The Workers' Paradise A Discussion of Workers Cooperatives and Building the New Economy

February 24, 2014

The Big (Wide) Tent of Worker Ownership

Last month, I flew to Washington DC for a day to represent the US Federation of Worker Cooperatives as a member of the organization. The event was a series of meetings on Capitol Hill sponsored by the American Sustainable Business Council (ASBC)We met with staff from US Representative Chaka Fattah (PA-2), Senators Harkin (IA), Franken (MN), Warren (MA) and Bennett (CO) from the Senate Committee on Health, Education, Labor and Pensions (HELP). We wrapped up the day with the main event: a meeting with Assistant Secretary of Labor (Employee Benefits Security Administration) Phyllis Borzoi. Along with me, representing my coop and the USFWC was Joe Rinehart with the USFWC, and representatives from Eileen Fisher, Dansko Shoes, and New Belgium Brewing. The latter organizations are all 100% worker owned Employee Stock Ownership Program (ESOP) enterprises. We also had people from the National Coop Business Association and Mondragon USA.

It was, as the title suggests, a Big Tent for worker ownership.

It so happens that I am reading The Citizen’s Share (Blasi, Freeman and Kruse) right now. This book chronicles the varied and rich history of worker ownership in the United States from the earliest days of the revolution until today. It notes that 47% of US businesses have some sort of worker ownership from the 100% owned companies named above to Google and Microsoft in which all workers have the opportunity to participate in the risk of the company (apparently Bill Gates’ ownership stake is now only 6% of the company he founded).  The message of the day was to discuss the importance of worker ownership as a sustainable model for economic growth in the United States.

I enjoyed this group and the approach. Too often, the concept of sustainable business only gets used to discuss environmental issues such as climate change. The plight of modern day employees tends to be ignored. This allows organizations engaged in Union busting tactics to present themselves as good corporate citizens. I would argue that sustainability (both for the climate and the economy) can only occur if workers are treated well and get a share of the pie that they create.

ASBC’s role is to bring together the worker owned businesses and unite the ownership movement. One of the problems is that there are some bad actors that use the image of worker ownership without providing the benefits to the workers. This is not unique to our country, but the lack of Federal understanding of worker ownership and a corporation laws that vary from state to state make it difficult to understand when workers really benefit from worker ownership.

For example, the US government clearly recognizes ESOP, but has no understanding or definition for a worker cooperative. The USDA recognizes Producer Coops and this language tends to be used by the IRS to determine if a business is a cooperative for federal tax purposes. ESOP really aren’t a type of business as much as they are a retirement plan. That is an important distinction between and ESOP and worker cooperative (and an area where the two concepts could create a lot of synergy). Ass’t Secretary Borzoi remained skeptical from her experience policing ESOPs that have used the structure to evade the Fair Labor Standards Act, but was impressed with the group at the table.

In January, we began a discussion with the Federal Government about worker ownership in the modern economy. It was clear to all of us (at least in the practitioner world), that the Wagner model of industrial relations has become outdated. We need new rules and definitions that help guide a national economy in which cooperatives and ESOPs operate across state lines (thus triggering Federal oversight) and engage in worker ownership and control of the workplace. We need to create laws that address a large workplace in which the workers really control the means of production through a one-worker, one-vote method (regardless of the type of organization). We, in the coop world, also need to strengthen the social definition of worker cooperatives (promote the CICOPA Oslo Declaration) and raise our profile. We can’t and shouldn’t be constrained by the legal definitions of the individual states. A democratically run ESOP with 100% worker ownership (even with workers having different shares of ownership) is as much a cooperative as Ch. 185 coop in Wisconsin with only 60% of its workers as members.

My only disappointment was that we did not meet with any GOP connected staffers. I truly believe that our movement is non-partisan and resounds with all of the political parties in this country (major and minor). If we are building a big tent, it will be necessary to look beyond party labels.

October 14, 2013

How Exceptional is “America”?

Filed under: Movement — Tags: , , , , , — John McNamara @ 7:00 am

The discussion over the last two weeks centered on the challenges of growing a worker cooperative movement in Anglo-Saxon dominated cultures. I split a bit further by focusing on the specific problems in the United States that further hinder the worker cooperative movment. At the same time, I have started reading Employment Relations in the United States: Law, Policy and Practice by Raymond Hogler. He offers a unique take on American Exceptionalism, a term coined in some sense by Alex de Toqueville in his still relevant work Democracy in America.

Too often, the concept of American Exceptionalism implies an attitude of superiority of the United States in comparison to the other 195 nations on the earth. That isn’t always the sense, but the rise of Reaganism and its attendant neoconservatism (as opposed to neoliberalism which seems more focused on economics than politics) proclaiming the US a “City upon a hill” as the beacon of all good things and leader of the world (free or otherwise). However, there is something different about the United States. Perhaps it is the combination of fifty unique states, the legacy of the Civil War in which the rights of those states to govern themselves remains in dispute or maybe it is the disposition of a country made up entirely of immigrants displacing indigenous populations (themselves often migrating with the seasons).

The concept of the “working class” has never fully taken hold in the United States as it has in other countries. While disputed, John Steinbeck, the great working class author, reportedly dispaired that “Socialism never took root in America because the poor never saw themselves as the proletariat as much as embarrased millionaires.”  Hogler uses the term American Exceptionalism to discuss the unique nature of the US labor system. This sytem, he argues, does not define people (workers)as a group united by class sentiment and common goals. It is a group that identifies as “American”. Hogler refers to Selig Perlman’s work of the early 1920’s that saw an American workers with the opporutnities that workers in other countries didn’t have. With the exception of women, non-slave workers had the right to vote in the United States and did not have to fight for suffrage. In addition, the abudnance of land that continued to expand throughout the 19th and into the 20th century meant opportunity for workers to stake out a claim on their own. This was simply not allowable in Europe and even England. Horace Greely’s exhortation, “Go West, Young Man!” was the mandate for young workers that if they didn’t like their job, they could move and create a new life becoming their own boss. The workers never coalesced into a finite social group because they always had other options.

