The Problem with Co-ops - No Boss

Britan 'does' big co-ops, like the Cooperative Group with its strong corporate culture and executive hierarchies. But Britain's record for small co-ops is poor, especially egalitarian collectives. In the 1970s and 80s thousands of worker co-ops were started by young people as a response to the last major recession, a decade of mass de-industrialisation when the normal jobs for young graduates in middle management disappeared. Where are the Mondragons and Emilia Romagnas that should have resulted.

My co-op, Suma, was started in the mid 70s. In 25 years Suma created 100 good cooperative jobs. In the same time Mondragon created 10,000.

Why don’t co-ops start and grow in Britain? Because British people don’t know how to behave and work together cooperatively? They only know hierarchical behaviour. They like the idea of cooperative behaviour but baulk at actually doing it. If they do start coops they mostly still don’t take advantage of the model because they ‘do their old jobs’ in the coop, behave as controllers or controlled, executives or operatives, because that is the way they know and it is safe. So coops in the UK operate like badly run ordinary businesses, ones which have ineffective bosses, instead of well functioning active democracies.

Giving such organisations hard business tools and opening up access to finance is inefficient, they can’t use them or it properly. Like giving someone a toolbox but not teaching them how to use the tools. It’s a typically British disease to under prioritise competency. The cult of the amateur is a very British delusion. We want to just have a go and learn by muddling through.

I would say that British cooperative development assistance has contributed to this by sticking to hard skills delivery and hoping someone else does the soft skills. In effect we assume there is a ‘hidden boss’ who will make people cooperate and make things happen once we go away. Many of our recommended procedures rely on 'committees' to plug this gap. In philosophical terms this is known as 'infinite regression'. We never actually pin down who we expect to be in charge with this systemic model of governance. In practice no-one is unless a boss arises or some form of collective governance is discovered.

Those co-ops which have found a way to resolve the lack of competency in cooperative behaviour skills out perform everything else. They can take and adapt other hard skills, recognising where they fit and where they don’t fit a cooperative business environment.We see this all over the world where cultures are less hierarchical and more egalitarian. The ideology of class runs deep in Britain.

>Essentially it's process versus system. Most management theory is based on the idea that organisations exist and are controllable systems, therefore executives can focus on the hard skills, planning, control, organisation, development, marketing, and the operatives service the systemic processes.

The new kind of post–systems process theory says the organisation does not exist as a 'reified' thing. Organisational reality is the (web of) relationships between the people and specifically the interplay of responsive communications between them. This merely gives the illusion of a system. (A web of) relationships cannot be controlled but it can be coordinated and facilitated. (The concept of a web is also a reified systemic concept, a social object which has no independant reality outside of our ideology, use with care)

Hierarchical organisations (including large corporate co-ops) can force people to fit the illusion. Collective cooperatives cannot. So systemic tools, hard skills, don’t work by themselves in egalitarian cooperatives.

Much cooperative development support is like generic business support and fails to address the soft skills, the relating skills ( communications. decisionmaking, collective working etc) without which small coops struggle to action the tools and plans. Because British people do not know how to relate to each other cooperatively. Its not in our culture unless it is oppositional, reactive and defensive, eg trades unions or football fandom.

Consequently we help people set up co-ops to struggle in a swamp of dysfunctional interpersonal relationships. No wonder they fail to grow as businesses or abandon cooperative principles in order to grow ( by instituting hierarchy and it's attendant alienation).

Thankfully new form of organisation arising from the activist movement are addressing these issues, group facilitation, concensus decisionmaking, non violent communication, emergent strategy are not alien concepts to the post systems generation even though they remain so to ours. Maybe they will see the need for a priori soft skills training.

The cult of the chief executive

The majority of chief executives are not value for money. In a strict HR sense they do not add sufficient extra value to cover their cost. In some organizations the remuneration and staff support costs of the 'leadership team' outweigh the investment in operatives. Too many chiefs indeed and no-one to do the work except to write reports for the leaders and respond to the leaders 'visions'.

In my long experience I have many times been involved in executive recruitment where I have said lets employ 4 operative workers instead of this deputy chief executive or 6 instead of this CEO and been met with incredulity. Yet 4 operatives working at 50% (say) of the value adding productivity of a good CEO makes......you work it out.

I know that teams can organize themselves, that management especially executive management gets in the way of good work more often than actively encouraging it. Most executives say No more often than Yes. We hear about the exceptional leaders in business media not the run of the mill conservatives.

There are good examples of No Boss enterprise , Suma, Rainbow, the hundreds of 'recovered factories' in Argentina and other collective style worker cooperatives. Circle hospitals use the motto ' no matter how clever are your executives, the brainpower of your workers is greater' and so they delegate most management to ward level.

