In the second of a series of spotlight interviews with the leaders of the top performing employee owned and mutual organisations, we talk to Chris Wrigglesworth, Managing Director & Sound Engineer at Clearcut Sound Studios about their recent journey into employee ownership and what advice he has for those who might be thinking of going down a similar route.
Clearcut Sound Studios is an accomplished, independent recording studio in the heart of Soho and has been creating award winning soundtracks for TV, radio, cinema and digital projects since 1993. In February 2012 Clearcut became employee owned and the new co-owners are very proud of the fact that every time a client calls to book some time, goes in for a session, or even asks for a cup of tea, they are dealing with the owners of the company!
Hi Chris, and thanks for joining us today. What brought Clearcut Sound down the employee ownership route?
“The team at Clearcut Sound has always been a loyal and committed staff. Being relatively small, we were (and are!) a very tight group and had a strong relationship with our previous owners, Pete and Carolyn Leggett. When they started to consider moving onto pastures knew, I believe they felt that the right team was in place to receive the mantel and continue to grow the businesses. Pete and Carolyn consulted with us and we all worked together to find the right succession solution. We all realised the immense opportunity for the team and after considering a straight management buyout, we collectively decided on an employee owned model, believing it to be the fairest and most sustainable option.”
Were there any barriers you faced in making the transition? How did you and your colleagues overcome them?
“In the years leading up to our transition, our previous owners had been taking a step back from the day to day running of the business, with a view to an eventual departure. They were however still heavily involved in the high-level strategy of the business, so it was important for the rest of the team to fill this gap and take on this responsibility during and after transition to employee ownership. We all had the company’s best interests at heart, and wanted to operate within the same value set that our previous owners instilled in the business. To this end, we structured a new management team, where the three studio engineers become directors and our studio manager took on more of the financial responsibilities to become Finance Manager. Roles and responsibilities have been distributed amongst the team, and our previous owners now sit on the Board, so are available for guidance and counsel.”
What are the key benefits you feel employee ownership has brought to your organisation?
“A sound studio is a very client oriented company. It is essential that clients have an exceptional experience with us, leave happy and rebook sessions in our studios. Clearcut Sound has always been focused on high standards, and the move to employee ownership has only strengthened this commitment. As co-owners, all staff are now geared to ensuring things are perfect, and that our clients have an exceptional experience every single time they engage with us.
The openness in decision making and working knowledge of every part of the company that every co-owner now has, means that ideas can be born, discussed, perfected and implemented really quickly.
Of course, it’s early days yet – our transition to employee ownership was completed in February this year (2012) – but I’m sure that the benefits we have already seen will only grow as our team of co-owners strives to grow our exciting business. Hopefully our clients can already see a fresh outlook in the company, as we do our best to engage with them and grow our relationships.”
Would you recommend employee ownership to other businesses?
“Yes, definitely! To know that you hold your own destiny and can take full responsibility in cultivating your own business is tremendously exciting, empowering and satisfying.
I strongly believe that employee ownership can be a great way of continuing a business owner’s legacy. As well as ensuring the longevity of the business, it’s a powerful way to provide an injection of passion, hard work and growth. The fresh pair of eyes that the co-owners have on the business is a very powerful thing. We are all very grateful that our previous owners had such a strong belief in the team and wanted to provide an opportunity for us to take the company forward, grow it, and share in the rewards.”
If you went through an employee buy-out again, what would you have done differently?
“We spent a lot of time considering our options, and in the first instance we were incorrectly warned off employee ownership for being too complicated and expensive. We then looked into the more traditional management buy-out, but this didn’t align itself with the culture we were trying to create in our business. It sounded like there was a risk of creating a “staff vs owners” kind of story, and that’s the last thing we all wanted. Luckily, we eventually had a chat with Baxendale Ownership who simplified the transition to employee ownership process – it was clear that this was the route for us. Of course, all of the options had to be considered, but if we were to do it again, knowing what we know now, we would have gone into employee ownership straight away and not wasted so much time and effort!”
Are there any tax benefits the business taps into?
“We are in the process of setting up a Share Incentive Plan (SIP) which will allow our co-owners to buy and/or receive shares in the company, giving them a tangible sense of ownership and provide us with a vehicle to share in the profits we hope to generate. The SIP gives relief on income tax and national insurance as shares are purchased so it also benefits staff in that way. In turn, the company can claim relief against Corporation Tax, and we save the employer’s National Insurance Contributions on the shares purchased – so it works really well for all parties.”
Does your business feel different since the transition?
“The sense of ownership we all feel is creating a buzz about the company. Everyone knows that all the effort put in, at the end of the day, is for our own benefit. This creates an environment where ideas are plentiful and people are willing to get things done. We have always been a loyal committed staff, and now that we are co-owners this culture has only been strengthened. There’s a tangible sense of being able to achieve so much as a collective group of owners.”
You must have welcomed some interesting people through the doors of your recordings studios over the years. Are there any stand-out moments, or projects you can tell us about?
“We meet a lot of interesting characters through both our clients, and the talent that comes in to record. It is sometimes easy to forget you’re at work, with so many different experiences and interesting people walking through the doors! Some memorable recent projects include Marmite’s viral take on the Queen’s Jubilee and adverts for Kwik Fit and Diet Coke. One of my personal favourites was creating the sound design for the (Harry) Pottermore world, a large project bringing to life the Harry Potter world online.”
- Baxendale Ownership provided the specialist funding and transition expertise to support Clearcut Sound Studio’s successful transition to employee ownership. If you are interested in how employee and mutual ownership can help your organisation flourish in hard times, contact us at www.baxendaleownership.co.uk, email firstname.lastname@example.org or call 0845 680 6702 .
- RM2 are the UK’s most comprehensive advisors on share schemes including SIPs, for more info visit their websitehttp://www.rm2.co.uk/ or call 0800 043 8150
- Cumulatively the employee owned sector brings in £25 billion to the UK economy every year. Employee owned businesses are increasingly redefining our concept of sustainable business practice, by beating downward trends during the recession and generating highly engaged, motivated workforce capable of delivering innovation, and economic growth to the UK economy.
- Baxendale Ownership is running a free seminar on 6th September in Glasgow for business owners considering succession planning for their business, for more details and to book your place, email email@example.com, or call Denise Logan on: 0845 680 6702