Riverford's EO journey – what other company owners could learn
It’s been headline news in the business world, and for good reason – Guy Singh-Watson’s decision to sell his remaining 23 per cent stake in Riverford Organics and make the company 100 per cent employee-owned.
Guy’s story shows how a founder / owner can manage the pace and timing of their own exit when their succession plan includes EO.
How Riverford announced Guy Singh-Watson’s news in a Guardian ‘exclusive’ in May
Like many who support the EO sector, JGA’s founder and MD Jeremy Gadd welcomed the news from Devon.
Jeremy worked with Guy in 2018 at the start of Riverford’s transition and has enjoyed seeing how the business and its employee ownership have evolved since.
Is he surprised at the attention Guy’s latest move has attracted? No.
‘This was always his intention and it signals real confidence in Riverford as an EO business,’ Jeremy says.
Recognising the challenge of letting go
Riverford’s national profile, combined with Guy’s commitment to truly ‘live his values’ (he’ll pay full tax on his dividend), have naturally created interest – even more so given recent speculation about large EO companies and their ownership.
Jeremy respects Guy’s honesty about the challenges company owners can face when transitioning control of their business into EO.
‘Finding your way forward [as a company owner] can be a significant challenge. Having the foresight and courage to bring in someone independent to facilitate this thought process can be an effective way to navigate through’
Jeremy Gadd, JGA’s founder and MD
As Guy explains in the Guardian article announcing the sale of his last remaining shares in May: ‘Founders find negotiating this transition to their successors incredibly difficult and painful and most people make a bit of a mess of it… I don’t want to be that person who needs to be told to go.’
The value of investing thought and time
‘Guy’s candidness demonstrates why he was able to do this,’ Jeremy points out.
‘I remember, when we were working with him, witnessing those conversations around how you deal with the loss of something so intrinsically linked to your values and your identity.
‘Finding your way forward can be a significant challenge. Having the foresight and courage to bring in someone independent to facilitate this thought process can be an effective way to navigate through.’
What can we learn from the Riverford story?
So what can other founders learn from Guy’s approach to managing his exit while supporting Riverford’s evolution as an EO business? Jeremy highlights three key insights for company owners considering EO for their succession planning.
1. Understand your legacy and EO journey
You’re transitioning from owner to custodian to handing your company on. What’s your legacy? How do you capture this in a way that’s not only relevant to your successor, but to your successor’s successor too?
‘The fundamental thing about Guy and Riverford is the sense of legacy,’ Jeremy says. ‘As a founder, understanding what’s important to you about the process of becoming EO will help you create the map for your transition and that of your business.
‘This is the one business decision you’ll make that has most impact on you as the owner, and those who can engage the right specialist support are more likely to do it well,’ he adds.
Working with someone independent who understands what you want, but isn’t emotionally engaged in the business, will influence the quality of transition you achieve.
2. Recontract your relationship with the business as it evolves
JGA’s founder and MD Jeremy Gadd
Regularly checking in on and (if necessary) recontracting your relationship with your business will make a significant difference because becoming EO doesn’t just impact you – it impacts your people too.
‘As we see in this latest announcement, Guy is to remain involved as a trustee, NED and spokesperson for Riverford,’ Jeremy explains.
‘I recollect from working with him that he’d created a strong leadership team who were using EO to reinforce the values they felt were important. He invested time and effort in creating the right board, and helped them to understand his vision. He successfully navigated his own exit, trusted himself to make and learn from mistakes, and didn’t underestimate how difficult that is for a founder to do. He’s demonstrated courage in doing that.’
3. It’s clarity – not the size of your business – that matters
EO businesses come in all shapes and sizes and there’s no one way to ‘do’ EO. However, Jeremy’s experience of working with more than 90 companies shows that it’s clarity – not size – that matters most when enabling a smooth transition to EO.
‘So often, employee ownership can seem ‘nebulous’ but when you create a clear narrative for change you’re able to engage people in something tangible,’ he says.
‘Clarity of purpose for the organisation, clarity around how EO will impact that and clarity around your narrative for change – including how you’ll engage your internal and external stakeholders – will really make a difference.
‘It’s about planning for change and project management, regardless of size – and recognising that it also takes time.’
Unlocking the potential of good EO
James de le Vigne, CEO of the Employee Ownership Association, describes Riverford as ‘a powerful example of the potential that can be unlocked through employee ownership’. Indeed, Riverford won the ‘Delivering Good Governance’ category in 2022’s EO Stories Awards.
Jeremy agrees with James, pointing out that when EO is done well everybody understands the responsibility and reward of ownership and works together to achieve more.
‘This means that employees become your talent pool, challenges become opportunities and strategies become reality,’ he says.
‘In my experience, the best EO businesses gain a real commercial advantage by locking in the relationship between responsibility and reward – this can encourage social mobility too.’
He concludes: ‘Having been a supporter, customer and admirer of Guy and the Riverford team, I look forward to seeing them – and their employee ownership – continue to flourish in the years to come.’
Want to know how we can support you and your succession planning with our transition, people and governance services?