The Great Resignation is causing an existential awakening throughout the world of work because “the dramatic upheaval of the past year and a half, along with the looming specter of death, likely inspired many to rethink how they spend their limited time on Earth.” Many historically successful firms find themselves “starved for staff” and, as a result, have begun introducing novel employee perks and benefits meant to engage a labour class that is feeling its own power. Around the world, cooperative leaders have an opportunity to bring the cooperative enterprise model to non-cooperative places.
More capitalist organizations need to become more cooperative to survive the Great Resignation and cooperative organizations need to scale a business model that is highly complex and not well-grasped by the public. For human-centred enterprises, especially member-owned cooperatives, our contemporary context represents and opportunity to reimagine the movement’s history. According to Karen Miner and Sonja Novkovic, “the cooperative business model is compatible with the most progressive understanding of sustainability, but many cooperatives still need to broaden their view toward deeper and more meaningful impact.” To maximize the opportunity afforded cooperatives by the global disruption of modern work, firms can look to the cooperative enterprise model “to enable transformation from an economistic to a humanistic paradigm” by aligning practices with cooperative principles and values to elevate the employee-member experience above financial (or member benefit) motivations. Or perhaps, as Anu Puusa argues, “unlike capitalism, the cooperative movement is not broken. It just needs better marketing.”
From my perspective, cooperatives that desire to evolve into more humanistic firms represent players that will drive positive environmental and social change; however, member-led, public-serving firms also represent a stakeholder group that, while not structured as cooperatives, share many of the principles, values, and governance criteria outlined by Miner and Novkovic, theoretically, would benefit from evaluating the Enterprise Model in the context of their organizations purpose, organizational design, and future potential.
Here’s how we might approach such an opportunity.
Evaluate the ecosystem
The cooperative movement, according to its critics, is overly complex and, consequently, risks collapsing on itself under the weight of governance and/or being perpetually uninteresting to the public. According to Catherine Levitan Reid and Brett Fairburn, this overly complex design will result in single stakeholder dominance or what Shann Turnbull refers to as “unitary-governance,”, which is a preferred framework for managing and governing enterprises because it consolidates power within a smaller community that is able to manage by self-interest under the guise of efficiency.
Further, one could argue, as Tim Mazzarol does, that cooperatives are “too socially focused to fit comfortably within the mainstream economic structures of the investor-owned firm (IOF), but remain too economically focused for the non-profit sector. The entrepreneurial component of cooperatives might not jive with the financial stewardship and actuarial requirements of a pension management firm, which are stipulated by law.”
This said, an evaluation of many public service, B Corps, and values-driven firms against Bouchard et al’s “typologies of cooperatives” illuminates the opportunity for organizations to reimagine how we are owned and governed. Within the cooperative ecosystem, a reasonable case can be made for organizations such as the BC Pension Corporation, Beneficial State Bank, or Patagonia being a players in the solidarity and circular economies that applies client- or member-led innovation to strategic direction as well as daily operations.
Connect to purpose
According to Miner and Novkovic, the International Cooperative Alliance seeks to go beyond the purely economic definition of cooperativism in order to reveal the “purpose, values and principles, along with three building blocks of the cooperative enterprise model: people-centered, jointly owned and controlled, and democratically governed. Taken together, these properties inform business practices, as well as organizational structures; incentivize organizational behavior that is markedly different from capital, state and nonprofit entities; and frame the purpose and nature of the cooperative enterprise as a values based business.”
Family run businesses such as LEGO, public sector entities such as the University of British Columbia, and multinational corporations such as Unilever are committing to purpose. By putting stakeholders, such as students, families, and historically-marginalized-supply-chain-bystanders, at the center of business models, firms are beginning to understand why the future of work is cooperative.
Define ownership
Here is where the rest of this pretty good argument falls apart.
From my perspective, the most challenging gap to bridge for purpose-driven organizations is ownership; who controls the enterprise directs its purpose: “Due to the separation between ownership and control and managerial opportunism—an assumption about human behavior shared with the view of investor-owned businesses—a primary role of the board is to hire, manage and monitor the CEO to ensure that the enterprise operates in concert with member interests. The more homogeneous (less diverse) the members, the easier and less costly it is for the board to represent them.”
While mechanisms exist for employees around the world voice their ideas and opinions in service of corporate governance, neither the one-member-one-vote criteria of cooperatives or the employee stock ownership model reflect the potential of cooperative democracy in most organizations (even though cooperatives employee tens of millions more people than all Fortune 1,000 companies combined). Further, capital plays and instrumental, not subordinate role, in terms of how the corporation evaluates patronage and the viability of our enterprise.
This said, as more organizations understand the opportunity to engage more deeply with cooperative values and principles, I wonder how far removed we are from realizing the potential of the Cooperative Enterprise Model.