South Mountain Company

Martha’s Vineyard’s integrated design/build company

This blog provides up-to-date news of goings on at South Mountain Company and occasional musings from John Abrams (and others).

Small Business

The Flip Side of Mitch

Sometimes we are fortunate enough to catch glimpses of progress within our federal government (yes, there is some – despite Mitch McConnell’s relentless efforts to assure that nothing positive happens in Congress, he does not always succeed!) I had this chance several weeks ago.

In August of 2018, Trump signed a 788-page defense bill which authorized $717 billion for the military. Hardly anyone noticed that New York Senator Kirsten Gillibrand slipped in a provision to help workers own their companies – a modest attempt to tackle wealth inequality, and a timely one.

As baby boomers reach retirement age, we are undergoing a “Silver Tsunami” – several million small businesses in the U.S. stand at a crossroads: What will happen to them when their founders move on? Some will be passed down to family members. Some will be absorbed by larger companies (and likely, moved out of town). Some will close their doors. Others will explore the increasingly popular notion of selling the business to those employees who helped build it.

There are obstacles. It’s not uncomplicated. Gillibrand’s bill – the Main Street Employee Ownership Act of 2018 – was designed to help employee-owned companies gain better access to technical assistance and capital. On February 12th of this year, the House Committee on Small Business held a hearing to examine how the bill is working, how it’s not, and how it can be improved.

I was invited to testify as a representative of the worker cooperative model, along with two individuals who represented ESOPs (Employee Stock Ownership Plans) and one who represented a cooperative bank.

The experience was an eye opener.

The room held a significant sampling of the Democratic and Republican representatives who comprised the Committee. Chairwoman Nydia Velázquez of New York opened the hearing with this remark: “At a time when income and wealth inequality are at record levels, real wages for middle class workers are nearly stagnant, and retirement security is no longer guaranteed, one way to combat these problems is through the employee-owned business model.”

She displayed a firm grasp of the issues and a strong commitment. She knew her subject. I was impressed.

Each of us had five minutes to testify. My peers were knowledgeable and passionate advocates.

Mark Gillming, senior vice president at Messer Construction in Cincinnati, praised the tax advantages (passed by congress 45 years ago), which have caused the ESOP model to become widespread:

When I began working at Messer Construction, it was a medium size, family-owned construction company with a long history and a good reputation; but, like most companies in construction, it had little in the way of employee benefits.

In 1988, the last son of the company founder died, and we found ourselves with an uncertain future. The grandchildren of the founder wanted access to their wealth and, having no connection with the employees, were not committed to maintaining employment at the company. In 1990, the Messer employees were able to buy their future from the Messer family, using the ESOP structure. We could not have purchased the company if not for the important tax advantages that the ESOP model afforded us.

Our country’s investment in ESOPs allowed ninety-nine Messer employees to purchase their future; and the engagement that opportunity created, has resulted in growth. Messer now provides quality jobs and predictable retirement for over 1,200 individuals and has company-funded retirement assets for those employees totaling more than $400,000,000.

R.L. Condra, VP of Advocacy and Government Programs at the National Cooperative Bank in Arlington, Virginia, spoke to the changing nature of cooperatives and those who stand to benefit:

A prohibitive policy requirement by the Small Business Administration (SBA) is hindering the growth of the cooperative business sector. If this issue is resolved, lending institutions, like the one I work for, will be able to make loans that will help to grow small businesses, create quality jobs at increased wages, and provide healthy food and grocery options for communities throughout the country.

Cooperatives have evolved since the 1960’s when the SBA recognized them as buying clubs. There are now over 40,000 cooperatives in the US and the top 100 generated $222 billion in annual revenue in 2018. Some notable cooperatives include REI, ACE Hardware, Ocean Spray, Land O’Lakes, and Congressional Federal Credit Union.

Since the great Recession, worker cooperative numbers have doubled, and have become a business option for young people, women and minorities. According to the 2019 Worker Cooperative Economic Census, 50% of owners of worker co-ops are Latino and African American, and 62% of women make up the majority of the workforce.

