In Cooperatives at Work we argue that worker cooperatives are uniquely suited to collaboration. Here, cooperation is baked into the structure and culture of the enterprise in economic incentives, HR practices, and the workplace culture.
Worker cooperatives are business enterprises that are owned and operated by the people who work in them. Workers share the ownership, the benefits (or losses) and the governance, which is democratic: one member, one vote.
Employee ownership hits record high
The rise of the employee-owned business
Hot topic: employee ownership
In a standard capitalist company, ownership is held by investors who ‘vote their shares’ and operations are run largely in a hierarchical manner.
It is not the workers but the executives and shareholders who decide such fundamental questions as whether to expand or liquidate the company, modify its mission or pursue major initiatives. Management structures and practices vary widely across worker cooperatives, as indeed they do in other firms; still, the basic foundations of shared ownership and democratic governance are constants.
Worker cooperatives are neither widespread nor well known, however. They represent about 3-4% of the global cooperative sector overall. There are approximately 85,000 worker cooperatives (WCs) in the world, employing about 12 million people (Eum, 2017).
A study of best practices in 2012-14 (Cheney and Hernandez, 2014) found many expert interviewees in the US and Canada looked forward to more sharing of insights from worker cooperatives for HR practice. Our most recent research shows that their instincts are right.
Here we profile five cases that offer important lessons for HR.
Financial literacy and transparency
At Namasté Solar, an installer of solar energy systems, owner-members have access to company financials and participate in regular, open discussions of important data and decisions. The coop also offers a compelling example of ‘scaling out’. After expanding to other states, the board encouraged the formation of similar solar energy cooperatives in a collaborative network. Organisational literacy, combined with staying small, but networking widely, supports a robust and far-reaching system of worker participation.
The many worker cooperatives united in the Mondragon Corporation are major players in several industries and represent a significant segment of the Basque and Spanish economies. Among valuable lessons from ‘the Mondragon Experience’ is the importance of ongoing, multi-dimensional training, in democratic and participative work processes as well as in technical arenas. In addition, Mondragon boasts specialised centres, a polytechnic school, a university, and a global entrepreneurship programme, along with its own social security system.
Open-ended, dynamic communication
The Venezuelan cooperative group Central de las Cooperativas de Lara (Cooperatives of Social Services of the Lara State) has some 20,000 consumer and worker members in dozens of affiliated cooperatives. CECOSESOLA is known for continuous open-ended communications. Through regular conversations, members discuss everything from immediate workplace issues to values like trust and compassion. The conversations also serve as venues for conflict resolution and community building.
Proactive, adaptive and innovative roles for HR
One of the biggest HR challenges a firm can face is the transition from a traditional hierarchical model to worker self-management and team facilitation. The ‘worker-recuperated enterprises’, known as ERTs (Empresas Recuperadas por sus Trabajadores) in Argentina, Canada, Italy and elsewhere are laboratories for innovative and adaptable HR practices in a culture where workers are collectively responsible for everything from production to policy.
Employee participation in a network structure
Australia’s Earthworker Cooperative is what is known as a second-tier cooperative, coordinating member cooperatives like Earthworker Energy Manufacturing Cooperative, a producer of solar water heaters. A culmination of work by labour and ecology movement activists, Earthworker embodies an ethic of worker self-organsiation, much like that of the ERTs. They are collaborating with Argentine ERTs in the creation of similar cooperatives.
Keys to success
As these and other cases we studied show, worker cooperatives demonstrate that business success can and ought to be judged by more than the bottom line or even by common environmental, social, and governance metrics and other similar measures. Worker participation and control, work/life balance, and environmental and social impact are all central to cooperative performance. The building of a resilient and forward-looking enterprise invites a reconsideration of the breadth and depth of HR functions as collaborative organisational structures are built and put into action.
Matt Noyes and George Cheney, along with four colleagues, are co-authors of Cooperatives at Work , in the Future of Work series from Emerald Publishing, UK.