Getting The Chemistry Right At Scott Bader
"We are unique” runs the tagline of Scott Bader. And it’s true that there are few businesses quite like the Northamptonshire-based chemicals group, with its one-of-a-kind employee ownership structure, Quaker-inspired values and mission to “make the world a better place”. Director met Jean-Claude Pierre, the group’s CEO, to discuss the company’s success formula
The taxi vanishes down the long gravel path, leaving you alone at Scott Bader’s 44-acre Northamptonshire headquarters. An eerie stillness hangs in the air, punctuated by the pealing of a church bell. There’s supposed to be 300 staff working here, but seemingly nobody’s home. With its manicured lawns, apple orchard, swimming pool and lily-strewn goldfish pond, few would guess these barns and meadows harbour industrial plants manufacturing resins, adhesives and pastes. However, when glancing up at the imposing 18th-century manor house, few would be surprised to learn a ghost is rumoured to lurk in the cellar. Not just any spectre – but that of the founder, Ernest Bader.
While some staff swear they’ve encountered the spectre of the man who established their company in 1921, even the arch-sceptic will admit Bader’s spirit permeates the chemicals firm in other ways. When he died on these grounds in 1982, aged 91, the Swiss businessman – who had arrived in London 70 years earlier – owned no private home, car or business assets, having “given away” his company by transferring shares to an employee-owned trusteeship. Having been shaped by his Quaker and Gandhi-inspired beliefs, today Scott Bader goes about its business making and selling resins, polymers and adhesives, while adhering to a doctrine aiming to “make the world a better place”. Not for nothing is the company’s tagline “We are unique”.
“Ernest Bader is not merely a remarkably creative businessman, but also a kind of prophet,” said economist EF Schumacher. Indeed, Bader’s visionary 1951 company blueprint with its commitment to equal opportunities and “responsibilities which extend far beyond its factory walls” could be seen as corporate social responsibility long before the term existed. His fortune-sharing pre-dates Warren Buffet and Paul Allen’s giveaways by decades, while Scott Bader’s pledge to dedicate 10 per cent of staff to innovation and R&D correlates more with Silicon Valley.
“He was ahead of his time,” says Jean-Claude Pierre, group CEO and the man charged with ensuring Scott Bader’s values survive. “[The employee ownership model] doesn’t mean that our business shouldn’t make money – Ernest Bader was Swiss and money means a lot to Swiss people! But it’s [about] bringing people to a different level of consciousness.”
Today, Scott Bader (‘Scott’ comes from Bader’s wife, Dora Scott, whose £300 capital fuelled Ernest’s first business forays) is a pioneering £176m-turnover multinational, employing 650 people on five continents. This expansion was partially down to Pierre’s predecessor, Philip Bruce, who before leaving in June 2015 made strategic acquisitions during his decade-long tenure. “When I was approached for the job, the only thing I knew about Scott Bader was their products and strong reputation,” admits Pierre, a convivial Frenchman who spent 26 years working for multinationals such as BASF. “I took one look at the website, ethos and structure and thought, ‘This is exactly the company I want to work for.’”
Before joining, Pierre spent nine years working in China at Beckers Group and EMS. There, he became interested in Taoism (a passage from fourth-century BC sage Zhuangzi occupies an entire wall of his office), a philosophy he believes harmonises with Scott Bader’s principles. “System thinking is at the core of Chinese wisdom,” he says. “That is something I have been influenced by, as well as the [Taoist] notion of ‘oneness’ with nature. We have a serious environmental duty. This is going to be the next big wave of transformation for Scott Bader – how do we become actors in the circular economy with the products we use and make?”
It’s a major consideration, given that Scott Bader’s products are seemingly in everything – its resins and formulas could form part of your living-room wallpaper, the car or train you commute in, the shower you used this morning. Its fire-retardant gelcoats were recently used in the construction of the new Shanghai Disneyland. Scott Bader’s two biggest-sellers are composites (favoured by large boat-builders – the marine sector is a key market) and speciality polymers, both of which can be used for multifarious roles, including fire-retardancy, reducing vehicle weights plus making products more durable and weather-resistant. Meanwhile, its market-leading Crestabond adhesive and secret-formula Crestapol resin are used to strengthen manholes, buses and racing cars alike.