Daniel Goldstein, President and CEO of Folience, a media company in Iowa, advocated for regulatory clarity that would lower the risk for businesses making the employee ownership transition:

I submit that the biggest obstacle to the formation and expansion of ESOPs is the chilling effect of the U.S. Department of Labor’s (DOL) actions. DOL has perpetuated an absence of formal regulatory guidance, while simultaneously pursuing a litigious approach to oversight. The effect has been a deep chill on the market.

Every year, hundreds of business owners who want to learn about ESOPs attend educational events hosted by The ESOP Association. And once exposed to the lack of clear guidance, many turn away out of fear that some unknowable misstep will invite never-ending DOL scrutiny.

Those fears are not unfounded.

Today, more than 45 years after ESOPs were established with the passage of ERISA, the Department of Labor has yet to finish its rulemaking process. They started. They nearly finished in 1988. But they never issued final regulations.

Operating without clear guidance is a risk ESOP companies should not be forced to bear; it is a risk that negatively affects the wealth and security of the 10.6 million employee owners DOL has been tasked with protecting.

But here is the travesty: It is impossible to prove how many American workers have lost the opportunity to become employee owners as a result of this chilling effect. And, due to the rapidly escalating retirements of baby boomer business owners, there is urgency to reduce the chilling effect this lack of regulatory clarity is causing.

And then it was my turn. I emphasized the value of employee ownership in our culture and the importance of sharing what we have learned:

I believe that owning our work is as essential to a good life as it is to own our homes. As former Treasury Secretary Lawrence Summers once remarked, “In the history of the world, no one has ever washed a rented car”. When employee owners are making the decisions, it is more likely that companies will stay rooted in place and be positive forces in their local communities.

Economist Richard Wolff says, “if our workplaces had been democratized, long ago, would the workers have stopped raising their own wages? Hardly. Would they have destroyed their own jobs by moving production overseas? Doubt it. Would they have employed technologies that pollute the local environment? No, they live there. 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 community-focused method that is democratic at its core.”

Growing the worker cooperative approach has the potential to positively affect the economy, our democracy, and the quality of working peoples’ lives. It is not a stretch to say that the benefits of the democratic workplace may even aid and influence the essential repair of our battered civic landscape – it could change, in effect, the chemistry of our culture. If you spend your days working in an environment of collaboration, mutual respect, and shared power, it is bound to spill over into other parts of your life – better parenting, more civic engagement, kinder relationships.

The value and benefits of employee ownership continue to fly under the radar, and you can’t take this important step without knowing the option exists. So perhaps the greatest need is extensive education and publicity – the stories of employee ownership successes need to be shared and celebrated. Employee ownership “ambassadors” should be funded to visit companies who are considering transitions – to teach, train, advise, and inspire. Widespread technical assistance should be made available. Employee ownership should be the number one business succession planning option.

But it’s not. I hope this committee will build on the good work it has begun and I am grateful for the opportunity to make this request.

After our testimonies, the representatives asked questions. Good questions. Engaged questions. It felt worthwhile.

Government can work. We know that; we can remember when it did. My experience in Washington amped up my resolve to work hard this year to elect a real president, help democrats take back the Senate, and increase the number of voices involved in decision making. There’s never been a moment when it mattered more. Not in my lifetime.

As for South Mountain’s commitment to employee ownership: we make our Operating Policies, Bylaws and Employee Ownership Toolkit available online and are always happy to help other companies find their way. If you have questions, feel free to contact me at jabrams@southmountain.com – but please read our Toolkit first. It may answer some of your questions. Or it may answer some and provoke others.

Entering the Neutral Zone

On November 19th, at our annual Day of Business, we unveiled the Transition Plan that will lead us to the next iteration of South Mountain. It was a threshold moment, a new hinge point in our 45 year history.

Are you ready? (This may take some time to tell.)

