Wolfgang Digital has become the first Irish-owned company to transition to employee ownership via the “John Lewis model” of an employee ownership trust (EOT).
As part of the transition, Wolfgang Talent Trust has acquired 25% of the shares in Wolfgang Digital and all employees who have been working for the agency for more than 12 months have become “partners” in the Trust. This will allow them have a say in how the agency is run while also giving them a share of profits every three months. In addition, a portion of profits each year will be used to fund future share purchases by the trust which, all going according to plan, will become the majority owner within 10 years.
Wolfgang Digital employs 70 staff and was founded by CEO Alan Coleman.
“We’ve had many opportunities to sell out to international acquirers,” says Coleman. “I’ve learned from these conversations that the sell-out is designed to extract value from the company. Selling out doesn’t feel like success to me, it feels like death, the death of the dream. On the other hand, the sell-in to employees creates value for all stakeholders in the business. There is a win-win-win for people, customers, and society. Personally, I love the legacy aspect of employee ownership. Our precious vision and values are now legally enshrined in our constitution forever more,” he adds.
“Many of the young people who work in Wolfgang fear they’ll never own where they live. They now own where they work,” he says. “Because the gang now has skin in the game, their relationship with their workplace has changed from renter to owner. I believe this will improve performance at work and the business will grow in strength.”
According to Coleman, each team within the business has elected a representative who can bring their insights and ideas to any decision-maker within Wolfgang Digital. The employee representatives will elect trust board members from among them who will be the ultimate decision-makers on behalf of the trust.
In addition, there will be regular employee ownership activities including a “Wolves Den” where each employee gets a say on how they would invest an innovation budget to strengthen the business. The best ideas will be funded.
“The most fundamental change is to the objective of the business which is written into the company’s constitution. While maximising shareholder wealth is the priority of a traditional company, an employee-owned company’s main priority is to be run in the best interest of the employees. The Wolfgang vision, values, and founders’ wishes are also enshrined in the Trust’s constitution,” Coleman adds.
As part of the new structure, Wolfgang has appointed Graeme Nuttall as chairperson of the Wolfgang Talent Trust. Nuttall is a former independent adviser to the UK Government on employee ownership and author of the influential Nuttall Review of Employee Ownership.
“Employee ownership is a proven highly successful business succession solution in the UK and USA and one that the Irish government should support,” says Nuttall. “As soon as the UK government started to promote the benefits of employee ownership, take-up increased at an accelerating rate. A sale to an employee ownership trust (EOT) now ranks in popularity alongside trade sales and other ways of selling a UK business. Other governments have already taken notice, including Canada which now has an EOT law. I would like to see this bold move by Wolfgang Digital, as Ireland’s EOT pioneer, kick-start an Irish employee ownership sector.”
