Torchbox Gave Employees Ownership. Then Profits Doubled.

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While engagement may have been viewed as a fluffy metric in the past, it’s directly tied to business success: Engaged teams are 21% more profitable and 17% more productive. Torchbox, a creative digital agency for purpose-driven businesses, prioritizes employee engagement and reaps great benefits. Since moving to an employee-ownership model in 2019, the company has doubled its profits.In recent years, Torchbox Chief People and Planning Officer Olly Willans expanded his own focus on employee engagement.“It’s [about] trying to find the right opportunities [and] trying to put people in the right scenarios where they can do their best work,” Willans said. When you set up your people to do their best work, it only strengthens your company.

Employee-Ownership: Prioritizing People Over Profits

Twenty years or more into leading a company, many founders start looking for an exit that will bring them a mandatory return, such as a company sale. But for Willans, this wasn’t the right approach. Employees join purpose-driven companies like Torchbox to do purpose-driven work, and selling Torchbox could mean losing track of the company's values. “You start worrying about what’s going to happen to the employees, perhaps more than you might do in a less purpose-driven business,” Willans said.The company took on shareholder debt that would ultimately allow profits to go to employees. Torchbox leadership aimed to pay off the debt in five years — instead, the agency improved its profitability and paid off the debt in three. Pursuing an employee-owned business model, though, brought benefits for everyone:

• An exit opportunity for the founders
• A fitting legacy for the business
• Profit sharing that rewards employees

The top priority after Torchbox reached financial freedom was to give employees pay raises and larger bonuses — which are now profit shares — along with investing in new initiatives and projects.“We’re looking at the future and saying, ‘Where does this business want to go for the benefit of these employees?’” Willans said. Torchbox’s commitment to its people offers a clear example of how, when you prioritize people over profits, you’re likely to attain both.

How Company Structure Helps People Succeed

A true focus on employee engagement starts at the highest levels of company leadership and extends to every aspect of the business.

1. Invest in tools that support managers.

For employees to have support and clarity around professional growth, managers throughout the organization must be comfortable having career conversations with their teams. But those conversations require training. Companies need to invest in tools that help managers facilitate ongoing dialogue with their teams about feedback and growth.Willans is working to improve the quality of line management at Torchbox. The current structure is a relatively spread format in which most line managers manage two people or fewer, but the company is considering new ways to organize line management.  Torchbox is focused on investing training and management development resources in gifted managers who want to lead teams. Over time, teams will likely grow — and the number of line managers will decrease — to ensure that people who are in management are well-trained and want to be there.

2. Create opportunities for non-management advancement.

The landscape of promotion opportunities has drastically changed in recent years. In the past, the sole path forward for those who were great at their jobs was a promotion to a manager’s position — typically without any training.Now, many more companies are offering additional advancement opportunities outside of management and the additional training that comes with it. Organizations should proactively create non-management advancement opportunities for talented individual contributors. Then, leaders should clearly communicate next steps and core competencies for those roles.Formal mentoring programs are another key way to allow high performers to influence others without moving into management, while also exposing them to knowledge and experience in other parts of the company.

3. Maintain a culture of continuous feedback.

Everyone responds to feedback a bit differently. For some, it can be a tough pill to swallow; for others, a welcome opportunity to grow. Creating a healthy feedback culture can improve employee engagement, especially when backed by training and resources to fuel efforts.“Feedback is such a powerful, generous gift that we can give to each other at work to instantly give someone bits of advice that can help them improve and grow and develop,” Willans said.Rather than only conducting twice-annual 360 reviews, Torchbox encourages employees to request feedback on an ongoing basis. Employees discuss who they might ask for feedback with their manager each month and constantly build a picture of how they can grow.Many people struggle with offering quality constructive feedback, so companies that truly value this skill should invest in training on giving feedback. For instance, rather than asking someone for feedback broadly, it can be more effective to say, “I’m trying to grow in [specific competency]. How can I work on this?” Feedback frameworks can help everyone benefit and buy into a feedback culture.

Ownership and Engagement: A Winning Duo

Whether employee-owned or otherwise, any company that wants to increase employee engagement should focus on helping employees feel a sense of ownership. “One of the things that has been a factor in driving our increased profitability…is that we've involved a lot more people in management,” Willans said. “We’ve created…more opportunities for people to grow and demonstrate those leadership and ownership qualities.”When people feel invested in the company and valued by leadership, they’re more likely to do their best work — and that’s how a business truly thrives.

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