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Catalyzing worker co-ops & the solidarity economy

Isthmus Engineering: A Case Study on Worker Co-op Governance

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March 7, 2022
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This webinar brings to life a case example of a worker-owned co-operative in a technical field. Learn about how the co-op manages participation and governance, project management techniques to streamline democratic decision-making, running meetings that work and other aspects of worker ownership and governance.

Meet the speakers:
Ole Olson has worked for co-operatives for over 40 years including the past 30 years as a Member/Owner of Isthmus Engineering and Manufacturing Cooperative. He is a graduate of the University of Wisconsin Platteville and a licensed Professional Electrical Engineer. Ole has served several terms as a Board member for the USFWC (US Federation of Worker Cooperatives) and is a founding member and current President of MadWorC (Madison Worker Cooperatives). Ole encourages employee ownership and the democratic workplace model and does public speaking engagements for many organizations.

Margaret Lund (case study author) is an independent consultant specializing in the areas of community development finance and shared ownership strategies. Throughout her 30-year career, Margaret has worked with enterprises in every major co-operative sector including credit unions, consumer co-ops, housing co-ops, worker co-ops, healthcare, agriculture and small business co-operatives. Prior to launching her consulting practice in 2008, Ms. Lund spent 16 years as a small business lender to co-operatives.

Moderated by Erin Hancock, Education Manager, International Centre for Co-operative Management

To read the full case study, visit www.smu.ca/iccm/researchandpublications/workingpaperandcasestudyseries/

This webinar was hosted by the International Centre for Co-operative Management, Sobey School of Business, Saint Mary's University (Halifax, Canada) on March 1, 2022.

 

Transcript (starts at 5:07)

Erin Hancock: So, just to introduce our great speakers here. So we actually are going to kick off today with Margaret Lund. She's the case study author and researcher. She's an independent consultant, specializing in the areas of community development, finance, and shared ownership strategies. Throughout her 30 year career, Margaret has worked with enterprises in every major cooperative sector, including credit unions, consumer co-ops, housing co-ops, worker co-ops, health care, agriculture, and small business cooperatives. So basically, we can ask her anything. And prior to launching her consulting practice in 2008, she spent 16 years as a small business lender to cooperatives. So huge history there.

And Ole Olson, who's going to be the sort of primary speaker for today, the person who lives this experience with Isthmus Engineering, has worked for cooperatives for over 40 years, including the past 30 years as a member-owner of Isthmus Engineering and Manufacturing Cooperative. He's a graduate of the University of Wisconsin, Platteville and a licensed professional electrical engineer. And he has served several terms as a board member for the U.S. Federation of Worker Co-ops, and is a founding member, and current president, of MadWorC -- Madison Worker Cooperatives. Ole encourages employee ownership and the Democratic workplace model, and does public speaking engagements for many organizations. We know he's very busy, we're very lucky to have him here today. So, we'll go ahead and kick it over to Margaret right now. Go ahead -- margaret's going to kick us off with some of the highlights that she sort of discovered throughout doing the case study research.

Margaret Lund: Yeah, thank you, I was really happy to do this case study to have this identified as one of the co-ops to work with because I've known these guys a really long time, I've probably known them for almost my 30 year career. And for that whole 30 years, people have been saying, "you have 40 people on your board, how does that work?" And then they would laugh and they would say, "Well, we're engineers, you know," and that was the short answer, that's how you do it, which is something of an answer. But there's also a longer answer to that. And as I found in the case study, that longer answer is really interesting.

And to me, as somebody who works with lots of different kinds of co-ops, there's always this kind of tension between 'can you be democratic, but can you also be a larger organization?' Or, you know, 'how do you get things done?' And it always seems, at least to people outside the co-op community, that this is a zero sum game. That growth and efficiency, that automatically means you're going to have less engagement and less participation. And I just think this is a fabulous example of how that isn't true. I mean, we all know that isn't really true, but just how do you organize? But how do you literally organize a larger group of people, or around projects, or whatever, and you do that in a way that's really democratic and that's really true to the co-op members' idea of what a co-op is.

So, he'll talk about to talk about the 40 member board and how that works. But also, kind of related to that, something that I was able to delve into more, is this idea of the board officers. And again, this is another conventional wisdom: it takes a long time to be the board president, and then you should be in that position for a long time, and it's super powerful and important, and you make all these decisions. And they have a really interesting rotating way of officers. And in this particular case, it doesn't mean that the officership isn't taken seriously. The fact that it's handed -- you know, that different people hold it, but they just have these officers function somewhat differently on their board than lots of organizations, which I think is also a really kind of specially tailored way of democracy working at Isthmus, and making it work for them.