This American Dream persists today. By the 1940’s the ideal of the American Dream and American Exceptionalism went hand-in-hand. Many of us, in today’s state of perpetual war, jobless economic recoveries, and shock doctrine capitalism may feel that the American Dream has become part of our past or a propaganda that never really existed. However, it has, over the years amassed a lot of power. It is the power of that dream that worker cooperatives can and should harness to further our movement in this country.

The Knights of Labor, for all of their faults, believed in the idea of workers managing themselves. They saw collective ownership as a form of the American Dream and won that would be attainable to workers. It would allow them better wages and give them the control over their lives that, as Americans, was their birthright.

One of the problems facing the worker coop movement is the same as that facing the labor union movement. Workers in the United States lack a class consciousness. There is a belief that through hard work and luck, we can all escape having to work for someone, hang our own shingle  and maybe even have people work for us. The lack of this class consciouness fuels an already dangerous sense of individualism that ignores the benefits of being part of a society or a community. However, worker cooperation can tap this energy. We can create a concept of achieivng that dream through collective ownership and decision making through the values of mutual self-help, solidarity and democracy. In doing this, we need to speak in the language of the American Dream, recognizing that in some way worker ownership is part of that dream.

October 7, 2013

Be the Change You Want to See

Bob Cannell presented some challenging ideas about the nature worker cooperation in the English-speaking world last week. He noted the disparity in the rise of worker owned and controlled businesses in Spain, Italy, France, Brazil, Argentina and a number of other countries that he deemed “Latin”. What cultural barriers exist in our Anglo-Saxon based cultures that prevent the sort of acceptance of worker ownership.

I don’t want to suggest that this post is a “response” to Bob in the sense that I am providing a counter argument. I, too, see the disparity. I think that it is a good place to have a discussion because too often I see that the idea of worker ownership is a tool that may community organizers want to use, but they don’t seem to see worker control as being part of the deal. This allows social structures that might improve job and working conditions, but don’t teach workers how to engage in a democracy. There are some reasons for that, and ultimately, it is what separates the Latin/Anglo-Saxon views of work and humanity. These differences create limitations and I offered a discussion on this topic a couple of years ago in a post-entitled Roadblocks on the Path to Mondragon.

Of course, each cooperative has its own unique spot in history. Mondragon was aided, to a large degree, by the Falangist Party in that the country was isolated from the world and the workers of Mondragon were not seen as a threat to the fascists in the way that the anarchists of Barcelona and the Communist Party in southern Spain were seen to be. In Italy, the coops managed to navigate Mussolini’s world and WWII and came out strong enough to create a legal framework for their existence. All that aside, Bob’s discussion of culture is one that we must address. We cannot depend on market failure and depression to build our movement.


A key difference that needs to be discussed is that the Reformation divorced a certain segment of Europe from the Catholic Church. The English Reformation (with their allies in the Netherlands and Belgium) occurred just a couple of hundred years prior to the rise of capitalism. This meant that Europeans who largely rejected or ignored the teachings of the Catholic Church took over North America displacing the existing civilizations. While I don’t consider myself to be religious, I do recognize that the Catholic Church has played and will continue to play a key role in cooperative development. Rerum Novarum, the Encyclical of Pope Leo XIII on Capital and Labor created the basis of the distributist movement and led its expression in the form of the Antigonish Movement, Mondragon, and liberation theology promoted South American priests. Written in 1891, Leo XIII expressed official Church support for labor unions, but more importantly dignity in work and the ability of working men and women to be able to better themselves intellectually, spiritually and financially through mutual self-help and self-responsibility and solidarity—three values of the modern Cooperative Identity. Of course, Rerum Novarum as a response to the growing popularity of socialism that threatened the holding private property and the Catholic Church had and has a lot of private property.

Father Jimmy Thomson and Father Moses Coady led the Antigonish Movement in New Brunswick, Nova Scotia and Prince Edward Island (the area still has a strong Acadian population of native French speaking Canadians). In Spain, Don Arizmenidaretta led Mondragon and his writings clearly espouse the teaching of Leo XIII. The use of worker cooperatives by the Sandinistas (Nicaragua) and Chavez  (Venezuela) revolutions come directly out of Rerum Novarum and liberation theology. Even today, Catholic organizations work diligently to promote cooperatives world-wide.

Work, in the English experience is not held to the same standard or is seen as a communal act. Neither is commerce. The origins of the word “competition” came from rivalry between merchant classes of Italy. Cum Petere, according to cooperative economists Stefano and Vera Zamagni, expressed the desire of the merchants of one city to work together in competition against other cities (Milan vs. Florence, for example). The Reformation changed this concept and made the individual owner, not society the center of one’s efforts. Roy Jacques argues in his work, Manufacturing the Employee, that pre-industrial US saw employment as either a means to become an owner or a personal failure of the individual. By the end of the 19th Century, the ideas of Scientific Management (Taylorism) were starting to take hold in the US, Canada and the UK, which infantilized workers leaving them untrusted for either ownership or control.

Thus the divide between Latin and Anglo-Saxon cultures has led to different concepts of worker ownership and control. I think that the difference results from a lack of ideological, if not spiritual, basis for the value of work. This allows many in the US to see ESOPs as equivalent to worker cooperatives. It allows well-meaning affluent social workers to create worker coops in name but with structures that limit worker control. The infantilization of the US worker has become so deeply embedded in our culture that many workers may not even be able to emotionally handle ownership without significant training on what that really means or worse, people may actually believe that workers cannot emotionally handle ownership.

I will be focusing primarily on the US experience. This is because of another schism that took place in 1783. When the United States divorced themselves from the United Kingdom, they also forsook common law that dates back to the Magna Carta. This has played out in a country in which work and labor is largely devalued. The role of Common Law may be a minor one, but it does have an effect as the number of “right to work” states and “at will employment” states continues to grow. In terms of Union households, the US is hovering around 9%–one of the the lowest of OECD nations (lower than South Korea) while Canada and the UK hang in at 32 and 33 per cent respectively. The US, in its puritan, Jacksonsian democracy simply doesn’t value labor unless it is one’s own personal labor. The American Dream is a solitary one.

