Fire your boss and take control

Co-operative businesses give workers more freedom to structure their lives, while also giving them a share of the profits. It's an old model, but one that's gaining traction as disillusionment with hierarchical corporatism grows

Who hasn’t worked a dead-end job for a faceless employer who has no interest in what you think and doesn’t care about you as a human being? It’s a reality for many in the modern labour market, where contracts are getting shorter and jobs are increasingly lost to automation and countries with cheaper labour.

But it doesn’t have to be this way. In recent years, an increasing number of people have chosen to take control of their own jobs and rekindle their sense of purpose as creative human beings who are inspired to serve their communities and the planet.

Some say we’re witnessing the death throes of an old way of doing things – where people are small cogs in big machines and follow ‘top-down’ instructions. They see a new model being born, in which we can express ourselves, collaborate freely with others, and exercise more influence over our own work.

Self-management and social purpose
Such ideas are hardly new in Denmark, where there is a strong tradition of farmers joining together in co-operatives to control their own work and income. Historian Peter Manniche even described Denmark at the end of the 19th century as “virtually a farmer’s co-operative commonwealth”.

The latest movement has been given an intellectual framework by Belgian professor Frederic Laloux, whose book Reinventing Organisations pulls together lessons from around the world, in which businesses and organisations have achieved surprising success by apparently breaking all the rules.

A striking example is Dutch neighbourhood nursing provider Buurtzorg. Founded in 2006, it quickly grew to 7,000 employees organised in self-managing teams of 10-12 nurses. There are no managers in the entire organisation. The teams have access to initial training in group decision-making, coaching and tools such as rota systems.

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By liberating the skills, commitment and creativity of nurses, Buurtzorg dramatically improved patient recovery rates, reduced costs, and increased patient and employee satisfaction. It’s a single case among many that demonstrates the benefits to clients, employees and society as a whole when staff are equipped with the skills and systems to self-manage.

Laloux calls these ‘teal’ organisations, which represent the next stage of evolution in society. They have three things in common: a high degree of self-management, a strong sense of social purpose, and an understanding that people are multi-faceted human beings.

Changing mainstream
Two of Denmark’s most enterprising and admired companies are Novo Nordisk, the world leader in diabetes care, and hearing aid manufacturer Oticon. Both are famous for their social purpose – to empower people with diabetes and hearing loss – and do so by empowering employees to maximise their potential and creativity.

These principles were drawn together in the influential 2012 book Unboss, which was co-authored by entrepreneur Jacob Bøtter and Lars Kolind, former Group CEO of William Demant, which owns Oticon.

“The Unboss organisation involves everybody instead of the few, it functions through mechanisms instead of structures, and it builds on purpose instead of profit,” they wrote.

Last autumn, the consultancy Agora – comprised of business psychologists based at universities in Jutland – established a consortium of 11 organisations who are jointly funding a research project to share their experience of new organisational forms and values. They include e-commerce consultancy Vertica and marine refrigeration specialist B COOL, as well as some public sector bodies.

“These are all organisations that are doing something different,” says Anne Lund Thybring, one of the researchers. “We want to examine what alternatives to command and control-based organisations might look like in the real world.”

Co-operative thinking
Perhaps the ultimate example of self-management already exists in Denmark: worker co-operatives, where employees own the business themselves. Many were founded in the 1920s and 1930s in response to industrial conflict between traditional employers and trade unions, and primarily operate in the construction, painting and plumbing sectors.

But a new generation of professionals in services such as management consulting is now joining them.

“What excites them is the possibility of control over how working life is organised,” says Susanne Westhausen, director of Kooperationen, which represents the interests of 92 worker co-ops in Denmark.

Westhausen points out while many co-ops are hugely successful, few people realise they are run by the workers themselves.

“Partly that’s because we don’t have a special legal structure for worker co-ops in this country,” explains Westhausen.

“So they may be structured as shareholder companies. The important difference is that only the employees are shareholders.”

Shared profits
One thriving workers co-op can be found in Copenhagen’s former industrial zone, Nordhavn, in the shadow of Svanemølle power station’s three sentinel cooling towers. Established in 1985, Byggeselskabet Maj (BygMaj) specialises in restoring buildings and making high-quality furniture and installing kitchens. Of the 25 co-workers and six apprentices, five are founding members, including carpenter Niels Mundus who also has the role of director.

“We wanted to create a different sort of feeling in our work, a different way of speaking and behaving towards each other.”

While BygMaj turns over around 15 million kroner a year, co-workers also express solidarity with people in need from around the world. Initially the co-workers gave two percent of their earnings to a small charity that built homes for an indigenous community in Nicaragua. More recently, the co-op sent two teams of eight co-workers to Nepal in association with ActionAid to build two schools.

Most of the co-workers are carpenters, cabinetmakers and bricklayers. While each bring in their own clients and work orders, more complex enquiries are handled by one of several co-workers with experience in estimating costs and negotiating prices. When the order is placed, they invite co-workers to be on the work team and monitor the progress along the way.

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BygMaj has been successful thanks to a few key principles. First, every member is expected to bring in work orders. Second, earnings are split relative to how much, and how effectively, each person works. Third, everyone in the work team on a particular customer order gets the same hourly rate of pay for their contribution — whether that’s setting up the job and dealing with the customer, or being a builder, carpenter or cabinet maker.

For example, when a work order is agreed and the team selected, each co-workers is paid the trade union minimum rate of 140 kroner per hour for their contribution. When the job is completed, the costs are paid and 22 percent of the surplus is returned to the company to pay for overheads such as rent and insurance. The remaining surplus is divided between the co-workers on the team, in proportion to the number of hours they worked. This means that if a job is completed in less time than estimated at the outset, the effective rate of pay for everyone increases, and they all have an incentive to work efficiently and get on to the next job.

