Farnham, Surrey-based brand experience shop 2LK has become the latest agency to go employee-owned. We sat down with its co-owners (now two among many), who find themselves asking, “where’s the catch?”
Independent agency 2LK has today announced that it has completed a transition to employee ownership (EO).
The deal makes the events shop the latest in a string of worker-owned agencies, along with the likes of RocketMill. These agencies join a broader movement: the UK-based Employee Ownership Association counts over 1,400 employee-owned businesses in the country (in the US, CertifiedEO counts over 6,000 members).
When The Drum visited 2LK in leafy Farnham on the eve of the agency’s 30th birthday celebration, co-owners (now co-owning with all their colleagues) Dan Mason and Andy Sexton paint a picture of employee ownership as a no-brainer – “when you start to unpack it, you start to ask, ‘where’s the catch?’”, says Sexton.
What’s your exit plan?
For Mason and Sexton, employee ownership is the almost-inevitable next evolution for a business with what Mason calls “an ethos of leaving”. Founded in 1993 by Derek Lunt, Mike Littlechild and David Kelly (two Ls and a K), those founding partners imbued the business with a philosophy of “writing your exit plan before you write your business plan,” says Sexton.
Written down, that risks sounding noncommittal or distant – particularly in the marketing world, where owners will often have one eye (or both) on sale and exit. For Mason and Sexton, it’s quite the opposite. “The principle underpinning the whole thing was that the business needs to be have enough money in it to buy out any individual shareholder,” says Mason. “The founders worked hard to ensure that they weren’t taking away our business – all the money stayed in it in order that, at any point, they could sell their shares to the company without massive investment… That’s what allowed them to retire, then the shares get distributed without actual personal investment.”
Mason goes on, “they also recognized the massive weight of pressure on individuals of owning a business and being responsible for people’s lives, families and mortgages. We see so many people burn themselves out trying to do too much. This was always about a bigger thing. How can we build something that people can own, then step away, without falling out?”
The ‘anti-growth strategy’
It’s an approach to business ownership focused first on the integrity of the company and the livelihoods of its workers, and not on the pockets of its owners (something codified in the pledges made by B Corps, which put people, profit and planet on equal footing). The result is a stable, profitable business (it’s looking at £5m in gross profits this year) – but not one likely to make its owners filthy rich – “every single person who’s owned a share of any amount in this business had a possibility of making far more money out of it,” says Sexton. “But it’s a choice: I’ll leave on my terms, when it suits me and my family. You don’t get that with M&A.”
The pair jokingly call this the business’s “anti-growth strategy” – focused on independence and sustainable careers, not growth per se.
In other words, “we’ve operated in an employee-owned spirit for a really long time,” says Sexton, so EO became “a pretty easy decision”. “We just felt like any of the M&A conversations we had, and there were plenty, left us feeling a bit sick. I can’t stand up and tell that story with any pride.”
Experiential, everywhere, all at once
Back in 1993, 2LK started out as a straight-up design-and-build firm for events and exhibitions. Three decades have of course changed this corner of the marketing industry drastically: immersive technology; real-time rendering; AI. All of this, the pair says, has also made differentiation harder. Here’s Sexton: “the pace of change in the industry has been mind-blowing. When I started, ‘experience’ was a word that lived only in the live channel. Now, the rest of the industry has gobbled that word up, and everything is ‘experience’ now – if you’re creating brands, if you’re creating stories, if you’re creating films, if you’re creating products, services, digital…”
Differentiation, in other words, is hard for a brand experience agency. But the shock of Covid (“when live experiences suddenly became illegal,” says Sexton) was, strangely enough, when the agency found its path forward. Insistent that “events will happen again,” Mason says, the agency resisted a pivot to virtual or hybrid experiences, instead investing in R&D, a strategy offering, and content creation.
The pair feel that these pivots have been vindicated by the bounce-back of events, and the short-lived nature of the ‘virtual events’ pivot. “The word ‘hybrid’ doesn’t really come up in briefs anymore,” says Sexton. “It just doesn’t replicate the bit that people really want.” (Though smart experiential shops, he caveats, will be investing in capturing the magic of events better in “cross-channel storytelling” strategies).
Another thing every experiential agency says is that it’s working to become more sustainable. But the pair hope that EO can help sustainability become a genuine priority. “There’s healthy change in the business, but it’s wasteful and there’s no getting around that,” says Sexton. “But being less bad is not the same as being good… we’re part of the problem.”
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