ISBN: 9781933392196 Year Added to Catalog: 2006 Book Format: Paperback Book Art: 60 b&w illustrations, appendices Number of Pages: 6 x 9, 328 pages Book Publisher: Chelsea Green Publishing Old ISBN: 1933392193 Release Date: May 15, 2006
Also By This Author
The Company We Keep
Reinventing Small Business for People, Community, and Place
The following excerpts from The Company We Keep have been adapted to stand alone for free use as media articles. When reprinted, all excerpts should be attributed to John Abrams, author of The Company We Keep: Reinventing Small Business for People, Community, and Place, Chelsea Green Publishing, 2005.
The following excerpt from The Company We Keep: Reinventing Small Business for People, Community and Place by John Abrams (Chelsea Green Publishing, May 2005) may be published free-of-charge by your media outlet when media attribution is given to the author, title of the book and book publisher—as outlined in John’s bio at the end of this article. As a courtesy, we would appreciate being notified that you plan to run this material in your media outlet.
Martha’s Vineyard has a serious affordable housing crisis. The island’s captivating charm is culpable. It wasn’t so long ago that young people could find caretaking gigs, shacks in the woods, welcoming campgrounds, cheap land, and a host of housing options. Locals could build homes on the family back lot and stay here to raise families. Today, staggering increases in real estate prices and the high costs of island living have made it impossible for many to afford homes. With its housing resiliency gone, the community is endangered.
We are beginning to suffer significant outmigration by people who are priced out of the housing market. Others, who are fortunate enough to have bought cheap land a quarter century ago and managed to cobble together a house and a livelihood, find themselves with excess equity. They could not possibly afford the house they own if they had to buy it today. The future looks grim for their children. Suddenly, they find themselves the owners of real estate worth a million dollars. They could buy a major chunk of western North Carolina or northern Maine for that. People are bailing out. We’re losing the essential fiber of our community, and the new buyers of Vineyard homes do not often fill the same important civic roles.
A community consists of a place and those who have a relationship with that place: the land and the people. Land conservation is a familiar concept, but now we have to think about people conservation as well. Affordable housing is less about houses or land or development and more about people who belong in and love a place being able to afford to stay in that place. Advancing people conservation has become our sixth cornerstone.
Neighbors and nannies, schoolteachers and social workers, truck drivers and technicians, artists and arborists, plumbers and plasterers, the town clown and the town drunk, whistleblowers and curmudgeons, peacemakers and troublemakers, politicians and taxpayers, grandmothers and grandfathers, sisters and brothers, those of different ages, abilities, incomes, colors, religious beliefs, sexual orientations—we need all these people. Each time any of them is forced to leave our community due to escalating real estate prices, the Vineyard becomes a lesser place. People conservation also relates to important jobs going unfilled, or being filled by those who are unqualified, or turning over quickly as people lose their housing patience and hope. It relates to a commuter workforce instead of one made up of familiar faces and old acquaintances. It’s connected to stress, anger, child abuse, alcohol, and divorce. When we begin to lose continuity of generations, we lose an essential element of community character.
Tom Chase, the director of the southwestern Massachusetts office of the Nature Conservancy, says:
Every time we lose a Vineyard family of long-standing, we lose a grey cell from our cultural memory. Gradually we forget the traditions of land stewardship. Affordable housing is [about] not only . . . people caring for people, but also people caring for the land. Enough islanders have to be around so knowledge of the land accumulates and transcends generations. Without restoration of our natural habitats and generations of stewards, we might as well live anywhere.
The affordable housing story is about people conservation. It’s a story about long-term community sustainability, and it is the essential complement to land conservation. Can our problem be fixed? We have decided, as a company, to invest heavily, and in many ways, in the notion that it can.
Martha’s Vineyard is a rarefied place, and it faces particular problems. But similar housing issues are virtually universal in attractive places. Desirability trumps affordability. There’s a bumper sticker that says, “Houses: Everyone Gets One Before Anyone Gets a Second.” I can’t imagine what the Vineyard would be like—or what South Mountain Company would be like, for that matter—if our housing market were governed by that principle. But somewhere between the draconian egalitarianism of this bumper sticker and the sticker shock of a real estate market run amok is the balance that can keep the Vineyard community healthy.
