Blogging is new to me. In fact, this is my first entry. The question is: why am I doing this? Why am I doing it to me and why am I doing it to you? I hope for good reason. There are two I can think of, so far.
The first is this. Over time, as South Mountain Company has matured (sort of), and in the course of my professional relationships, book adventures, speaking opportunities, and teaching experiences, I have found a small group of people who seem to be interested in what’s going on at SMC – what we are doing and thinking about. I’m curious to communicate with you, and others – in some organized way – to see what might come of this far-flung web of relationships.
The second is selfish. There are many obligations in my life – external demands which require attention and discipline. Writing is not one of these; it derives only from internal desire. I have little discipline, but I do have an over-developed sense of responsibility. I’m hoping I will respond to the duty of maintaining this blog (I’ll try to write once every week or 10 days, and try to respond quickly to any responses I receive) by writing more steadily. It’s something I love to do, something I need to do to feel whole. But, like exercise, sometimes it’s hard to get to. Perhaps this endeavor will help.
I expect, in this space, to expand on the topics and issues tackled in my book, Companies We Keep (recently released by Chelsea Green), particularly the promise of employee ownership and the importance – and challenges – of conducting business with community, people, and planet as our top priorities. I will relate what is happening in our design/build and renewable energy business and how that may connect with larger events. I will pass on currents of relevant thinking we uncover in our interactions with others. And I will talk about new influences on my own thinking as they emerge.
Hard Times, Hard Work
At the moment we all seem to be holding our breath, waiting for economic recovery. We may be waiting for the wrong thing. Instead, I hope, the economy will shift, and I welcome the prospect, although I am frightened by it too.
As the warm glow of a thrilling election has faded into the stark grey tones of the hard work ahead, I still believe that Obama’s election said something encouraging, even exhilarating, about the current state of mind of the American people.
For us, at South Mountain, it has been a tumultuous year of change. We had to think about uncomfortable issues that had not previously been necessary to address. We had to think differently. We had to re-assess our own state of mind. Last September, while one of my co-owners was preparing the plans for a large project for construction – and nearly ready to begin – we received a call from our client, who said the crashing economy made it imperative that he and his wife put their project on hold.
That was the defining moment of our year – it was, in fact, the beginning of an avalanche of backlog-diminishing postponements. It jolted us from the petrified status quo that prosperity had layered into our collective company consciousness for many years. It became a catalyst that drove us to take a sobering look at who we are, what we do, and how we might insist on the future we’re after. It became, oddly, a very good thing.
For 33 years, every SMC employee has come to work each day of each week of each month of each year and had productive work to do. Now, perhaps for the first time, that legacy might come to be in jeopardy. For us, 2008 began like a carnival; we were in the midst of some of the best times we’ve ever had. But when the effects of the US economic collapse came, they came quickly. It became the year of trials and tribulations, stormy weather, scrambling to stay ahead of big waves, and trying to move mountains. Hard work in difficult times.
Tackling the Unthinkable
But difficulty and opportunity mingle; at times it is hard to distinguish one from the other.
The author Andre Gide relates the experience of a trip he took into the Belgian Congo: “My party had been pushing ahead at a fast pace for a number of days, and one morning when we were ready to set out, my native bearers, who carried the food and equipment, were found sitting about without any preparations made for starting the day. Upon being questioned, they said, quite simply, that they had been traveling so fast in these last days that they had gotten ahead of their souls and were going to stay quietly in camp for the day in order for their souls to catch up with them. So they came to a complete stop.”
We can’t come to a complete stop, but it may be that we need to find time, especially in these slower economic times, for our souls to catch up with us. This is what we had to do this year at South Mountain. It was our year of reckoning. I hope our souls are, at least to some modest degree, catching up.
Along with considering innovative ways to re-build our shrinking backlog, it was our moment to tackle the unthinkable: what happens when the day comes that there is not enough work for all? Countless businesses have had to do this in these times. For us, the examination of the unthinkable had surprising results. Our cooperative structure proved to be robust. After several meetings a policy emerged:
In the event of not enough work to provide full-time employment for all individuals in the company, we will take the following six steps, in this order:
- Voluntary temporary rolling furloughs;
- Employ our capital to do speculative work (income postponed) for a limited period of time;
- Employ our capital to do non-income-producing community work for a limited period of time;
- Strategically reduce hours worked;
- Reduce wages across the board, graduated from highest paid to lowest;
- Involuntary temporary rolling furloughs.