So What Do We Do About This?

As a movement, we need to talk about repowerment not “empowering” people. How is that different? I see repowerment as developing the sense within today’s working class that they have power and that power isn’t something given to them by benevolent wealthy people it is something that they already have and they need to use it. Repowerment means seeing ownership as something that has, to a large extent, been stolen from the working class by the employing class (or investing class). The infantilization of the modern worker through Scientific Management (Taylorism) and Human Relations (Taylorism with Mayo) is a leftover effect of slavery and indentured servitude that creates a culture of workers that don’t believe that they are capable of managing their own affairs.

Culture change needs to be front and center in our movement. We need to create the ideological, if not spiritual, basis for worker ownership as we organize workers. We can do this by working with like-minded groups such as pro-worker coop labor unions such as the US Steelworkers. We need to create a consistent message that the worker coop movement isn’t just about decent jobs, it is about creating human dignity and allowing workers to reach their full potential as a human being.

To some extent this may mean pushing back a bit on those seeking to use the worker cooperative model in community organizing. We need to hold them to standards of worker control as well as ownership while also providing the tools to help teach worker control.  Some may see this as being too ideological, but if we simply allow worker cooperation to be co-opted by ESOP style models (in which control stays in the hands of a super board, social workers, or an investing class), then we will be relegated to being a small movement.

Bob suggests that we can expand our movement if we can find governance models that make sense to the Anglo-Saxon mindset. However, given the population trends in the United States, I think that we would do better to change the Anglo-Saxon mindset. Due to globalization and post-colonial migration, our societies are becoming much less monolithic and mono-cultural. The era of Anglo-Saxon dominance in the world has been relatively short-lived, maybe 150 years and in the US the Anglo-Saxon culture may become a minority culture within the next fifty years. Fortunately, one aspect of Anglo-Saxon mindset is the ability to quickly adapt and appropriate other culture’s norms.

Worker Coops and Labor Unions

One of the great opportunities for a cultural shift is occurring right now. As the US labor movement comes to realize that the tiny box known as the National Labor Relations Act (aka The Wagner Model) no longer holds that full potential of organizing workers in a factory-less economy, it is also seeking repowerment by redefining what it means to be a labor union in the United States.

Labor Unions have already attempted the ESOP model only to see some fairly massive failures (United Airlines, for example). They are also seeing a shifting labor movement in terms of language, cultures and industry. In many areas, worker cooperatives and labor unions are working among the same group of workers. The experiment of the US Steelworkers and Mondragon shouldn’t end there. The Mondragon model works for Basque culture but it can’t be simply transplanted onto US workers. We need to create our own model built on our own culture and the first thing to do is to start defining that culture by working with groups to demonstrate that repowerment will be stronger than empowerment. A number of these ideas have already been put into motion due to the determined opportunism (the good kind) of the US worker coop leadership; however, we also need to develop a consistent message that goes beyond “teaching people to fish”, we need to say that worker control doesn’t just feed people’s bodies, but there minds and spirits as well. We aren’t just interested in decent jobs, but in creating a strong society of fully-realized human beings who will be present in their lives and create sustainable health communities. We don’t want a nice playground (workplace) for children (workers). If our worker coops don’t have the ability to make stupid decisions and learn from them then it is just another playground.

Some practical steps:

  • Read Arizmendiaretta’s Pensamientos
  • The US Federation of Workers Cooperatives should consider joining the AFL-CIO when that membership becomes available;
  • Attend and participate at events such as Jobs with Justice to promote the worker ownership and worker control model of worker cooperation (I’ll be in Detroit for one such meeting on October 19).
  • Work with groups such as Interfaith Center for Worker Justice to promote worker cooperatives.
  • Within our cooperatives, take the time to teach about the coops that have successfully flattened their hierarchy or engage real control over the workplace (i.e. they don’t hire a non-member manager to tell them what to do).

Don’t be afraid of a secular spirituality or even a religious spirituality. No one is asking anyone to convert.

Of course, before we can change the culture, we need to agree that it needs changing and on what to change it to. Without having conversations such as the one started by Bob Cannell, we will continue to operate within the Anglo-Saxon paradigm that privileges consumerism over labor.

Workers, in the United States and perhaps in the UK, Canada and other WASP dominated nations have allowed themselves to be defined by the employer which has created an infantilized workforce unable to function without a parental manager leading the way. It is a sick culture that usurps our humanity. If we really want to see our movement grow, it needs a cultural basis (if not an ideological basis) that makes it more than just another arrow in an organizer’s quiver.

September 30, 2013

Governance of Worker and Producer Cooperatives

Filed under: Governance — Tags: , , , — John McNamara @ 7:00 am

Earlier this month, I had the honor of representing US worker cooperatives on a panel about governance at the International Cooperative Governance Symposium held at the Sobey School of Busines, St. Mary’s University in Halifax, Nova Scotia. Bob Cannell of SUMA and CooperativesUK moderated the panel discussion that also included Dr. Fabio Chaddad from the University of Missouri and my fellow Wisconsinite Jerry McGeorge of Organic Valley.  Rather than discuss our panel discussion from memory (since I was presenting in an open format, I did not take notes), I would like to present the opening commentary from Bob Cannell. Unfortunately, this commentary did not actually get distributed to the audience prior to the panel’s convening so we had to wing it a bit. Nevertheless, I thought that Bob’s comments were very intriguing (and some might even say inciting). I will develop my response to Bob for next week’s blog, but am interested to hear what folks think. While this was for public distribution, I did ask Bob if I may post this to my blog and he agreed, so hopefully, he will jump in to clarify points or to continue the discussion. Any typographical errors or emphasis are mine.

Bob Cannell’s Opening Commentary

“The aim of this session is to challenge our assumptions about governance in worker and producer coops. What models and tools of governance do we default to without critical assessment?

“Traditionally, in Anglo-Saxon cultures at least, worker and producer coops are lumped together. Because we are the ‘other’ type when we prioritise consumer and financial coops. In the UK traditionally, producer co-ops were the ones that made things rather than being retail businesses. These days producer coops encompass agri-coops, marketing coops, bulk buying coops and other coops where small business people join together to increase their market share.