Myriad products are made at the Northamptonshire site but, while Scott Bader chemicals reinforce a diverse range of products, there’s one industry the company won’t get involved with: defence. “None of the products shall be sold to customers who are known to use them for war-related purposes,” states its constitution – hardly surprising given Ernest Bader helped co-found CND.
Indeed the Second World War resulted in Scott Bader’s move to Northamptonshire – when bombs started raining down near their east London factory, Bader and his colleague spent every weekend cycling away from the capital searching for new premises – and also influenced his world view. The Baders had always been a progressive couple – both vegetarians, they faced racial prejudice when adopting a black son in the 1920s – but it wasn’t until his 1951 decision to hand over 90 per cent of family shares (the remainder followed in 1963) to a new body, the Scott Bader Commonwealth of workforce members, that his vision for capitalism crystallised.
Ernest Bader was widely regarded as slightly eccentric – he sacked people on impulse and detested the British penchant for tea-drinking – but allowing all staff, from factory workers to Bader himself, to become “trustees-in-common” of the company’s assets was revolutionary. The structure, though, differs from traditional employee ownership schemes: “We’re members of the trust, not shareholders – we don’t receive dividends,” explains Pierre. “We receive a minimal amount of a few hundred pounds, set democratically every year but that’s it – our founder wanted to keep money out of the equation as much as possible.”
There are more than 300 employee-owned companies in the UK, which contribute £30bn to the economy. An Edinburgh Napier University study found 80 per cent of employee-owners would recommend their organisations as places to work, exemplified by Scott Bader’s high staff retention (Pierre: “There is a saying, ‘If you’ve spent 10 years with Scott Bader, you’ve just crossed the line between being a newbie and an employee’”).
The model can have limitations, with Pierre noting: “We’re not on the stock exchange so access to capital is limited; you can’t grow as fast.” Unlike other employee-owned businesses, such as John Lewis and Blackwell books, there is no big share payout during a good fiscal year. “Employee ownership is good, but equally important is leadership style, which has to be democratic where self-management is prominent… Like for any company, the challenge for employee-owned companies is to have more decisions taken at employee level.”
Scott Bader’s status ensures it can “never be taken over or acquired”, bringing better governance and “greater stability” according to Pierre. “Customers know that we’ll act the same tomorrow as we do today. When other suppliers are acquired, your business as their customer may end up not being strategic anymore. Suddenly, you have decisions, such as you don’t have the same staff or the same local plant. [Our customers] know that with Scott Bader, this won’t change…”
Such values emanate from Bader’s Quakerism. Cadbury, Rowntree, Barclays and Lloyds all began as Quaker companies, with their reputation for honesty leading to success, as well as introducing paternalistic benefits for workers such as free education, medical care and a pension fund. Today, the key Quaker tenet of “living within your means” is a major part of Scott Bader, with management always taking economy, rather than business-class, flights.
Another Quaker legacy is found in Scott Bader’s “obligation to the wider community”. Today, the company gives a minimum of one per cent of the group salary bill to global charities, whether it’s Zambian orphans or the Prince’s Trust. Meanwhile, each employee receives an annual stipend (around £200) to donate to a charity of their choice. Staff regularly undertake volunteering days – Pierre recently cleaned dishes at a Northampton centre for the homeless – while locals are allowed to use company facilities, with schoolchildren splashing around its swimming pool or pensioners staging tea parties in its Commonwealth Centre.
Another Scott Bader edict is “each generation is charged with handing on the company to future generations in better condition than they inherited it”. Pierre says Scott Bader’s future lies in changing its business model to find “the best way of contributing to a circular economy. What it will look like, we have no idea yet, but it will be in line with our ethos to make the world a better place and being more mindful about how our products are used.”
Whatever happens, the spirit of Ernest Bader will doubtlessly tell them whether they’re on the right path or not.
*Article written by Christian Kock from Director.