So we will talk about that, and I I know he has some slides on this, but another thing that's really striking, and I think we're all different, again because they're an engineering co-op, they do a lot of stuff with formal project management. And again, they didn't invent it. Project management is something that conventional businesses use all the time. They particularly use it in industries like engineering, or projects like Isthmus works on, where you're working on a unique machine. So it's not an assembly line -- it's the opposite of that -- that you need to be able to manage that project. And one thing Isthmus has done is taken these tools from a conventional business world, and they've made them like really tools of democracy and transparency. They've really made them their own. And I just find that so, entrancing, that we're kind of using the tools of 'the man,' and we're going to make -- you know, we're going to say, "Well, how do you use these kind of conventional business structures to make our co-op better, and make ourselves a better co-op, and make ourselves a co-op where people have more autonomy, and have more decision-making, and have more information about their work? And I think they're a great example of that.

And then, in a kind of related way, I know Ole will talk about it, and they talk all the time, they give a huge amount of credit to the rest of the U.S. worker co-op community, and the things that they've learned at meetings about facilitation, management, and then they turn around and teach their project management skills and their approach to other people. So they're a very nice example, I think, that when we really all get together, we are so much more than the sum of our parts -- that if we put all our brains together, we really get something very special. And so I just think they're really nice example of that. So I'm not going to talk anymore. I'm going to let Ole talk, but I hope you'll all look at the case too, and in some of the other cases, because there really are some extraordinary co-ops, I think represented in this group that we've been researching. So I'm going to hand it over to Ole now, if that's all right.

Ole Olson: Well, good afternoon, good morning, everyone, depending on where you're at. I see we have people everywhere, so that's a great thing. I like starting these off with just kind of a strange story to get your attention, and hopefully you can see my screen now. And I'm sure Erin and Margaret are looking at this going Ole, where are you going with this? So this will only take a minute.

So you've all probably heard of Apollo 13. It was meant to be the third mission on the Moon. April 11th to the 17th, 1970 forty two years ago, James Lovell, John Swigert and Fred Haise were the astronauts. You probably also know that they had issues. Oxygen tank on the service module failed two days into the mission, the original mission was scrubbed, the crew swung around the moon to head back to Earth. And interestingly enough, it failed on April 13th and it was Apollo 13. It was a Monday not a Friday, though.

If you know the story at all, you know that they the ground crew actually had to find a way for them to scrub the carbon dioxide from the air that they were breathing so that they would have enough time to get back to Earth. Remember, this is 1970. Really, no computers like we think of today, no GPS, no calculators. And you might know the story, you've probably seen the movie if you're my age or close to it. If you're a enough of a NASA nerd, you might even know the astronauts. But one of the true unsung heroes of this story is a person by the name of Judith Love Cohen.

She was an aerospace engineer and she was responsible for the Abort-Guidance System. Well, preparing for this mission, she was nine months pregnant. They were having issues with her guidance system, while trying to solve an important problem, she went into labor. She actually took the documents and plans to the hospital with her that day, and she called in the corrections before she gave birth that day. That was April 13th, 1970. Her system is called upon to take immediate control and get the astronauts back to Earth.

So you remember in 1970, they're doing all their math with slide rules. No calculators, no computer program to prepare for the oxygen tank blowing up. Imagine being an engineer at this time, all new flight paths, coordinates, speed, entry angle, landing coordinates, hundreds of variables, so much risk, and the world is watching. Nobody probably knows her name, but they would have if her system would have failed. Why don't we know her? We knew the story might know the astronauts even. We saw the movie, they gave some of the ground crew credit, but she's actually one of the heroes in the story. Just curious, who did she give birth to? Her son was Jack Black, born before the mission. We all probably know who that is, but we still don't know her. Why is that? So my moral to this story is way too often those who do the work do not get the recognition or the reward. That's what makes worker co-ops different.

That's a true story. It's two minutes of your life, you're not going to get back. But I think it's a good point of trying to recognize the people that are doing work. So now for the real stuff, let's talk about a worker co-op. So as Erin and Margaret said, Isthmus engineering, we're a worker owned cooperative in Madison, Wisconsin. We concept, design, and build custom automation equipment. We build machines. We've been in Madison since we started, and we'll be here forever, I hope. Established in 1980, so we're forty two years old, started as a partnership and became an official worker cooperative January 1st, 1983. We currently have just over 80 employees, about half are engineers, and the other half are electricians, and machinists, and mechanics, administrative people.

We do over $30 million in annual sales and our name is hard to pronounce, but we're named after the isthmus between Lakes Menona and Mendota in Madison. So the picture on the bottom is where we started, actually. The different industries we serve are medical and pharmaceutical, consumer products, light industrial, automotive, and emerging markets such as solar. So we don't make these products, we build the machines that make these products.

