Open City's 'Who's the boss?' recapped

Business is often portrayed as a ruthless enterprise where it's advantageous to be selfish. The panelists at the recent Open City Speaker event, however, would disagree with that dogmatic representation. And if the "Who's the Boss?" event is an indication of the rest of the city, there's an increased interest in the possibilities of sharing in a business environment.

The panel was composed of: Bekah Galang - Colors Detroit, Cooperative Academy coordinator; Deborah Olson - executive director of the Center for Community Based Enterprise; founder of the Community Economy Group; Tera Holcomb - founding partner, Sidecar Detroit. Chanell Scott of 456 Consulting moderated the event. 

Curious attendees likely wondered what it means for a company to be categorized as a cooperative. Is it simply a tax designation? The way a company is organized? An adherence to certain principles?

Olson, who has helped businesses start or transition to a cooperative model for over 30 years, said "Cooperatives are defined by their principles not their legal form,"  and afterwards cited the Seven International Co-Op Principles, which include tenets concerning company organization and community engagement.

The panel argued there's a number of sound reasons to choose cooperative ownership. Even those with a strong vision for their company, like Holcomb, prefer to delegate some responsibility. "I don't want to be anybody's boss," she said. Olson picked up the thread, saying, "There's a whole spectrum of things that become possible with community entrepreneurship," such as the synergistic effect of working with others and the unconventional solutions that arise from including membership in the decision-making process.

While having a committed group of people share profit, risk, and goals may sound attractive in principle, in reality there's a number of complex matters a business must consider before it undertakes such a transition. The foremost concern is making sure the venture is viable. "You have to look out for your business first," Galang said. "The first step, always, is to determinate if you can scale up to support new membership."

When Chanell Scott asked, "How should a cooperative business be structured?" she, in so many words, wanted to know: "Who's the boss?"

"Generally it's one person one vote," Olson said. The panel then offered variations on this basic form, such as "dynamic governance," which bases decision-making on how outcomes influence individuals or branches. As Olson said, "Participants need to know how to differentiate between issues that affect them and those that don’t," and then to participate only in the ones that do. For the sake of company psychology, Olson added that it's important to have clear guidelines about decision-making.

Sidecar Detroit, a cooperatively owned pop-up eatery, delegates decisions on a modified consensus where individual departments make decisions for themselves but require 100 percent consensus. This structure has similarities to the dynamic governance model, but because unanimity is required, members must compromise.

If a company becomes large enough, there's also the difference between members and employees to consider. Holcomb doesn't believe that working at a cooperative company should require employees to entirely buy in to the philosophy. But she said that if you're an employee of Sidecar Detroit, "It can mean more than earning a paycheck; hopefully you can learn a few things."

A cooperatively-run business isn't a new concept. In fact, it's rather old, even in Michigan. In a handout that highlights Olson's work, Circle Pines Center, Twin Pines Dairy, and Co-op Optical are cited as business that transitioned to cooperative ownership during the 1930s. The time period isn't coincidental either -- recessions encourage the development of this model as tight budgets force people to pool wealth and resources, and work together to solve problems. The recent recession was no exception, which saw the growth of national businesses such as Airbnb and Zip-car, as well as local ones like Grown in Detroit, Detroit Food Lab, and the Green Garage.

This panel seemed convinced that Detroit will see a rise in the number of cooperatively-owned businesses. Part of the reason this model is gaining popularity, Holcomb said, is because "working in a business where decisions are made by a democratic process, where people have skin in the game, is a gratifying process."

Aaron Mondry is a freelance writer.