The thrilling part of this was that never, during these difficult discussions, did the word “layoffs” come up. Never did anyone suggest that those who had been with us for the shortest time should be at greater risk. Never did anyone suggest that we should use this time to rid ourselves of those who may be less productive or in other ways perhaps less worthy – to separate the wheat from the chaff. This was a time of coming together, as a workplace community, rather than a time of fragmentation and protection of individual self-interests.
Fortunately we have not yet had to take any of the steps outlined above, partially because my colleagues’ vigorous defense of community and democracy inspired me, as an individual, and us, as a company, to double our efforts to re-build backlog and creatively manage workload.
Each year we conduct company-wide individual evaluations. Part of the process is a written self-evaluation. One of the questions asks us to rate the company’s year on a scale of one to ten. Most years, the average hovers around 8. Last year, our most profitable and upbeat year ever, it was 8.4. This year, our most trying ever, it was 8.7. Hmmm. . . what does that mean? I think it means that collaborative discussion and constant internal communication enhanced our sense of community. People felt cared for, by each other. That’s what a culture of shared ownership can do. Self-interest was indistinguishable from the welfare of the whole group.
America the Possible
But we cannot just tend our own small garden; there are far larger forces in play. We are in the midst of a cascade of spectacular events. Several years ago, Al Gore released An Inconvenient Truth. About the same time, NYT columnist and best-selling foreign affairs author Tom Friedman saw the green light and began to write about climate change and energy (which will be, he says, “the greatest innovation project in history”). Venture capital shifted its focus from software and internet to clean technology. Oil prices shot up. Climate change and energy suddenly became a high level presidential campaign issue. Never before.
After a childish financial elite ran the global economy unsupervised, and ran amuck, Wall Street was finally unmasked, revealed, and crumbled. With that, the impossible global economy – predicated on perpetual growth in a finite world – became wobbly. None of this came without warning or predictions. A few intrepid economists, and others, have insistently pounded the warning drum but nobody, as far as I know, expected it to happen so soon or so fully. Those entrusted with guiding us hadn’t a clue. That’s not unusual – as economist John Kenneth Galbraith once said “. . the reason for the existence of economists is to give credibility to astrologers.”
Our country is experiencing more mood swings than a teenager. But it may be a prelude to the good things we hope will come next. There are no guarantees, only possibilities. As my friend William Greider so eloquently tells us in his remarkable new book Come Home America, we cannot re-build the same economy we had before and the new one must be based on new knowledge and new circumstances. He calls it America the Possible.
It’s also America the Different. John Fullerton, former Managing director of JP Morgan, says, “At the beginning of the 20th century scale did not matter. At the start of the 21st century, scale redefines our economic challenge. The world may be flat, but far more critical in terms of its implications, the world is full, and that changes everything.”
Our future will require us to transform our economy. We will have to manage the sky as a commons, auction emission permits, and use the income to serve the public good – to re-distribute wealth and wean ourselves from fossil fuel. The current Waxman– Markey Energy Bill is only a crude and tentative first step by government. There must be far more to come.
Owning the Endeavor
I can’t help but think that this long-term global transformation we need – the “new operating system for the planet” as author Paul Hawken calls it – will require more than political will and appropriate investment; it will also require collaboration of a type and scale heretofore unknown. We will need new tools, new abilities, and new ways of working together. Businesses will need to “share information and support each other rather than engaging in competitive exclusion” says Tom Wessel in The Myth of Progess. All of us will need to own the endeavor. A central requirement may be the ability to own our workplaces and share responsibility for the outcomes, both good and bad.
Employee ownership may be an important part of this. It’s about the recognition that when the people who are making the decisions bear the responsibility for the consequences of those decisions, and also share in the rewards that accrue, better decisions will result. It’s about building community within the workplace and connections to the communities where we work and live.
The task at hand is to unwrap the complex bundle of convergences that suggests that the next twenty years will be dramatically different from the last twenty, to try to understand what the differences will be, and to change our businesses and our selves so we are ready, able, and above all willing to do what it takes. The challenges are immense, but I think it can be a rousing journey if we take the time to prepare – if we make room for our souls to catch up. It’s a time to breathe deeply the opportunity that this new era brings.
There it is, my first blog entry. Longer than I meant it to be, but hey – it’s the first one. I will hang my hat here, and I hope it will stimulate an exchange that helps us learn to work together in healthier, more beneficially productive ways. If so, I’ll be glad. My colleagues and I look forward to communicating with others who are thinking about employee ownership, social enterprise, and cooperative, community based business that keeps our planet front and center. “Markets,” as Marjorie Kelly, the former editor of Business Ethics Magazine says, “are a subset of the earth and subject to its requirements.”
So are we.
Wherever you are out there, I hope you’ll join in and let us know what’s up with you!