When Paul Gilding’s book The Great Disruption was published in 2011 it had a profound impact on me.  In September of that year I wrote that it was, for me, the most accessible and full-bodied treatment to date of the effects of climate change on our planet, our economies, our lives.

Still is – although Gus Speth’s superb new book America the Possible is a knock-out that in many ways expands the vision further.

Gilding has a blog called “The Cockatoo Chronicles.”  It has been inactive for some months, but recently he made up for lost time when he posted a 2500 word essay that argues for a new reality:  the economy is now aligned with the environment and there is evidence that we can – and will – win the climate change battle.

That’s a big thing to say.

I read the essay and I felt like he hit the nail squarely on the head.  But I also felt that it rambled, that it was repetitive, and that there was a bit of unnecessary hyperbole.  All of this I attributed to his excitement at the recognition of new possibilities.

I thought it would be worthwhile to condense his 2550 words to a compelling 1000 word case by selectively quoting from the essay.  I was a bit concerned that he would be offended by this, so I sent it to him before posting.  He wrote back:  “All good, John.  It was too long.”  So here’s my condensed version:

“There are signs that the climate movement could be on the verge of a remarkable and surprising victory [and perhaps] the fastest and most dramatic economic transformation in history. This would include the removal of the oil, coal and gas industries from the economy in just a few decades and their replacement with new industries.

To understand this incredible potential we have to understand the unique structure of this social change movement – an idea whose tentacles reach into every tier of government, the world’s largest companies and financial institutions, and throughout the academic and science communities.

It has the support, to various degrees, of virtually all governments, many of the world’s most powerful political leaders (including the heads of state of the USA, China and other leading economies), the CEOs of many global companies, and many of the world’s wealthiest people.  This [combines with] one of the most global, best funded, broadly based and bottom up community campaigns we have ever seen.

We are in the midst of two simultaneous tipping points that create the opportunity to [eliminate] net CO2 emissions from the economy and secure a stable climate (but still a changed one).

The first is the rapid acceleration in climate impacts.

A series of increasingly dire warnings from conservative bodies like the International Energy Agency, the World Bank and the International Monetary Fund [confirm this].   The IEA, historically an advocate-in-chief for the fossil fuel industry [pointed] out that a stable climate and economy requires the majority of the global reserves of fossil fuels to never be burnt.

It is an extraordinary turn-around when key mainstream economic institutions lay out the case for dismantling what is arguably the world’s most powerful business sector.

Of particular note: a predominantly ecological question [has become] primarily an economic one. This is a profoundly important shift.  When non-fossil fuel companies understand the broad economic risk posed by the lack of climate action, they will become genuine and strong advocates demanding climate action – in their own self-interest.

The second tipping point in 2012 was the clear evidence that a disruptive economic shift is already underway in the global energy market, [indicated] by the [widely] noted acceleration in the size of the renewable energy market with dramatic price reductions and the arrival of  cost competitive solar and wind. It is hard to overstate the significance of this as it changes the game completely.

            To summarize:

            – The science shows we are not just failing to slow down climate change, but are in fact accelerating towards the cliff.

            – In response, mainstream organizations are arguing that the only way the world can avoid the risk of breakdown is to transform the economy urgently and dramatically.

            – Our capacity to do so is real and practical, with the technologies required already being deployed at large scale and at competitive cost. The size of the business opportunity now on offer is truly breathtaking.

            -If  the future is based in renewables and these are price competitive without subsidy, or soon will be, the transformation could sweep the economy relatively suddenly, even without further government leadership.

            – This [creates] an enormous and systemic financial risk: investments in, or debt exposure to, the multi-trillion dollar fossil fuel industry.

            – This risk is being increased by activist campaigns against fossil fuel projects and arguing for fossil fuel divestment.

            – Investors and lenders will reduce their exposure to fossil fuels and hedge their risk by shifting their money to high growth renewables.

            – This will then reinforce and manifest the very trend they are hedging against.

Is that it? Can we now sit back and expect the market deal with this?

Most definitely not.  It is probably true that the market would sort this out by itself if we had 60 years for it to do so. But we don’t. The science is clear that we have less than 20  - and this is where the opportunity for the climate movement emerges and why the choice of focus and strategy is now is so important. The task at hand for policy makers, business, investors, and the activist community is to slow down fossil fuels, speed up clean energy, and make the 60 year process of preventing the climate from warming more than 2 degrees centigrade (a point past where the system could spin out of control) into a 20 year [process].

While we can be comfortable that this process will deliver the required outcome, it’s not going to be smooth or pleasant. It will be messy, highly controversial and huge amounts of value and employment [will be] destroyed and created as the economy restructures around the necessary reality of a post-fossil fuel economy.  I’m neither relaxed about this nor naïve about the scale of the challenge.  I just accept that it’s now inevitable.

Of course, the losers will fight all the way to the end, using every argument, maneuver and delay they can think of. Most of us would do likewise faced with similar circumstances. But they will still lose.

So with some surprise, this is where we find ourselves. For the first time, we can envisage victory in the fight on climate change. The science is clear, the technology is ready, significant sections of the elite are on [board] and the financial momentum is with us.