We're a project based company. All the work that we do comes in as a project. We have our operations manager and a scheduling committee. They select individuals to work on each project. And then the project has a team of workers responsible for completing that task for getting it built the way the customer wants it. This is a little bit of an older slide. It says the average project life is 20 to 52 weeks. We're currently working on machines that'll take us about three years. Normally, I show some machine videos because they're kind of interesting to watch and people enjoy seeing them, but that's not what we're here for today. So I'm going to point you to YouTube or to our website, which you'll see our website address at the end of this presentation. But if you go on YouTube and you search for Isthmus Engineering and Manufacturing, we probably have 100 videos of machines running so I'll just point you that way.

This happens to be a machine. This is the design model that kind of looked like a cartoon. But this is a machine that actually builds a mousetrap. Not kidding. This is makes a medical capsule. I'm not supposed to tell you what it does, but I can tell you that the capsule that it makes is used to clean surgical tools for hospitals. This is a machine that makes a pacifier, which you give your infant. And this is a machine that makes that part of a solar panel. So anyway, those are the things we built, that's what our projects do, is build things like that. Let's talk a little bit about our structure here and get to the meat of this.

We are a worker cooperative, modeled after the Mondragon cooperatives in Spain. Actually, if you have seen The Mondragon Experiment, which is a grainy old BBC documentary that was produced in about 1980, our four founders watched that video and that's what inspired them to become a worker co-op. It was an experiment at that time, they didn't know if they could make it work, and we still consider it an experiment to this day. I know many other worker co-ops that have come out of The Mondragon Experiment, so I highly recommend it if you haven't seen it.

As Margaret was saying, over half of our employees are also member owners. And it always, regardless of how big we get, it always seems like we're just over the 50 percent mark. As far as membership goes, due to attrition and retirement and bringing on new members, it just seems like we've always been around that 50 percent mark. All members, everybody that becomes a member, sits on the board of directors, and that's a little bit where we consider ourselves a direct democracy. It's currently over 40 people, I think it's 42 people right now. We just brought another person in recently and we're on the verge of bringing another person.

And so annually we elect an executive committee president, vice president, secretary, treasurer. So there's an annual election. It doesn't mean that we elect new people each year. Sometimes, you know, we like to elect the treasurer, you know, four consecutive years because it takes almost a year to get them up to speed. So the tTreasurer might be in place for two or three years. Same with the president, that's another position that might go for more than one year. But there is an annual election for that position. The board makes all administrative decisions, not project decisions. They don't make any decisions about the machines we're building. The board decides who to hire, who to fire, when to build a new building, what color to paint a mailbox, but not anything regarding the machines that we built.

We have a flat management structure. All the work that is non-project, is not machines, is mostly done by committees. The committees are something that are also restructured annually after we vote for our executive officers. We have a sign-up sheet and everybody volunteers for committees and the board looks at the sign-up sheet and they see how many people are on each committee. And then the board has the right to shuffle people around to make sure that there's enough people on each committee and the right people are on each committee. But this gives everybody a chance to be part of different sections of the business. Everybody starts as an employee for the first two years, after that time they can apply for ownership. They have to buy their voting stock when they become a member. It takes an 80 percent vote to get voted in, and 50 percent to get voted out.

Our committee structure: everybody in the light green oval is an employee of business. If you become a member, that's the dark green oval in the middle. The committees that we have are made up -- some of the committees can be both members and nonmembers. Some of the committees are members only they have any confidential information that they're dealing with. So you can see one other thing that's unusual about us, our sales manager cannot be a member. That's something that we put into our bylaws. So although he has a lot of influence, or they have a lot of influence, they don't get a vote on the board.

We did a study -- we should probably redo this -- but we did it in 2010 when we had about 50 people. And it's nice to use round numbers. So if we had 50 people and each person worked about 2,000 hours in that year, that would be 100,000 total work hours. If you look at the bottom of that chart, you can see that just as a gut check, in that year we worked 97,000 hours. We track all our time, so we know how much time was put into all of these different things. The amount of time that this big board that we have spent on board meetings was about 2,083 hours, which ironically, you know, a 52 week year, forty hours a week, is 2,080 hours. So almost exactly one man-year was spent on the board labor. All the committees that we have, the work that was put into the committees, that was another almost one-man or 2,070 hours. So we don't have a lot of supervisors and managers and a lot of overhead governance. We're doing that all with these, with the committees and with the board.

