As published in EG on 27 October 2022

When real estate consultancy Hollis announced its switch from a limited liability partnership to employee-owned business in October last year, the thorny issue of succession planning had been playing on John Woodman’s mind for a while.

It was not a decision taken lightly, says Hollis’s chairman. He had been considering how to future-proof the company for months – years, even – painfully aware that businesses like his can easily get it wrong.

“When companies still have founding partners knocking around like we do, I have noticed that succession planning can go badly because people are not always very good at letting go,” he says. “I know, though, that at some stage I am going to have to let go. There are a lot of really good people coming through the business who could, and should, take over.”

Now, nearly 12 months on from the announcement, Woodman lifts the lid on the lead-up to the decision to make the business employee-owned and discusses why he is waiting for “just the right moment” to leave the company in the capable hands of its nearly 500-strong team.

Time taken

A hasty resolution around how to hand over the reins of the business Woodman set up three decades ago with his fellow founding partners was not an option. Time was dedicated to the conversations, deliberations and discussions. Lots of time. “During the pandemic the management team started talking about next steps for the business every day at 8.30am – that included weekends,” he says.

“We talked through all of the options and eventually landed on this idea of making Hollis employee-owned.” The catalyst, he says, was what he saw unfold when the pandemic first hit. Facing what he knew could be a “major crisis point for a business like ours”, he looked on as Hollis’s digital transformation team – made up of people “far cleverer” than himself – stepped in to get the company set up remotely as quickly as possible. It was this that sparked the realisation that spreading influence and profit across the whole business, incentivising young employees and attracting fresh talent could be the answer to securing Hollis’s ongoing longevity and success.

“We think that young people will want to work for employee-owned businesses,” he says. “The traditional equity partner model is all well and good but all the profits going to a few people probably isn’t going to be the model of the future. Across the wider business the decision has been well received, as it is such an appealing business model for young people within the sector, both in terms of financials but also from a social perspective.

“We have had a junior board for a while but the idea of formalising a structure whereby everyone has a say, influence and voice is an attractive one.” As for the partners, it will take time to understand how it is all going to work. However, Woodman is quick to point out the move was more than just a strategy to attract fresh young talent into the business; it also made sense commercially. “The EOB model provides a mechanism for the founding partners to leave the business through tax incentives,” he says. “The proceeds from the sale of the business in this scenario are tax-free. So it is a tax-driven solution that effectively costs the company nothing.”

No hanging around

And as for Woodman himself, has the long-deliberated future route for the company given him the confidence to let go? The answer is inconclusive. “In terms of a personal plan? I don’t really have one, if I am being completely honest. There are plenty of things I could do but I think there will be just the right moment. Right now, people are still slotting into their new roles and we are quite nervous about the current economic climate.”

While the right time might not be imminent, Woodman is keen to ensure he doesn’t miss the window to step back at an opportune moment. “There is no retirement age policy at Hollis but it is important that people like me don’t hang around for too long,” he says. “You have to step aside to give other people the freedom and let them loose on things for a while.”