And this time, the economics is playing on the same side as the environment. Just in time.

Think about that.

Mainstream organizations are arguing that the only way the world can avoid the risk of breakdown is to transform the economy urgently and dramatically.

Investment in the fossil fuel industry will become a bad risk.  That could be a tipping point of titanic proportions.

Investors and lenders will reduce their exposure to fossil fuels and hedge their risk by shifting their money to high growth renewables.

The fossil-fuel divestment campaign that was started by the grassroots organization 350.org began with colleges.  Now, according to an article last week in Grist it is spreading.  San Francisco, Seattle, and 10 other cities are considering selling off all their fossil fuel holdings.

This is big news for climate change.   The Obama administration is quiet, but the citizens’ movement is truly finding its voice.

Some say that predicting victory may breed complacency.  I don’t worry about that.  Hopelessness stymies.  We need robust notions of how success might be achieved.  Gilding’s assessment gives me hope.

Tony and his wife Margie have been long-time SMC clients and great friends – to the company and a number of us within it.

Tony was a New York Times columnist for three decades who won two Pulitzer prizes.  The Times said after his death that he “transformed coverage of the supreme court.”  But Eric Alterman of The Nation focused on “the remarkable three-decade career that followed his Supreme Court coverage: the period, beginning in 1969, when Lewis established himself as the bravest and most eloquent columnist of the Vietnam and post-Vietnam eras.”

“Nobody,”said Alterman, “had ever written anything in the paper of record the way Lewis did. The Vietnam War, he thundered, was ‘a crime against humanity.’  He continued to speak, over the coming decades, as perhaps the most prominent of establishment voices for the antiwar, human rights and civil rights movements. Indeed, he lit up his biweekly corner of the Times op-ed page with the kind of political passion that is typically roped off in Washington at marches and rallies.”

His wife, Margie (Margaret Marshall) is the former chief justice of the Massachusetts supreme court who wrote the decision that legalized gay marriage in Massachusetts.

Although we were influenced by Tony’s work and proud of his accomplishments, we loved him for who he was and Margie for who she is.

We heard about his death at the end of our semi- monthly Owners’ meeting.  Stories and memories instantly poured out.

Tony would stop by our shop from time to time to drop off a towel bar or a chair to be fixed.  He loved to be in the shop and was always interested in the goings-on there.

During the last days of January 2000, South Mountain Company’s 25 employees, along with several friends and planning experts; spent two days thinking about the future of the Vineyard.  Our goals were to sketch the outline of a future we would like to see on the Vineyard, and to decide what commitments we, as a company, are willing to make to achieve such a future.  We invited a few outsiders to broaden the perspective – the historian David McCullough, conservation biologist Tom Chase, and a few others.  And we invited Tony, too, whose eloquent remarks about the island he loved echoed long after the sessions were over.

We remembered him from just last August,  when we had a party for our past and current clients to celebrate our 25 years as an employee owned company.  Tony had to be there, and enjoyed himself, even though he was ill and obviously didn’t have the energy he wished he had.

Before we knew him, he and his family spent summers in a little camp on Deep Bottom with no running water, electricity or phone.  He would call in his columns to the Times from a pay phone at Alley’s Store, or use the phone at a friend’s house.

In 1993 he and Margie asked us to design and build a house for them not far from the camp.  It was more refined, but he wanted his upstairs office over the screened porch, to be reminiscent of the camp, with exposed rough-sawn whitewashed framing and sheathing.

I remembered those beautiful letters on New York Times stationary, typed on his manual Royal (I think) typewriter, that would come periodically.  In December 1993, during the design of the house, one of them said: “We greatly enjoyed Sunday’s meeting – - as always.  After the house is finished, could we please go on meeting every few Sundays?”

And in August 1994, after a few South Mountain people had been in and out of the house one day when it was nearly done he wrote,  ”At some point I said to Margie, ‘Isn’t it amazing how happy everyone is who works at South Mountain is?’  I went on to say that for you and everyone else, work there seems to be the opposite of the grudging necessity it is for so many people.  I am in danger of sounding pompous, so I’ll stop.  I just want to tell you what many others must have told you over the years:  You have created a remarkable enterprise.  Or better, the word should be life.  You make beautiful houses and things for us, and all involved have a chance to be craftsmen in the true sense.”

I responded, “Thanks so much for your kind note.  I feel as you do but you give me far too much credit.  This is a wonderful group of people.  They care about what they do.  I make the promises but they’re the ones who keep them.”

We are not all that he says, but I can say for certain that he got -precisely – who we aspire to be.

They loved that house, and came as often as possible.  Tony loved to putter around, work in the garden, and collect driftwood.  We built their outdoor shower from some of Tony’s driftwood collection.  When Margie’s work as Chief Justice made it impossible for her to come as much as in the past, Tony didn’t stop.