So it turns out that our indirect labor, the labor that's not spent working on jobs, was about 31%, a little over 31%, and the time we spent actually working on jobs is just under 70%. You know, we're electricians and machinists and engineers, we're not business people. I don't know if that's good or bad, but these are real numbers. This is 70% of our effort goes into producing something, 30% is managing ourselves. Somebody always asks, "what's this costing you to do?" This is what it cost us.

Democratic decision making -- first complaint usually stated is the length of time it takes to make a decision. I don't know if you've ever been part in a meeting like this. I've definitely been part of them, and I've definitely seen them. At many co-ops, especially work at co-ops, board meetings are painful -- too long, too inefficient, not enough engagement. Co-ops, especially new co-ops, rarely take the time to establish ground rules for process or structure. We are no exception. Thirty years ago, when I started at Isthmus, there were only 14 people on the board. We were in the exact situation where meetings were ridiculous. Our board meets twice a month. The meetings average five to six hours long. That's averaged. We had meetings longer than that. Topics at the end of the meetings were rushed. They didn't get the same attention as the agenda items that started the meetings. Previous meeting minutes were gone through line by line, even if no action had taken place.

At that time, there were about 30 total people that worked here, and all of our customers were within 50 miles. It was a much simpler situation than what we have today. Now we have 80 people, over half are members. All members still sit on the board, and the full board still meets twice a month. So that hasn't changed. None of that's changed. We are a much more complicated company, a more technical workforce, and tons of external dynamics, Covid is just an example of that. Our board meetings now are usually about an hour long. Actually, last night we went an hour and 20 minutes and people thought it was a long meeting, so we accomplished more than we ever have before in our meetings. And the board still has final say on almost all administrative decisions.

So what changed us? They mentioned project management earlier, and that's definitely had a huge effect on how we approach things. Speaking to other worker co-ops that have the same issues: 40 years of our own experience, we kind of know what doesn't work, and we're still trying to find things that do work. And we attend a lot of co-op conferences so that when the U.S. Federation has a good nuts-and-bolts conference, there's nothing better than sharing ideas with other worker co-ops that are at those conferences. Whether it's your regional organization, or the national organization like the U.S. Federation of Worker Co-ops or the NCBA, any nuts-and-bolts conferences that you can go to are just well worth your while as a as a co-op. So some of the things that we'll talk about here, I have to mention that they're not our ideas. These aren't original ideas. We've applied these techniques and tools that we've gotten from other people, we've made them work for us. And it wasn't one magic wand that fixed everything, it was a step-by-step process. I would say that started about 15 years ago, so I've been here 30 years. Our meetings were painful for the first half of my employment. Over the last 15 years now, we've finally refined them into something that new members that start don't understand what a bad meeting is. We definitely take it for granted now.

Let's talk about some of those things. Different duties: the president -- and this I think is similar to a lot of worker co-ops, where the president is a facilitator, not a decision-maker. So it's not necessarily a position of power, does not make decisions. He makes sure that decisions get made. The duties include setting the agenda, determining meeting schedules, when the meetings can happen, and the president facilitates the board and executive committee meetings.

Vice president: I've heard other people call them 'the needle.' Vice president's responsible for going around, poking people, making sure that they're carrying through what the board voted to do. So originally this position was just used as a filler position. If one of the other executive committee members wasn't there, the vice president can fill in for that person, in the blue box at the bottom. These are duties that we've added to the vice president over the years. So the vice president does the meeting roll call, he makes sure that we have meeting quorum, so he's chasing people, making sure they're going to be at the meeting. When there's 40 people, that's not necessarily a simple job. We have something we call the topics log, and we'll get into that a little bit further. But the vice president reviews the topics log, the agenda topics log, and he looks to see what the board voted on. And then he goes around and makes sure that all that stuff is getting worked on, and if there's any updates for the board. So he also tracks all the committee work.

So we mentioned the broad topics like the agenda topics log, it's basically a two page spreadsheet. There's an active sheet and a completed sheet. We kind of start a new one every year. So, pretty simple. I don't even have to give you an example of this, you can create a two page spreadsheet on your own. But all new agenda items go into the active log, and only things that are being worked on come to the board. So, on the active sheet is any agenda item, and any old agenda item that's being worked on. So that's what we talk about at the board level, is what's on the active sheet. As things get completed, as the board sees items get completed, they get moved into the completed list. So at the end of the year, on the completed list are all the things that you've accomplished in your board meeting, all the different projects. So at the end of the year, you still have the active sheet. Whatever is still going on gets moved into the next year and you have a complete list from the previous year of what got completed.