Over the next three years, our company will gradually transition from first to second generation leadership. At the end of that time, I, as founder, CEO, and president, will retire and continue to work very part time for several years. Deirdre Bohan will become CEO and president, and will work in a “first-among-equals” arrangement with the four other members of our strong, capable, dedicated, and well-aligned Leadership Team (comprised of Ryan Bushey, Rob Meyers, Siobhán Mullin and Newell Isbell Shinn). We are tremendously excited, and very confident, that this Transition, which we have been planning for many years, will assure the long term success of the company. It will allow us to continue to serve our clients and our community in the way that we always have.


LEADERSHIP
To thrive, prosper, serve, and endure, an organization needs effective leadership. So does a family. So does a country. Leadership is both a skill and an orientation. Everyone has some leadership skill, just as everyone has some athletic skill and some musical skill, and some of every other kind of skill. Even those who claim no musical skill can still sing a song to their child at bedtime. In the same way, everyone has leadership skill. Some have more of it than others, just as some are better athletes and better musicians. Some people have an orientation toward leadership; they think about it and practice it. Some work hard to learn it and cultivate it. Some have natural leadership ability. Most good leaders combine all three.

As the leader and CEO of this company, I have, over time, had the great good fortune to gather a group of stellar leaders here at SMCo (and people with other essential skills, too – those who can design, and build, and craft, and engineer, and practice finance, and administer, and manage). This has been intentional. In my own career, I have learned to do all of those things, but in most cases, only well enough to recognize and attract people who can do them better than I. That’s what our company consists of – people with 38 unique skill sets and orientations that comprise the whole. We couldn’t possibly flourish without each of them.

Few of my colleagues arrived here as skilled leaders. Our current leaders – Deirdre (our COO) and Ryan, Rob, Siobhán and Newell (our four department directors) had some innate leadership skills that they brought with them, but more importantly, they had a leadership orientation, and they developed those skills here at SMCo. There are other people here besides these five who have a strong leadership orientation and will develop those skills further over time.


BUSINESS TRANSITIONS
According to the Small Business Administration, there are approximately 30 million small businesses in the U.S. Many of them were founded by baby boomers who are aging out. Some will be passed down within families, but fewer than in the past. Most businesses will close their doors with the retirement of the Founder. Many others – those with value – will be sold to a new owner or absorbed by larger companies. None of those things was ever my intention or the intention of any of the other SMCo owners, past and present.

A smaller (but growing) number will be sold to their employees and become worker co-ops or ESOPs (Employee Stock Ownership Plans). South Mountain was sold to its employees and became a worker co-op in 1987. Having already made this conversion, we now have the luxury of foregoing the arduous and complex process of figuring out the transfer of ownership, and can direct full attention to capacity building.

Planning for our Transition began six years ago, in 2013. In June of the following year the full SMCo Board (all 19 owners) approved and adopted, by consensus, our first “Avalanche Scenario” (what happens tomorrow if I am buried by an avalanche today) and our “Next 40” projection (what the company will look like/who will lead it in 40 years time).

Despite all of this preparation, I struggled for some time to fully visualize leaving this company. In January of 2019, all that changed. I saw our leadership group taking the bull by the horns and making amazing progress. It was time to give shape and definition to our future.

In Managing Transitions: Making the Most of Change, , William Bridges writes:

Change is situational: the move to a new site, the retirement of the founder, the reorganization of the roles on the team, the revisions to the pension plan. Transition, on the other hand, is psychological; it is a three-phase process that people go through as they internalize and come to terms with the details of the new situation that the change brings about.

Managing transition involves helping ourselves through three phases:


  1. Letting go of the old ways and old identity people had. This first phase of transition is an ending, and the time when you need to help people to deal with [the loss].

  2. Going through an in-between time when the old is gone but the new isn’t fully operational. We call this time the “neutral zone”: it’s when the critical psychological realignments and repatternings take place.

  3. Coming out of the transition and making a new beginning. This is when people develop the new identity, experience the new energy, and discover the new sense of purpose that makes the change begin to work.”

We are just completing phase one.


THE PLAN
After my realization, I assembled a plan and brought it to the Leadership Team. Understanding it requires some background.