Tony himself was a craftsman in the true sense, in every way.  My colleague and co-owner Derrill Bazzy was one of the carpenters when we built their house in 1994.  In 2001, when we did an addition to that house, Derrill had become one of our designers and was responsible for the design of that addition.  He was very close to Tony and Margie and speaks about it eloquently:

“The first time I met Tony was as a carpenter building his house.  Later I was lucky enough to design the bedroom addition on that same house.  During those times I had countless opportunities to talk with Tony, and the topic usually turned to the US and the World.  Before working for South Mountain, I had spent the 1980′s as a free-lance photojournalist in Central America.  It was a time of great learning, but these talks with Tony were stunning expansions of what I had learned.  His wisdom and political clarity helped me understand the unfortunate events of those times in the context of history, politics, and the future.

We also had many conversations about the house we were building (or the addition we were designing) – how the pieces fit together, why certain woods were chosen, and how things would age over time.  He was genuinely curious about the craftsmanship, and it became clear to me that this was how he viewed both “home” and “abroad”.  Tony was a craftsman of words and concepts, events and possibilities, progressive values and legal fairness.  We were craftsmen of wood and structure, durability and function, humane design and code compliance.  Tony was, without a doubt, a master craftsman.    He is one of the men I admire most in my life, not only for who he was, but because he was married to one of the women I admire most in my life!  Tony and Margie were affecting history at a national and even global scale, but they set aside whatever “important” matters they were engaged in to be truly present in the life of whomever they were with – the carpenter at their house, and even the life of that carpenter’s son.   “Nos hace falta Antonio”.  (We miss you Tony).”

What else can I say after that?  Not much, except that we loved him, we love Margie, and our hearts are with her as she celebrates his life and mourns his passing.  He was a master craftsman for our times.

There’s not much you can do on a capped landfill because it’s essential that we not disturb the protective rubber liner that is usually only 12-18” below the grass that covers it.

But there are some uses.  Most are relatively passive:  cultivation of hay, green space, wildlife habitat, and biking/walking/running trails.  Some are more active:  golf courses, baseball fields, and soccer fields.

Perhaps the best (and becoming widespread) is covering the cap with solar panels.  There’s poetry in this.  The symbols of our wasteful practices – landfills – are becoming host properties for the promising creation of a society powered by renewables.   Like parking lots, landfills are distressed properties that can now serve a valuable purpose.

The small town of Aquinnah on Martha’s Vineyard capped its tiny landfill many years ago.  Now it serves only as a transfer station.  Residents drop their solid waste in bins and it is then transported to our Regional Refuse Station (don’t get me started about what happens after that – most of it could be composted as it is on Nantucket, but we haven’t reached that stage of semi-enlightenment yet).

On January 23^rd a ribbon-cutting was held for the new solar system at the Aquinnah Landfill that will provide all the electrical power for the town municipal buildings.  Below, SMC co-owner and foreman Pete Ives and solar installer Hunter Cottrell are installing the racking.

The project was another collaboration between Vineyard Power and South Mountain Company (SMC).  SMC co-owner and energy division manager Rob Meyers describes the ceremony like this:   “It was a cold, clear day, perfect for generating solar electricity, and perfect for a short but sweet dedication ceremony — we were freezing!!  After an introduction from the Town Administrator, Adam Wilson, and Vineyard Power (VP) Board Chair Paul Pimentel spoke about how the project came to be, and reminded us all that this is but a stepping stone towards VPs goal of providing 50-70% of the power needs of Martha’s Vineyard with a combination of solar and off-shore wind projects, Town Selectman Jim Newman was given the honor of cutting the ribbon, and releasing us from the clutches of winter to enjoy a cup of hot coffee at town hall down the road.  There were no lingerers!”

Rob goes on, “This is the seventh completed landfill solar project in Massachusetts.  The project is local in every sense of the word. A town project developed by the local electric cooperative, funded by local investment, and designed and installed by local contractors and electricians.  The innovative PPA/Lease model created by Vineyard Power enables town ownership of the system in as little as ten years; most such models have a 20 year term.  Given that the system is comprised of the highest quality equipment available on the market – SunPower - this is a robust benefit to the town as they will likely have free electricity for 20 years or more after ownership is transferred.”

“Typically,” he continues, “fixed-tilt ground mounted PV structures are set as close to the ground as possible to reduce costs.  One key difference in the design of this system is the use of a racking system with greater ground clearance.  The goal is to assure easy site maintenance:  just run the lawn mower under the panels.  Because the high efficiency SunPower panels only need 50% of the area of standard solar panels to achieve the same output, less racking was required.”

And Derrill Bazzy, another SMC owner and the project manager, chimes in, “Another important concept of the system design was no fencing.  The townspeople are proud of the installation and we felt they should be able to walk around and between the PV panels, touch them, connect with them, and experience them fully.  This required a novel approach to protecting the wiring from being touched (electrical code requirement).  We worked with our installation crew to keep all the exposed wiring (which is located on the underside of the solar modules) between two horizontal struts within the racking system, then we spanned those struts with a 2’ strip of metal fencing, creating an elegant detail at a fraction of the cost of fencing the perimeter of the array.  Win-win all the way!”

Landfills are fragile.  The permitting is complex and the site must be carefully protected during construction.  It’s good to have one under our belt.  We’re ready for more – bring ‘em on.  Chilmark sounds good, and West Tisbury and Edgartown and . . . maybe Nantucket too!!

All those were good.