John Abrams is the president of South Mountain Company (www.somoco.com), an employee-owned build/design firm on Martha’s The Company We Keep: Reinventing Small Business for People, Community, and Place (Chelsea Green Publishing, www.chelseagreen.com, May 2005), in which he explores the role of small business in promoting community, creating social equity, and maintaining ecological balance.
The following excerpt from The Company We Keep: Reinventing Small Business for People, Community and Place by John Abrams (Chelsea Green Publishing, May 2005) may be published free-of-charge by your media outlet when media attribution is given to the author, title of the book and book publisher—as outlined in John’s bio at the end of this article. As a courtesy, we would appreciate being notified that you plan to run this material in your media outlet.
It’s clear to me that a workplace is a better place when employees truly work in teams, but the most familiar team models we have are those that are created to win wars and games. We have a commander or a coach who gives orders, and the soldiers or the players use those instructions to defeat the opponent. Mediator Bill Ury says, “People are realizing that adversarial, win–lose attitudes in an increasingly interdependent world, where I depend on you and you depend on me, just don’t work anymore. Using those tactics is like asking, ‘Who’s winning this marriage?’”
Who’s winning this company? Wrong question.
Consensus decision-making is a powerful tool for building nonhierarchical teams that can produce the best possible collaborative thinking. I am not suggesting leaderless teams and open-ended processes with no controls. Quite the opposite. I’m suggesting well-led processes that invite, engage, and expand capability and that lead to an effective and just way to make decisions, develop initiatives, and solve problems.
The prevailing method for conducting meetings and making decisions, Robert’s Rules of Order, comes from military beginnings and relies on rigid structure, rules of conduct, and strict adherence to the rule of the majority. Often nearly half the people at a meeting disagree with a decision that has been reached. In many cases, by using a more open process that encourages dialogue and participation, we can arrive at decisions that are supported, at least to some degree, by everyone affected.
Consensus is a process of synthesizing the wisdom of all participants into the best decision possible at the time. It is not unanimous agreement, and in fact, participants may consent to a decision that they disagree with, but that they recognize meets the needs of the group or the situation. The root of consensus is consent, which means to give permission to. When you consent to a decision, you are giving your permission for the group to go ahead with the decision.
Consensus is about accommodation, but, more important, it’s about nobody having to accept that to which they are vehemently opposed.
The cooperative nature of consensus yields a different mind-set from the competitive nature of majority voting. Key attributes of successful participation include humility, willingness to listen to others and see their perspectives, and willingness to share ideas without insisting they are the best ones.
Some describe consensus as a transformational process. When we use the accumulation of several peoples’ ideas and weld them together, the final product is better than what anyone could have devised on his or her own. The idea of consensus is not to eliminate conflict but to transform it.
At South Mountain Company we have used consensus decision making for seventeen years to run our business. At Island Cohousing, where I live, we have used consensus decision making for four years of development and five years of living. As the chair of the Island Affordable Housing Fund, and in many other facilitation situations, I use the consensus process even when it is not explicitly stated that we are doing so.
How Does Consensus Decision Making Work?
Consensus can be divided into five parts or stages:
Expression of an initial idea;
Discussion of the idea;
Synthesis of reactions and creation of a proposal;
Testing of the proposal within the group, and modification if necessary; and
Implementation and evaluation of the decision.
The fundamental difference between consensus and majority vote is that in a consensus process a single person can block a decision. Consensus empowers each individual in a way that majority voting does not. Majority voting can accomplish decision making quickly, but it also can strain relationships and the sense of community. In achieving a majority of votes, expediency can become more important than relationship. What one individual thinks may not matter unless that individual has sufficient power. Consensus often requires more creativity, and it often results in more complete solutions.
Because consensus can become paralyzed by one difficult, powerful, or dysfunctional individual, I advocate a backup voting mechanism to be used when consensus cannot be reached after a specified amount of discussion. In the organizations with which I am most familiar, this mechanism has been essential but rarely used. Aside from its practical utility, its existence assures more adherence to the consensus process— when someone is being stubbornly disagreeable, that individual knows that he or she is likely to be outvoted if he or she doesn’t find a way to compromise.
Occasions do arise in which individuals are consistently argumentative for the sake of argument. They often characterize their behavior as “playing the devil’s advocate.” I once heard a facilitator respond to someone who was “just being the devil’s advocate” as follows: “Thanks for your sentiments, but I think the devil has all the help he needs.”
