Why a Cooperative Model?
“Out of curiosity, why did you do it this way?”
NEW BUSINESS, NEW ADMINISTRATIVE HEADACHES
We sat across from a would-be banker, our business newly minted with the state, paperwork in hand, ready to open an account. But “cooperative” was not an option in the bank’s pre-determined drop-down list of business entities, and we were all stumped. His question was well meaning and totally understandable in a business landscape where cooperative ownership is not the norm. “Out of curiosity, why did you do it this way?” Our business structure was an administrative headache for the bank, and beyond that, somewhat of a mystery.
That day, we sputtered some half-baked answer because we had never been put on the spot like that. Fortunately, we’ve had a little practice since then.
OTHER BUSINESS STRUCTURES ARE EASIER, RIGHT?
That depends on your goals. The goal was never to build something that lives and dies with us as founders. Many business structures are optimized for the people at the top of the org chart. Control is consolidated with a select few; early investors are heavily rewarded; and often, decision-making is bottlenecked over time. In theory, this looks good for us as founders! But it’s less appealing for future colleagues. We wanted something designed to outlast us, to bring others in as equals and participants, and to distribute ownership and accountability broadly over time.
After experiencing work environments in nonprofits, government, and small family-run businesses, we knew we wanted something different. We pursued cooperative ownership to achieve the goals outlined above. It’s the mechanism that makes these goals attainable and able to withstand the test of time.
DEMOCRATIC PRINCIPLES & EQUAL STATUS FOR ALL MEMBERS
When members join, they have the same amount of control over company decisions, regardless of capital contribution. One member, one vote.
We’ve heard skepticism from folks about this one: this sounds fair, but it ignores expertise. Or how do you get anything done when everyone has to decide together? These concerns are understandable, but they conflate governance rights with operational authority.
Democratic governance doesn’t mean that every person is involved with every decision. Well-run cooperatives delegate technical and operational decisions to the people qualified to make them. Members vote on things that shareholders typically decide on: profit distribution, leadership, and strategic direction. Meanwhile, operational and logistical decisions are delegated to brilliant and capable worker-owners who handle day-to-day operations. We trust our teammates to operate in their swim lanes, and to keep each other informed enough to make important collective decisions.
This clear delineation between governance and operations demands clarity from us as co-founders. Did this take longer at the start? Absolutely! But slowing down to establish this level of clarity has made our business relationship and foundational systems stronger. It has also made the potential for growth seem in our grasp: the prospect of inviting other worker-owners to PG is less daunting when the terms are clear for all parties. Ultimately, our relationships, business practices, and impact in the world are stronger for it.
What this looks like in practice:
Governance: At our founding, we developed agreements (Member Agreements and Bylaws) that clearly articulated the rights and responsibilities of worker-owners.
Operations: On an ongoing basis, we develop tools (standard operating procedures) that lay in “plein air” our collective agreements. We do this for big things like employee compensation, and seemingly minute things file folder structures. It helps keep us on the same page!
Job Descriptions: even with just two co-founders, we quickly learned the value of “divide and conquer.” We have clear job descriptions. We trust and hold ourselves and each other accountable for our pieces of work.
THE ROLE OF CAPITAL
There’s a cooperative principle called “Capital as Instrument,” which describes capital as subordinate to labor, not the other way around. In other words, capital is necessary to ensure ongoing business operations and allow for work-life balance. We don’t use capital to maximize return on investment for individual investors. It’s this mindset and practice that has led to the degradation of our natural world and staggering wealth inequities.
Instead, we use capital (and surplus profit) to re-invest in the organization, serving member needs collectively. This means ensuring good paying jobs, good working conditions, and the opportunity for individual growth and development.
What this looks like in practice:
Profits are distributed based on labor given to the company, or they are reinvested in company growth.
LABOR SOVEREIGNTY
Work has conditioned us to increase productivity; to distrust each other based on our positioning and level of control at an organization; to maximize profit.
Cooperative models ask us to treat each worker as integral to the whole and work as if our destinies were intertwined (because they are). We build cultures of support, responsibility, and mutual aid by operating with honesty, transparency, and caring for others in the work.
What this looks like in practice:
We name our boundaries and needs: We allow ourselves to work at a pace that matches our material and emotional needs. Pace and schedules fluctuate based on the real needs of our worker-owners.
We trust others’ expertise: we understand administrative work and big-picture strategic work are equally important forces that drive PG forward. We compensate our worker-owners fairly and equitably.
WORK AS A LIFE-SUSTAINING & LIFE-AFFIRMING FORCE
We hope the nature of work shifts from one of necessity to an act of social transformation. Humans are so cool and we can achieve great things together. To be human together on this planet is a gift. We are forever in awe of the art, science, and technology made possible by our creative and collaborative nature.
We strongly believe work should be life-sustaining. If that sounds subjective, you’re absolutely right. “Life-sustaining” can mean different things to different people, or even to the same person at different life stages. Cooperative models allow us to work at a pace that’s “life-sustaining” for us, whatever that means for us as individuals and for the collective whole.
We’re also committed to the supportive, sustainable development of the industries and geographies we work in. We care about the social, environmental, and economic impacts of our work. When our governance and decision-making structures force us to slow down and build consensus, we’re often tuned into all these outcomes, ensuring we’re caring for the collective whole along the way. Our work then becomes about making communities better places to live.
What this looks like in practice:
We work with clients whose work we can get behind: we work with creatives, thinkers and organizers making a real impact in their communities. We get to know their stories and their work deeply. And we cheer them on relentlessly.
We have fun together: picnics, retreats, walking meetings outdoors. Silly memes, expansive check-ins on a human level at the start of each meeting. We’re human together first.
WE’RE SO GLAD YOU ASKED
The questions we’ve fielded about cooperatives have made us better at articulating our “why.” We arrived here by asking what we wanted work to feel like, what we wanted our relationships to look like, and what we want to leave behind. The cooperative model gives us a framework solid enough to build from and flexible enough to grow into. We’re just a year into this cooperative endeavor. It’s been a slow build, but we wouldn’t have it any other way. We certainly don’t have it all figured out, but our experience thus far has demonstrated that the work we’re doing, and the people we’re doing this with, are worth the effort to build it right.