It’s important to know that we had never considered, in any meaningful way, hiring a new CEO
from outside. We were encouraged by the King Arthur Flour model of a small leadership group – three in their case– becoming co-CEOs. At the time, our discussions with them led us to believe this was the right model for us.

But after further consideration, it didn’t make sense to have five co-CEOs (too unwieldy and confusing) and there weren’t two or three individuals that outshined the others. The five have great complementary skills and personalities, and are uniquely well-aligned. Four of them are department directors and Deirdre’s job has been co-managing the company with me – her job has been like a co-CEO for a number of years. The answer was clear: Deirdre should be the CEO, but in a first-among-equals arrangement with the Leadership Team.

I proposed this at a meeting. I expected some pushback or resentment from those who might have expected to be one of the co-CEOs. There was none. Everyone recognized the impracticality of five people sharing CEO responsibilities and the need for the company and community to have someone that is ultimately responsible for South Mountain Company – a face for the company and a place for the buck to stop. It was as clear to them as to me that Deirdre was the right choice. Since joining our team in 1995, at the age of 28, she has moved from bookkeeper to interior designer to COO to co-manager, developing into a confident, dedicated, skillful, compassionate leader and friend. She never aspired to this position; in fact, for years she did not think herself suitable. Now she knows that, with the support of the others, she is.

Deirdre will not absorb all of my responsibilities; rather she will continue her COO work while adding some new responsibilities. For several years now, we have been working to distribute some of the particular skills and experience I have accumulated to other members of the Team. We meet regularly to develop the details and work on implementation. Each Team member has completed a personal capability analysis and statement – outlining what they could provide and what they need to learn. We continue to work on these together.

For example, one of the key areas of need is in “sales” – the complex process of cultivating in prospective clients a deep understanding of who we are and what we do that leads them to believe we are the perfect fit for them. I had always done that alone.

These days, Ryan accompanies me to nearly every initial meeting and is growing into this role in leaps and bounds. Newell has been having more and more client contact and is starting to have a much larger role in the interface between design and construction. We are finding that both are particularly well-suited to these roles.

As we develop these capabilities, and many others, we think we are also developing the confidence, optimism, and vision which will lead to a prosperous shared future.

From this work, a plan has emerged.

The design of this plan becomes a model for future transitions which will come far sooner than this one has. As a seasoned company, we will never again have a 25 year old leader who remains in the role for nearly half a century. Deirdre will be taking the reins at the age of 55 and anticipates inhabiting the role for 10 or 15 years, at which time we will have developed a new Leadership Team and a robust system of transition for the next time around. Hopefully the CEO to replace Deirdre is with us today.

This transition is a work-in-progress. During the three years from now until the transition, we will conduct further capacity-building, flesh out the details, and test ideas and methods.

For those of us who have been working on it, this endeavor has become a great adventure. Ultimately, I think it will become that for all of us. I personally have one goal, and one goal only: to leave this company, this company I deeply love, in the best shape it’s ever been, ready to go forward as it never has. And to leave the people in this company, who I deeply love as well, in a position to succeed.

In a way it’s like watching a mostly grown child venture out into the world. But vastly different too: the child is young, adolescent, unformed – there’s very little certainty about how things will go. But this “child”, this company, is led by mature, capable, empathetic, passionate, dedicated people. It’s hard to imagine anything but success.

After the Day of Business, in response to a request for feedback, one of our employees, Chris Wike, wrote, “I am grateful to have come to this company when I did, to get a taste of what is was, but I am truly excited to be a part of what it will become.”

I think we are all feeling that way. We will move forward toward this new beginning together.

Larger Than Life

Paul “walking on water”.
That first house.

When Paul Simmons was 22, he built a house in Acushnet, just down the road from his hometown of New Bedford, where his father had a concrete form business. He built it from the ground up – the foundation and everything else too. He and his first wife raised two sons there.

