at @RelentlessEco. And I’m also on Instagram. You can find me @LindaNazarethKeynoteSpeaker.