But the reason for the trip was to meet with the 19 members of the Partners Group who own the Zingerman’s Community of Businesses in Ann Arbor, MI.  Zingerman’s is one of the great stories of today’s business world, a hopeful harbinger of the Next Economy.  The partners manage nearly 600 employees and the eight distinct businesses have combined annual revenues of $46 million.  They are all food-related (and educational) and they are all in Ann Arbor.

Over time the Zingermans (Paul Saginaw and Ari Weinzweig, the co-founders, and their partners) have steadfastly resisted the temptation to franchise their stellar brand.  Instead they have expanded at home, and they now consist of the following:  the flagship Deli where it all started in 1982, Zingerman’s Bakehouse (bread and pastries), Zingerman’s Creamery (cheese and gelato), Zingerman’s Roadhouse, Zingerman’s Mail Order, Zingerman’s Candy Manufactory, Zingerman’s Coffee, and ZingTrain, the education business which “shares the Zingerman experience with forward-looking organizations around the world.”

For the last 6 months I have been communicating by phone and e-mail with Ari.  He and a small group of partners have been designing a plan to transition Zingerman’s to an employee owned worker co-operative.  When the plan is implemented they will become one of the largest worker co-ops in the U.S.

The partners were gathering in Portland for a three-day offsite retreat, partly to discuss the co-op design.  Ari had asked each of them to read my book, Companies We Keep, and asked me if I would come to react to their governance and business transition plan.

I was thrilled to have the opportunity to meet and think with such an extraordinary collection of people so brimful of honest intelligence.

It was quite a day.  The dialogue was good.  Although I was the only outsider in the room I felt comfortable there.  It was relaxed but productive.  Funny and philosophical.  They work together with remarkable flow – tackling big issues with such passion and commitment to excellence (using first-rate meeting facilitation provided by Fran Alexander of Alexander Resources) that they are able to allow the great and the grungy and the elegant and the messy to all co-exist at once in the service of a greater good.

They’re not only competent and principled; they’re courageous too.  For several decades all policy decision-making has been by consensus – not an easy thing to do in a large dispersed network of businesses.  The two co-founders have veto power, but they have never used it yet.

And now they’re transitioning to a worker co-op.  That takes courage too, or (as in our case when we did it 25 years ago) pure naiveté!  And naïve they are not.

When I asked Ari and Paul if I could write about what they are doing (given that they are still in process and I didn’t know if it was public knowledge) Ari thought it would be fine and queried Paul who said, “Sounds just fine to me. That’s the power of putting the vision out there. It imposes accountability on us all to execute, preform and succeed.”

Now that’s the way to run a business, isn’t it?  Fearless and transparent.

They also have a publishing house, called Zingerman’s Press.  Ari has been writing consistently for at least the last decade.  Two of his most recent books are ZINGERMAN’S GUIDE TO GOOD LEADING, PART 1: A Lapsed Anarchist’s Approach to Building a Great Business and PART 2:  A Lapsed Anarchist’s Approach to Being a Better Leader.  He’s a good one, and these are thoughtful and engaging books that mix humor and wisdom as they introduce the reader to the methods and madness that led to Zingerman’s emergence as a powerful force in progressive business.

Paul reminded me that we had met once before, at a Business Alliance for Living Local Economies (BALLE) conference about five years ago.  I remember that I was immediately impressed when he was talking about principled business and said, “But principles aren’t really principles until they cost something.”

Like everyone else, apparently, I asked Ari where the name came from.  It’s a long story, and a good one, and he gave me the whole thing.  You can hear it from him, but I’ll tell you one good part.  After they had finally decided on the name Zingerman’s, says Ari, “one thing we still weren’t sure about was whether we should spell it the European way, with two ‘n’s or with one.  Paul called his grandfather to ask his opinion.  Didn’t take him but a second to decide:  ‘with one ‘n’, of course, so it’ll be easier for them to write the checks.’  Paul’s grandfather was a very wise man.”

And so are the folks at Zingerman’s, who represent long haul, next economy thinking at its best. We at SMC appreciate this new association.

And we appreciate another one, too.

In December we hosted Blake Jones, CEO of Namaste Solar, – a 100-person worker co-op solar company in Boulder, CO – for several days of information exchange between our two companies.   Namaste is far younger than Zingerman’s, but equally inspiring.  Next post I’ll talk about Blake’s visit.

In the fall of 2011 we were asked to examine a 50-acre property with multiple buildings to see if we could determine ways to reduce our client’s carbon footprint.  The historic buildings presented a challenge.  There were acceptable ways to reduce energy consumption but they were not as significant as we would have liked.  Likewise, the opportunities to produce energy were limited as most places to mount solar electric panels on both roofs and ground were ruled out.

Rob Meyers, who manages our energy department, happened to inquire whether our client was anticipating any additional buildings on the property.  She said she had considered building a barn.  We suggested that the barn could be sized to accommodate the appropriate amount of panels to serve the entire electrical needs of the property.

She accepted enthusiastically.