“This lumping together ignores the specific governance needs of worker owned coops. It assumes the same modes work for both. Indeed in the UK we have a serious ‘one type fits all’ problem where generic model constitutions have to be force fitted to worker coops. And they don’t work in practice.

“We have a governance gap. Legal constitutions that tell worker coops how they should govern themselves which do not work in practice in the special circumstances of a worker coop where the workers are owners and are also often the managers as well. Three hats to juggle. The old ways to govern are too slow, too cumbersome, too bureaucratic to fit modern business needs and the needs of small start up worker coops.

“Francophone, Italian, Spanish and Brazilian traditions keep worker coops separate and so think about their specific govenance issues.

Accidents of History.

“Are the governance needs of worker coops really distinct from those of producer and other coops?

“Are we habitually using the worng governance tools for workers coops just because we haven’t looked for better and fit for purpose tools?

“Governance. What is it? It’s the legal constitutions (andin the UK worker and consumer coops share the same legal constitutions) but it is also the management tools used in the coop to take decisions and resolve disagreements. We call these ‘cooperative working skills’. They can range from full executive management pyramids to flat hierarchy collectives. Skill needs in these are obviously very different.

“Worker coop governance traditions are very different in different countries and cultures. The relative success of the worker cooperative model is very different also.

“I am from the 1970’s anarchist worker coop tradition. My coop Suma is a radical collective with no CEO, no MD, no permanent chair. Indeed almost no executive management. It relies on the cooperative working of 140 largely self-managing members. Coordination is by consensus mostly. Yet we are very successful paying very high wages, big bonuses and out competing multi-nationals despite our small relative size. There are a few other successful worker collective in the UK but most just survive haphazardly.

“Our traditional worker coops from the 19th century were castasrophically unseccessful. They were run using orthodox executive management structures and failed enmasse either as businesses or being privatised if successful. Indeed the 1890 Cooperative Congress decided that the worker owned cooperative model had failed and cooperative production (for coop stores) should henceforth be owned by the consumer owned retiail coop socieities. Thus we moved from a cooperative commonwealth to a cooperative federation.

“Enough of the history lesson. Today we have only 400 small worker coops in the UK, the same as in the USA. There are no official worker coops in Germany or the Netherlands. More or less none in white Australia or white New Zealand.

“Why is the worker coop model so much more successful in so many Latin cultures: French, Italian Spanish, Brazil (but not Portugal) than Anglo-Saxon cultures? 2000 and rising in France, 25,000 in Spain plus Mondragon, 30,000 in Italy, many thousands and increasing fast in Brazil. Compare Quebec to the Anglophone parts of Canada.

“Is there something culturally specific about the governance needs of worker coops? Something they do right in Latin countries and regions and we don’t do properly in Anglo-Saxon ones? Something which some ouf our radical collective in the UK such as Suma and Unicorn Grocery have hit on but many others have missed? What is it that we can’t see?

“I have ideas which I’ll touch on in the discussion and cover in detail tomorrow in my presentation on complexity thinking and worker coop governance.

“Let’s look at Employee Ownerships. Very successful in the USA, 13% of business have either significant, majority or 100% employee owned but not employee controlled. UK has a  long tradition of employee owned business (John Lewis Partnership) and currently a big government push to expand the employee ownership sector. There is big competition between worker coops and employee ownership ideas in the UK.

“In the USA, worker coops only have had a federation since 2006.  Why is employee ownership ok in Anglo-Saxon countries by employee control is not?

“Does the distinction matter? It doesn’t seem to in Spain. COCETA and CONFESAL work together. What are the strengths of the worker coop model that the Latin countries use and the Anglo-Saxon countries do not?

“Clearly the opportunities to grow the worker coop sector in Anglo-Saxon countries are enormous if we can define goverance models that make sense to the Anglo-Saxon mindset. So what are they?

“Let’s enjoy speculating about those differences, about the weaknesses and strengths of thw worker cooperative model and how it should be governed.”

Thus ends the opening commentary that wasn’t.

I hope, that like me, you found yourself wanting to respond to Bob’s comments. Please do–I have thoughts that I will post next week, but hope that this is the beginning of a discussion.

April 22, 2013

Democracy at Work Network

Filed under: Education,Movement — Tags: , , , , — John McNamara @ 12:14 pm


I was recently reelected to DAWN’s Board of Governors and the Training and Certification Committee. I am also a founding member of the organization. The following opinion (pitch, if you will) is all mine, however, and should not be seen as a statement by DAWN or representing DAWN.


Last weekend, the third annual spring meeting of the Democracy at Work Network (DAWN) convened along with the certification of its third cohort of Peer Advisers. It was an incredible weekend and we were reminded by our the folks on the Marketing Committee that we need to get the word out.

What is DAWN? 

DAWN is, as it names implies, an organization of people aimed at assisting worker owned businesses in improving their functionality and governance as a democratic workplace. What makes DAWN different from a consulting service or academic pursuit arises from the population of the group. DAWN focuses on Peer Advising. The majority of people in DAWN either work in a worker cooperative or have worked in a workers cooperative within the last five years. This is an essential element. While we do have members who work as professional consultants, DAWN looks to embody the concept of inter-cooperation and solidarity. Peer Advisers don’t need to learn about the dynamics of workers cooperatives since they live those dynamics.

However, this isn’t just people who work in co-op sharing war stories. The certification process ensures that the PA can provide the level of assistance needed. The first year of membership is spent engaging in intensive training through webinars and weekend retreats. while learning about financing, legal structures, strategic planning and a host of other issues, PA apprentices conduct research about coop models, teach each other about those models, and participate in an internship utilizing their host and a mentor for guidance. All of this culminates, if successful,  in becoming a Certified Peer Advisor.

DAWN’s Goal

DAWN ‘s stated goals are to:

  • meet the demand for technical assistance and development advice with high-quality services, and
  • increase worker cooperative technical assistance capacity from inside the movement.