Co-op consultancy
A couple of kilometres away in the heart of Copenhagen’s retail district near the walking street Strøget, is a very different type of co-op. Management consultancy KnowledgeWorker helps businesses tackle a range of problems, from developing their businesses plan to increasing turnover.

They also collaborate with partners as a business developer to create new products and services. For example, they are working with housing provider Dominia and Juul & Hansen Architects to develop a framework for maximizing the sustainability of urban renewal projects. On projects that actively seek to improve conditions for people with limited social and economic resources, they offer their services for free.

Founded in 2011 by young university graduates with degrees in fields such as economics, business development, engineering and communications, the co-op has 17 members of which seven currently work full-time, five part-time, and five are occasional contributors.

Frederik Pedersen, chief executive of KnowledgeWorker, a co-operative business consultancy. Photo: Rasmus Degnbol

Chief executive Frederik Pedersen says they rejected careers in more hierarchical organisations because they stifle the creativity and motivation of knowledge workers. Instead, they employ collaboration as a creative principle and a source of valuable ideas.

“By sharing knowledge freely in the company we can ensure that the best possible people work on specific projects. We also teach each other because knowledge becomes more valuable when it is shared. By working together we create something that is greater than the sum of the parts,” says Pedersen.

Free living

Self-management allows co-workers to meet their own diverse priorities as complex human beings. This means having the freedom to say ‘no’. In BygMaj, no one is obliged to join the work team on any particular job. Workers who turn down opportunities may be asked less often, however, and if any co-worker gets a reputation for being unreliable or slow, they may not be asked at all. If someone has no work, they then qualify to be made redundant and collect unemployment benefits through their unemployment insurer, though this rarely happens.

Most KnowledgeWorker members also work for themselves or other employers, so they sometimes can’t devote more time to the co-op.

“That’s perfectly fine,” says Frederik Pedersen. “The co-op enables us to tackle more complicated projects than we would be able to individually. It’s founded on personal freedom mixed with social responsibility.”

Another freedom in self-management is in deciding where to set the balance between earning money and having free time. Many co-workers at BygMaj, for example, choose to work less than 37 hours a week.

“If you want to make good money here, there’s the opportunity,” explains Peter Klint, who is a carpenter and also sets up the kitchen remodelling jobs and work teams.

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“But I’ve taken extended time off, for example to design furniture and exhibit at the Milan Show.”

Others at BygMaj have reduced their hours to build their own homes, spend more time with their young children, or travel abroad. BygMaj’s employee association also sometimes contributes if co-workers need support for special health needs or educational purposes.

But could being the co-owner of a worker co-op also put people under pressure to commit too much time and energy, as is commonly experienced by the owners of more conventional businesses?

“It does require a lot of discipline,” says Frederik Pedersen from KnowledgeWorker. “Your responsibility is both to yourself as a worker and to the rest of the co-operative as a co-owner.”

Trust matters
For self-management to succeed there has to be a strong sense of mutual trust. While BygMaj’s co-workers can do some work for other employers, they are not allowed to own their own companies too because that would create a conflict of interests.

Klint recalls the case of one “very clever, fast and well-connected guy” who people were glad to welcome into the co-op, but was later discovered to be operating his own company at the same time.

“After that, he lost the trust of everyone else, and had to leave.”

Both co-ops have found it’s important to have someone responsible for the overall perspective and make quick decisions on everyone’s behalf when necessary. KnowledgeWorker operates in a fast-paced environment and delegates a lot of decision-making to chief executive Pedersen. He is formally accountable to bi-annual general assemblies, and there are also weekly meetings of the active co-workers.

“Decisions are rarely subject to a vote, as we aim to reach agreement through discussion and debates,” says Pedersen.

Co-workers at BygMaj charge for the hours they put into a project , and also claim a share of the surplus. Photo: Rasmus Degnbol

At BygMaj, part of Mundus’s role as director is to make sure everyone follows the agreed rules. He works about a quarter of his time as director, a quarter as a contract constructor and half as a carpenter. His tasks as director includes helping co-workers chase their customers to pay on time, and ordering building materials in the most cost-effective way.

All of BygMaj’s co-workers meet every two months to review how the co-op is doing and decide on matters such as investing in new machines, admitting new co-workers, taking on more apprentices or supporting charitable projects. A t an annual general meeting they also elect three people to a board, which then appoints the director.

This role was created ten years ago because the co-op recognised it needed someone to keep an eye on ‘the big picture’ financially, and to talk to the tax, municipal and regulatory authorities.

“I accepted the role because someone has to do it,” says Mundus.

But it doesn’t set him apart. He mainly has to persuade people, rather than tell them what to do. For this part of his work, he’s paid a fixed rate per hour, which is roughly the same as what he earns as a carpenter. His overall salary is equivalent to what any experienced carpenter in Copenhagen might expect to earn.

“There’s no reason why working in a co-op has to mean a lower salary. But if you’re only here for the salary, then this isn’t the place for you.”

Peter Klint adds: “Being in a co-op isn’t really a matter of owning anything. It’s more about sharing, facing challenges and the satisfaction of building something together. We all feel connected as friends and partners.”

BygMaj’s original founders are now in their late 50s and remain enthusiastic about co-operative ideas. Together with the apprentices and a younger generation of co-owners who joined the co-op around ten years ago, BygMaj has a healthy representation of age groups.

“Many younger people want to have the freedom of managing their own work, and have a higher level of understanding about how co-ops operate,” says Niels Mundus. “They have the ability to bring in customer orders, and are keen to take responsibility. It’s great to see them choosing this lifestyle, joining BygMaj and making their future here.” M


By Rob MacLachlan

After a career editing and publishing business magazines in the UK, Rob MacLachlan recently moved to Denmark.

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