In the words of project architect Matt Coffey, “Two weeks later we had our marching orders and were into schematic design for a structure that would serve a host of functions.  The building was to incorporate an art gallery, a small kitchen, a woodworking shop, a greenhouse, storage and a 35kw roof mounted PV array.  The building was to be flexible, efficient, and robust, with natural daylight throughout.  A dream job for this team.

After several early massing investigations it was concluded that a single story structure was going to be the best match for the anticipated use of the spaces and the required roof area for the PV array.  Large doors, ample wall hanging space, expressed structure, unfinished surfaces and a casual relationship to the outdoors were known elements. The composition of these elements was to be determined.

During the early stages of design it was decided that the greenhouse would be heated exclusively by solar energy.  A unique system of heat storage was designed and executed by the SMC Energy group using simple fans, high performance glazing, 1500 gallons of water and a super-insulated shell.

The project became an opportunity for each department of our company to bring their best efforts to the table and collaborate alongside our most trusted consultants.  Soaring scissor trusses, massive redwood doors, an engineered day lighting strategy and the most sophisticated bi-modal energy system we have installed to date were all executed to the highest standard of design and construction.  Great slabs of regionally sourced slate were installed with precision and care, the millwork is flawless and the hardscape shows the hand of practiced tradesmen.  This was a job where people felt pride, ownership and investment.

Our client provided quick decision-making and thoughtful input.  She was not afraid to shake things up in the interest of a better outcome.  A series of mid-stream changes to the kitchen, bathroom and interior walls and window layout became opportunities to enhance the space and improve its function.  Throughout the process her caretaker – a very talented craftsman in his own right – was a constant companion to our team, helping us navigate decisions and prioritize our efforts.  We look forward to seeing the fruits of his new workspace, as he will equip and occupy the woodworking shop.

The real story of this project has only just begun.  We are all eager to follow the evolution of the building and its surrounding landscape as the years go by. We hope that it becomes an important addition to the eclectic mix of elements found throughout the property.”

Matt’s words speak to the extraordinary effort that he and project foreman Rocco Bellebuono led and so many others contributed to.  Many minds and many hands. Work-in-progress.  Exhilarating moments of resolution. Missteps and minor disappointments.  We broke new ground –for us – in several ways.  Sometime early next month the windows will be clean, the floors will be scrubbed, and we’ll turn it over.

That’s always bittersweet.   There’s joy in completing a project that requires so much human collaboration and effort – so much care, and patience, and guidance . But it’s hard to let these buildings go; they become a part of us.  For some they are a daily destination, and then suddenly they’re not.  But we will stay connected.

Raising a barn is like raising a child.

It was a year of many “first-evers”.  On November 1^st we welcomed three new owners at SMC – the most ever at one time.  When DonE Turnell, Marc Rosenbaum, and Aaron Beck became owners, it meant that 21 of our 30 full-time employees are now full owners.   DonE worked here for 20 years before taking the buy-in plunge, our longest journey-to-ownership ever.  And it goes back further – I can remember him as a 14 year old skate punk back in the early eighties. He hasn’t changed much.  After his first SMC Board meeting, he said, “It was kind of like a road association meeting but with less stupid people.”  Less stupid people?  Hey DonE, what are you trying to say??

Marc has been here for only 2 ½ years – when he was hired (after 30 years of running Energysmiths and 20 years as an SMC consultant) the SMC owners varied our policy of five years to ownership for the first time ever.  And who knows? It could be the last.

December 31st also marked the end of the United Nations International Year of the Cooperative.   Worker cooperatives (and employee ownership in general) are emerging from the shadow margins of our economy.  For the last decade or two I have noticed that the socially responsible business movement in the U.S. has been essentially deaf when it comes to issues of widespread ownership.  That is changing, and that’s important because, as Marjorie Kelly says in her seminal book Owning Our Future, published this year, “Ownership is the gravitational field that holds our economy in its orbit.”  Which means trouble if ownership is concentrated and promise if it is well-distributed.

Economist Richard Wolff  says “What distinguishes the United States from every other capitalist experiment is that from 1820 to 1970 the amount of money an average American made in “real wages,” – the money you earn compared to the prices you have to pay – kept climbing.  No other capitalist system has delivered to its working class that kind of 150 year history.  Then, in the 1970’s, it ground to a halt.”

For the next 30 years we lived on debt.  During that time the top tax rate plummeted from a high of 91% to the current 35%.  The 1 % thrived, the 99% did not.

“ By 2007,” says Wolff,  “the American working class could not make the payments.  They were exhausted:  exhausted financially, exhausted physically, exhausted psychologically.”

Meanwhile, the vast majority of working people have no voice.  In a democracy the people who have to live with the consequences of a decision ought to participate in making it.

Wolff goes on to say, “If our workplaces had been democratized, long ago, the workers would not have stopped raising their own wages – the credit-card borrowing frenzy would have been avoided.  Would they have destroyed their own jobs by moving production overseas?  Highly unlikely.  Would they have employed technologies that pollute the local environment?  No, they live there.  Would they have used their profits to speculate in derivatives? Doubt it.  Would they have allowed some to earn astronomical salaries while the rest got no raises?  No way.  Our economic history over the last thirty years would have been radically improved if we’d had a different way of organizing our enterprises – with a more cooperative, collective community-focused method that is democratic at its core.”

