Table of Contents
- What is an EO
- Why we became EO
- Our journey to becoming EO
- What it means for our clients & team
- The founders
Employee ownership (EO) is sometimes referred to as the ‘John Lewis model’. It’s a government incentive to encourage more businesses to be led by employees.
At NOVOS, this means that:
Sam and Antonio, the business’s founders, have sold 90% of their shares to an ‘employee trust’, which is a legal representation of the employees set up as a separate entity on Companies House
The role of the Trust is to represent what the employees want and need, giving them a voice in how the company is run
We launched a People Committee responsible for collecting feedback, ideas, and issues across each part for the company and feeding that into the Trust
Sam and Antonio still run the day to day business alongside the leadership and management teams, however, any large decisions that will directly impact profits need to be voted for by the Trust (.e.g new markets or services, very senior hires).
It’s important to note this is not an EMI scheme - it’s very different and is treated as a business sale to another company. In this instance, the new company the employee ownership trust (EOT) referenced.
How Does This Differ From A Normal Sale?
We strongly believe this is a more rewarding route than a traditional merger or acquisition for an agency.
We can name tonnes of incredible agencies that no longer exist because the purchasing company absorbed the brand after the founders left. We’re yet to hear a positive story about an agency that's been purchased by another.
This is a common trend and compromises the longevity of small and medium-sized agencies. The worst stories we’ve heard are from current staff who have experienced a sale at previous agencies they’ve worked at. Everything they’ve worked toward gets ripped beneath them, ultimately impacting their personal life.
This is how we view the benefits of an EO vs. a traditional agency acquisition route:
Traditional | EO | |
|---|---|---|
Targets | Ridiculously high so you purposely will not achieve them | We’re in control |
Motivation | Destroyed due to targets | Motivation boosted |
Earn out | Founders need to ‘earn out’ the company they’ve built | Founders remain and are rewarded |
Founders | Leave after 2-3 years | Founders stay for 10+ years |
Staff | Leave inline with founders or sooner | Stay for much longer |
Staff benefits | 0 | Ownership, voice and profit share |
Business longevity | Short 5-8 years | Forever if we adapt |
Culture | Destroyed | Maintained and evolved |
Client benefits | None | More motivated account team and stable/always growing service quality |
Why We Became EO
There are 3 core reasons why we embraced the EO route vs. a traditional sale to a larger company:
- Values - Many agencies use the term ‘people first’, but we actually live and breathe it. We’ve gone a step further and are a fully-fledged ‘people-led’ agency, driven by those who helped build the company to where it is today.
- Everyone gets rewarded - A traditional sale doesn’t guarantee team benefits. Only the founders and a select few with shares benefit from any dividends/rewards, whilst the employees are left to transition to a larger company, often with a completely different culture.
- Longevity - The longevity of the business is maintained, as with so many incredible independent agencies of the past that are now non-existent after they’ve been absorbed into their parent company. This way, NOVOS can live for longer as Sam and Antonio continue to support the company’s growth.
Our Journey To Becoming EO
2018
Sam and Antonio launched statement.digital whilst both employed at their in-house roles.
2019
2019 marked the first year Sam and Antonio focused on the agency together, executing a rebrand, moving into a co-working space and hiring their first team members.
2021
2021 was the year we hit some major business milestones. Exactly 2 years after hiring our very first employees, we hit the million-pound mark!
2022
The year we became EO after scaling the agency to over 30 people and doubled our revenue in just one year. Pretty impressive stuff!
2023
By 2023, we had grown 100% YoY since launching, all whilst keeping one thing consistent: our people-first mindset.
2024
Following an incredibly successful year, we had to make a plan for what the future of the agency looks like. A new strategy, and a new chapter for NOVOS.
What It Means For Our Clients
Our team has always spared no effort for our clients who live by the same values. And becoming EO means this love and attention are taken to an entirely new level. Our teams directly benefit from client retention, account growth and campaign performance, meaning they really care about keeping the brands we’re fortunate to work with happy.
Generally, many agencies experience serious issues with retention, and even more so in the digital agency world. EO has helped us to retain senior talent, enabling us to maintain a constant team structure that benefits all involved. Additional benefits for our clients include
- More togetherness amongst our team, which will make them even more motivated to be the absolute best and ahead of every competitor.
- We’re not selling to an external party or being acquired, so we're not going through major changes that we see every agency do, and you’ll never have to experience that with us.
- Morale and enthusiasm are higher for everyone in our team because they have more skin in the game, so therefore will go even more above and beyond for the business as they’re owners now, as opposed to treating it as a standard job.
What It Means For Our Team
We pride ourselves on our generosity with employee benefits. Unlimited annual leave is one of our most recognised perks - we can only offer it by putting a high level of trust in each other to support our teams.
We also operate an online peer-to-peer rewards system, Assembly. Each month, our team receive credits to reward teammates, which can be claimed as vouchers for leading eCommerce brands, medical appointment discounts, experience days like driving an F1 car or the ever-popular Deliveroo orders.
Beyond fiscal gains, our team has a much larger voice in company direction and decision making. Through the People-Committee, ideas and issues are fed into the Trust to support how the agency operates.
Our long term vision is to have over 50% of profit shared between the team. When achieved, it will be a completely unique concept to the agency world.
The Founders
An EO model is structured to incentivise founders and shareholders over a longer period, ensuring the long-term health of the business.
For the first 3 years, we chased sales targets similar to other agencies. But once we became the first SEO EOT business, our mindset shifted, focusing on being best in class, working with the right clients and team, and building a sustainable profit over a 10-year+ window.
“We created NOVOS to be truly different from other agencies in the industry, and becoming an EO company enhanced this vision. The next phase is to share over 50% of profits with staff - something we can only achieve by working with brands that share our values.
We’re both confident that the people who helped build this agency are the right people to lead it into the next level of growth.”
Sam & Antonio