One of the things that came from project management, or project management training, was the process of charters. So whenever a new idea comes to the board, in the end, the board says, "Hey, that sounds like a great project. We should take that on. Well, let's put an ad hoc committee together." They'll say, "the first thing you have to do is create a project charter." So the charter defines the scope of the work, the stake, who's involved, the schedule for things getting completed, and what's your definition of complete? What is a successful project?

So I can kind of show you. We started -- we kind of use this for our committees, also. This is an example of it's an older committee, but our co-op, if you're asking me, this is how we started out doing it. So this is an old one with purpose, history, definition, guiding principles and some reference sources. What I want to point out here is it's one page. If it's any more complicated than one page, it's too much information. This is our current list, which I think Erin is going to share a generic one and an example on the chat list. But so this is an example of a project charter. We started Energy and Resource Committee. Defined who the chair people were, who the team members were. We defined a problem statement, a project description. You don't have to read all this stuff because you're going to be getting it in the chat, but basically I'm highlighting the blue lines here: who the stakeholders are, project scope statement that has objectives, deliverables, scope, milestones, and the critical success factors. And there's a brief description of what each one of these are. If it takes your team more than one meeting to fill this out and it takes more than one page, you put too much work into it.

But this is something that's been invaluable to us to the because the committees, for the most part, are not empowered to make decisions. But the committees should have a predefined scope of work, and they'll use that scope of work to make a recommendation to the board, and present the information that they've been working on, and then the board will make the decision. So this project charter, like this, helps you refine what the committees are going to be working on, so the scope doesn't creep outside of what the board is expecting.

We would like every day to look like this. This is a real picture, Alex, who actually took this. But a lot of days look like this. You got to work through 'em. Spring will come. So that's my concluding slide. Here's our website, you can get to some of our machine videos at this website. My email address is on the bottom. You're free to take a picture of this. I'm willing to open this up to questions.

Erin Hancock: Thanks so much, Ole. People are very appreciative of you and the things that you're sharing here today. Big time. I'm going to add Margaret to the spotlight as well. So we did have a couple of questions that came up in particular. Can you say a bit more about why it is that you -- sorry, just let me grab that -- the rationale around the sales manager not being a member, having a vote.

Ole Olson: So we had a -- maybe it might have been a kneejerk reaction -- it's an interesting story that I won't share all of. But at one point when we were much smaller, we had one position that was the general manager and sales manager, that we're kind of a combined position. And we found that that one position held too much information, and we had a bad experience with it, and we decided to change it. And so we currently don't have a general manager, that's something we're experimenting with right now. We have the sales manager, yeah, we have no general manager. We do have an internal and operations manager. But we we don't let the general manager or the sales manager be members just because they have so much influence. So that's why we did it that way. I don't know that it's something that will stay that way permanently, but that's the way it is now. It's a good question, and that one always comes up.

Erin Hancock: Thanks so much. Someone had asked for the slides and I added them to the chat as well. If you want to go back and refer to anything that they had raised.

Margaret Lund: You know, I was just going to say I was just thinking -- and I think Jeff's even on this -- but I did interview Jeff Yarwood, who's operations manager, and one of the things that struck me is I think he really is viewed much more like a trusted facilitator. So it's not really like a boss, but like someone who has a lot of information and coordinates things and, you know, has a point of view where you can see lots of different projects at the same time. But it's really a different perspective, I think, of that position, than a really traditional general manager would have. And I'll stop.

Erin Hancock: Thank you. OK. Question here from Evan: "is project management training offered to all employees, members, or a prerequisite for committee board and board work?"

Ole Olson: It's not a prerequisite. We had -- several of the people volunteered initially to do it, that were already managing big projects, and what drove us into project management to start with, was our projects were getting so big. The first time we built a machine that cost a million dollars, we're like, "How do we handle a million dollar machine? How do we manage this project?" So that's kind of what forced us into it. But then once our -- well, was initially engineers that that took the project management classes -- once they took it, they said, "Hey, you know what? We can use this for our governance. We can use this for how we actually operate the business, too." So stuff that they were learning, things that they were learning through their training, we started to use. And now, rather than sending people to school, which we still do if they want to, we can do a lot of the project management training in-house now, because we have people that actually are licensed project managers. So it was an investment. Probably one of the best investments we ever made 15 or 20 years ago, starting to send people into school.

Erin Hancock: Thank you all. So because of you having the values that you do and -- it seems like really being open to the people who are involved if they want to pursue membership in the cooperative, that's very much open to them -- how is it at the outset, knowing that at some point they could move into the realm of membership? How do you find a culture fit? How do you know that person is right for the experience when obviously you're not hiring them from another engineering cooperative that follows a Mondragon type model? There's not a lot of those out there that you're sort of just passing people between. So how do you know that someone is right, and might eventually be a good member?

