Why a Worker's Cooperative

This past weekend I was at the Software Craftsmanship North America conference (SCNA) hosted by 8th Light in Chicago. This is a wonderful conference that each year I manage to drag more of our staff down to experience.

SCNA was a bit of a break for me, as much of my time lately has been going in to setting up The Commons Cooperative, a new organization that I’m building focused on software development services for businesses, entrepreneurs, and what I’ll call “social good”.

While at SCNA, I was having a conversation with Dave Thomas (@pragdave, co-founder of The Pragmatic Bookshelf http://pragprog.com). I was describing The Commons, and mentioned that we were proud of it being a different legal structure than most companies. Specifically, we are setting up The Commons as a Not-For-Profit Worker’s Cooperative.

His simple question was basically, what’s the benefit of a cooperative versus a partnership or other traditional business structure?

Not being well practiced in talking about The Commons, I stumbled. I found myself at a loss to verbalize why I was so passionately pursuing this avenue. Since then, I’ve been thinking about how I want to answer that question.

You see, my current business, Three Wise Men Inc. (which is being renamed to Mojility Inc.) is a standard corporation. I’ve been running this business for nearly 12 years, and we try very hard to retain a stable staff of developers. We have managed to establish a healthy collaborative culture, with people that care, enjoy mentoring others, and fit very well with the values of the Software Craftsmanship movement.

Now, I’m not the best at business development and sales. From time to time, when business is down, I’m struck with the difficult decision of when and how to lay off excess staff. I have a very hard time with this, we invest so much in our people, both professionally and emotionally. I think this is one of the reasons why our staff is so loyal, and our workforce so stable.

Now, think of the job of a CEO. As so bluntly put recently in Ruby Rogues #125 - Loyalty and Layoffs, it is this person’s job to maximize shareholder value. If the CEO does not do this, they aren’t doing their job, and should be removed by the board of directors. These are the values of a Corporation, a purely capitalistic abstraction, with the purpose of generating wealth for its shareholders.

So here I am, CEO of Three Wise Men Inc., with a fiduciary responsibility to myself as sole shareholder, to shed staff to the point of profitability.

There was my friction. These people, that form the foundation of my value proposition to our customers, that I so fervently and frequently argue are not a commodity, that cannot be bought and sold on the market, needed to be shed in some heartless savage act.

This here to me represents the fundamental difference between a Corporation and a Worker’s Cooperative. The values that drive the actions of the CEO.

The values of a Corporation are hierarchical, profit-focused, maximizing shareholder wealth. The values of a Cooperative are democratic equality, sharing, taking care of the needs of the community.

So I find myself having attempted to run a Corporation with the value system of a Cooperative.

Sure, by and large it mostly works. It’s very short sighted for a Corporation to neglect its staff in exchange for profitability. Corporations invest in people, not out of the needs of the people themselves, but the need to avoid the cost of re-staffing, retraining, reduced productivity.

It’s this alignment of values about which I find myself most excited.

The promise that I can execute, with full responsibility, using my own value system, to the benefit of our staff and customers.

And here’s the best part – I’m not alone! Every one of our workers is aligned. Not just doing their job for a paycheque, not just working for the financial benefit of some unseen group of shareholders, but working together, towards all of our common cause, for our customers, as people.

I have frequently referred to software development as a social endeavour. Now, it’s in our bones.