There’s a legitimate start.  In the U.S. today cooperatives employ more than 2 million people, generate over $500 billion in revenue and $25 billion in wages and benefits, according to the National Cooperative Business Association. Green Futures  reports there are 1.4 million cooperatives globally, with 1 billion employee-members.

Hardly trivial.

I was recently talking to Melissa Hoover, the incredibly energetic and effective executive director of the U.S. Federation of Worker Cooperatives.   She describes a 15 year arc of increasing interest in worker coops that resulted, seven years ago, with the founding of the U.S. Federation, which has become a vibrant national organization in a short time.

Then, three years ago there were two major events: the founding of the Evergreen Cooperatives in Cleveland, which have been consistently in the news and held up as a model for urban economic revival, and  the historic agreement of the U.S Steelworkers and the Mondragon Cooperatives in Spain.

These inspired new interest, but, as Melissa says, “I think there are some substantive things happening in the past year that feel different.  There was the International Year of the Cooperative, more media attention, more academic inquiries, enough lawyers to start a [workers coop] legal professionals group, interest from sustainable business and socially responsible business people, crowdfunding tools starting to be used for worker cooperatives, and first calls from outside investors wanting to develop funding vehicles for worker cooperatives.”

She goes on to say, “It’s this stuff in the last year that really feels like expansion to me: the socially responsible business people, the slow money people, the investors, etc. are sniffing around worker ownership with some curiosity (if not respect—yet!).”

Melissa speaks with a voice informed by her central role in these developments.  I can only speak anecdotally, but I can say for sure that this year we have had more inquiries and appeals for assistance from people interested in starting or transitioning to worker coops than ever before.

My fellow baby boomers now own several million small businesses.  During the next decade or two most of these founders will exit.   The businesses will either be shut down, sold (usually outside the community) or they will be passed on.  Many of these owners, who have poured heart and soul into these companies for 30 or 40 years, are looking for alternatives.  Selling to the employees is an option that is becoming more widely understood.  It offers powerful benefits to all parties and it is becoming an important entity of choice.

Owning our work, and finding meaning there, is as essential to a good life as owning our homes.  When the employees, who live in the community, and are part of the civic landscape, are making the decisions, it is more likely that the business will stay rooted in place, and there is more incentive to be a positive force in the community.  We are a part of the place we are raising our children, and we have a long-term commitment to it.  Community accountability is woven into the fabric of the cooperative system.

While the global economy crawls toward a tentative recovery from the 2008 financial collapse, worker coops are proving to be surprisingly durable and robust.  “Co-ops are built to be permanent businesses. They’re built for the long term,” explains Rodney North of Equal Exchange, an employee-owned Fair Trade brand selling foods from 40 co-ops in the developing world, with revenues of roughly $50 million a year.

Twenty five years as a co-op for us.  Here we go for number 26.  Exactly one year ago today I said, “Our 25^th year as an employee owned company looks like it will be a thrilling one.”  It was.  And I’m sure this one will be a wild ride as always.  We’re getting younger and younger.  Our oldest owner/employee (Mike Drezner) retired this year and we just hired Hunter Cottrell, our youngest full time employee ever at 20.

The infamous Donald Rumsfeld once famously said “There are the knowns, the unknowns, and unknown unknowns.”  What he didn’t say is that it’s our job to master the first two and always be prepared for the third.

We’ll sure give it a try.  And I hope 2013 will be a good one for you too.

Dear John,

I am writing to share information regarding a wonderful construction/energy company that was established in Happy Valley, Pennsylvania.  This company was greatly inspired by the model outlined in your book, Companies We Keep, and has had a remarkable impact on many peoples lives.  It is my personal opinion that this Pennsylvania company can be viewed as a descendant of your South Mountain Company.

This company is known as Envinity.  Please have a look at their site.

Envinity began in 2005 with a vision from a very highly respected community member and, my personal partner, Shaun Pardi.  Shaun wished to create a design/build company which would be deeply rooted in environmentally responsible building methods and standards — very similar to the values of the South Mountain Company.  Others very quickly became interested in Shaun’s vision and soon, the employee-owned company formed.  Envinity began with just a few dedicated owners, a trusting client and, like magic, attracted some of the most amazing and skilled carpenters in Pennsylvania!  Envinity slowly added owners and employees to their team and expanded to include its equally valuable energy division. 

The company prospered. They made mistakes along the way, but they were always able to turn these experiences into their own kind of wealth.  The road has not always been smooth but this dedicated team continued to work together to welcome contracts and leave clients extremely satisfied.  Before anyone realized it, a beautiful community had formed — a community of not only company owners and employees, but also of devoted clients.  They are found mingling together at each other’s homes, traveling, playing on the Envinity softball team and celebrating life’s joys and sorrows together.  It is truly beautiful to see how this community has woven itself together from the common threads of sustainable values! 

Envinity’s story does not end here, however.  Today the company is experiencing the effects of the staggering economy, likely similar to what you experienced in 2008.  A few layoffs have been made and the decisions that Shaun has been faced with have not been easy.  I do the best that I can to support him, but of course I am not able to give him the mentoring that he really deserves.  He needs someone who can understand what he is facing, someone who has experienced the highs and lows of the business. 