Ole Olson: That's a good question. I wouldn't say that engineers, and machinists, and electricians aren't necessarily the most knowledgeable about cooperatives, coming off the street. They might be a member of a credit union or shop at Willy Street Co-op, but they probably really don't even realize it's a cooperative until they come here. And in fact, we have to compete with other companies, so we have to offer similar salaries and benefits to get them in the door. And then it's a matter of finding out if that person is somebody that you want to go into business with. It's not always easy. People are not guaranteed if they apply for membership that they'll get in the first time. Some people might have to apply a couple of times before they get in. It's really rare, in fact. It's only happened once or twice in my 30 years that somebody never got in. But it's a matter of finding out how they'll fit into the culture, and we try and do that in interviews. That's really difficult to do because you need to work with somebody for a while to find out how they're going to fit in. It definitely isn't for 100% of the people. Some people need to be managed, it's hard to -- some people don't want the responsibility of being a business owner, so it's worked out for who we have as members now, and I hope that answered your question.

Erin Hancock: Sounds good. Yeah, we're going to toss a whole bunch of good ones at you today. Hope you had your coffee. Lots of great questions coming up in the chat. So how about this one? How do you maintain such high member engagement? And are there members who are resistant to the indirect labor, and prefer to only do direct labor? And how do you address them?

Ole Olson: Well, that's a great question. We still struggle with member engagement, but having the committee structure that we have got, everybody gets a chance to participate, and take on, and learn different avenues, it's kind of amazing. I mentioned not every member gets in the first time: we had a member that was a machinist that didn't get in the first time he applied -- and we consider ourselves an engineering and manufacturing company, but normally everybody, they don't think of Isthmus Manufacturing they think of Isthmus Engineering -- anyway, so he didn't get in the first time. Eventually, he did get in. He was elected president a few years later and he's one of the best presidents we've ever had. Who would have thought that a machinist with his background would make a good president? You just don't know until you give people -- let them take the responsibility that you entrust them with, and see where they go with it.

So not everybody is 100% active on the board. Actually, if you had everybody that was 100% engaged all the time, your board meetings would look like the one where the people were holding each other's neck. I might not be a good situation. Sometimes you have to trust other people to carry out the work and do it, and then you still get a vote on it before final action is taken. I think the simplest answer to your question is, we can spread the responsibility, we can spread the work out by the committee structure that we have. It gives everybody a chance to participate, and everybody can understand where and why the decisions are getting made.

Erin Hancock: That's great, thank you, and that that was a good question, that was from someone from the US Federation of Worker Co-ops, so yeah, they're going to dig in to the good stuff. So maybe we'll we'll open a space to get some other voices into the room. Jerome, always asks great questions. Maybe it's better, Jerome. If you want to voice your question yourself, and then maybe I'll put Christina on deck, and then Marcelo after that. Go ahead, Jerome.

Jerome: Can you hear me? It was a very interesting talk, not just interesting, but also very informative, and I'm sure for many practitioners also just useful for their own firms, enterprises, and so on. So the question I had, this relates to this notion that you just said. How they have restricting membership from, you said for instance, the sales manager, because these people have so much power, and so on. Is there sort of an implicit danger of, I put it this way, of creating what economists -- you know, I have an economics background -- of creating sort of a principal-agent framework where you know, you have these management on one side of the table, and workers on the other. How do you deal with that? Is that something that you've seen? Just, you know, people think in terms of roles, you think of Milgram's prison experiments, and Stanford, you know, people just -- we love to play roles, you know, we're sort of theatrical. So how do you deal with that?

Ole Olson: Well, we try to not have -- the difference between management and the workers, actually, when it breaks down, it's interesting. Most of the engineers sit in a quiet area where their computers are, and the shop floor tends to be more wide open, and there's lots of noise, lots of background noise. But if you talk to the shop people and the engineers, you know, I would say that's the breakdown between our management and workers, which we try to not let that come between. So even the fact that we don't let the sales manager become a member, it's not like we're trying to draw a line or anything. We're just we're trying to have a check and balance. So on a normal workday, you know, I kind of read a report to the sales manager or the operations manager. But twice a month at a board meeting the sales manager reports to the board. So it's a check and balance. It's so that one person doesn't hold all the power. We want to make decisions democratically, we don't want one person to be making all the decisions for us.