Dr Paul Thomas ' the business doctor' encourages private and public sector workers to sack their bosses and co-organize their work effectively. Once they get over their inhibitions, his clients seem to love the experience of self-organization.
Ricardo Semler famously sacked the entire executive management of his company Semco and re-energized the business ( see his classic book Maverick) by forcing his workers to organize themselves. Baxi in its worker owned phase had eliminated executive management by vertically integrated work teams (but crucially didn't do away with the CEO role and it was a ' mistake' by the CEO that lost them the business).

Old cults die hard. Even though we promise ourselves 'We won't get fooled again' (1960s Who). Even though we prize Autonomy above all else at work (once the hygiene factors of money and security are satisfied) (modern motivation research) we seem to crave the comfort of a chief. Hierarchy is a superficial defence against uncertainty and the need for us to act into an unknown future but it's an addictive and costly tranquilizer.

We place too much faith in our leaders and then denigrate them when daddy fails to live up to our unreasonable expectations instead of having a mature co-responsible relationship with them. We choose charismatic actors and are disappointed when they cannot write the play for us (Blair?).

This is much more than simply fat cats defending their privilege though that is definitely a factor. We would see through that self interest.
Organizations which have no privilege hierarchy, like worker cooperatives recreate poor copies of executive leadership management. It arises spontaneously. It meets a deep need.

There are surprisingly few critical studies of the cult of leadership. One academic who encourages pragmatic debate is Ralph Stacey. In 'Complexity and the Experience of Leading Organizations', Douglas Griffin and Ralph Stacey examine where this ideology comes from and allow CEOs to describe how even their attempts to introduce participative management were met with opposition by staff, the same staff who feared them when they were behaving 'as expected'.

Stacey has a process and relationship based management theory which could be the answer to our self imposed executive prison.

european worker coops to help uk rise to the cameron challenge

At the CECOP meeting of European worker coop federations in Brussels today we asked for assistance to respond to the Cabinet Office policy announced today to promote worker coops for public service delivery. And we got an enthusiastic response from Italy and Spain where they know all about externalising public services into coops.

That's the spirit. Cooperation between cooperatives. Our Principle 6 secret weapon (see International Cooperative Alliance principles)

worker coops beat the credit crisis

Statistical assessment and surveys show that worker coops have been more resilient than conventional enterprises in withstanding the economic crisis.
Social services did better than manufacture & construction
Worker coops used flexibility and innovation to better overcome the crisis. better than conventional enterprises.
Worker coops had better reserves and less dependent on external finance than conventional enterprises.
Led to better sustainability of employment in worker coops.
The worker coops that failed were already in trouble. Few healthy worker coops failed.

More evidence that worker cooperative is a better model of organisation for SMEs. Over to you David Cameron, Nick Clegg and Vince Cable. Will you promote worker cooperative as the number one SME model?

Social Cooperatives - Cameron's Cooperatives?

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Suddenly we find ourselves with a government intent on externalising NHS services into worker cooperatives. I share other worker coop people's unease at the thought of groups of workers working for one monopoly customer and pocketing NHS money as profits.

Is there a better solution?

Multistakeholder coops in Italy run externalised services. Type A are care coops with workers, users and others as members. Type B are employment inclusion with permanent employees as members and temporary training members. A majority or a large proportion of directors are elected by workers but their self-interest is tempered by user representatives and others from funders, trade unions etc.

Very successful, number some 7000 now. We do have multistakeholder coops in the UK. Greenwich leisure, GLL Ltd., is the best example and Somerset Cooperative Services http://www.somerset.coop/node/17 have written UK specific model rules for multistakeholder IPS but they have not yet been as popular as social coops in Italy.

Social cooperatives are a solution to the problem of bureacratically inefficient state services and the potential misuse of public funds in the private sector. Social coops use public money to provide services. They are proper cooperatives with full democracy. Think social enterprise but cooperative. So executive salaries are agreed by the members and the organisation remains locked into its local community and does not become a detached corporate plaything of its executives.

CECOP (the European Federation of worker and social coops) and CICOPA (the world federation) are developing a world definition of a social cooperative to help other countries to develop legislation and regulations to use social cooperatives to safely use public funds for social purposes.

In a global survey of social enterprise and cooperative legislation by CICOPA, it was found that the majorityof states which had social enterprise laws used a cooperative model and not the corporate executive led model which dominates the UK. The CICOPA definition will be agreed by the ICA as a guide to these and other states, and for national cooperative associations.

Confcooperative , one of the Italian cooperative federations are happy to help us in the UK to introduce the concept of social cooperatives to our politicians and civil service. As the UK representative to CECOP and CICOPA (from Cooperatives UK) I will be trying to link them up with the appropriate people in the UK.