I think that an unstated part of this is to also get our worker cooperatives (over 300 in the United States) to not always rely on a “do-it-yourself” method of development. Too often, in my opinion and experience, co-operatives either ignore development as something too expensive or too corporate or just too complicated. If co-ops do engage in development, then it is usually the result of a small group within the coop driving it and not necessarily part of a strategic vision. At best, everything is successful and the people leading have the knowledge, skills and ability to manage the manage the program and  are around long enough to see it through to fruition. At worst, it creates a series of false starts that further stigmatize coop development or organizational development as expensive, time consuming and not worth the effort. For most cooperatives, I imagine, the reality lies somewhere along the continuum between those extremes with most co-ops just feeling too busy managing operations to deal with the larger picture issues until an issue reaches a boiling point and demands the attention of the group.

Why DAWN Can Help Worker Coops Succeed

Operations tend to be what we are best at as co-operators. I think that this is a nature aspect of worker cooperation. We get the gritty details of getting people cabs, fixing bicycles, running retail operations, and making/roasting coffee. Sometimes the bigger picture of long-term planning, capital planning, organizational culture, governance and accountability gets lost in the mix as we try to keep our customers coming back, pay ourselves and our vendors. Some of these development issues get us outside of our comfort zones and don’t seem to really make a difference, so why spend our members’ hard-earned equity on it?

Worker Co-ops need to create new ways of managing. We aren’t our competitors and don’t want to be. Taking the time (and money) to think and create new ways of managing the collective assets of the cooperative in a manner that strengthens the organization along cooperative values and principles should help make our coops stronger and more resilient to the demands of the market place. It should create added-value for the consumers of our operations. Sometimes, this can be hard to do by ourselves. We may not always have the right mix of knowledge and skills or there may be underlying social issues that prevent moving forward. This is true of any type of business, not just worker coops and is why consultants often get brought into any business.

DAWN offers the ability to efficiently deal with development issues and build structures tailored to the individual cooperative. Outside facilitation can assist the members is seeing their organization from a different perspective, learn from other worker coop models (cross-pollinate if you will) and develop systems and strategies that will help their cooperatives meet missions, core values and be successful. DAWN is a fee-for-service organization. It isn’t cheap, but it does provide value.

DAWN was created to help coops help themselves through a peer assistance program. If you think that your coop needs some outside assistance, please consider DAWN as a resource created specifically for worker cooperatives.

To keep up to date with DAWN check them out on Facebook or Twitter


April 16, 2012

Getting Back to Normal?

Filed under: Governance,Management,Movement — Tags: , , — John McNamara @ 10:03 am

I am looking forward to the future! For the last nine months, I have been in the role of General Manager of my co-operative. It has been a very difficult time made more difficult by the ebbs and flows of a business cycle based, in part, on government funded programs and bad weather. This year, the money was mostly ebb with little flow.

The biggest lesson that I am walking away with is the realization that hierarchy in a worker cooperative is dangerous at best. Creating a “boss” and recreating the dynamics of the traditional workplace do not allow a worker cooperative to succeed. It creates a fertile ground for petty political maneuvering around personal agendas instead of open and transparent discussions about the value of cooperation. It causes the workforce to engage in a bizarre form of sibling rivalry in which the GM and the Board play the role of indulgent parents.

I am very happy that our co-op decided to get rid of our GM position and replace it with a council consisting of department leaders and senior workers. We have yet to see how this will work, but we have spent the last nine months practicing. Although I accepted the title of Interim General Manager, I attempted to diffuse as much power as possible to the various work teams. By a previous board decision, discipline and accountability issues had already been turned over to a Behavior Review Council-this made me the first GM without the authority to discipline.

It is an exciting time to be in the worker coop world. New worker coops are starting every day. Older worker coops, like mine, are reinventing themselves, and new energy is coming into the movement from the Steelworkers and Academia. Hopefully, now that my interim period is coming to an end, I can return to chronicling and commenting on the exciting energy that is out there!

I will be in Halifax for two months beginning May Day. I hope to return to my Monday postings, so please start checking. The world really is changing. After 170 years, co-operatives are finally coming into their own and we get to be a part of this incredible transition.

August 24, 2010

The Co-operative Index

One of the last workshops of the National Worker Co-operative Conference introduced the Co-operative Index to a United States audience. Before going into the details of this tool, it needs to have a bit of the history explained.

In 2005, Johnston Birchall addressed the International Co-operative community. It was the occasion of the the 10th anniversary of the adoption of the Statement on the Co-operative Identity. Prof. Birchall called for the community to “operationalize” the statement. In effect, to take the document off of the wall and out from under glass and make it part of the day-to-day decision-making process of our co-operatives. He used a phrase that had already started spreading around the movement: “market the co-operative advantage” or MOCA. However, he also used another phrase: “Managing the co-operative difference.” Birchall argued that we really can’t create a co-operative competitive advantage until we manage our co-operatives differently from our competitors.

In 2003, the St. Mary’s MMCCU program had begun towards this end, but the rest of the co-operative world had yet to really embrace the statement. It needed a push and Birchall gave it one. The folks at St. Mary’s also heard his call. While they were busy improving their Master program, they were also looking for opportunities to highlight the co-op difference and create the competitive advantage.

John Chamard, Sonja Novkovic and Tom Webb discovered a Polish professor of organizational psychology who had developed a method of measuring participatory workplaces with an eye towards helping them to improve themselves. His name is Ryzard Stocki and he created the Open Index as a tool for non-profits to measure themselves against their ideals. It was decided to see if such a tool could be developed for co-operatives and that the best sector to start with was the worker co-op sector. In 2008, the St. Mary’s team brought together a group of Co-op developers from Canada and worker co-op practitioners. I was one of the participants in a weekend long session of developing an “ideal” worker co-operative against which we could measure real world worker co-operatives. It was an exciting, and at times frustrating, process. In the end, we created a framework for a diagnostic tool that worker co-operatives could use that was different than tools such as the SA8000, World Blu Democratic workplace survey, or other such measurements. At the New Orleans meeting of the US Federation of Worker Co-operatives, the Federation membership agreed to support it.