Margaret Lund: Erin, I just wanted to bring up another thing from the case study and that kind of topic, is with this orientation towards project management -- I mean, not everybody is a project manager, and not everybody wants to be a project manager; not everybody's skills are right, including engineers who come in later in the process, they wouldn't be a project manager. So one of the things I think that also just kind of tamps down some of those natural tensions, is the fact that that like in a conventional business way, the way you get ahead is to be a manager. And you'd be a project manager, then you'd be a of department manager, then you -- you know, there's like this hierarchical system, and it just isn't the only way to leadership at Isthmus, either on the ground level, or on the governance level. So I think that the fact that there just exists these different avenues, and that being a project manager doesn't necessarily mean that you have X, Y and Z other powers, or other money, or other influence, or any of these other things, it just kind of tends to tamp down some of those tensions a little bit. And I don't speak from being inside, I'm just saying, from outside that's a really different way of organizing work. So somebody ambitious could say, "Well, I'm not going to be a project manager, but I really want to be the chair of this committee," or something else. So you have different ways of having, if you want to have influence, of doing that.

Erin Hancock: Thank you, Margaret,

Ole Olson: That answer your question, Jerome? I want to make sure.

Jerome: Well, I mean, I don't think there's any way to definitively answer something like that, because you're getting into topics like, you know, human nature and how to organize for all sorts of contingencies. But yeah, I just thought it would be an interesting a topic that probably you've had a lot of experience with just because that's, you know, you have to balance various interests in a company, especially the fact that you have to continue to exist, you have to make sales. But yeah, thank you.

Erin Hancock: Okay, great. So we've got a number of other people. So over to Christina, to you. Ask your question.

Christina: Sure. Thank you. So my question was just around if -- how do you prevent corporate mindset from creeping into the board or the membership ideals? And has this been an issue in the past?

Ole Olson: Well, the only people that we allow on the board, first of all, are people that work here. If you don't work here, you can't be on the board. So that's one thing. The other, we don't have a lot of administrators on our board. So I mean, our board is made up of electricians, machinists, and I can't say that there haven't been corporate I ideas that have been discussed, and it's always a struggle, we have to make sure that we put the company first, and we're not trying to put ourselves first. You know, if the company is successful, everybody will be successful. So we kind of have to keep that in the back of our minds also. We do -- I mean, it's really common for us to look at the seven cooperative principles. And somebody asks the board, "well, I'd like to go to management school." And we look at principle. What is it? Number four or number five, that's education. Well, yeah, we should do that. We should offer this person the ability to improve themselves through project management. So we we have the seven cooperative principals published on our walls and probably five or six different spots. And I wouldn't say that for every board meeting, but it's pretty common that we'll look at them and make decisions based on those principles. So. For us, there are real.

Erin Hancock: Thanks, Christina. Thanks Ole. OK, Marcello, the next question, go ahead.

Marcelo: Hi, all. Nice to meet you. Great presentation. I'm curious on the daily basis just like how you communicate between meetings? I just see you like 60, 30, like 30 will be the indirect work, and the 60 will be a direct work. But I'm curious about how you communicate, like you only use email? You have a different tools, decision maker, or like I saw a very good a shot from each project. But I'm curious, like on the daily basis, like you only use email, you use other tools to communicate to each other because it is a flat structure, not down. Then it's like you have 40, they have a lot of people have to make decisions. I'm curious about that.

Ole Olson: Boy, I'll try and make this answer short, but I can give you a long explanation for this. We try and do as much face-to-face as we can. Obviously, COVID disrupted us just like you did everybody else, and we had to go virtual and we started to use Microsoft Teams, which was kind of our communication tool. But actually, today is our first day without masks. So, yeah, so we're back to face-to-face.

Through our project management training, usually like, let's say we're building a machine. The entire group the entire team meets every morning for what we call a scrum. And it's just meant to be a 15 minute stand up meeting. The project manager says, "What's everybody doing? What are you working on today? What did you do yesterday? OK, let's get it done." And if the project manager needs to redirect a couple of people, that's his chance to do that. And then the project manager usually spends at least one meeting a week talking with the customer. And so that'll be usually a virtual meeting because our customers now are from coast to coast, sometimes internationals. So that's how the customer kind of tracks us.

And then so the project manager is kind of the bridge between the customer and the project team. And a lot of our customers now are starting to use Microsoft Team, which has its ups and downs. I'm not a big Microsoft fan, but that's what industry is using right now. So there's several other platforms that allow you to do the same thing. So, usually the project managers are really good about keeping track of emails and history. We do have marker boards that some teams will use quite extensively, and that are right next to the machines. So if you're looking for something to do or if you're having problems with something, you can go on the marker board, and then the project manager can decide how to divvy it up. Or if you see something that you can fix, you can take care of it. And that's also how the administrators can get involved. If the operations manager sees a marker board, that's overfull, he he can say, "Hey, do you guys need more help?" And, you know, it's a way for everybody to track everything.

