Karl Marx once reflected that history rewards those who make the greatest number of people happy. He also happened to believe that private interests undermine a society’s ability to make people happy, by prioritising the accumulation of capital over workers’ health, happiness and humanity. We’ve since become used to the idea that the interests of workers and owners are fundamentally and inevitably opposed. We see this idea played out every day in the business pages of our newspapers: in criticism of tycoon Philip Green’s behaviour towards staff and (lack of) funding of Arcadia employees’ pension fund; in the string of scandals that led to Travis Kalanick’s ousting at Uber; in Mark Zuckerberg’s flat out rejection of calls to break up Facebook. The details differ but the theme is the same: an entrepreneur’s first priority is to make money, and everything else comes second – including worker welfare.
Julian Richer has caused many of us to question whether this is really the case. He founded Richer Sounds in 1978 and recently announced his intention to hand the business over to its employees. As a result, he’s been lauded as a great and generous bloke and a refreshing exception to the generalised view of entrepreneurs as money-grabbing megalomaniacs in the Zuckerberg/ Green/ Kalanick mould. Based on two decades of working with entrepreneurs from all walks of life, I’d argue that Julian Richer is far from the exception. The idea that entrepreneurs start businesses with the sole or main intention of making money seem akin to saying people have babies with the sole intention of propagating their genes. Gene propagation may be the outcome, but most of the people I’ve met have had babies as a result of love, or desire, through a sense of responsibility or purpose, or simply as a happy accident. My experience of helping entrepreneurs articulate their ambitions and define their brands has revealed precisely the same motivations. Fame and fortune may be the eventual outcome for some, but many are happy as long as they feel a passion for the business they are involved in leading.
This is why entrepreneurs often continue to work far beyond a reasonable retirement age. Warren Buffett took over a failing textile business in 1965. By 1988, Berkshire Hathaway was big enough to buy an almost 10% stake in Coca-Cola. Now aged 88, he still wakes at 6:45 every morning to go to work. And he’s so unreasonably committed to his product that he drinks Coca-Cola for breakfast. There are simply too many examples of this type of obsession to ignore.
It’s easy to revile entrepreneurs. They have money, power and an address list that mere mortals can only dream of. But without them where would we be? Henry Ford created a concept of mobility that has profoundly shaped how we live, work and commute in between the two. Richard Branson demonstrated to the world that a privileged background and a classical education aren’t a prerequisite for business success. Oprah Winfrey has made vast sums of money but she has also opened minds and challenged people to question the entrepreneurial stereotype. A recent study of entrepreneurs’ fears by academics at the University of Istanbul found that their biggest concerns centre around social stress: their fear of losing the respect of their customers, of being misunderstood or having their reputation smeared, of losing the love and respect of their family and friends. These fears lay bare the enormous social anxiety that comes with being an entrepreneur. And it’s interesting to see that they outweigh worries about profitability, the economy, legal issues and skills shortages. Instead, they echo the anxieties many of us tend to feel as parents: that the mistakes we make may affect our relationships with family and friends.
So should entrepreneurs follow Julian Richer’s example and give away their businesses to employees? Honestly, it all depends on how prepared they are to let go of their baby. Entrepreneurs come to rely on their companies every bit as much as their companies come to rely on them. Some would simply be stripped of any sense of purpose without a workplace to call home. Julian Richer has decided to hand over a substantial part of his company to its workers because he wants the spirit of his business to live on – but this will only work because he has spent the past 30 years instilling this spirit in his colleagues. The stores employ a disproportionate proportion of musicians and music buffs. Employees are given an extra day off to celebrate their birthday. Colleagues who submit ideas for making the business better are rewarded for doing so. The top performing store on any given month is given access to the company Bentley.
All of these initiatives have been designed to create a unique culture that can be sustained in the absence of a cult of the founder. But this is only possible because Julian Richer has a concept of “enough”. He has enough money. He has enough success. He has enough perspective. And he has enough going on in his life to see beyond his work – including drumming in his band. He also has no children to pass the business on to. Not all entrepreneurs are in this position. But even those with children shouldn’t feel like giving away or selling their companies is the end of their family’s involvement. Last year, I had the pleasure of interviewing Stephen Twining. He’s the tenth generation of his family to be involved in the business, which has been owned since 1964 by Associated British Foods (which also owns Primark).
Despite his family no longer owning the business, it’s remarkable to meet someone so emotionally committed to the company. He decided at the age of eight that he wanted to teach the world about the delights of tea. Decades on, he is still working tirelessly to spread the word, not out of a sense of duty or because of the weight of history, but because he has a genuine passion for tea. While it’s true that employee ownership creates strong incentives in the form of employee motivation and productivity, this counts for very little if the people who work in the company aren’t steeped in a strong, sustainable culture. That’s why people like Julian Richer and Stephen Twining are really valuable examples to follow; not because they demonstrate the advantages or disadvantages of any particular form of ownership, but because they show that passion for a business can be sustained through any number of ownership models, provided that employees share a common set of values and a strong sense of purpose.