For the last 30 years (since he was 32), Paul has battled multiple sclerosis. He was diagnosed a few days after the morning he woke up, got out of bed, and crumpled to the floor. He had no feeling from the waist down. When the doctors finally figured out what was wrong, one of them, a neurologist, told Paul he would never walk again.

“Give me that goddam wheelchair,” Paul replied. He pulled himself into it, wheeled to the door, and left the room, only looking back to say to the doctor, “I don’t ever want to see your face again.”

Three weeks later, Paul shoved the wheelchair against the wall and asked his wife for a walker. He got up. He learned to walk. A few months later, he went skiing! Paul has always loved to ski. It was the favored family activity when his kids were growing up, but in recent years, his degenerative MS has made each run more difficult.

Last year, he tackled Wildcat Mountain with his grandkids. From the summit, he looked across the valley to Tuckerman’s Ravine at Mt. Washington, remembering the times he had hiked and skied the headwall, the good lines, the beautiful days. The day before, skiing with the kids, Paul had fallen and couldn’t get up. He did, somehow. Now, a day later, he could feel that this run was going to be trouble. Maybe his last one.

He told the kids to go on ahead; he would catch up. It took him an hour and a half to struggle down the mountain, in part because it was such a monumental effort and in part because he kept stopping, looking across the valley, savoring his last run.

One of Paul’s largest scale projects.

Paul takes after his Dad. His company, L.P. Simmons (it used to stand for “Lonely and Poor” after his second divorce, now it’s “Level and Plumb” deep into his third marriage), has built all our concrete foundations for the past few decades. The rough-and-tumble, boisterous nature of Paul and his cohort overlays consummate professionalism, tremendous skill, and a remarkable breadth of experience.

Paul is very good at what he does.

Paul with son Tim circa 1992.

He has skied hundreds of days and built hundreds of foundations with no feeling in his knees. These days, he can’t manage the hard physical work; his son, Tim, manages the on-site aspect of his business. Tim says his Dad is his number one priority (don’t tell his partner Aja). He says Paul’s a genius. “He looks at a set of plans and immediately sees everything. And he can do anything. But he should have been a critic – that’s his real calling. Food, movies, me – he’ll tell you what he thinks about all of ‘em.” Tim has been through some rough times, too, and beat the odds. He feels that his father’s love was a big part of what carried him through the rapids.

Paul’s physical limitations don’t stop him. Remember that house he built 40 years ago? Since then, he has built half a dozen more in his spare time. Today he lives at the end of a dirt road in Vineyard Haven with his wife Ann. Recently, he took me for a tour. The house is chockablok full of hand-crafted treasures – ingenious woodwork (much of it made with reclaimed lumber from our yard, from jobsites, and driftwood). There are curvy polished concrete counters and fine tile work. There’s even a recent addition to the house with a beautiful iron and wood stair railing. He still does everything himself (mostly).

Paul with wife Ann in their Vineyard Haven home.

He has a tiny shop in the basement with rudimentary tools. He carefully figures out everything he needs, goes downstairs, cuts the pieces, and hauls them up. Once they’ve arrived upstairs, they don’t go back down for corrections. It’s too hard to negotiate the stairs. He measures twice and cuts once.

Whenever Paul comes to our office (these days assisted by a cane) to drop off a quote or pick up a check, he lights the place up. He’s as friendly as he is loud, and he brings a bit of joy into the day, no matter how he’s feeling. As our Director of Finance, Siobhán, describes it, “Everyone starts smiling. He’s larger than life.”

We’re lucky to work with him, to benefit from his vast experience, to enjoy his friendship, and to endure his good-natured insults and admonishments. The positive spirit and defiant optimism that pulled him up out of that wheelchair 30 years ago continue to define him. He’s a lesson to us all.

Eddie Cottle Sr.

Ed and his wife Betty in their Lambert’s Cove home. Photo by Mark Alan Lovewell, courtesy of the Vineyard Gazette.

Eddie Cottle Sr., the founder and longtime proprietor of E.C. Cottle Lumberyard., died on November 9th at the age of 87. Quiet, fair, modest, and generous, he had a big heart and a fine sense of humor. He lived on Lambert’s Cove Road in West Tisbury, where the yard is located, for almost his entire life.