Consensus is a conservative process. Because it takes a new consensus to replace an existing decision, decisions tend to stand once made. Some people are uncomfortable with this conservatism because it can be hard to change a decision. To address this, some consensus proposals include a review period or a sunset clause. Requiring that the decision be renewed after some time has passed can encourage a group to experiment with new ideas without fear of being locked into a risky or unfamiliar path. It also provides an easy mechanism for incorporating new learning, over time.
One way to ensure that group time is not spent reconsidering previously made decisions when only one person—or a few—wants to do so is to require that reopening a consensus decision have a minimum number of supporters, say 10 or 20 percent of the group.
There are some issues for which consensus may not be an effective process. A classic example is style issues or color or design choices. Choosing the color scheme for corporate headquarters may not be the best decision to put to a group consensus process, because there is no best choice between blue or green; they are simply personal preferences. In these cases, using a weighted voting system on a number of choices may be a more effective way to get the job done.
Consent does not mean agreement. The goal of consensus is to come to a decision that everyone will give permission to, at least for a while. Supporters of a decision usually include true supporters of that position, those who don’t really care either way, and those who don’t fully support the position but don’t wish to stand in the way.
Blocking is appropriate only if a participant strongly believes that a proposed decision is going to be bad for the whole group or to violate the mission of the group. If a participant blocks a group decision because of his or her personal values, that individual is essentially demanding that the whole group subscribe to his or her values. It is the facilitator’s job to be clear about this and to remind participants of the powerful responsibilities that come with the ability to block decisions.
There are ways of objecting to a proposal without blocking consensus:
Nonsupport—I don’t agree with this decision but I will go along with it.
Reservations—I think this decision is a mistake because _________, but I’ll live with it.
Call for a later review—I would like this decision reviewed after ________ .
I am sometimes asked whether it is perilous for the employees to make the decisions for a business. What do they know? Isn’t it inefficient and potentially paralyzing for decisions to be made by consensus by a diverse group? Shouldn’t we leave the decision making to skilled management?
I speak primarily from my particular experience. South Mountain’s governance system is a democracy with clear divisions of responsibility and authority. Much of the authority to act is delegated to management. This delegation comes easily, because this was the established mode of operation before the ownership of the company was shared. The difference is that there is now a clear mechanism for discussion, debate, and change. The comfortable delegation of authority may be one of the advantages of a company converting to worker ownership and control, and consensus decision making, rather than starting that way. Once the entrepreneurial leap of starting a new business has been achieved, adoption of consensus-based decision making becomes a part of the maturation process. In our case, consensus decision making has only broadened our view; it has not watered down our decisions or derailed our ability to make them in any discernible way.
John Abrams is the president of South Mountain Company (www.somoco.com), an employee-owned build/design firm on Martha’s Vineyard. This article has been excerpted with permission from his new book, The Company We Keep: Reinventing Small Business for People, Community, and Place (Chelsea Green Publishing, www.chelseagreen.com, May 2005), in which he explores the role of small business in promoting community, creating social equity, and maintaining ecological balance.
The following excerpt from The Company We Keep: Reinventing Small Business for People, Community and Place by John Abrams (Chelsea Green Publishing, May 2005) may be published free-of-charge by your media outlet when media attribution is given to the author, title of the book and book publisher—as outlined in John’s bio at the end of this article. As a courtesy, we would appreciate being notified that you plan to run this material in your media outlet.
Good meetings are a joy. Poor meetings are tragic. Many of us, in our lives, spend significant time in meetings, but we are not taught how to lead them well or how to effectively participate in them. I have facilitated hundreds of meetings. This doesn’t mean I’m particularly good at it or have special expertise, but my experience has given me great respect for the practice.
Too many meetings are unsuccessful: too long, unfocused, petty, unproductive, led by domineering or disagreeable individuals, meandering, time wasting, boring, contentious. Such meetings leave participants dreading the next one.
A facilitator is an individual with a particular skill who accepts responsibility for helping the group move through an agenda in the time available and make necessary decisions and plans for implementation in order to accomplish common goals.
Usually meetings are facilitated by default, by whoever is in charge, without recognition of the meaning of the job.