We based our tool on the Identity Statement and the principles of Mondragon that go beyond the identity statement (sovereignty of labor, subordinate nature of capital, payment solidarity, and participatory management). The tool was fine-tuned and then put into the field to test its effectiveness. After the initial attempts were made, the reports were analyzed and the tool was fine tuned. It is now ready for a mass distribution. The workshop was its official exposure to a US audience.

What is the Tool?

The tool is a lengthy survey designed to measure the perceptions of immediate stakeholders in a worker co-operative (separating those who identify as “leaders” with those who identify as “rank-and-file”). It asks questions designed to rate the ability of the cooperative to meet its obligations under the identity statement: Values, Ethics, Principles as well as its organizational ability to meet its members’ needs. It creates an index for the co-operative to measure across time and, eventually, will create an index to measure against other worker co-operatives.

There are two methods of using the tool. It can be used for a very brief snap shot of the “state of the cooperative” or it can be part of a more intensive triangulation of issues facing the cooperative. In either case, it can, and should, help influence strategic planning, education, training, and leadership development. At the national and international level, it can help planner determine workshop needs and membership needs.

The first method is the simplest and cheapest. The co-operative works with someone from St. Mary’s to set up the survey (more information is available from either the US Federation or the Canadian Worker Cooperative Federation). The co-operative participates with a very real goal of 100% participation by its members. The assistant helps produce a report that distills the scores on a maturity index for the different segments: values, organizational, principles, etc.

The more involved method involves have the assistant work with a small committee of the co-operative. this could be the social audit committee or the strategic planning committee. Ideally, it is a committee of members representing the cooperative stakeholders (i.e. not all directors, or all rank-and-file). The survey gets completed as before, but the adviser also helps the committee build a document base to examine how the perceptions of the survey interact with actual policy and practice of the co-operative. This allows the committee to make solid recommendations on structure, operations, and governance as a means of improving the co-operative along the maturity curve.

Ideally, a co-operative might do the full process every three to five years and the short process annually. Obviously, the size and nature of the co-operative will make some differences in the process. However, even smaller co-operatives might find that they have a disconnect between groups within the co-operative.

This tool can help co-ops dig below the surface issues to get at root causes of problems and provide strong solutions. On the other hand, the tool can help co-operatives see where their strengths are and help them learn to share those strengths with other co-operatives.

The initial work on this tool has been so successful and the support for it so enthusiastic that the Canadian Co-operative Association received a substantial grant to design similar tools for the other sectors. The call the overall project “Measuring the Co-operative Difference Research Network”. Hit the link for more details.

With the development of the Democracy at Work Network of peer advisers coming on-line in January and the advent of the Co-op Index Tool, Federation member co-operatives and all worker co-operatives in Canada and the United States will have a powerful means of analyzing their processes, their policies and the functioning of their co-operative as a co-operative. This, in turn, will allow them to not just “manage the co-operative difference” but create a strong competitive advantage for themselves and other worker co-ops. This project is exactly, in my opinion, the sort of thing that the Federation was founded to accomplish. It allows us to bring our considerable brain power together in an act of mutual self-help and solidarity with the goal of creating strong sustainable workplaces and communities.

March 1, 2010

#25: The Internationalist Nature of Co-operatives

Over the last 6 months,  I have been working my way through the Statement on the Co-operative Identity that the International Co-operative Alliance adopted at the 1995 meeting which also commemorated its first century of service. This statement solidified the Rochdale Principles as well as adding a list of values and ethics. In part, this was done to assure countries emerging into the world after decades of the Cold War, that co-operatives were not co-opted. That co-operatives that they experienced behind the Iron Curtain or as part of an attempt to shore up a rulers power in an emerging nation were not a true representative of the co-operative model. The Identity Statement also was a challenge to the western co-operatives as well. It was, and remains, a challenge to not rest of the laurels of the past, but to constantly struggle to improve our co-operatives and credit unions. The ICA created a true touchstone by which every co-operative and credit union in the world could be measured. That 1995 meeting may be the most significant moment in the movement’s 167 year history.

Dr. Ian MacPherson made these salient points in his background paper to the Identity Statement:

“It was a task much more difficult than the delegates of a hundred years ago knew. Overcoming the differences created by national perspectives and histories, coping with the ideological cleavages that swept the world in the Twentieth Century, recognising the biases each of us possesses, understanding empathetically the nature of co-operative experiences in non-European societies has not been easily accomplished. In the important book she prepared for Congress, Rita Rhodes has explained the deep tensions that made progress in creating a strong international Movement for most of the Twentieth Century difficult to achieve. It is a story worth pondering as we seek to understand how we can forge even stronger links among co-operative organisations spread around the world.”

In my days college days, we often challenged ourselves to “think globally, act locally”. We needed to recognize that the struggle of people is an international struggle but that we also aren’t saviors for those in other countries. To fix the world, we need to fix our local communities and share our story with the world. The Identity Statement embodies that ethos. As MacPherson notes, the co-operative movement exists as an international movement. The creation of the International Co-operative Alliance in 1895 was to help co-operatives world-wide and to share their stories. When workers in the Argentine factories succeed as running their own plants, they create a better environment for cab drivers in Madison, WI (and vice versa) by showing that workers can manage themselves. When Equal Exchange workers broke the Reagan Quarantine on Nicaragua with Café Nica. they helped farmer/workers the world over know that cold war politics could be defeated by workers and farmers uniting in a common cause.

The Identity Statement is our touchstone as a co-operative and credit union. It is an international document that makes our individual membership in our co-operatives and credit unions an international act of solidarity. Our membership in our organizations and our support for the ICA and the Identity Statement force us to “think globally”. By striving within our co-operatives to bring the Identity Statement to life, to “operationalize” the statement, we act locally. One of my projects over the last couple of years has been assisting in the development of something called the “Co-op Index.” It is a diagnostic tool to measure an individual worker co-operative against the Identity Statement (and the Mondragon principles). Ultimately, it will create a maturity index for worker co-operatives world-wide but in the short run, it will provide worker co-operatives with the information and tools that they need to become stronger co-operatives and create “best practices” for worker co-operatives in particular. It will be a means of improving our workplaces and the world at the same time.