For the last 43 years, E.C. Cottle has been South Mountain’s primary lumberyard. It was there long before we were here, opening in the early fifties when Ed was in his early twenties.

As it says in Ed’s obituary, “He worked tirelessly to make the lumberyard a very successful and well respected business. He appreciated his customers and his employees. He never forgot his humble beginnings and would often, very quietly, help a contractor or anyone else if he saw that they were struggling.”

Many years ago we needed a stationary shaper for our shop. There was one in the E.C. Cottle shop that was never used; it had a thick coating of dust and was piled high with Playboy and Penthouse. I asked Ed if he wanted to sell it.

“Sure,” he said. “We never use it.”

“How much do you want for it?” I asked.

“Oh I don’t know,” he replied, “Just put the magazines on the floor, take the shaper, and we’ll figure it out later.”

We moved the shaper to our shop. And for years after that, whenever I saw him, I’d say, “Hey Ed, we need to settle up for that shaper, remember?”

He’d mutter something and never answer the question. One time he said, “Oh forget it, we’re square.”

It became a refrain. Whenever I saw him, I’d say “when are we gonna settle up on that shaper?”

He’d chuckle and say, “We’re square.”

South Mountain still uses the shaper today.

My friend Richard Greene told me, at Ed’s internment, that the last time he’d had a laugh with Ed was at the opening of our new shop 20 years ago. The two were looking at all the beautifully crafted woodwork made from reclaimed lumber, full of nail holes and defects. Ed leaned over to Richard, grinning, and said, “Where I come from we throw that stuff away.”

Where Ed came from business was done on a handshake, loyalty was a virtue, and there was nothing but the truth. That’s good business, in my view. He was a good man.

The Amicus Cooperative – Stronger Together

South Mountain is proud – and lucky – to be one of the co-owners of the Amicus Cooperative, a collection of 50 of the most progressive solar companies in the U.S.. Amicus exists to support smaller regional solar companies by leveraging national scale purchasing power, sharing best business practices, and combining collective brainpower. My colleague Rob Meyers, who manages our Energy Services division, never misses their semi-annual gatherings. I have gone twice, once in 2015 in Phoenix and once this year in Denver.

It is not an overstatement to say that both times the Amicus group took my breath away. The intelligence, the heart and soul, the culture of civility, humility, humor, inquiry, fellowship, and friendship at these gatherings are extraordinary.

We’re happy to be able to share this piece about Amicus written by Sarah Stranahan, a senior editorial associate at The Democracy Collaborative and a leading member of its Fifty by Fifty employee ownership team.

The Democracy Collaborative is another remarkable organization which does cutting edge research and “works to carry out a vision of a new economic system where shared ownership and control creates more equitable and inclusive outcomes, fosters ecological sustainability, and promotes flourishing democratic and community life.”

Good stuff all around. These are important below-the-radar antidotes to the sorry, sleazy, sadistic mess of national politics today. – JA


Amicus Solar Purchasing Coop Spreads Employee Ownership
Achieving Scale while Maintaining Local Impact

By Sarah Stranahan

Amicus Solar is one of more than 250 purchasing cooperatives in the US, including such well-known brands as Ace Hardware and Best Western Motels. By forming a large national cooperative, small producers or retailers increase their purchasing power and access to project financing, while remaining independently owned and operated. An additional benefit, it turns out, is that a purchasing co-op can be a particularly effective means of spreading employee ownership.

Amicus Solar was founded in 2011 by six independent solar companies, including employee-owned cooperative and certified B Corp Namaste Solar and South Mountain Company. Amicus Solar is led by cooperative veteran and former Namaste Solar employee-owner, Stephen Irvin, who serves as its president. Today Amicus includes 48 local and regional solar photovoltaic (PV) installers and developers who openly share and collaborate on a wide range of business issues, from operational efficiencies to sales and marketing strategies.

