The Hard Middle of EO
Where Value Is Won or Lost
There’s a moment in the life journey of every employee-owned business where the energy shifts. The transaction has completed. The announcement was celebrated. People feel genuinely proud of what’s been created. And then the work begins.
Not the work of being employee-owned. The work of running a business under constraint, with growing ambition, heightened expectations from employee and a leadership structure that often hasn’t yet evolved to match the complexity it now faces.
Financial Freedom Day – the point at which the EOT loan is fully repaid – is rightly celebrated as a milestone. But in my experience working across scaling organisations, including EOTs navigating the post-transaction years, it is also the moment that reveals everything that was either built or neglected in the years preceding it.
This is not a piece about culture, or purpose, or the ethics of employee ownership. Those things matter. But they are not what determineswhether your organisation performs through the pay-down period. What determines that is whether your leadership team has the organisational capability, execution discipline and decision-making clarity to sustain growth while cash is constrained and the board’s attention is stretched.
This Risk Is Tangible! In the last eight months we’ve been having conversations with exec teams and trustee boards across a wide array of EOBs, typically in the 2-4yr period post transaction. The lived experience for a large proportion of these stakeholders (over 60%) is that they do not feel optimistic on how the business is progressing along its EO journey – and have real fears around whether they can continue to operate, satisfying exiting shareholders and employees in a commercial market that feels different to the post-covid bounce when the sale transactions were completed.
This is where Still We Grow’s work begins. Not as a cultural intervention, but as a commercial one.
Ownership Must Change How Decisions Are Made
One of the most common misconceptions I encounter when working with newly employee-owned businesses is that the transaction itself changes the organisation mindset. It doesn’t. It changes the ownership structure. The organisation only changes if leadership deliberately redesigns how it works.
The critical question for any EOT leadership team is this: who actually makes decisions now, and are those decisions being made well to move us towards our new desired future as opposed to our default one…
In my experience, post-transaction decision-making often deteriorates before it improves. Trust boards sometimes drift into operational territory they should be overseeing rather than managing. Leadership teams, newly aware of their accountability to a broader stakeholder base, can default to consensus-seeking where clarity and pace are needed. Commercial trade-offs that were once made quickly become extended discussions.
This isn’t a failure of intent. It’s a failure of design. Growth under constraint requires faster, clearer, evidence-led decisions – not more debate. And that requires explicit decision rights: who decides what, at what level, with what information, and by when.
Drawing on my advisory work across scaling businesses – including multi-year engagements with organisations growing from £30m to over £100m in revenue – the organisations that sustain performance through periods of significant change are invariably those that have invested in decision-making infrastructure. Clear accountability frameworks. Defined escalation paths. Commercial awareness distributed across leadership, not concentrated at the top.
Employee ownership should sharpen this. If it doesn’t, it becomes symbolic – a story the business tells, rather than a discipline it practises.
Engagement Without Execution Is Expensive
This is perhaps the sharpest thing I can say to any EO leadership team, and it is the point where Still We Grow’s perspective most clearly diverges from the prevailing narrative in employee ownership circles.
High engagement without execution discipline does not create performance. It creates friction.
I’ve seen this play out across organisations at various stages of growth. A newly employee-owned business invests heavily in communication, consultation and culture-building programmes. Engagement scores rise. And then (quietly, steadily) execution quality falls. Because too many initiatives are running simultaneously. Because everyone has been consulted, but nobody is clearly accountable. Because projects have been launched without any serious analysis of whether the organisation has the capacity to deliver them. Because cultural conversations are happening in the absence of any clear link to commercial outcomes.
Every initiative consumes time, attention and energy. In the pay-down period, when cash is constrained and leadership bandwidth is stretched, capacity is the scarcest organisational asset. Consuming it on engagement activities that don’t translate into execution improvement is not a neutral cost. It is a direct drag on performance.
This is not an argument against engagement. Engaged employees perform better – the evidence is clear, but engagement is a means, not an end. In an EO context, the outcome should be an organisation that executes its strategy more effectively, allocates its resources more intelligently and generates better commercial outcomes for its employee owners. If engagement isn’t producing that, something is wrong.
The 62% average improvement in strategic execution efficiency we’ve measured across our client engagements has not come from culture programmes. It has come from structural changes, operating models, how work is prioritised, how decisions are made and how performance is managed.
Organisational Design Is the Bridge
If I had to identify the single most common gap between EO aspiration and EO performance, it would be this: the absence of an operating model designed to absorb the organisation’s growth ambitions.
Most EOT businesses inherit an operating model from their pre-transaction phase. It was designed for a different set of constraints, a different leadership structure and a different strategic intent. The transaction changes all three. The operating model often doesn’t keep pace.
What that looks like in practice: functions operating in silos without clear cross-functional accountability. Performance disciplines that were adequate at smaller scale but can’t support the complexity of a growing business. Leadership structures that were designed for founder-led decision-making but haven’t evolved to distribute authority appropriately. Governance processes that create bureaucracy rather than oversight.
Organisational design (the deliberate redesign of how the business is structured, how decisions flow, how performance is managed and how resources are allocated) is the bridge between ownership aspiration and commercial reality.
In practical terms, this means addressing some very specific questions:
- What gets stopped? (The initiatives, structures and processes that consume capacity without generating proportionate value)
- What gets sequenced? (The growth investments that are right but need to be phased against cash and leadership capacity)
- How are trade-offs explained? (So that employee owners understand commercial constraints without feeling excluded from strategic intent)
- How is progress reviewed? (With what cadence, using what measures, against what goals)
I have spent the last decade working with founding teams, boards and executive leadership groups on precisely these questions – across sectors including technology, financial services, professional services and engineering, and at revenue scales from early-stage to £280m. The pattern that predicts performance is consistent: organisations with clear operating model design outperform those that rely on leadership quality alone.
An operating model that cannot absorb growth will make Financial Freedom Day irrelevant. The distributions will flow into an organisation that doesn’t know what to do with the freedom they represent.
By the Time You Reach Freedom Day…
Financial Freedom Day should be a confirmation, not a rescue.
If the pay-down years have been used well – if leadership has genuinely invested in building the operating foundations that commercial performance requires – then by the time the loan is repaid, something important will have happened. Employee owners will already understand commercial reality, because the organisation has been transparent about the trade-offs it navigates. Ownership will already be influencing decisions, because the accountability structures have been designed to make that real rather than symbolic. Execution discipline will be stronger than it was pre-transaction, because the organisation has been forced to prioritise. And growth will be intentional rather than reactive, because the operating model was designed for it.
In that scenario, Freedom Day is a genuine milestone – the moment when the financial constraint lifts and the organisation, already well-designed and well-led, can accelerate.
If the pay-down years haven’t been used well, the picture is different. Freedom amplifies what already exists. If the organisation has drifted into low execution discipline, Freedom Day accelerates the drift. If complacency has crept in, the removal of financial constraint removes the last structural pressure that was keeping performance honest. If the board has been reactive rather than strategic, Freedom Day gives them more to react to.
Still We Grow works with employee-owned businesses at exactly the point where this choice is made: in the years between transaction and freedom, when the decisions about operating model, leadership capability and execution discipline will determine what Freedom Day actually means.
Our Growth Foundations framework (30 operational practices spanning strategy execution, organisational design, commercial performance and leadership effectiveness) provides the structured, commercially rigorous approach that EO businesses need and that the broader EO advisory market has not, until now, consistently offered.
If you are leading an EOT business and recognise the patterns described here, the conversation worth having is not only about culture or values. It’s about how your organisation is designed to perform.