The Identity Statement cannot just hang on the wall. We need to teach it in our co-operatives. We need to connect our actions to it. At my co-operative, we attach a “policy note” to each measure before the board that connects the proposed action to the co-operative’s vision, mission, core values and the Co-op Identity. It is a useful exercise that I think all co-operatives should adopt. The basic premise is that if we cannot explain why the proposal works from the vantage point of the Co-op Identity, then maybe it isn’t a proposal worth adopting.

On a final note, the Identity Statement is not a final document. It is, like the Rochdale Principles that it replaced, a living document. Each generation since 1843 has re-visited the co-operative identity and made adjustments appropriate to their time and place. In 1995, a strong movement existed (but eventually lost) to include a principle of co-operative management that would instruct co-operatives to manage in a different way and to create co-operative management schools. That effort didn’t fail, but continued and my imminent graduation as part of the 4th Cohort in St. Mary’s MMCCU program shows the power of that principle. It may be that the next incarnation of the statement will include management as stronger educational efforts on co-operative management have sprung up throughout the US and Canada to join existing programs at the UK’s Open University, Cooperative College and Spain’s Mondragon Univeristy. (These include the recent creation of an undergraduate degree at the University of Toronto, the CooperationWorks! Program, the Southern New Hampshire University program and the USFWC’s Peer Assistant Network).**   In addition to educating ourselves to manage from a co-operative framework, there is also a growing effort to expand the ‘concern for community” principle by adding a new principle specific to the protection of the environment.

The Identity Statement will celebrate its 15th anniversary this year. It has changed the dynamics of co-operation; it has given us an international touchstone that tells us that a co-operative in Sapporo, Buenos Aires, Winnipeg, Manchester, Madison, Bilbao, Bologna, Gdansk, Tel Aviv, Kiev, Dar es Salaam and Sydney all act under the same set of principles and values. The co-operative label is a label of trust, honor, and dignity for working men and women.

Next Week: This ends the series on the Identity Statement. I hope that people enjoyed it. I appreciated the comments on this site (and on Facebook where it mirrors). Feel free, as always, to use or redistibute my posts. I intend to keep the Monday entries going. The next series will be on a document that is just as important but little known: CICOPA’s World Declaration on Worker Co-operatives. Thanks for reading.

***Sadly, I have heard a rumor that there is some sectarian attacks on the Canadian programs coming from south of the border. The attack is jingoistic in nature (that the Canadian programs aren’t “american” and therefore not appropriate for US co-operatives. I haven’t had anybody say that to me directly (most likely because I would correct their opinion). It is a shame. Each program offers a means to manage our co-operatives according to the principles. I personally, would love to see the day when a co-operative undergraduate degree and the MMCCU are as ubiquitous in our universities and colleges as the business degree and MBA. We shouldn’t be fighting each other over our turfs, but co-operating to expand the educational opportunities for co-operative managers, directors and members. I chose MMCCU because it fit my life at this moment. In a different scenario, I might have elected for Mondragon, the UK, or SHNU. Had any of these programs been available to me when I was in college (1982), the path that my life took would be amazingly similar and different at the same time! It is my hope that in my lifetime learning of a young co-ed can earning their undergraduate degree in co-operative administration while working at a co-operative becomes a normal expectation and doesn’t require moving to specific part of the world.

January 18, 2010

#19 Participatory Management

The next principle from Mondragon is that of Participatory Management. This seems like a no-brainer for worker co-operatives. What is the point of going through all the work of setting up a worker co-op if the workers don’t actually have a say in how the place is run? They would be better off in a unionized Employee Stock Ownership Program.

I’ll get more into this in a second. First, I want to share the language of the principle from Mondragon (translated, as they all are, of course):

“The Mondragon Cooperative Experience believes that the democratic character of the Cooperative is not limited to membership aspects, but that it also implies the progressive development of self-management and consequently of the participation of members in the sphere of business management which, in turn, requires:

a)     The development of suitable mechanisms and channels for participation.

b)    Freedom of information concerning the development of the basic management variables of the Cooperative.

c)     The practice of methods of consultation and negotiation with worker-members and their social representatives in economic, organisational and labour decisions which concern or affect them.

d)    The systematic application of social and professional training plans for members.

e)     The establishment of internal promotion as the basic means of covering posts with greater professional responsibility.”

(source: The Mondragon Cooperative Experience, by José María Ormaechea, 2000)

Second, I want to parse the word management. We manage our co-operative whether or not we have a person holding a title with the word “manager”. Some co-ops manage collectively, some manage through a hierarchy, but we all manage the same things: assets, liabilities, equity, work performance, customer satisfaction etc. In this, as in most posts, I use the term management and manager in the broad sense.

Participatory management does not mean democracy and democracy does not mean participatory management. I say this because they are often linked together in a synonymous manner. A worker co-operative can have a strict top-down hierarchy that allows little or no member input and still elect its board of directors. Likewise, the concept of participatory workplaces can exist in capitalist organizations.

This principle exposes some dangers to worker co-operatives in that it is this area that the co-operative movement may be co-opted. World Blu has created a list of the “most democratic workplaces” for a couple of years now. While I have nothing against their mission, they misuse the word democracy when they mean participatory management. Only a handful of the companies on their list are co-ops or esops. In other words, they are honoring workplaces as “democratic” when the workers have no control over the governance of the organization. While I think that participatory management is a noble thing for a stock corporation to entertain, it isn’t democracy, it isn’t a right. It can be taken away as soon as the stockholders decide the experiment isn’t making them enough money. While I support World Blu’s efforts to humanize capitalism, I don’t think it will ever succeed on a grand scale but am glad that the workers in those business have a decent place to work.

A worker co-operative should abide by the values and principles of democracy. Participatory management should be another user principle for co-operatives even if it isn’t in the Identity Statement. It is the means by which the workers of the co-operative “use” their co-operative. Just as consumers use the products and services of a consumer co-operatives, workers use their ability to participate in decisions affecting their work life (roughly ¼-1/3 of our lives) as their right of membership.

Mondragon has created an excellent definition of participatory management. It isn’t simply deciding what type chairs to get for the office, it involves a complete involvement of the workforce in the operations and planning of the organization.