Similar to Best Western and Ace, Amicus is democratically owned by its members, 40 percent of which are B Corps and a growing number of which are employee owned. With five Amicus members having joined the cooperative as employee-owned companies, Amicus has made a conscious effort to educate its members about worker ownership. As a result, five member businesses (ReVision Energy, Technicians for Sustainability, SunBug Solar, Positive Energy, and Sunlight Solar) have converted — and another five are considering converting — to either become worker coops or employee stock ownership plans (ESOPs). The purchasing co-op has become a means of “industry contagion” — a way of rapidly spreading employee ownership.

Staying Local While Creating a Competitive Advantage

Since the Great Recession, there has been an increased interest in localism (also called subsidiarity) — the principle that decisions should be made at the lowest practical level or closest to where they will have their effect — because small, local mission-driven businesses have three key advantages for nurturing a more democratic and sustainable economy:
They invest locally, capturing and multiplying value, particularly when they sell locally produced goods;
They are more successful at participatory management because it is easier to cultivate personal trust and accountability in small-scale, local organizations; and
They are more likely to care about and be accountable to their communities in terms of environmental health, social equity, cultural vitality, and good governance.
Localism, however, faces challenges when it comes to economies of scale, which can increase efficiency and reduce the costs of production. Scale is also required to meet the needs of densely populated urban centers, where a larger and larger portion of the world’s population lives.

Small solar installers have faced intense competition from large national companies such as SolarCity (recently acquired by Tesla), SunRun, and SunPower. By coming together in a purchasing co-op, the relatively small businesses that own Amicus Solar have leveled the playing field with their larger competitors, particularly in terms of purchasing power, while maintaining the advantages of staying local.

New Ventures

In addition to taking advantage of cost and marketing efficiencies, Amicus members share best practices and develop joint strategies to advance their common goals. For example, in 2016 Amicus won a $358,000 grant from the U.S. Department of Energy to found a new cooperative to provide high-quality operations and maintenance (O&M) support to large-scale solar installations. Today Amicus O&M Cooperative includes 20 member organizations that have set collective operations and management standards to ensure that commercial and utility-scale solar PV systems fulfill their performance expectations over the long term. Amicus O&M Cooperative is being led by another cooperative veteran and former Namaste Solar employee-owner, Amanda Bybee.

In 2017, Amicus members helped found the Clean Energy Credit Union (CECU), which received the first federal charter for a new credit union in Colorado in 31 years. CECU’s mission is to promote clean energy, environmental stewardship and cooperative enterprises through the financial services it offers its members. Using the federally insured deposits of its members, the credit union provides consumer loans to reduce the cost of clean-energy products and services. “We envision a world where everyone can participate in the clean-energy movement,” said board chairman Blake Jones, co-founder of Boulder-based Namaste Solar. This new federally chartered credit union will make it easier for people to both invest in and use clean energy in order to help protect our environment and improve our economy.”

Jones is leading another venture in this growing ecosystem called Kachuwa Impact Fund, which has provided capital in support of multiple Amicus members. Kachuwa’s mission is two-fold:
(1) To provide privately held “impact companies” with mission-aligned, long-term, and non-controlling capital; and
(2) To provide “impact investors” with diversified, impact investment opportunities outside of Wall Street.
Kachuwa’s multiple “impact themes” include cooperatives, certified B Corps, and companies that are owned by employees, women, or people of color. Kachuwa itself is aiming to convert to an investment cooperative structure in 2019 and, among other things, to increase its support for companies converting to employee ownership both within the Amicus ecosystem and beyond. Improving access to values-aligned capital is a critically important part to growing the cooperative and employee ownership movements.

Democratic Governance

According to Irvin, president of Amicus, Namaste Solar has had powerful influence on the culture of the purchasing coop and its members. It was at Namaste Solar that Irvin learned about cooperatives, democratic processes and governance, and the importance of facilitating a process to reach consensus. Like Namaste Solar, he says, Amicus uses an open-book management policy to keep everyone fully informed and a committee structure to facilitate decision making.

