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).

Workplace Democracy

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 SMCo Equity Journey

I recently attended the Eastern Conference for Workplace Democracy in Worcester MA.  Worker co-ops from around the country were represented.  As I listened to people relate their struggles to align values with business, it made me think of our good fortune with one aspect of our company:  our owners’ equity fund.

In 1987 SMCo transitioned from a sole proprietorship to a worker cooperative.   Part of the re-structuring was a commitment to profit sharing – we would distribute 35% of annual net profits as cash bonuses to each employee, based on hours worked.  The purposes: to share the wealth (of which there wasn’t much at the time) and to partially mitigate our hierarchical wage scale.

In addition, our new by-laws called for the distribution of annual dividends to internal capital accounts for each of the co-op owners.  Generally, these distributions were (and are to this day) roughly 50% of the remaining net income after profit sharing.

The internal capital accounts are paper accounts; they do not have cash in them.  They are an obligation – the company owes the money to each owner/employee when that person leaves the company.

Read More about The SMCo Equity Journey

Two Pats on the Back

September was a month of recognitions for South Mountain.

I’m always of two minds about awards and prizes. 

They feed the perverse (in my view) competitive impulses of our culture and our education system.  The implication is that there are winners and losers – the worthy and the less so – when our attention should focus on each of us doing the best we can.  All deserve to be recognized for their unique accomplishments.

But some awards have special meaning because they embody learning opportunities and inclusiveness at the same time as they hold some achievers out as particular examples.  During the past month SMCo has received two of these.

The Great Place to Work Institute named SMCo as one of the 50 Best Small and Medium Workplaces.

And the B-Lab named SMCo as one of their “Best for the World” companies for 2014.

The processes that led to these two recognitions are worthy of examination.  I will try to do that in a way that is not overly self-congratulatory, with the knowledge that I am likely to fail.

When Great Places to Work first contacted us two years ago and asked us to go through the application process, we looked at it and went “Whoa.  This is hard.  A ton of work.”  And we declined.

This year we looked at it again.  Two things occurred to us.  The first is that we felt that the work to assemble the information they require would be a useful exercise for us – the introspection demanded would point to new and better ways we can improve who we are and what we do.  A learning opportunity.

The second was our appreciation for the heart of the process –  an anonymous survey they conduct with each of our employees. Submissions go directly to them; we do not see them.  We thought it would be interesting for our employees to have that opportunity to express themselves freely about the company.   We liked that everyone has a voice; it’s inclusive.

So we decided to do it.

The work was useful, and it was nice to be named, but the most rewarding part of the process was that the Institute provided us with a selection of anonymous quotes from the employee survey.

Here are just a few:

“I have never before worked at a place where it seems that 100 percent of the people love their job. Turnover is almost nonexistent, and I felt so lucky when there was an opening for a position. I truly like to spend time with the people I work with every day. “

“The goal is to get your job done the best you can, but family comes first. “

“This company has a great reputation because we give back to the community. It makes it a place where everyone is proud to work.”

“There is a very strong sense of all-for-one and one-for-all. 

“The people that work for the company are what makes it so unusual. When I first started working for the company, everyone was so nice, helpful, genuine and laid back that I thought something must be wrong. After a couple of weeks, I realized that’s just the way everyone is.”

“We have extraordinarily good and generous mental and health benefits, and outstanding opportunities are given to employees to shape and change their job descriptions and roles within the company. “

“We are an employee-owned company. Personally, this makes a big difference! Having worked in ‘corporate America,’ I know that the difference is real and profound. It is so great to have a say in everything, from the big decisions to the small.”

“It is a ‘choose your own adventure’ experience. Dream it and make it happen.”

Here is the full write-up that Great Places did about South Mountain.

B-Lab is very different from Great Places.

 It is a non-profit  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. Their rigorous process includes in-depth examinations of company practices and documents. SMCo received B Corp certification in 2008.  We have been re-certified twice since then, and over 1100 other companies have been certified to date in the U.S. and 34 other countries.

Until now, we have had no real standards to differentiate good work from good marketing.  B-Lab provides exactly that.   B-Corp designation is like LEED Certification among developers and the Fair Trade designation among product suppliers.

The “Best for the World” designation is applied to the highest scoring of the companies that have gone through the certification process.

One of those is SMCo.

So there they are.  Two nice recognitions.  Two pats on the back.  We all need them from time to time, whether we like it or not (which we do!).

 

Yes, Indeed, it was a Zinger!

Last week I traveled to Portland Oregon.  It wasn’t only to get a wonderful day of skiing at Mt. Hood with my fine old friend Jonathan Orpin.  It wasn’t only to stay with Jonathan, Maxine, and son Jake River at their beautiful Vermont Street house.   And it wasn’t just to get a dose of Portland culture, hang with the downtown dirtbags, and sample some of the great food from the hundreds of food carts parked around the city (outta- this-world food and teeming with life – it makes you feel like you’re in Kowloon).

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 SMCo 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.

 

 

Good Year for Worker Co-ops

On the last day of 2012 our 25th year as a worker cooperative (and 37th in business) ended.  It was an extraordinary year – rich, full, profitable, demanding, restorative, and uplifting.

It was a year of many “first-evers”.  On November 1st we welcomed three new owners at SMCo – 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 SMCo 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??

Read More about Good Year for Worker Co-ops

B-Corps on the Move!

On July 31, the last day of this summer’s legislative session, Massachusetts became the 11th state in the country – along with California, New York, South Carolina, Louisiana, and 6 others – to pass legislation enabling businesses to register as a new type of corporate entity:  Benefit Corporations, or B-Corps.  Benefit Corporations are companies which consider the public good – factors such as environmental sustainability and community benefit – in their corporate decisions rather than financial return only.

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.’ ”

Read More about B-Corps on the Move!