Worker cooperatives: Building democracy in the workplace

There is no single boss at Wisconsin-based Isthmus Engineering, a robotics manufacturing company – there are 37 of them. After working two years at the worker cooperative, an employee can apply to become a company owner, if they want the responsibility. 

“The day that you become an owner, you have an equal vote to everybody else in the business … everyone is giving a voice,” said Ole Olsen, a member-owner of Isthmus Engineering, in an interview with WikiTribune.

While the concept of a worker-owned business may sound socialist, cooperatives hardly offer an escape from the pressures of capitalism. What they do provide is a lesson in cultivating democracy in the workplace, where authoritarianism is typically expected. 

Isthmus employee-owners convene twice a month to discuss and vote on a wide range of topics. Bi-monthly meetings may sound like a nightmare for employees at traditional companies – the trauma of long and soul-crushing conference calls may be enough to put some off the idea of meeting with co-workers forever. But for the roughly 600 worker cooperatives in the United States, these sorts of summits give every owner a voice. 

Owners at the most recent Isthmus meeting discussed the possibility of installing a charging station for electric vehicles and purchasing new design software. A final vote has yet to be held. Other meetings have touched on more sensitive issues, such as finances and increasing ownership.

Isthmus Engineering member-owners during a groundbreaking ceremony in August 2015

“You have to make sure that everybody gets a chance to speak, or it’s not working as it was intended,” said Olsen. “But at times, people still feel their voices aren’t being heard.”

Cooperative advocates who spoke with WikiTribune see Isthmus as a shining example of how the business model can work. But cooperatives in service- and manufacturing-oriented business, like Isthmus, face a distinct challenge that grocery or retail co-ops (common in the co-op landscape) can usually avoid. They must balance a pool of owners with significantly different socioeconomic backgrounds, from engineers to receptionists.

Olsen says tensions are rare in owner meetings, even after 38 years as a co-op, though pecking orders naturally arise.

“I wish I could say there’s no hierarchy. There actually is. Definitely some people carry more influence than others. And at times that probably goes too far. But it’s 100 percent better here than it is in other companies,” said Olsen

Cultivating workplace democracy

Namaste Solar, a Colorado-based cooperative that manufacturers solar panels, also has a pool of owners of different backgrounds. The majority are in trades – electrical apprentices, for example – though ownership includes marketing executives, as well.

Blake Jones, a member-owner, is baffled when outsiders scratch their heads at the co-op model, especially other Americans.

“We believe in democracy so fervently we will go to war with another country in order to overthrow a dictator … but in the business world, democracy is nowhere to be found,” said Jones.

Namaste Solar requires employees to undergo a training program before they can become new owners. Training includes workshops on financial literacy, business management and co-op functions. Jones says these introductory courses have helped create cooperatives in which everyone can constructively participate.

The deliberation process in owner meetings sometimes goes on longer than Jones would like. But he cherishes them because they give Namaste Solar something he says traditional companies try to artificially create: buy-in.

Also on WikiTribune: Q&A: Labor experts weigh in on four-day work week proposal

“At a conventional company, there’s inevitably going to be people who oppose a decision and try to sandbag it. … At our company, we just put the cart before the horse, so even when somebody is in the dissenting minority on a decision, they go along with it because they were included in the process,” said Jones.

Several sociological studies have determined people work harder if they feel a sense of “psychological ownership” over their jobs, a mindset that can be difficult to instill in a traditional company with top-down management (Harvard Business Review).

Employees at worker cooperatives tend to be more productive than their traditional counterparts, according a study from Leeds University. The key is employee-owned businesses must go beyond a feeling of ownership, and actually give workers real influence over the company. 

How the responsibility of ownership is allocated differs from co-op to co-op. Many successful models, including Namaste Solar and Isthmus, find it helpful to diffuse responsibility into committees.

Committee system

Jones compares the model to the U.S. Congress, where members have chairs on different subcommittees. Unlike Congress, cooperatives try to fill committees with member-owners who have a background in the subject.

The committee system avoids a direct democracy in its purest form. At Isthmus, committees form company policy, then give other owners a chance at an up or down vote. At Namaste Solar, committees often make unilateral decisions because the rest of ownership grants them such autonomy.

“The shipping clerks might not know what the engineers are doing, but then they don’t know what IT is up to either, so it’s a matter of trust,” Olsen said.

Olsen looks to the Basque region of Spain for inspiration. That’s the location of the Mondragon Corporation, the largest worker cooperative in the world, with over 74,335 employee owners in 2015.

Even this co-op titan struggles to get employees to adopt the mindset of a “co-owner,” according to Javier Marcos, Mondragon’s communications director. The instinct to defer to management is simply too deeply ingrained for most employees. He recommends every co-op help employees realize their “new purpose.”

“(You) must to commit yourself, get involved and do everything in your power, and above all, in your mind, to collaborate proactively in the development of your cooperative,” Marcos told WikiTribune via email.

But giving workers a voice goes only so far in maintaining a healthy cooperative. The other critical part of being a co-owner is compensation. Some form of profit-sharing is central to nearly every worker cooperative, and one that shouldn’t be neglected, according to Joe Marraffino of the Democracy at Work Institute, a California-based organization that helps establish co-ops. 

“There’s different elements of ownership,” Marraffino told WikiTribune. “Some of it’s voice, some of it’s having kind of autonomy or control over your work environment. … But a really important ingredient is that sweetness of profit at the end of the year to know that if you put in labor, if you put in extra effort that gets returned to you monetarily.”

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