Factorydesign was founded 17 years ago by myself and fellow creative director Adrian Berry. Since Peter Tennent’s arrival as managing director, the consultancy has been wholly owned by the three of us.
In the early years, Factorydesign was all about the output of the directors, but nowadays the output of everyone here contributes significantly to the business’s success.
This has come into focus with the vast Etihad project – since 2009 Factorydesign has been working on designing much of the interiors of the airline’s new fleet. This huge project gave us the opportunity to rethink the way our company is run – to reward our staff with more than just a good salary and to put a plan in place so that they would feel the future of Factorydesign was secure.
We have put in place a new structure in which Adrian, Peter and I remain majority shareholders and retain executive control. Now, though, seven of the Factorydesign staff are also shareholders (two of them were already associates) and will directly benefit from the future success of the business. The staff-shareholding scheme will also be open to future members of staff.
Sounds simple – but how did we put it into place?
Initially, we three original owners discussed our intentions with each other and then consulted the two associates, Matthew Fiddimore and James Tanner.
Then, one summer’s afternoon in 2013, we took everybody in the company out to lunch, and announced to them that we’d decided to give them all a bit of the business. We got quite a positive reception.
Actually setting it all this up though was arduous, to say the least. We imagined that as we owned Factorydesign outright, we could choose to give it away. But devolving ownership is a complicated process and not for the faint-hearted.
There are significant tax hurdles to overcome, and the process was much more time-consuming and expensive than we could have predicted. It really surprised us.
In the end it took a year to develop the structure in conjunction with our financial and legal advisers: Bolton & Co and Humphries Kirk respectively.
Once we’d decided on the finer points, we sat each member of the team down separately, took them through the pros and cons, and gave them a week to accept or decline. We are pleased to say that they all accepted.
The questions that they had were straight-forward ones such as: “How much is the company worth?” “What happens if someone tries to buy the company (each member of staff would get their share of the slice)?” “And why are you doing it?”
For the new shareholders, the structure encourages them to think seriously about their contribution to the future of the company.
And as directors, we’re confident that these plans will provide additional stability, strength and value to Factorydesign over the coming years.
Adam White is creative director at Factorydesign.