Irvin told Solar Pro magazine in 2014, “[Open-book management] is important since the members are equal owners. Consensus building can take time — but once we’ve come to a decision, you see more engagement and commitment from everyone.”
Democratic governance has not only contributed to the purchasing co-op’s success, but has shown members that ownership, mission, governance, and culture matter. Today Amicus Solar is an important driver of employee ownership across an entire industry.

The Ultimate Customer Service

There’s a saying that “Customer service is an attitude, not a department.” The story that follows might be a perfect illustration of those wise words.

In 2009, as part of a renovation project, we re-built 2000 square feet of wood deck surrounding three sides of a house near the water. To frame the deck we used a highly anticipated, well-regarded (by respected sources) new lumber product called TimberSIL. Touted as pressure treated lumber without the chemicals, it was infused with a baked-in, supposedly rot-resistant glass barrier. The material was guaranteed to last for 40 years, and contained no residual chemicals so that when the wood reached the end of its useful life, it could be chipped up and used as mulch. The TimberSIL slogan was “Locked in for life”. Unfortunately, it turned out to be a pathetically short life.

Fortunately the material was so problematic to work with that we never used it again. Unfortunately, that one time we did use it was for a very large job. This year it failed, miserably. From a serviceable deck to a major hazard in no time flat. We discovered that there have been other major failures, most notably in the case of Brad Pitt’s Make It Right Foundation, which used it on houses they built in the post-Katrina 9th ward re-building, only to experience severe failures. Not surprisingly, the company is out of business and nowhere to be found.

We learned that that our liability insurance doesn’t cover this loss and that our client’s Homeowners’ coverage has a limitation for rot coverage that wouldn’t come anywhere near the cost of the new deck.

We felt that our clients deserved a new deck, but we also felt that they should participate in the replacement cost as they got eight years of service life and will now get a new deck. They agreed, but a very large chunk of the financial responsibility was on us.

I took Sandy Ray, the owner of Martha’s Vineyard Insurance (he sold it to a larger company five years ago but is still involved) out to see it. He said, “your liability insurance carrier would only cover if there was an incident and something or somebody were damaged.”

I said, “Look at this, Sandy, it’s an accident waiting to happen. Doesn’t the insurer want to avoid an accident?”

He said, “you know, John, it makes sense, but insurance companies are not known for their foresight. And there just isn’t any coverage.”

“I get it, Sandy,” I said, “but here’s the thing. Over the past four decades we have paid your company literally millions of dollars for insurance and never made a claim. Now we have a problem and we want help. There must be something you can do. I hope you’ll get creative and come up with something. I know you can do it!”

Three days later, he called and said he wanted to come talk to me. He said they can’t refund premiums or commissions, but, he said, “My son Matthew and I are going to do the dismantling of the deck for you.”

“You’re going to what?” I said.

“It’s something we can do to help,” replied Sandy.

It’s no exaggeration to say that he got about as creative as you can get – and then some! When he said he and Matt wanted to do the de-construction of the deck as a gesture of participation, I was startled. It was way more than a gesture! It was 100 hours of grueling work. Sandy, at the age of 73, worked throughout, long days. They did a beautiful job, they did it promptly, and they did it with great humor and plenty of pride.

I said to Sandy, “I’ve heard of good customer service, but this takes the cake!” We are grateful, impressed, and appreciative.

The new deck is complete. Ultimately, the cost has been equitably shared by all. Everyone’s feeling pretty good. Bad situation, sweet resolution.

I have no idea how much of this inferior product TimberSIL sold. There doesn’t appear to be much information available. I hope it wasn’t much.

It is not uncommon for us to be faced with evaluating new products that appear to be improvements over old products. We generally do so warily and carefully, with the understanding that when we choose to experiment there’s risk involved and that we may have to make good on failures that occur. Fortunately it doesn’t happen often. It’s heartbreaking when it does. In this case it was a good example of plain old bad judgment. But when you receive “the ultimate customer service “ it sure does take the sting out of it!

It’s looking a bit better now, isn’t it?