With Christmas arriving I have been considering that perhaps you would be willing to talk with him.  

John, I am wondering if it would be possible for you to call Shaun on Christmas day to wish him a Merry Christmas, briefly tell him something positive that you saw on the Envinity web site and ask to schedule time to talk.   Your short call would be a wonderful gift to our entire family, and the highlight of our day! 

I do understand that you have a family of your own and would deeply respect you feeling that this idea would not fit in.  

Call me brave.  Call me naive.  I don’t know.  But the reward that could come from this request would certainly be well worth it!

Most Sincerely,

Katrina

So that’s what the letter said.  It said a lot of other stuff, too, but that was the gist of it.  Not such happy times in Happy Valley.  And as for Katrina, maybe a little brave, hardly naive, and certainly soulful.

Yesterday, as you may know, was Christmas!  I called Shaun.  He picked up the phone and I said, “Hey Shaun, it’s John Abrams and I’m just calling to wish you a Merry Christmas.”

“Who?”

According to the Boston Globe, “To rein in the excesses of capitalism without losing the dynamism that makes it hum, a variety of thinkers have begun looking for ways to re-imagine the corporation itself, restructuring it to encourage businesses to pursue not only profit, but also positive social impact. One of those innovations will hit Massachusetts December 1st, when companies here will be able to register as a new entity called a ‘benefit corporation.’ ”

Last Monday, my colleagues Deirdre Bohan, Jim Vercruysse and I joined State Senator Brian Joyce and other officials in the Great Hall of the State House in Boston to celebrate this new designation.  Three days earlier, SMC had formally registered with the Secretary of State as one of the first Benefit Corporations in Massachusetts (thanks to the efforts of Jessica Manganello and New Leaf Legal, who quickly and efficiently did the necessary legal work for us).

The new law springs from a five-year effort by the B Lab, a non-profit group that certifies companies as “B Corporations” based on a variety of factors including corporate accountability and transparency, treatment of workers, community practices and environmental practices. SMC was awarded B Corp certification in 2008, and 650 other companies have been certified to date in the U.S. and 14 other countries.  Thousands of others are currently engaged in the process.

B Lab aspires to complete three initiatives:  to screen and certify companies who comply with or exceed certain criteria of social responsibility; to influence public policy to give triple bottom line (people, planet, profits) practices legal status; and to drive capital toward certified B Corps.  The first two programs are well under way.  B-Lab founders Jay Coen-Gilbert, Bart Houlihan, and Andrew Kassoy, and their staff (which now numbers 30) have done a remarkable job in a few short years, creating a robust and apparently durable movement.  Staff members Heather Van Dusen and Holly Ensign-Barstow organized the Boston event.  Kassoy joined them and said, “This is a way to re-define business so that those of us who are in business are trying not only to be the best businesses in the world but the best businesses for the world. “

Maryland and Vermont were the first states to create legal benefit corporations, in 2010. Since Massachusetts became the 11^th, Pennsylvania and Illinois have become the 12^th and 13th.  D.C. is expected to vote favorably by the end of this year and 16 other states have legislative initiatives under way.  Many of the votes have been unanimous; all have been bi-partisan (imagine that!).

Until now, we have had no real standards to differentiate good work from good marketing.  B-Lab provides exactly that.  A recent article in the Harvard Business Review  likened the B-Corp designation to LEED Certification among developers and the Fair Trade designation among product suppliers.

Most importantly, this new standard extends the purpose of corporations beyond maximizing value for owners and shareholders (as existing statutes require) to combining the pursuit of profit with social purposes.  It provides new latitude for corporate entities, especially public corporations.

As the Globe said, “The idea of a benefit corporation is to weave some social responsibility into the DNA of the company itself through its charter.”   It allows companies to avoid lawsuits from shareholders if the company, for example, does a pro-bono project to benefit its community rather than distributing money as dividends.

The legislation varies slightly from state to state.  In Massachusetts each Benefit Corporation must have a Benefit Director (who can be a Board member but is not an employee or an owner of more than 5% of the company) who files an annual report, and each company must be certified by an independent third party (which, in our case at least, is B-Lab).

State Sen. Brian Joyce, the Milton Democrat who sponsored the legislation, said the law will allow for “doing well while at the same time doing right by the environment and the community in which the company resides.”

Several of the company owners at the State House said the designation codified what they had already been doing.  For SMC, it’s like gravity – the B Corp designation fits so closely with our mission that it is an obvious step to take.  People, planet and profits all comprise our bottom line and this is a way to formalize it and make our corporate purposes align legally with our mission.

The other early MA B-Corps represented  (Dimagi, Inc., Dancing Deer Baking Company, The Green Engineer LLP, Social K) have similar philosophies.

B-Corp designation also ensures that when a business is sold, new owners are more likely to continue socially responsible practices.  Patagonia founder Yvon Chouinard said last January when his company became the first Benefit Corporation in California “Patagonia is trying to build a company to last 100 years.  Benefit Corporation legislation creates the legal framework to enable mission-driven companies like Patagonia to stay mission-driven through succession, capital raises, and even changes in ownership, by institutionalizing the values, culture, processes, and high standards put in place by founding entrepreneurs.”