Note though, that the principle discusses the creation of “suitable” methods. Decisions have to be made and they have to be made in a way that enhances the organization in terms of serving their customers and succeeding in the market place. A restaurant can’t hold a membership meeting to discuss which person serves which table every time a customer walks in for dinner. A cab company can’t hold a debate about call assignment for each and every order. However, the co-operative can create methods of having these discussions about systems that ensure fairness and those methods should involve a wide range of voices from the membership.

Information has to be available to everyone or how can it truly run as a democracy. This isn’t on a “need-to-know” basis, but on the basis of ownership.

Another key point is that the co-operative needs to create bodies that will assist the worker-members in finding their voice. This might be a peer support program, a traditional stewards’ council, or even a labor union (although that is decidedly not what Mondragon is talking about). The bigger point being that management in a worker co-operative (whether run with a hierarchy or not) needs to establish means for worker’s to have a real voice in the discussion. Depending on the size of the organization (and the work week schedule) this will have different levels of formality. Rainbow Grocery is famous for its collectivist approach while Union CabMondragon models the labor movement through a stewards’ council and committee structure. uses a “social committee” in which elected representatives help provide input to the board and management as well as acting as a watch dog.

The last two points of the principle create an imperative of making participation systemic. As with the Sovereignty of Labour, this principle promotes the belief of internal promotion. The top end positions of a worker co-operative should generally not be hired from the outside of the worker co-operative movement. It is better for worker co-operative to create strong in-house training (and utilize professional development programs such as the Masters of Management: Co-operatives and Credit Unions) to develop the future leaders of the co-operative. One of the problems, in the United States, is that our co-operatives tend to be small and this limits opportunity for workers to advance and develop. It also limits the level of education and training that can be provided. However, we need to think beyond our stand-alone co-operatives. Just as Mondragon is a system of 180 or so co-operatives, we should start thinking of US Worker Cooperatives existing as an economic base.

Ormaechea chose this particular quote from Don José: “Co-operation brings people together in a collective task, but it gives each one responsibility. It is the development of the individual, not against the rest, but with the rest.”

By creating a base of strong management of our co-operatives we build the capacity for the movement to grow. We create the means for our co-operatives to cross-pollinate, to occasionally go outside of our stand-alone co-ops and we also create the means for the rank-and-file members to expand themselves, to develop themselves as people.

Next Week: Payment Solidarity

November 16, 2009

#11 Caring for Others

Filed under: Human Relations,Identity Statement Series — Tags: , , — John McNamara @ 12:55 pm

This is the last of the ethical values and the last part of the identity statement that was added to the set of familiar “Rochdale Principles” in 1995. As such, it wraps up the concepts that have gone before. It acts as a bookend with the first value of self-help.

We can’t help others if we can’t help ourselves. We can’t be only about ourselves. In thinking about this entry, I couldn’t help but remember the scene from Hair in which a women confronts the father of her child who is otherwise a hip cat trying to change the world:

Cooperatives are a social movement, an economic movement, and an educational movement. As a result, caring for others takes us beyond the social responsibility so easily co-opted by caring capitalist and benevolent dictators. We have to be about caring for each other. This value of caring likely attracted the likes of Don José Arizmendiaretta and Moses Coady and other Christians in Italy and throughout the co-operative world. This sense of community service and support finds itself in the religious movements of  the Abrahamic religions. For more on this topic, check out Andrew McLeod’s book, Holy Coooperation!

For those of us in the secular world, caring for others is just as essential a value as it is for the religiously inclined. It is a human value, after all. The human species can survive on its own, but it flourishes as a community. As such, the need to cooperate is necessary to our survival.

Tom Webb presented the value of Caring for others in this manner:

“Caring implies not just charity but active concern about how to act and create structures so as to enable others to realize their potential and live full and satisfying lives.”

Worker Co-ops have a special mission under this value. We need to create structures in our co-operatives that develop us as human beings and even world citizens. We need to help our members break away from the bad habits of other workplaces that only value the labor of the worker. The “move them up or move them out” aspect of Human Resources (whose very name suggests that the human is simply another asset to be managed) must be replaced with Human Development.

Many workers (at least in the larger worker coops) come to co-operatives without a lot of knowledge about co-ops. They may be seeking a good job in the industry more than a commitment to co-op development. I’ve heard one co-op organizer describe them as post-traumatic stress syndrome victims. A lot of workers have learned the wrong lessons from other workplaces and they need to see that the workplace can be healthy for human  beings. Caring for others means that our policies and work places place the worker’s well being (physical and emotional) at the center of their purpose. This means creating strong resolution process that go beyond simply ending conflict, but transforming the individuals to make them stronger people.

Loyal and happy workers lead to loyal and happy customers. By creating a supportive and nurturing community inside our cooperatives, we create a strong and vibrant business model. Caring for others creates the basis for the co-operative difference in a worker co-operative. Creating strong relationships and human development among our work force allows us to develop life-long relationships with our customers.

Of course, not everyone is able or willing to participate in this sort of environment. It may be that the wrong lessons of how humans treat each other have become so ingrained that the individual can’t overcome them and prosper in a co-operative community. It may be that some people see the co-operative community as “easy to get over” and manipulate others for their personal ends. The value of caring should not imply that co-operators are emotional doormats. The value of caring for others should empower ourselves to step up and confront members who don’t act co-operatively. Mostly, these issues will be resolved through education and development programs. In some cases, however, the only way for the co-op to exhibit “caring for others” will result in asking unco-operative members to leave the community. We can’t pretend that co-operatives can fix everyone—especially in the United States where the co-operative option is such a minor part of the overall economy and workplaces. In this extreme case, caring for others means protecting for the larger community. Of course, even in this sad situation, the people involved should be treated with dignity and respect.

Caring for Others gives guidance to co-operatives on how to create thriving, human based businesses. This ethical value moves co-operatives beyond the concept of social responsibility. By expressing caring for others, co-operatives create a healthy workplace that helps people realize their full potential as human beings.

Next: We start on the familiar principles and will make a few detours along the way to learn about the Mondragon principles as well.

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