Creating an employee owned company - and changing the face of health care

How do you create a great employee owned company?  Most companies in employee ownership start off in more traditional structures, then transfer to an employee owned model for reasons of business succession, or owner vision.  One company proves that starting from scratch can produce superb results.  At the recent Leadership Course run by Baxendale at Oxford University, Ali Parsa, Chief Executive and Founder of Circle Health, talked of his passion to create something great, a business owned by everyone.  Circle Health is a great success story.  Founded in 2004, the company has grown from zero to a turnover of £100m.  There are now 1000 partners.  The plans are that in four years, Circle Health will have 10 000 partners.  That will be 10 000 employees who own the company in which they work - influencing, participating and sharing in the rewards they helped create.

Ali delivered an inspirational message. The reason we do not create many great companies in the UK is because we settle for "good enough".  We don't have great hospitals or schools because what we have is good enough.  Ali told the Oxford students the three principles of creating a great business:

1. Do what you are passionate about. It is passion that drives great performance and great results.

2. Do what you do better than anyone else. Unless you can do something simpler, better or deliver more value then let someone else do it. Within Circle Health, if the procedure is being performed better elsewhere, they don't do it. 

3. Do what makes economic sense. There is no point striving for a higher purpose, working hard at what you do, unless it meets your financial goals.  This isn't about pursuing highest profit: for example, employee-owned Arup strives for "reasonable prosperity". You define what makes economic sense to you.

iIt could be said this is standard business stuff, but why choose an employee owned structure?  For Ali Parsa, this is central to the credo of Circle Health. Ali  was formerly Executive Director of the investment arm of Goldman Sachs.  He saw that although everyone in that organisation worked hard, only those at the top would benefit from the rewards.  Ali wanted to create an organisation that everyone could feel part of; where everyone in the company would have an ownership stake.  He also believed that there is a better way to deliver healthcare.  One of the central tenets of Circle Health is that clinicians are the best people to decide on how clinical decisions should be made, not bureaucrats or politicians. The patient is put at the centre, and the service is built around the needs and interests of that patient. All employees are encouraged to challenge, improve and participate.

The model works.  Health Minister, Andrew Lansley was very impressed with the Circle Health structure and what it has achieved. Ali Parsa is now advising the coalition government on how public services can be delivered more effectlvely- and that means putting control in the hands of those who actually deliver the service. 

The delegates on June's Baxendale Leadership course were impressed and inspired by Ali's presentation.  The story of Circle Health shows that combining sound strategic thinking with participative ownership structures can bring incredible results - for customers, employees, and for society.