As Benefit Corporation legislation and the B-Corp idea gain traction around the nation and the world it indicates that a restorative, generative economy – one that we all know we need – is coming to life in the wake of the troubling times of the recent past.  We are thrilled that the MA legislature and B-Lab have teamed up to make this opportunity available for Massachusetts businesses.  We hope that we can live up to – and be a shining example of – the principles of the Benefit Corporation for decades, and for generations.  And we hope many will join us.

This is the future of business, an important part of a prosperous tomorrow. It’s a step toward good business that’s good for all of us.

But is it good enough?  Does being a B-Corp somehow signify that we’re doing what we need to do? No way – we’re babes in the woods when it comes to that.  Not until we can say we’re a zero fossil fuel company (2015? 2020?) and a zero-waste company (2020?  2040?).  Not until everything that we do is generative and restorative.  But what the B-Corp system does is to give us a means of measuring progress, year after year, as we slog through the weeds of our constant desire to improve.

Rob continues, “Among the many highlights was Bill Clinton’s keynote address during which he threw down the gauntlet to all of us. He told us in no uncertain terms that we have not done enough to get the real story of solar to the general population.  After recalling the success of the US PV industry – 100,000 new jobs, lower prices, higher efficiency and a growth rate of 8% during a recession – he said ‘The problem is that most Americans who are not in this hall at SPI don’t know that.  You can be proud of yourself and get the positive facts out there.’  Some of those facts:

• Over 100,000 Americans are employed in the solar electric industry, in 5,600 small business across all 50 states;
• The number of U.S. solar installations grew 116% from Q2 2011 to Q2 2012 (US Solar Market Insight Report);
• Every kWh produced with PV in New England effectively offsets three kWh produced and distributed by our 30% efficient conventional power supply and grid.

He pointed out that Solyndra, the company whose failure has been a rallying cry for Republicans, was less than one percent of the DOE guaranteed loan program.  ‘We’ve been giving oil subsidies since 1916, sometimes they dig a dry well, but we persevere.  You’ve got to take chances if you’re going to tomorrow’s dance. We need government investment for new technologies to develop as we move into the next economy. We’re not going to get everything right the first time, that’s not how life works.  But we can’t stop trying because of one failure out of 5,600.”

For a number of important reasons, we do almost all of our solar jobs using SunPower equipment.  An important part of Rob’s attendance at the conference was to see if we can find a low cost alternative (for a few situations where we absolutely must go for lowest cost) produced by a company with whom we share some values and which has an absolute commitment to quality.

Rob was impressed by one, a Chinese company called ReneSola. He spoke to ReneSola representatives at length.  After his return they contacted him and offered an all expenses paid trip to Shanghai for Rob and two colleagues.

Although it’s easy to jump on the bandwagon and say that we are not interested in doing business with Chinese companies, there are few solar product choices these days that don’t have some connection to Chinese manufacturing.  Not wanting to preclude any future product options based on adherence to principles that may be too limiting, Rob, Ryan Bushey, and Mike Drezner accepted the offer.  I wanted to go too,  but couldn’t clear the decks enough to make the trip.

They left for Shanghai on a Sunday and returned seven days later after a whirlwind.  They were grateful to have the opportunity to witness the solar manufacturing process first hand and appreciative of the graciousness of their hosts.  But they were only marginally impressed by the ReneSola product.  As a producer and supplier of wafers and cells – base components used in the manufacturing of the panels – they may have an edge over other Chinese companies that buy these components, but the panels are still 33% less efficient than the SunPower equipment we prefer to install.

A week after their return Rob and the others did a slide show for SMC employees.  Clearly they were deeply affected by the combined genius and madness of modern day China.

They were wowed by the pace of construction and development, of course.  The billboards with advertisements for the Evergrowing Bank (that’s China!), injection molding equipment, and other manufacturing hardware demonstrated that business to business marketing is paramount.  The slogan “billions and billions served” has a very different meaning in China.

But most of their pictures, when you got right down to it, were of food.   And food adventures.  They liked the street food in back alleys the best.  Rob, as many of you know, is gregarious, to say the least.  Before too long he was standing behind a pushcart with an old Chinese guy making won tons.

It was a worthwhile trip.  We have a better understanding of the solar manufacturing process, and a better basis for comparison, but the most useful thing to come from the trip may be the development of Rob’s won ton skills. There may be a South Mountain dim sum restaurant in our future!

They came back weary and worn out.  Here’s the fearless leader himself barely able to nurse a Tsingtao.

But by the time they got back to work they were smiling again.  And feisty as ever, but perhaps sobered by the implications of the current path of the Asian giant – for all of us.

So last night was a big, big relief.

Obama, Warren, Tammy Baldwin and more.  Major cultural shifts, too.  I can’t remember ever being so satisfied after an election as I am right now.

I’m looking forward to a good four years, much better than the last – even – in oh so many ways.  Since that’s the last time Barack Obama will ever have to run for election, maybe he will be able concentrate on running the country – in the way we always thought he could.

John