Facilitation is part art and part science. There is a growing body of knowledge and resources about the practice, and there are several ways to learn the skill. It is being consciously practiced more and more in business, government, and the nonprofit world. There are also many natural facilitators—leaders who don’t think about facilitation but practice it as their standard mode of conducting meetings.
Especially with large groups, facilitating can be scary—it’s a big responsibility. It requires moment-to-moment awareness, being awake and active, and thinking on your feet. It’s like dancing. If your mind wanders, you lose the rhythm and stumble. It’s more like jazz than classical music, and it’s exhausting.
And, just as musicians have off nights, facilitators can have off meetings. I’ve had plenty.
The responsibility of the facilitator is to the group and its work rather than to the individuals within the group. The group gives the facilitator additional rights to accompany the increased responsibility.
A facilitator encourages the expression of various viewpoints—the more important the decision, the more important it is to have all pertinent information (facts, feelings, and opinions) on the table.
A facilitator keeps the group focused on the agenda item and task at hand.
Perhaps the most common misconception about facilitation is that the facilitator is supposed to make sure that everyone gets to say what they want. That is the opposite extreme of not letting anyone speak at all. Facilitation is the art of finding the middle ground—the place where as many people as possible get to express themselves as completely as possible within the bounds of what the group is willing to listen to and what time permits.
Facilitation is not about encounter. It is about learning a form of group guidance that produces accommodation.
The facilitator is responsible for protecting ideas and individuals from attack, suggesting processes for following the agenda, and devising other approaches if the process bogs down.
Listening is the primary skill of facilitation. The facilitator listens for the whole group and each person in it. As facilitator, you listen for the group’s purpose, and the power of your listening focuses and energizes the group.
I have conducted facilitation training at both South Mountain Company and Island Cohousing, and in both organizations we now have a number of skilled facilitators. I have noticed that once they are trained to facilitate, people become better meeting participants as well as better meeting leaders. They understand the process in a new and more complete way.
Facilitation is an important tool. Practiced well, it can help groups of people with divergent views to achieve consensus based on the pooled wisdom of the participants. That sounds like a good thing, doesn’t it?
John Abrams is the president of South Mountain Company (www.somoco.com), an employee-owned build/design firm on Martha’s Vineyard and the author of The Company We Keep: Reinventing Small Business for People, Community, and Place (Chelsea Green Publishing, www.chelseagreen.com, May 2005). In this book, he explores the role of business in promoting local culture, creating social equity, and maintaining ecological balance. This article has been excerpted from The Company We Keep with permission.
The following excerpt from The Company We Keep: Reinventing Small Business for People, Community and Place by John Abrams (Chelsea Green Publishing, May 2005) may be published free-of-charge by your media outlet when media attribution is given to the author, title of the book and book publisher—as outlined in John’s bio at the end of this article. As a courtesy, we would appreciate being notified that you plan to run this material in your media outlet.
A cherished business doctrine is that growth must be a primary business purpose: “grow or perish” is a mostly unquestioned truth. At South Mountain we favor certain kinds of growth, but not expansion for its own sake, which author Edward Abbey described as “the ideology of the cancer cell.” We embrace growth to achieve specific goals, but always with consideration of the consequences: it may disrupt and endanger treasured qualities. We look for ways to develop and thrive without enlarging, thereby holding to limited growth. When we grow, it is by intention rather than in response to demand. We think about “enough” rather than “more”—enough profits to retain and share, enough compensation for all, enough health and well-being, enough time to give our work the attention it deserves, enough communication, enough to manage, enough headaches.
Years ago we were designing a house for new clients. The process was going poorly. Our clients wanted to build at a beautiful spot on top of a hill. We proposed to site the house beside the hilltop, so that the lovely area on top, capped with a huge glacial rock formation with a view, would be preserved. They did not share our perspective. They could not believe, even after we presented convincing photographic evidence, that there was a design solution that would, at once, preserve the cherished hilltop landscape and secure the view they desired. I wondered whether we should end the engagement. Given such a fundamental design disagreement and lack of trust so early in the process, it was doubtful the process would go well. On the other hand, this was a big project, and we were counting on it to provide a significant chunk of our workload for the following year to keep our growing workforce busy.
I brought my partners to the site. We sat on the big rock and considered the problem. They shared my view that our design solution combined responsible use of a beautiful site and sensitivity to our clients’ needs. We understood that if we withdrew from the project at such a late date, we might not be able to replace the work quickly enough and might run short of work sometime the next year.
