Working as a co-operative brings creative as well as business benefits for Cullinan Studio
‘The design of buildings is a social act…’ begins the handwritten manifesto of our practice, Cullinan Studio. If designing for the built environment is indeed a social act, can the practice of it reflect that concern? By operating as a co-operative, all members of our practice have an equal say and share in the business and have done so for the past 50 years. As the Employee Ownership Association (EOA) has recorded, more businesses are adopting some form of employee ownership, accounting for 4% of the UK’s GDP. In 2014 the HM Treasury allocated £75 million in tax relief to support the growth of employee owned companies.
The co-operative is just one form of employee ownership; governance and structure can differ hugely and each organisation will have its idiosyncrasies. For a potted definition, every qualifying employee has a stake in the business, be that directly through share plans or indirectly through a trust.
Cullinan Studio has shown leadership in this area for decades, lately mentoring fellow members of the EOA, and we find ourselves in good company in the built environment sector. A useful sample is the EOA’s Top 50 largest members, which in 2018 accounted for 171,000 employees and £19.8 billion combined sales up 6.5% from 2017. EOA companies working across the built environment sector account for just under a quarter of that combined revenue and employees.
Employee ownership is increasingly the choice of start-ups, but it also neatly solves the problem of business succession. As in the recent examples of Haworth Tompkins and BuckleyGrayYeoman, the workforce buys out the owner.
Uniquely to us, Ted Cullinan set up the practice without shares or literal stakes, running the co-operative with members akin to partners in the legal sense. This was reorganised in 1990 into a formal legal structure, with two limited companies (the design practice and the premises) under an employee benefit trust holding 100% of the equity.
Directorship over the various entities is shared by members of the co-operative, who we continue to call ‘partners’. Profit share is decided on together annually by partners using a points system, which also defines salaries. The points are limited by a three-to-one ratio between highest and lowest earning partners.
Empowerment and transparency
Money talk aside, arguably the two most successful attributes of the cooperative are transparency and empowerment. They do however beg the efficiency question: should all employees be involved in the business of business, as well as the business of designing buildings?
The pros are obvious: it is egalitarian, it promotes open discussion – usually in the quintessential open-plan office – and teamworking, and responsibility is shared. Transparency is good for employee welfare, as my colleague Wen Quek explains: ‘Younger members feel more in control of what they do, contributing to personal wellbeing.’
It can also help the bottom line. Laura Cooke, from fellow EOA member Make, underlines that transparency is fundamental to the comprehension of why things are done in certain ways, linking understanding to helping cost control. For all partners, being better informed eliminates gossip and guesswork on the business’s health.
Tim Hurstwyn from Expedition Engineering (a part of the employee-owned Useful Simple Trust) explains there must be a balance, that transparency must have education alongside so that, rather than challenging everything presented at partners’ meetings, those not assigned to resourcing and finances can be more comfortable in asking questions.
Additionally, benefits such as profit shares act as an incentive to do one’s best, and there’s a fairness to such a reward system. Yet sharing profits also means sharing business concerns and responsibilities alongside project work – a jack-of-all mentality that may well suit an architect but must be reinforced by a robust management structure.
The social act of architecture
There is a case to be made for employee ownership as a complementary way of producing good design. Renée O’Drobinak from Donald Insall Associates stresses that the longevity required to validate the practice’s conservation work rests upon colleagues being invested enough to stay over a longer period, retaining knowledge for long standing clients such as the Palace of Westminster. Cooke agrees that Make’s business ethos impacts positively on its architectural work, allowing collaborative decision-making without ‘a boss’, which translates into eschewing a house style.
On a practical level for Cullinans, fellow architect Nathan Breeze says: ‘I think it’s particularly relevant to consultation services, such as workplace design, as we are able to understand and sell the benefits of engaging lots of people across an organisation.’ Theoretically, he says this also should mean a natural boost to everyone’s confidence in expressing their opinion, so there may be more good design ideas on offer.
It’s clear that employee ownership goes some way to addressing the issues experienced by some in a traditional hierarchical structure, but the idea that it can influence a richer and more humane design of the built environment is quite tantalising.
For me, it’s the trials and successes of working in a practice that, rather than simply being a perfected antithetical business model, is a continuing social experiment in itself.
Sahiba Chadha, partner, Cullinan Studio is a member of RIBAJ’s Rising Stars cohort 2018