Why Businesses Should Embrace the Collective Model

I love a good collective. Is it like cheese, where there isn’t a bad one? If you’ve spent time in Berkeley, California, you might have eaten delicious pizza from the Cheese Board Collective, an employee-owned cheese, bakery and pizza shop. They serve only one specialty pie every day – its vegetarian and piled with weird cheeses and veggies, and there’s a line out the door and around the block every single day. The collective has been in business since 1971. The workers are the owners and they make decisions collectively about the direction of the business.

“I love saying to people that this seems like an impossible business model, but it works, and it works very well.”
– Charlie (Longtime Cheese Board member)

Cheese Board was so successful that it inspired the Arizmendi Association of Cooperatives, a collection of six bakeries. The model has been so successful that it has expanded to a landscaping design/build cooperative and a construction company.

Look beyond the bakeries and you’ll find grocery store cooperatives and preschool cooperatives: in those cases the customers also work as employees, volunteering in the store or school, to reduce costs and increase community engagement.

What’s the difference between a collective and a cooperative? And can these structures work in other industries? I’d love to see these business forms continue to expand to the service industry. Pizza and groceries are great — why not accountants, doctors, web developers and graphic designers?

According to cultivate.coop, “the word “cooperative” refers to a specific ownership structure.  Cooperatives can be owned by workers, community members, or both.  The word ‘collective’ refers to how members participate in the management structure.”

So, cooperatives are employee-owned and collectives are non-hierarchical. Another creative structure is the ESOP, the employee stock ownership program, in which employees own a percentage of the company. Clif Bar and many other sustainable darlings are ESOPs.

I belong to the MAG Impact Collective, a distributed agency made up of independent professional experts in sustainability communications from content strategy and execution to branding and design, leadership, strategy and web development.

It’s a great model for an entrepreneur because we have the backup of a bigger team when we need it, but everyone gets the flexibility to run their business as they see fit. Our model also provides true cost as opposed to what you might find at traditional agencies — all our members work directly on client projects because we love helping our clients further their sustainability missions. 

The cool thing with all of these structures is they take a little bit of power-and-profit away from the top. In a world where the top 0.01 and 0.001 percent, earn average annual incomes of $35.1 million and $152 million, we can use a little or a lot of rebalancing.

Do you shop coops or otherwise endorse them? Hit me up on Twitter @jenboynton.

image credit: Luigi Mengato, Flickr Creative Commons

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