Made in Bristol with Love
As the Oscar-winning animation studio behind beloved titles such as Wallace & Gromit, Shaun the Sheep, Chicken Run, and many more, Aardman’s transition to employee ownership (EO) sent ripples across the media industry when it was announced in 2018.
Bristol and Aardman are inseparable. Over the past quarter century, the company has invested £300m in the city and surrounding region, while its iconic characters have become synonymous with Bristol’s cultural identity.
Why EO Was the Right Fit
Peter Lord and David Sproxton co-founded the business back in 1972. After 40 years of producing award-winning animations, they began to consider how they’d preserve the skills, culture, and quality of work they’d built at Aardman once they retired.
A trade sale was ruled out as it risked the company’s IPs being shipped out to other countries in tax-advantaged territories. Ultimately, this would cause the company’s Bristol setup to be shuttered.
Various other succession options were floated - including an MBO - before the duo decided a move to employee ownership was in the best interests of the business, its staff, and Bristol.
“In an industry which is so people-based and dependant on the skills and imagination of individuals,” says David, “it’s imperative that you find some way of retaining those because that’s the bedrock on which your company is built.”
Considerations
The founders felt that the business already had the right cultural alignment and a profit-sharing system in place. Employee ownership was the logical next step.
As the pair wanted to avoid any potential challenges that might arise from internal share dealing, or buying back shares from departing employee owners, they settled on an Employee Ownership Trust (EOT).
As well as supporting salaried employees, the pair also discovered a way to support their extensive list of freelancers. Given freelancers are seen and treated as an extension of the wider Aardman team, this became a crucial part of their EO planning.
The duo gave themselves twelve months to prepare for the move, as the company’s extensive repertoire of subsidiaries, IPs, and associated technicalities meant there was plenty of legal paperwork to wade through.
Approach
An employee council was established to help employee owners provide input into the running of Aardman, while the senior team joined a new board of directors to lead the business. As this board reported to the board of trustees, it’s also able to decide on the bonuses that employee owners are entitled to.
To communicate the company’s EO values and ensure everyone supported the transition, Aardman founded the Partners Representative Group. This saw the company divided into ten constituencies with nominated trustees representing around thirty employee owners in each.
To further boost transparency, they evolved how financial figures and business updates were reported, establishing quarterly financial and creative updates open to all employees.
Additionally, Aardman bolstered its communications with freelancers and across its two sites to support employee voice and participation by:
- overhauling its meeting rooms to support video conferencing
- updating its internal communications system, and
- making its company intranet more user friendly.
Reflections
As a pioneer in the entertainment industry operating an EO model, Aardman says it’s come a long way in learning how to get the most from its new structure and defining how to effectively utilise the roles of the trustees, executive board, and the Partners Representative Group.
“I believe the business is in a much better place,” says Managing Director Sean Clarke. “We can see from our internal surveys that partners in the studio are happier with respect to communication around the running of the business, its vision and long-term strategy. This, in turn, translates into a more motivated and productive studio.”