Guy Turnbull On Cooperative Enterprises Creating Shareable Value For Employees

Dr. Guy Turnbull is an award-winning, internationally recognised social entrepreneur.

Highly acclaimed in his field, he has been a major figure in the co-operative and social enterprise sector since 1988, including building a UK based $35m care co-operative from scratch and co-creating ‘RED’ - an innovative approach to social enterprise development with people with disability. He was the 2018 Don Dunstan Foundation Thinker In Residence focused on building South Australia’s social economy through developing co-operative solutions to community and societal challenges.

In 2016 Guy’s work in the care sector was recognised by The Great British Care Awards where he became national winner in the ‘Outstanding Contribution To Social Care’ category. He was also the winning UK national finalist in EY’s prestigious global competition, ‘Entrepreneur Of The Year’.

Guy discusses his path to discovering the equitable outcomes created by cooperatives and the benefits of self employment for people experiencing disability and homelessness.

Highlights from the interview (listen to the podcast for full details)

[Indio Myles] - To start off Guy, could you please share a bit about your background and what led to your interest and work in social enterprise?

[Guy Turnbull] - It has been a bit of a journey really. My doctorate is in geography, I've got a PhD in social geography and when I was writing my thesis, it was about youth unemployment and why employment policy didn't work in areas of high youth unemployment? I went undercover and ended up supporting the development of a housing co-op in a difficult to let housing estate in the Northeast of England. This was just to build awareness and understanding, and I discovered during this time why youth didn't want to work.

[I also wanted to] be a geographer, an academic and a lecturer, and then I just became blown away by the cooperative model, and how this could be ethical and share ownership with workers and consumers.

I eventually decided that I would give up my academic career and focus on developing cooperative businesses. That was back in the late eighties, and then from there I went on to become a co-op development worker for a local authority in the UK for a number of years, and later on I set up my own co-op in consultancy work. What I learnt in that time was interesting, because I always describe myself as an accidental entrepreneur. I never saw myself as running a business or a social enterprise. Some of the things I learned along the way, which informs how we operate today was firstly you need to make your business model attack the social purpose or social requirements. For example, with the care co-op we set up in the UK, the main challenge was staff continuity and keeping labour turnover as low as possible.

The way you deal with that is you give the workers a share in the business, so if you make a profit, that profit shapes the workforce and makes the workforce stay loyal.

They become engaged in delivering the service, and this brings your staff turnover lower so you deliver higher quality care. It's all about not just running your business and then giving money to a social purpose because it's two sides of the same coin. It's coming up with social enterprise models where the actual business model informs the social purpose. I think that's really key, and I think the second thing is business can be overly complicated. It is all about bringing it back down to very basic ideas about where is your breakeven point and how can you keep that low? It's often easier to keep your costs low rather than just going for sales, certainly at start-up time. Start modestly but have ambition to grow.

As a Director of Healthy Social Care Pty Ltd, can you explain to our audience the key differences between social care and traditional health services?

Social care is a UK term, out in Australia it's more disability and home support. Social care is the non-acute, non-primary care activity you deliver in people's homes or in centres outside of a hospital. It's about delivering at home support, NDIS support, supporting people in social activities and economic activities, that's essentially what social care means.

What piece of advice would you give to an aspiring changemaker to help maximise their chances of success in the field?

I think you need to be really clear early on about what your business model is. It's about trying to come up with a business model which integrates with the social purpose. Another great example is the Big Issue, which is a newspaper raising awareness of homelessness and also creating jobs for people who are homeless. It's route to market is employing homeless people to sell newspapers, so it's raising awareness and its actual business model is linked to a social purpose. You've always got to keep that in mind, so another example back in the UK is we set up a craft co-op. The problem craft makers face is that they're very good at making stuff, but not very good at selling it. If you create a cooperative of craft makers, you get that economy of scopes with 20 to 30 different makers together in one co-op. They can then afford to pay for a lease in a city centre shop and to provide to a professional shop manager who knows how best to sell their products. The more an individual member of that cooperative sells through that shop, the more an impact is commissioned.

Integrating the business model with the social purpose is when ethical business can really make a difference. With the Rapid Enterprise Development (RED) model and when I was on the housing research for my PhD, I didn't realise I'd end up running a $35 million care co-op. Along the way I learnt a few nuggets of knowledge on how to write a business plan, raise money, check viability and we fit that very much into RED. It's all about making business development accessible for people with lived experiences, and it starts on the premise that business actually is all about people, I'm talking about the entrepreneur. It's about working out whether the founding group that is setting up the enterprise have the focus, positivity, idea generation, thick skin and resilience to succeed. The more I thought about it, the more I recognised that there's a relationship and link between those entrepreneurial traits and lived experiences with disability. Having a thick skin, being focused and doing things over and over to get it right and ingenuity are linked together.

When we run our RED workshops, we start with what makes you an entrepreneur, and then we go straight to breakeven point. If we have a neat, simple way of training, teaching and explaining the important gross profit concepts and contribution, they can be aware (for example) of how many t-shirts or how many bars of soap they need to sell to break even. Once you've worked out that backbone packet point, you can then do the market research and competition analysis to actually recognise whether its viable or not. Once you can boil your business down to two or three key areas or KPI's, then everybody can understand what you need to be moving towards. We've had some great fun with it over the years and we have been really fortunate. It was almost started as a hobby to give something back, but then I became able to oversee the RED program in South Australia which started about three years ago. We've actually been sharing a lot of support with the lived experience community here in South Australia. It's basically Maslow's Hierarchy, so what do we all need? We need somewhere to live, someone to love and something to do. There's proof in lived experiences that something to do is sometimes a real challenge because a lot of people work for an income, but the job itself does not feed into their self-esteem and the range of other things in the occupation. For people with a lived experience where mainstream work is a challenge, building self-employment opportunities is a real viable option. One of our clients Melissa wanted to be a fashion designer, but she's also a great artist. We ended up creating this line of t-shirts, she outsources the printing and sells them at market. Along the way, her confidence, self-esteem and knowledge increased, and she even asked for support to see the change and the confidence.