We mused a bit. The silence was broken by my oldest partner, who speaks bluntly.
“Let’s shitcan it,” he said.
The next day I met with our clients and said, “You know, this isn’t working the way we anticipated. Before we dig the hole deeper, let’s just call it quits.” They were surprised, but after some discussion we agreed that it would be better to part company.
As it turned out, we were lucky, and another opportunity quickly filled the gap. We learned to trust our intuition when it told us not to risk the quality of our work in favor of security and growth.
Until that time we had responded directly to demand. When work was offered, we accepted it, and when the volume of work required expanded capacity, we grew. This was standard operating procedure and we had no reason to question it. It was thrilling to have the opportunity. But this incident helped us contemplate the effects of growth, and we began to wonder whether this passive approach made sense for us. We began to examine growth rigorously and evaluate the benefits and detriments.
It may seem odd for a company with thirty employees to have a self-conscious concern about growth. Maybe it’s why we’ve remained so small. While the potential to expand has been steady, we have scrutinized it carefully.
I do not know, from experience, what it would be like if our company were several times—or many times—larger than it is, so it’s hard to talk with certainty about the value of smallness. But I have suspicions. I suspect that we could not retain many of the qualities we value if we were significantly larger. Many ecologists and a few intrepid economists question whether the planet can sustain a global economy that enjoys perpetual growth, but the idea of individual enterprise growth is rarely challenged in the world of business. I have searched business literature and found surprisingly little that questions the advantages of growth, or that considers optimization of size. In fact, conventional wisdom implies that small businesses are those that just haven’t had greater success yet.
Not that we don’t favor some kinds of expansion—we do. But we do not embrace unrestrained growth for its own sake. We grow to achieve specific goals, but we are aware that when we choose to increase in size, we may disrupt and endanger treasured qualities. Such concerns do not imply that we must limit development. Economist Herman Daly makes the distinction by explaining that to grow means to increase in size by the assimilation or accretion of materials, while to develop means to expand or realize the potentialities of; to bring to a fuller, greater, or better state. Our planet, he explains, develops over time without growing, while our economy, a subsystem of the finite and nongrowing earth, must eventually adapt to a similar pattern.
If we apply Daly’s insight to our companies and look at the implications of growth and the possibilities for development without expansion, we might conclude that remaining small, manageable, and familial has concrete value.
One of the few proponents I have found for limiting business growth is Jamie Walters, the author of a book called Big Vision, Small Business. She compares the concept to precious jewels: “It’s more a matter of polishing a gem and perfecting its facets, if you will, than of acquiring an ever- expanding number of gems regardless of quality or despite the fact that they might be permanently depleting the mine.”2
The apparent lack of questioning about the nature and benefits of business growth, however, may simply indicate that the literature lags behind a changing conventional wisdom. In the lead article in a recent issue of Inc. magazine titled “America’s Favorite Hometown Businesses,” the magazine’s editor-in-chief, George Gendron, says:
Wherever I go these days I run into founders who say that getting big fast is not a part of their business plan. They care about financial performance, but they’re equally devoted to building a company that promotes personal and professional development, that fosters close relationships with their community, and that gives them pride and satisfaction they haven’t been able to find elsewhere. . . . What they lack is business legitimacy. There’s absolutely no reinforcement for such thinking in the mainstream culture, and precious few role models for founders who choose such a path.
There is intense debate within the movement for socially responsible business about a parallel growth-related issue: how to keep control of socially responsible businesses as they grow, and how to keep their original values intact. Scale is a critical issue. Many companies that start off with a mission and find early success feel that they must go public to finance expansion. Once they do, they are vulnerable to buyouts by larger companies and subject to corporate law that requires a publicly held company to prioritize profits for shareholders. The takeover of Ben and Jerry’s by Unilever is the most well-known example, but there are countless others. Many small natural and organic food companies, like Stonyfield Farm, Odwalla, and Cascadian Farm—which have been emblematic of independent, live-your-beliefs-no-matter-the-consequences commerce—are now owned by the likes of Coca-Cola, Groupe Danone, and General Mills. The extent to which their freedom to embed their values in their company and their brand may be compromised by their growth is a question.
