THREE BUSINESSES THAT PUT PEOPLE BEFORE PROFIT

civilization How to Save the World has been developing the concept of New Collaborative Enterprises , businesses that are totally egalitarian, self-organized, self-managed and founded on principles of members’ happiness and well-being, not growth and shareholders’ profit. Several readers have asked if such enterprises exist, and my answer is ‘to my knowledge, not yet’. This article profiles three companies that come close. Next week I’ll put on my consultant hat and describe how a true NCE might evolve.

Ricardo Semler received brief fame for his book Maverick, about how he transformed his father’s family business in Sao Paulo, Semco S.A. into a totally egalitarian, decentralized, worker-operated company. Now, ten years later he has just finished a sequel, The Seven Day Weekend , that shows he has lost none of his idealism. Key to success is an obsession with employee freedom, and total disregard for growth. Here’s what he’s up to per a recent report in the Guardian:

He refuses to make long-term projections. “If someone asks me, ‘where will you be in 10 years’ time?’, I haven’t got the slightest idea. I don’t find it perturbing either if we said, ‘look, in 10 years’ time Semco could have 500 people instead of [the current employment of] 3,000 people’; that sounds just as interesting as 21,000 people. I’d hate to see Semco not exist in 10, 20, 50 years’ time, but what form it exists in, what business it’s in and what size it is are not particularly relevant.”

Semco’s staff work in small, autonomous units of about a dozen (the size, says Semler, of a close family group). They make the decisions, choose their leaders, set objectives and decide who they need and what they should be paid: someone who wants too much pay for what they are doing might be frozen out by the group. “From a distance it can sound like a workers’ paradise,” says Semler, “but the system is pretty unforgiving, because if you put your salary too high, and people don’t put you on the list as someone they need for the next six months, you’re in more trouble than you would be at General Motors.”

Sounds a bit like an NCE, doesn’t it?

His next project is to develop a school in Sao Paulo based on the principles of freedom and flexibility. “The schooling system seems very stupid, much as the business world is,” he says. “As with cars and airlines it needs someone from outside the business to rethink it from scratch.

The Canadian La Siembra Co-op tells their story better than I can:

La Siembra Co-op is a leading North American fair trade organization offering consumers high-quality, certified fair trade organic products that improve the livelihoods of family farmers and the well being of communities at home and abroad. Incorporated in 1999, La Siembra is the first organization to import, manufacture and distribute fair trade certified organic cocoa products in North America. La Siembra’s Cocoa Camino product line is sold throughout Canada and is expanding distribution in the USA. La Siembra’s Fair Trade certification guarantees consumers that farmers receive higher than world market prices. This includes the payment of organic and social premiums that are used for development programs, decided on by the producer co-op members. La Siembra’s Organic cocoa and sugar cane certification means better health for farmers, the environment, and the consumer. La Siembra’s cocoa is produced using traditional Shade Grown techniques that preserve the environment and maintain bio-diversity while providing a much-needed habitat for migratory birds. We source our cocoa from co-operatives of family farms who grow organically under a shade canopy in the rainforests of the Dominican Republic.

The company’s small group of shareholders are intimately familiar with the business of the company and devoted to its cause. Arms’-length financing is from financial co-ops and credit unions.

Seven minutes from our home on the Oak Ridges Moraine is a manufacturing company with a difference. Husky Injection Molding Systems of Caledon, Ontario is located on a large industrial space completely landscaped with native plant species — no herbicides or pesticides used. President Bob Schad resigned from the Canadian Chamber of Commerce over that group’s opposition to the Kyoto accord, and was an active and effective lobbyist getting Canada to ratify the accord.

Schad’s company cafeteria is run by licensed nutritionists and offers only wholesome, healthy foods, and its in-house health club is free to all employees and open 24/7. The company always appears near the top of every listing of Canadian ethical investments, and its emissions are remarkably small for a huge manufacturer, and the largest employer in the area. The company is obsessed with employee safety and health. They have developed their own technologies to reduce materials used in production of containers, and to maximize the use of recycled materials in containers. High-efficiency manufacturing processes and building design minimize waste, noise and energy use. Employees are empowered to identify and create ways to further reduce, reuse and recycle, and minimize the environmental footprint and enhance worker health and safety in this remarkable company.

On top of this, Husky has a written Commitment to Society :

Charitable giving and support of non-profit organizations play an important role in the implementation of our core values at Husky. Each year Husky donates 5% of its pre-tax profits to charitable organizations. The Schad Foundation is responsible for directing 20% of Husky’s charitable budget primarily in support of environmental projects. The remaining 80% of the budget is divided among Husky locations worldwide in support of local community and educational initiatives.

One of these initiatives is Environmental Week, a program in our area fully sponsored and funded by Husky where every grade six student spends a week learning about and participating in stream rehabilitation, wetland enhancement and tree planting in and around local school grounds.

In a world ravaged by corporate greed, selfishness, dishonesty, worker exploitation and social and environmental neglect, it’s good to know there are companies like these to show the way forward. If you know of others, let me know and I’ll do a sequel.

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5 Responses to THREE BUSINESSES THAT PUT PEOPLE BEFORE PROFIT

  1. Thank you very much for this blog on NCEs. This is just the kind of info business people need. Many times it?s hard enough just keeping a business afloat never mind sailing off into uncharted using a new management style. Businesses will be more likely to try something new if we can know that new strategies have actually been implemented successfully somewhere.Nice work. Keep it coming.Tom

  2. doug powell says:

    What do you think of St. Luke’s Communications in London?http://pf.fastcompany.com/magazine/06/stlukes.html

  3. Dave Pollard says:

    Doug: Great catch. I have a natural skepticism about advertising, but a close colleague works for a big agency, and he’s really countercultural, so I’ll e-mail him the FC article and get his response. Thanks.

  4. natasha says:

    This is very encouraging, thanks for posting it.

  5. iProceed says:

    Another company that seems to be doing what Semco did is July Systems (Santa Clara, CA).

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