If you are self-employed, you become more confident. Disability isn't just about physical empowerment, it's about how you feel about yourself. It's about body image, and if you can address some of those social issues by becoming self-employed, then you really start to address those deeper challenges around disability.

What developments have you seen occurring in the South Australian social enterprise space?

It's been really interesting, because I started to come to South Australia in about 2013 when I met my future wife and began commuting between the Northeast of England and South Australia. Obviously, we were very fortunate to be invited to the Don Dunstan Foundation to be the thinkers in residence in 2018. I think some of the great changes have been firstly around infrastructure, so the creation of the SASEC coalition and the development of better business supports for people thinking about social enterprise submissions. I think we're certainly not there yet; there's still a lack of access to social investment capital in Australia widely. Starting up on the co-op or social enterprise route, it's quite difficult to raise start-up funding.

The big challenge for creating a really vibrant social sector is getting access to early risk capital.

That's something which is still a challenge in Australia. If you look at the UK, it's got a much more mature social investment market, and that's certainly not the case here yet, but it needs to be. One factor is business development support and tailoring those bespoke decisions for a sector, but secondly, you need access to early risk capital to really grow the idea. One of the other really good changes in South Australia is through social procurement, and I think one thing COVID has taught all of us is that the government can act and use its spending wisely. I think the idea of using public procurement to generate local work and retail workflows is really key.

Where do you believe there are opportunities for entrepreneurs to address the issue of access to healthcare?

One of the other social projects that I'm currently leading with my co-director Arthur is VIVA Mutual, which is a not for profit at-home support provider. We started in November in 2020, and we currently have 60 workers delivering about 1,300 hours a week of disability support. That is all a part or where the real opportunities are, which is on the cusp between acute and community. We need to see health and disability care as a system, so one of the reasons we get ambulance ramping is that it's very difficult to provide a safe and timely discharge for patients and give enough support in the community to allow them through the hospital. What you need to do is create social enterprise and co-op solutions in response, so one idea is to avoid hospital admissions in the first place. There is home use technology and a range of other options to try to lower that admission rate. Then secondly, to have services that reach into the acute sector and to facilitate a safe and timely discharge.

One of the things that is starting to be recognised in South Australia is the importance of lived experience peer support work.

For example, a lot of presentations in AME are around mental health, and actually if we can do more early intervention and employ more people with lived experience in a confrontation peer support, we could get alongside those individuals to avoid costly admissions and create better health care outcomes.

What other organisations do you believe are creating a strong social impact?

I think in the UK things have really changed the landscape with an organisation called the Social Investment Business which really modelled that market for social investment. When we started CASA back in 2014 and grew it to a $35 million co-op, we did all that with unsecured debt. That would be a big challenge currently in Australia. Secondly, I think bizarrely the other organisation that really made a difference was the UK Government. My background is co-ops, new employment and businesses, and the tax treatment of workers and businesses in the UK is very favourable.

If you have your business majority owned by what's called an employer trust, you can distribute profits to the workforce tax free, and that resulted in burgeoning interest in employee ownership in the UK, but also in terms of transforming business succession.

Retiring owners not selling out the highest payer or to foreign investors, but actually selling the business to the workforce is crucial. That again will retain wealth locally, and what we need to do is create a locally owned social enterprise and co-op so we can actually bridge wealth. What we know about employee owned businesses is they retain wealth within their communities because they pay better and they're owned locally, so you haven't got people stripping out profit, but instead reinvesting it back into the local community. It's that idea of recycling money and cash, and that is what social procurement is all about. If we're serious about community wealth building, it's about building a sieve of all the cash which is fed to the community. If you google the Employee Ownership Association in the UK, there's also an Australian version as well. Also look at the Business Council for Co-operatives and Mutuals.

What books or resources would you recommend to our listeners?

There's a book called The Great Game Of Business written by a hero of mine Jack Stack. I've actually met Jack, and he's in his seventies now. Jack was running an American tractor manufacturer, and he gave it to his workforce. He actually gave the business to the workforce, but he couldn't work out why they weren't acting like owners. What he did over the following decade was come up with a whole methodology for how you can get your workforce to start acting like owners. He simplified how they interpret the business and it became about everybody understanding they can follow the actual dashboards and get a stake in the outcome.

I remember when we were developing CASA and VIVA Mutual now actually, it's very easy legally to give somebody a share in your business, but it's very difficult to get them to act like owners. You constantly need to reinforce and find ways of engaging the workforce.

What we know in health and care is engaged employees deliver high quality care, so its about how we create that engagement. My second book recommendation is the novel Catch-22 by Joseph Heller, it just makes me laugh! It’s one of the only novels I've read more than once. The first time I read it I wasn't sure if I fully understood it, but it’s one of those books you can actually read again. It is full of catches in life, and the 22nd catch in life is about flying in a world war. It's just fantastic.