January 28, 2009
Business books on the Triple Bottom Line abound. Trust me. I speak from experience. I am an MBA student in a program focused on sustainability, and a mountain of these books stands between me and the end of each semester. Most do an adequate job of plodding through the subject matter, but I usually find myself skimming the material to extract the main points so I can move on to the next book. One down, mountain to go.
That was not my experience with John Abrams’ revised edition of Companies We Keep – Employee Ownership and the Business of Community and Place. The book is a revised and expanded version of his 2005 Company We Keep. Abrams is the cofounder of South Mountain Company, an employee-owned, custom building business based on Martha’s Vineyard that began operations in 1975. He’s written a very readable narrative that knits together a personal memoir with an examination of the employee-owned business model he has developed at South Mountain Company.
In Abrams’ words, "This is a book about a different way of doing business in today's world -- a way based on workplace democracy, shared ownership, staying small, building community, commitment to a place, and long term thinking." He believes that building a profitable company can be compatible with serving the needs of people (employees and owners), the local community, and the environment.
We assign priority to a collection of bottom lines while consigning the traditional bottom line – profit – to its appropriate role as a vital tool that serves the others.
A worker cooperative typically uses the C or LLC corporate framework, and shares many of the same benefits. It has corporate protection from liability, earns profits, is governed by a board of directors, and is managed by one or more officers. But it differs in three aspects as Abrams explains. First, it’s a membership organization limited to employees who complete a trial period and invest through a membership fee. Second, a cooperative is democratically governed as each member gets one vote, rather than the usual one share/one vote model. And third, a portion of earnings is allocated to members based on their work investment rather than their capital investment.
Beyond the legal framework, Abrams’ vision of the worker co-op also emphasizes staying small and keeping it local. These two principles buttress the social and environmental bottom lines.
I question the lack of value placed on maintenance of those business communities we create and the communities within which our companies operate. This disregard supports unfettered allegiance to an economy whose rewards have become skewed toward the distant and the global at the expense of the local, and whose system of incentives encourages wage servitude and environmental recklessness.
Part guide to democratizing the workplace, part visionary business model, and part endorsement for strong local economies, the book is organized by Abrams’ eight cornerstone principles:
• Sharing Ownership
• Cultivating Workplace Democracy
• Challenging the Gospel of Growth
• Balancing Multiple Bottom Lines
• Celebrating the Spirit of Craft
• Practicing Community Entrepreneurism
• Thinking Like Cathedral Builders
• Committing to the Business of Place
He dedicates a chapter to each principle, explains their relevance at South Mountain Company, offers examples from several other successful co-ops, and skillfully draws on numerous writers and thinkers to expand his ideas. The appendices include an extensive reading list, resources, and detailed particulars on South Mountain Company’s structure.
The National Cooperative Business Association (NCBA) estimates the top 100 co-ops have a combined $117B in annual revenues. Among these top 100 are the large national companies you are probably familiar with like Land O’ Lakes (a producer co-op), Ace Hardware (a dealer co-op), and REI (a consumer co-op). Fewer in number are the worker co-ops described by Abrams, (about 300 as estimated by the NCBA) but these tend to be more locally-based.
As we look for more sustainable business models and legal frameworks, Abrams crafts a well-reasoned and articulate argument for including locally-based, worker cooperatives in the mix. Marjorie Kelly echoes this argument in The Divine Right of Capital:
Thomas Paine’s vision was of “every man a proprietor.” It’s a worthy ideal, to own one’s place of work. But in the corporate era, most citizens are necessarily employees, and always will be. We need a new economic vision for a new era: not every man a proprietor, but every employee an owner.
*Abrams, John. Companies We Keep: Employee Ownership and the Business of Community and Place. 2d ed. Chelsea Green. 2008. 333p. illus. bibliog. index. ISBN 978-1-60358-000-7. pap. $17.95.
Abrams posits a new business model based on community, goodwill, craftsmanship, and not-so-big growth, outlining the steps he took to help his own firm become a “more democratic, more responsible, more permanent kind of company.” (LJ 10/15/08)
In Abrams's The Company We Keep (2005), he wrote about his residential building and design company, South Mountain, and of his efforts to grow gradually and sustainably. In that book as well as this revised and expanded edition, Abrams presents a chapter on each of the eight "cornerstone principles" of sustainable businesses, including sharing ownership, cultivating workplace democracy, and celebrating the spirit of craft. In the new edition, he expands his vision beyond his own company (with its somewhat unusual Martha's Vineyard location) to companies across the United States. His conversational style and instructive anecdotes paint a rosy picture of employee ownership, but he also cautions that a company's transition away from reliance on a single leader can take many years. The overall message is positive, emphasizing local development and "challenging the gospel of growth." Appendixes provide South Mountain's employee-ownership contract, tips and resources to support a company's transition to employee ownership, and a guide to mediation and discussion; a reading list suggests books that Abrams says "changed the way [he] think[s]." For all libraries.—Heidi Senior, Univ. of Portland Lib., OR