For thirty-five years, I owned and managed Fenwick, the professional services consultancy that I founded in 1976. The culture of the firm is to create the greatest opportunities for individuals to thrive. Its employees are granted autonomy and responsibility for their own actions, are provided with opportunities to grow, and are encouraged to apply their skills to help each other and to deliver value for their clients.
Over the years, we had worked to refine this culture; to build relationships with our staff, clients and suppliers; to develop methodologies for the sale and delivery of our services; and to run our business in a consistently profitable way. Creating Fenwick had been my life’s work; it was something I was very proud of.
As I approached retirement, I was faced with a dilemma. Who would own the firm and who would manage it when I was gone? We march to a different beat to most of our competitors. To sell to a competitor risked having everything I valued destroyed. Money seemed inadequate compensation.
Yet the obvious alternative, to pass it on to those staff who had worked with me make it what it was, faced what appeared to be insuperable difficulties. They would have to make a long-term commitment. Were they ready for that? Was this the future they wished for? They had limited capital to purchase the business. Yet if I gave it to them as a reward for years of service, the tax office would treat that as an attempt to avoid income tax and demand half of the value from them, in cash —immediately.
We worked together on the details over a period of years and eventually determined who should be shareholders, how their shareholdings should be funded, how the firm should be valued, what the rules would be for future sales and so on.
In 2011, we established our employee-shareholder scheme and I sold seventy-five percent of the business in equal parts to five key staff, one of whom, Greg Galloway, is now CEO. The firm is thriving and the culture is being maintained under his leadership.
Like old Mr Grace, from the TV programme Are You Being Served? now I just potter in once a week and say “You’ve all done very well.” And so they have. And so have I.