And then last but not least, we have something we call Wednesday Lunch, which I don't know that you talked about it at all, Margaret. But every Wednesday, everybody in the company sits down for lunch together, and Isthmus pays for the lunch. And we talk about all the machines that are on the floor. So every team has to talk about their machine and where it's at. Are they on schedule, or are they behind? Do they need help, or are they starting to wind up? Do they have customers coming in? So once a week, the entire company finds out where everybody else is and who needs help. And that's just for the project labor, that's not for administrative decisions. The board takes up the administrative decisions during the board meetings. So that's for all the work being done. So it's kind of a long winded explanation, but you an idea that's how we communicate.

Marcelo: Thank you. I appreciate it.

Erin Hancock: Oh, my goodness, there's so many good questions this could go on. But I want to respect people's time. So Paula, are you there?

Paula: Yes, hi. Thank you so much. It's been just wonderful so far. My question seems a little bit tied to Marcello's question, but how do you make sure everyone's informed enough on all aspects of the business to vote in a meaningful way? Is that even a concern? Do you have commitments that each voting member has to review certain information before they vote? How do you work with that, in addition to anything you described?

Ole Olson: So all financial information, all agenda items, the topics log, all that information is open to all the membership. Everybody has all that information. Before each board meeting, the president sends out the new agenda, a link to the topics log, for open and closed meetings. So everybody is supposed to review those items before the board meetings. If they don't do that, that would revert us back into our five and six hour meetings, having to review everything from the top down. So that's a very good question, and it's one of the things -- that topics log gives everybody a chance to see where things are at. So, thank you for that.

Erin Hancock: Thank you. OK, so I will say that we will spend the last couple of minutes trying to get in a couple more questions. So but I will say if people do need to leave at the hour, I will say thank you to everyone for being here. Thank you so much to our speakers. And thank you all. We know that you get a million requests, and so thank you for coming and sharing with this audience. We will add this to YouTube and we will send the recordings and the attachments and so forth to other people after, as well.

Ole Olson: Feel free to use my email address also. I might not get back to you same day, but when I do get time, I'll answer your questions if you want.

Erin Hancock: Thanks. OK, we'll include that in the follow up email as well. So if people do need to depart, see you later. Maybe we'll stay on an extra few minutes to see if we can address a couple more questions. Sunil, did you want to unmute yourself and ask a question?

Sunil: My question is that when we are forming various committees, is there a possibility that one member can be on more than one committee?

Ole Olson: Well, yeah, I mean, that's going to depend on the size of the your organization. You know, if you're a small organization, you might have to be on three or four committees. I think I'm on three committees right now, but a couple of the committees aren't very demanding. So, especially when people are new, we recommend that they don't take on more than one, maybe two committees at a time. And so the board looks at that. When the board reviews the sign-up sheet for all the committees, the board says, "You know what? You're on four committees here, and you need to pass that down a little bit, so that you're not overburdened. So that is something the board watches. But it is possible to be on more than one committee.

Erin Hancock: Thank you, Sunil. Thanks Ole. OK, one more question, and I got a lot of votes. So real democratic situation here. This one's from Electra asking, I'm wondering how has your board member orientation changed over time? What elements have you introduced that have made a difference in how members understand governance, and collaborate within the governance structures?

Ole Olson: Wow, these are good questions. So initially, we do very little training, which is one of our weaknesses for new members. It's learn-by-doing, and initially employees could not be on committees, so they never got to experience facilitating, making decisions democratically, until they became a member. So that was something that changed probably 20 years ago, where we we had certain committees that we started to let new employees be on, if they want to do. And that also gave the board a chance to see what people were capable of. So it's worked out well for us, and we've expanded the number of committees that can have both members and nonmembers on. But that's how they learn right now. It's one of our weak points, I think, is how we get people trained.

Erin Hancock: Thank you, Ole and Margaret. Well, that brings us to the hour. There's still some activity in the chat, if people want to address any of those questions or chat back and forth, but we'll make sure to to send people lots of the good bits in the follow up email. And we'll link some of those in YouTube as well in the description. So thank you to you both, and thank you to everyone who is here, and everybody with all the great questions too. We hope that you take a lot from this, even if you take a little you'll be doing well. And again, to dig a little bit deeper and revisit some of these things, we invite you to check out the full case study. So thank you, everyone. Happy cooperating. And you can visit managementstudies.coop if you want to see more of the things that we're doing at our center, the publications, the events, the degree programs and other things. So thank you all. I'll hang out for a few minutes. We'll turn off the recording if people want to stay for a little informal chat for a couple of minutes.

 

This transcript has been lightly edited for readability.

 

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