Success Factors in Worker Coop Development

Transcription

1 Success Factors in Worker Coop Development Hilary Abell & Alison Lingane Co-founders, Project Equity Assets Learning Conference Roundtable September 17,

2 1. Why Worker Cooperatives? 2 2

3 WHY?: Income inequality is perilous for the economy Income inequality peaked right before the Great Depression and the Great Recession. Source: Robert Reich. 3 3

4 WHY? Working poor has become the norm 45%of workingadults in the East Bay earn below Basic Family Wage 55% 45% % working adults in Oakland of Work in the East Bay and Oakland 2012.pdf Basic Family Wage is the minimum needed to cover basic living expenses of food, shelter, healthcare, transportation and childcare. In California it is $18.15 / hour for a family with 2 working parents. Project Project Equity Equity

5 WHY? Workers of color bear too much of the burden $1.00 $0.60 $0.47 White Black Latino For every dollar earned by white workers in Oakland, workers of color earn far less 5 5

6 WHY? Research shows that worker ownership leads to Better jobs Lower turnover More efficient Higher survival rates Civic engagement Pay well above industry average at Arizmendiand WAGES cooperatives 15% at Cooperative Home Care Associates vs % industry-wide Worker coops in the plywood industry were 6-14% more efficient 65% of Canadian coops survived 5 years vs % of comparable businesses Citizens with employee stock ownership vote more: 73% voted in 2008 vs. 63% of non-owners All citations are in Worker Cooperatives: Pathways to Scale 6 6

7 2. Worker coops are building assets around the United States 7 7

8 Equal Exchange West Bridgewater, MA 8 8

9 WAGES Oakland, CA 9 9

10 New Era Windows Chicago, IL 10 10

11 Cooperative Home Care Associates 11 Bronx, NY 11

12 3. Success Factors 12 12

13 Success Factors in Worker Coop Development Development Model Resources& Infrastructure People & Culture Processes & Programs 13 13

14 CHCA Success Factors Development Model Home health care industry focus Acquired industry expertise Multi-disciplinary leadership team VNA, ICS mission-aligned large clients People & Culture Social entrepreneurial leadership Coaching supervision Culture of dignity & respect Resources& Infrastructure Initial support from CSS Ample grant funding Processes & Programs Robust job & soft skills training Hybrid governance with outside leadership & education built in 14 14

15 Success Factors in Worker Coop Development Development Model Design for biz success - Business & human development - Clear priorities - Industry focus Effective long-term support People & Culture Strong management Cooperative fit Distributed leadership Social entrepreneurs Resources& Infrastructure Patient capital Shared business services Processes & Programs Ongoing training Cultivation of cooperative culture Good governance 15 15

16 4. Project Equity s approach 16 16

17 SF BAY AREA BLUEPRINT for increasing worker ownership Goal: Create actionable feasibility studies and pilots across 3 pathways to worker ownership 1. Pilot Worker Coop Academy: small-scale coop entrepreneurship 2. Business conversion assessment 3. Scalable coop development plan Primary Partners: Project Equity, Sustainable Economies Law Center, Green Collar Communities Clinic 17 17

18 Pathway #1: Coop entrepreneurship WORKER COOP ACADEMY PILOT WORKER COOP ACADEMY: Design and pilot this Academy for small business cooperatives and coop incubators in the Inner East Bay. Core partners: Project Equity, SELC and GC3 Year one deliverables 1) Pilot Program: Sept 2014-March 2015 Start-ups & Expanders Conversions Developers 20 teams applied for 5-7 slots Too many coop founders and developers undertake this work without the benefit of the business expertise that comes only from experience. - Worker Cooperatives: Pathways to Scale 2) New course at Laney College: Incorporate Worker Coop Academy modules into a course curriculum for a class to be offered as soon as Fall

19 Pathway #2: Business succession assessment COOP CONVERSION FOR BUSINESS RETENTION Opportunity Roadmap for Coop Conversions: Assess and support the potential for employee-ownership as a business retention strategy in Oakland. Year one deliverables 1) Quantitative & qualitative analysis: superset of Oakland businesses that could be considering a sale in the next 1-5 years, and the subset of those with significant LMI worker employee bases. Focus groups and interviews with business owners regarding attitudes toward worker ownership. 2) Outreach campaign: A ready-to-launch educational campaign directed toward those businesses The #1 preventable cause of job loss is a lack of succession planning. Only 30% of family businesses succeed to the 2 nd generation, and only 15% to the 3 rd. Those that don t close are sold to out-of-state buyers or private equity firms that often relocate jobs or the entire business. - National Center for Employee Ownership 3) A guide for other cities to follow to research the conversion opportunity, and to localize the outreach campaign design

20 Pathway #3: Scalable coop development plan OPPORTUNITY ROADMAP Opportunity Roadmap for Scalable Coops: Industries of opportunity and specific business ideas Year one deliverables 1) Industries of opportunity: Select 2-3 industries by reviewing research on Bay Area growth sectors, workforce trends, and government investment. 2) Business fit framework for assessing fit of specific business ideas with scale goals (50+ jobs), and with skills levels of workers Now is the time to invest in scaled development of worker cooperatives. We see a window of opportunity to catalyze growth. - U.S. Federation of Worker Cooperatives 3) 2-3 business ideas that demonstrate the key elements of the framework, and have a clear competitive advantage (could include anchor, sweetheart or major missionaligned clients) 20 20

21 Scalable Coop Development High-level criteria for assessing business fit jobs, minimum High % entry level jobs Full-time employment Potential to improve job quality (pay, benefits, profitsharing) Growth and partnership opportunities 21 21

22 Scalable Coop Development Feasibility research We are assessing opportunities in the following East Bay growth industries: Manufacturing (specialty food; advanced manufacturing) Logistics & Shipping Green infrastructure (e.g. stormwater management) Green building services Renewable energy / energy upgrades Greening of hospitals 22 22

23 Scalable Coop Development Community partnership roles Ecosystem development Community organizing Talent pipeline Workforce development Community colleges Community organizations Social service agencies Business advisors via local accelerators Business general manager Industry expertise Connections to wraparound services Human + Business development Project Equity s core capabilities 23 23

24 5. Round table discussion 24 24

25 DISCUSSION QUESTIONS 1. How many in the room have direct or indirect experience with worker coop development? Other kinds of coop development? 2. Do you see worker coops as a relevant model / strategy for asset building? Why or why not? 3. What were your key take-away s from the success factors presented here? Were there any surprises? 4. What would your organization or community need in order to take on a coop development strategy? 5. What questions or insights do you want to share? 25 25

26 6. Resources 26 26

27 For more information on worker ownership: Worker Cooperatives: Pathways to Scale (PDF available at American Worker Cooperatives: Community-Wealth.org, co-op section: Curriculum Library on Employee Ownership (Aspen Institute): Democracy At Work Institute: Grassroots Economic Organizing: Contact: Hilary Abell & Alison Lingane, Co-founders, Project Equity