Faced with such issues, some companies have taken a different approach. Seventh Generation, the Vermont purveyor of environmentally friendly household products, went public in 1993 but saw where that path was leading and was in a position six years later to begin to buy back its stock. The company returned to private ownership and is now charting its own destiny. Patagonia, a pathbreaking environmentally and socially responsible company, has always been privately and very closely held, so when they decided to make a costly shift to organic cotton to satisfy their mission, they were free to take the plunge.
There are no outside investors and no non-employee board members at South Mountain. Each owner is an employee. We decide what kind of business ours will be. The decisions are partly economic and partly philosophical, and the people making them have well-aligned interests. Our considerations have led us to believe that if our business practice is not governed by an unquestioned growth imperative, we will have greater flexibility and freedom and the character of the business will better match our aspirations.
I am not suggesting that every workplace should be modest in scale. An unquestioning attachment to smallness seems as careless as an equivalent affinity for unconsidered expansion. In our case we believe that excessive growth may narrow our horizons and limit good things like invention, personal fulfillment, and the overall quality of our workplace and our products. Most people I talk to want these good things in their work but find it hard to resist the tug of other forces more persistent. Too often we tend to grow for increased profits rather than to stabilize and improve proficiency. I am profoundly grateful to have partners who are committed to helping one another resist those forces, in favor of a different direction with other rewards.
Why Grow?
Sometimes frantic growth, I think, becomes a purpose in itself, or the perversion of other purpose. For example, our purpose might be to make the finest bagel or supply the best mortgage. But why do we need to produce all of either? Why not make just enough? The wish to make the best of a product and the wish to make all of a product may each preclude the possibility of the other. It may be impossible to satisfy all the demand for your excellent product without compromising essential elements of product quality. A different approach would be to learn how to do it, share the learning with others, and thereby encourage the establishment of small bakeries and banks embedded in their locale, well positioned to make the best bagels and mortgages for the people they serve.
Some say that to argue about growth in commerce is spurious. Of course you have to grow, they say: “Nature demands growth just as business does.” I say, “That’s debatable.” Wall Street demands growth; business does not. Neither does nature. Nature seeks optimized growth and imposes limits. In the book Upsizing, author Gunter Pauli points out that if an oak tree grows to 150 feet, it is strong enough to resist wind, wear, and tear. But it doesn’t grow to 1,500 feet, even when nature provides sufficient nutrients. Instead, it provides room for ten other trees. If it grew to 1,500 feet, it would become too fragile and lose its resilience and stability.
Nature has many inherent limits that identify optimal size for different organisms, and we may be better off if we do the same in our organizations and businesses. As business ecologist Paul Hawken once remarked, “Do you want to be a mushroom or an oak tree? Spores beat out acorns every time in growth rates, but never in longevity or durability.”
Why do most businesses want to grow? Sometimes there are legitimate reasons that make it necessary in order for a business to survive. Chroma Technology Corp., an employee-owned company in Vermont that manufactures and supplies specialized optical filters for microscopes, must respond to the industry it serves. As the microscope manufacturers grow, they demand more filters. If Chroma can’t supply them, they will lose their accounts. Their position in the supply chain requires growth.
The Weaver Street Market, located in suburban Washington, D.C., had no intention of expanding, but a large development that combined residential, commercial, and retail uses was completed nearby and its residents wanted a market. They tried to get a major chain to open a store in their area, but none was interested. So the neighborhood asked Weaver Street to open a second market, and six hundred subscribers signed up to finance the start-up. The residents of the community put their money where their mouth was. How could Weaver Street refuse to offer the service?
More often, however, it seems that the pursuit of happiness has become, for many, synonymous with the accumulation of wealth and power. Maybe it’s just because we’ve been led to believe that we’re supposed to grow, supposed to win in the competition of the survival of the fittest.
Our inquiry need not be about growth versus no growth; it better serves us to think about the quality of growth. Some things we want to grow and some we do not. We want to increase our responsiveness, our satisfaction, our effectiveness, our reputation, our legacy, our sense of accomplishment, our relevance, our capacity to improve the quality of our products, and our contributions to good lives for our employees and our community. We do not want to increase our waste, our pollution, our unfulfilled commitments, our stress levels, or our callbacks.
