Employee-owned company: This is what lies behind Arineo's organizational structure.

EOC – employee-owned company. This is the new organizational structure anchored in the Arineo GmbH founding articles. Founded in 2018, the Göttingen-based start-up will be 51% owned by the workforce within five years; after ten years, the company will be 100% owned by the workforce. Arineo thus guarantees that the capital generated remains in the company and does not flow to owners, investors or shareholders - and with this approach, it is integrated into the ranks of the Purpose-Companies, which are companies whose primary objective is not to generate returns for their owners. Of course, Arineo GmbH must operate just as economically as conventional companies in order to fulfill its primary purpose, namely to offer customers IT services at the highest level. According to the Purpose idea, all surpluses are available to the company and its goals: They can be used entirely for reserves, investments in employee development, new solutions or meaningful growth. Another part of the Purpose idea is that the sale of the company is only possible if all employees agree to it. This prevents Arineo from becoming an object of speculation.

"The chosen owner structure is comparable to a modern football club in the German football league: There is one association that acts as the owner of a football company. The association members have no direct influence on the operative business but determine it indirectly through the appointment of supervisory boards, which are bound to the association's objectives. The operational football business, with its necessary decisions, will then be shaped by the management," explains Ruven Heybowitz, Chief Transformation Officer at Arineo, and adds: "With the difference that Arineo is not an association, but a modern company."

These constructs are nothing new: Clubs operating towards a specific purpose, cooperatives belonging to their working members, and start-ups with revenue-sharing models are not uncommon. What is new is the combination of all three elements, combined with a modern management culture. Because in addition to employee ownership, the company is managed together. Decisions are made jointly by the those responsible - after all, they have the most information and can, therefore, make faster and more differentiated decisions than traditional managers, who first have to spend a lot of time familiarizing themselves with the details. "In traditional corporate structures, middle management often has to deal with administrative matters - for which it is rather overqualified. We create lean structures in which information flows faster and administrative and project-relevant matters - such as vacation requests or procedures - are handled by the team. This enables the company to respond better and faster to market conditions. And the employees find meaningful working conditions," according to Heybowitz, Chief Transformation Officer at Arineo.

This organizational structure brings clear competitive advantages. As a companion in the digital transformation, the company must be able to quickly master and harness new technologies. This is only possible if the people who represent Arineo can make full use of their creativity and commitment. Such people are in high demand in the job market and usually seek an environment in which they can flourish. The founders of Arineo used established knowledge from work and organizational psychology to create such an environment: Emotional security, appreciation, clarity, independence, self-determination, solution orientation, team-work and a healthy balance between work and private life are not luxuries, but basic prerequisites for effective and creative work. Employee orientation creates the conditions for customer orientation. "We are convinced that the best results are obtained when paid work feels like voluntary work. This is in line with modern people and their needs and gives us a unique competitive advantage in our market," says Heybowitz.

Despite cooperative leadership, Arineo is no grassroots democracy. The agile decision-making structures give employees the opportunity to make decisions quickly and independently within their value chain. Business decisions, on the other hand, are the sole responsibility of the management. The latter reports to a supervisory board composed of external experts and representatives of the holding company. Only employees of Arineo GmbH may participate in the holding company. "Basically: Decisions that deal with the here and now are made cooperatively by those involved - decisions that affect the future of the company are the sole responsibility of the management," adds Heybowitz.

After only six months after its foundation, Arineo is already operating at break-even. Arineo's business model has been very well received by its medium-sized target customers. "It is important to note that the Arineo teams already had a very good reputation in the industry before the company was founded. The company, of course, benefits from this. Many customers followed the teams to Arineo," Heybowitz emphasizes and adds: "Most people who have analyzed our approach find it good. After all, it is obvious that motivated employees who identify with the company do a better job. Ultimately, our customers benefit from better work performance and low employee turnover."

The Arineo headquarters are located in Göttingen, Germany, where the majority of the workforce is employed. Also, cooperation with companies from the region has already been established. "I believe that with our cooperatively managed Purpose-Company we have our finger firmly on the pulse. Our design contributes to securing interesting jobs in the long term," adds Heybowitz.

The owner structure of the company