Employee ownership (EO) is so much more than just a business model. It is a culture and a contract. To truly understand its success, we must look beyond the balance sheet and examine the two fundamental pillars that underpin every successful EO business – Stake and Soul.
To mark the upcoming launch of Barry’s EO podcast, Stake & Soul, this week’s EO Know How takes a deep dive into the inspiration behind the name, what listeners can look forward to, and why this series offers a richer, more human exploration of employee ownership than the typical business podcast.
What to Expect from the EO Podcast, Stake & Soul?
In a world where business conversation is often reduced to transactions and compliance, we believe employee ownership represents something fundamentally deeper – a powerful transformation that marries purpose with prosperity.
The Stake & Soul podcast is for business leaders who know the greatest ROI comes from investing in their people and a belief in their potential, growth, and wellbeing.
In essence, Stake & Soul is poised to be more than just an EO podcast, but rather it is designed as a narrative-driven journey into the heart of benevolent business transformation, providing both profound inspiration and actionable guidance from the most experienced voices in the space.
What the Words ‘Stake & Soul’ Really Mean for Our Employee Ownership Podcast
Barry explains in detail the meaning behind both ‘Stake’ and ‘Soul’ throughout the blog. His view is that the name itself signals a deeper exploration than typical business podcasts. He’s not just discussing financial ‘stakes’ (though that’s crucial); he also dives into the soul – the human, cultural, and emotional transformation inherent in EO.
This immediately differentiates his discussions from purely transactional or legalistic discussions.
1. Stake – The Financial and Legal Commitment
In the context of employee ownership, ‘Stake’ refers to the financial and legal interest employee owners hold in the company’s success. This is the structural side of the equation. The mechanism that ensures the hard work of every employee translates into shared financial rewards, both current and future.
What ‘Stake’ Means
Simply put, ‘Stake’ is the benefit received when the company succeeds financially. Let’s explore that further.
- Collective Financial Ownership. In the most common UK model, the Employee Ownership Trust (EOT), the Trust legally holds a majority of the shares on behalf of the employee owners. The ‘Stake’ is the right of all employee owners to be the ultimate financial beneficiaries of the company’s profits.
- The Profit Share. The most tangible expression of the ‘Stake’ is the annual profit share (or EOT bonus). This is the mechanism that ensures that employee owners directly benefit from collective growth, moving beyond a standard salary-for-hours exchange. Managing the split between debt repayment and profit share is key to realising this financial ‘Stake’ and represents a real challenge for the business in the early days when the vendor debt is being repaid.
- Long-Term Value. ‘Stake’ ensures that employees benefit when the company’s value increases. Since the Trust holds the shares indefinitely, the financial benefit is perpetual, securing jobs and future rewards.
2. Soul – The Cultural and Operational Influence
‘Soul’ refers to the cultural ethos, the sense of belonging, and operational influence employee owners gain within the EO model. It’s the psychological contract that turns employees into owner managers who are invested in the company’s long-term purpose and performance.
What ‘Soul’ Means
Essentially, ‘Soul’ is the reason you care about the company’s purpose and have a voice in how it is run. ‘Soul’ is all about the feeling you get walking into the workplace, the way people treat each other, and the collective commitment to something bigger than just profit.
The ‘soul’ of an employee-owned company isn’t just a nice-to-have; it is a crucial driver of long-term success, innovation, and employee retention. The shared values and strong culture are what make EO truly thrive.
- Owner-Mindset and Accountability. When employees understand they have a stake, they tend to adopt more of an owner-mindset. They are more likely to think about waste, efficiency, and client value. The company’s ‘Soul’ is the culture of shared accountability that permeates the organisation.
- Influence and Voice. ‘Soul’ is manifested through governance structures that empower employee owners. This includes having formal representation on the EOT Trust Board, as well as active Employee Councils or Forums. ‘Soul’ is about ensuring every employee owner has a formal channel to contribute ideas and influence strategy.
- Purpose-Driven Work. EO businesses often have a clearer sense of purpose, protected by the Trust. The ‘Soul’ ensures that decisions are not just made for short-term gain, but for the long-term benefit of the people, the community, and the company’s mission.
The Synergy. Why Stake Needs Soul.
The true magic of employee ownership happens when ‘Stake and Soul’ work together.
A business can give employees a ‘Stake’ (a generous bonus) but if they lack ‘Soul’ (no voice or influence), they feel like they’re just getting a large, annual tip. They remain employees, not employee owners.
Conversely, a business can have a great ‘Soul’ (collaborative culture, lots of meetings) but if the financial ‘Stake’ is negligible, employees eventually feel exploited or that their hard work is not being adequately rewarded.
The EO goal is to align the financial interest (Stake) with the psychological commitment (Soul) to create a high-performing, resilient, and equitable business that truly empowers its people.
You’ll be able to listen to the Stake & Soul podcast on YouTube or your favourite podcast streaming platform.
Reach out today to start the conversation with Barry Horner.
Who We Are
We’re Paradigm Norton – a financial planning firm that understands both sides of the employee ownership table.
We’ve supported founders navigating the handover. We’ve helped new EO businesses build sustainable cash flow models. And we’ve lived the journey ourselves, since becoming employee-owned in 2019.
That’s why we approach deferred consideration with two priorities: protecting the vendor’s future and empowering the employee-owned business to thrive.