Charles Handy thinks broadly about expansion. He believes that growth can mean not more of the same but “leaner or deeper,” supporting improvement rather than expansion. Bigness, he maintains, can lead to reduced focus, excessive complexity, and less effective control. He goes on to say:
Once big enough [businesses] can grow better, not bigger. It is a formula which Germany’s mittelstander (small family firms) have tried and tested to great advantage, content to corner and dominate one small niche market, through constant improvement and innovation. Rich enough, and big enough, they concentrate on the pursuit of excellence, for its own sake as much as anything.7
Handy’s assessment is consistent with Daly’s distinction between development and growth. Opportunities for development without growth are legion.
Rule of 150
Growth can be an extreme sport. When a company is growing quickly there’s a thrill a minute. It’s the same type of sensation many people seek by climbing a mountain or soaring off a cliff clinging to a hang glider. Some of us are willing to forgo such thrills in our work in exchange for familiarity and stability. Some try to get the best of both, and these people have made important discoveries.
When organizations become large, there is often the concurrent inclination to make small units within the larger structure to maintain qualities like conviviality, effective communication, and flexibility. Malcolm Gladwell’s The Tipping Point explores how little changes can have big effects and turn ideas, products, messages, and behaviors into major trends. In the book Gladwell writes about the theories of anthropologist Robin Dunbar, who, in the interest of learning about optimal size, has studied how groups of varying numbers work. A striking collection of examples supports his conclusion that there is a Rule of 150, which says that 150 is the maximum number of people who can share a social relationship with each other. Therefore, organizations work best if they remain within that rough limit.
The number reveals itself in a variety of interesting settings. Dunbar looked at twenty-one different hunter-gatherer societies around the world and found that the average number of people in each village was right around 150. The pattern holds true for military organizations, whose planners have a rule of thumb for the size of a functional fighting unit: 150 to 200 soldiers. Reduced hierarchy, fewer rules, and fewer formalities are required for the group to function as a team if it remains at that size. Group behavior operates on the basis of personal loyalties and relationships in a way that is impossible with larger groups.
I cannot envision our company with 150 or more people. I can almost imagine it with fifty, or maybe sixty. Even now I don’t always remember the names of all the kids of my workmates. Since many people are scattered at different job sites, I may not see someone for weeks. Occasionally it takes months or years to have follow-up conversations to the mutually probing exchanges we had around the time of a person’s hiring. I wish I knew everyone better. I wish I made more time to catch up on people’s lives, and shared more of mine. I wish there were more chances to explore the intricacies—the hips and valleys, the copes and scribes, the successes and failures—of the projects they’re doing.
The pursuit of concentrated power and wealth may be like chasing a porcupine—if you’re not careful, you just might catch it. I’ve come to believe that there are optimal scales for different businesses and organizations, that we need to think more broadly about the meaning of growth, and that the concept of “enough” has a place in our internal debates. As our ownership pool grows, we may have to expand our ability to create individual equity as the larger numbers dilute the distributions. If one of our goals is to extend our influence through growth, we may have to find inventive new forms of growth, like observing the Rule of 150 or implementing new forms of franchising. Careful examination and control of growth has become a prominent link South Mountain’s chain of values. It’s a tug on the sleeve that has our full attention; the gospel of unrestrained growth is not the right doctrine for us.
There’s a story about a fisherman who was sitting on the beach with his wife one afternoon enjoying the surf and the sun. He had enjoyed a big catch that morning, so he came in for the day. A wealthy businessman heard about his success and approached him.
“Why didn’t you keep fishing and bring in twice as much?” he asked.
“Why?” said the fisherman.
“Because you could make more money. Maybe buy another boat and hire some employees.”
“Why?” the fisherman asked again.
“You could keep growing, increase profits, and buy more boats. If you worked long and hard at it after some years you’d grow rich.”
“Why would I want to do that?”
“Because then you and your wife could retire and relax on the beach,” said the businessman.
“But that’s what I’m doing now.”
John Abrams is the president of South Mountain Company (www.somoco.com), an employee-owned build/design firm on Martha’s Vineyard. This article has been excerpted with permission from his new book, The Company We Keep: Reinventing Small Business for People, Community, and Place (Chelsea Green Publishing, www.chelseagreen.com, May 2005), in which he explores the role of small business in promoting community, creating social equity, and maintaining ecological balance.
Print this page.
