The Ownership Revolution

Ed Fowkes
Jun 19
5 min read

Over the past few weeks, I've been exploring a recurring theme. That life is not linear. Value is not evenly distributed. Outputs rarely match inputs in neat and predictable ways.

In short, life isn't fair. A lesson that most of us learn sooner or later. Usually sooner. My mother drilled this into me frequently.

While value remains stubbornly uneven, something does appear to be happening globally that’s increasing fairness. Power, influence and opportunity are becoming more distributed.

Women have opportunities that previous generations could only dream of. Young people are often freer to express themselves than their parents were. Those who think differently, whether through neurodiversity, background or circumstance, increasingly find communities and opportunities that once simply did not exist. The trend is not perfect. Progress rarely is. But viewed across decades rather than election cycles, the direction of travel is clear.

A related shift is occurring in business.

For centuries, ownership was concentrated. One person owned the farm, the workshop or the company. Everyone else simply worked there. Today, that model is beginning to evolve. Employees are becoming owners. Communities are becoming investors. Customers are becoming stakeholders.

This week, I explore what may be one of the most significant changes taking place beneath the surface of modern business: The gradual democratisation of ownership.

For most of human history, ownership was very simple. The ruler, often a king, owned everything. Sometimes they shared some as rewards. Then, personal ownership began. A farmer owned his land. A merchant owned his shop. A family owned its estate. Later still, shareholders owned companies. Companies, often funds, owned the shops and the land, and employees sold their time in exchange for wages.

A comparatively strange relationship, and certainly more complex. But the idea that one group owns the asset and another works within has been the zeitgeist. If you invest the money, you reap the harvest you have sown.

The Idea

Over the past century something rather interesting has been happening. Ownership has slowly begun to spread.

Perhaps the most famous example in Britain is the John Lewis Partnership. John Spedan Lewis seems to have asked himself a philosophical question. Why should the people helping to create value not participate more directly in its rewards?

At the time, this was a remarkably radical idea. Ownership had traditionally belonged to the people who provided the capital. Employees provided labour and received wages. Owners provided capital and received profits. But Lewis believed the relationship could be more balanced than that.

Agree with his philosophy or not, it raises an interesting question. Who should benefit from the value a business creates?

This is a question that has become increasingly relevant over the past century. Across society, people have gained a greater voice and greater agency. Employees increasingly expect more than a payslip. Customers influence businesses through reviews, social media and public feedback. Communities expect organisations to consider their wider impact.Essentially, the people creating value increasingly expect some influence over the systems they participate in.

Sharing ownership is one response to that trend. At its heart sits an ethical argument beyond that of whether, as an employee, you should work a job that slowly kills you. The question is if success is created collectively, should ownership remain centralised?

The Mechanism

Fairness is rarely enough to change the world. But structures change everything and this is where employee ownership becomes particularly interesting.

Founders can spend endless hours discussing culture, accountability and engagement. Yet behaviour rarely emerges from good intentions alone. More often than not, behaviour follows incentives, and incentives are shaped by structure.

Change the structure and behaviour often changes with it. Give somebody a salary and they think one way. Give them a profit share and they think differently. Give them ownership and they may suddenly notice waste, efficiency and opportunity in places they previously ignored. It wasn’t relevant to them.

In property, we see similar patterns. Homeowners often maintain homes differently from tenants. Long term investors make different decisions from short term traders. A king with descendants acts differently to a politician who can be voted out in a few years. People behave differently when they have a genuine stake in the future.

The same principle exists inside businesses. And interestingly, because ownership is one of the most powerful structural tools available to a founder. It influences recruitment. It influences retention. It influences decision making. It influences culture.

And culture, in turn, influences performance.

Ownership is not merely about who receives the rewards. It is also about agency, responsibility and influence over the future.

The Practical Reality

What began as a philosophical idea became a force for success. Subsequently, it has become a practical solution. Many founders approaching retirement now see employee ownership as a way to preserve culture, protect jobs and maintain the character of the businesses they spent decades building.

Think Riverford, Richer Sounds, Arup, The Entertainer. Different industries. Different founders. Similar conclusion.

A business is rarely just an asset. It is a collection of relationships, values and accumulated trust. Selling to employees offers one way of preserving them.

Employee Ownership Trusts have become particularly popular in the UK for this reason. Rather than employees individually purchasing shares, ownership is transferred into a trust that acts on behalf of the workforce. The result can allow founders to realise value, employees to benefit from ownership and the business can continue to run independently. It is an elegant solution to a challenge many founders eventually face - “What happens after I'm gone?”

Of course, ownership is not a cure. Giving somebody shares does not automatically give them judgement. Nor does distributing ownership eliminate poor strategy, weak leadership or difficult decisions.

The history of co-operatives, mutuals and employee-owned businesses contains both remarkable successes and notable failures. Human nature has an irritating habit of surviving every organisational chart ever invented.

A flawed strategy remains flawed regardless of who owns the shares. Ownership and responsibility are not automatically the same thing.

Ethics, Incentives and Legacy

Employee ownership is often discussed as a succession strategy. In reality, I suspect it sits at the intersection of three ideas.

Ethics.

A belief that the people helping to create value should participate more directly in it.

Incentives.

An understanding that ownership changes behaviour because structure shapes outcomes.

Legacy.

A desire to preserve what has been built beyond the founder's involvement.

Whether employee ownership becomes a dominant model remains to be seen. What interests me more is the broader trend beneath it.

Ownership itself appears to be evolving. For much of the twentieth century, ownership, influence and control were concentrated in relatively few hands. Today, all three are becoming more distributed.

Employees want ownership.

Customers want a voice.

Communities want representation.

Investors want transparency.

If the twentieth century was largely concerned with creating wealth, perhaps part of the twenty-first century will be spent deciding who should own it.

For founders, there is an important strategic question. If ownership shapes behaviour, what ownership structure is your business optimised for? Because ownership is not merely a legal construct. It is a strategic choice. And like most strategic choices, it affects the shape of everything that follows.