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Catalyzing worker co-ops & the solidarity economy

Creating a Cooperative Culture

Lessons from Mondragón

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May 29, 2014
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cross-posted from the Philadelphia Area Cooperative Alliance blog

I recently traveled to Spain to visit Mondragón, the world’s largest worker cooperative. The week-long seminar in Mondragón was organized by Praxis Peace Institute, a non-profit peace education organization based in California. I received a Massena Fellowship to attend the program. I also went to Madrid, where I visited FECOMA, the Federation of Madrid Cooperatives and Gredos San Diego, a network of 8 cooperative schools that are owned and controlled by teachers and staff.


While visiting Mondragón, I was particularly interested in hearing about methods for building and maintaining member engagement in co-ops. This is partly because I do communications and outreach work for PACA, but more importantly, co-ops with active member participation are stronger, more resilient, and more democratic. In this article, I describe some practical ways that Mondragón and Madrid co-ops are engaging their members and I try to identity similar practices among our Philadelphia co-ops.


What is Mondragón?

Mondragón is the name of a town in the Basque Country in Northern Spain. This town is home to Mondragón Corporation, a network of 120 worker cooperatives.

In this article, I am mostly going to focus on my personal reflections and analysis. If you want a quick, straight talk introduction to Mondragón, read this recent column in the Huffington post by Frank Islam and Ed Crego about worker ownership, Mondragón, and the labor movement. If you’d prefer a more in-depth introduction to Mondragón featuring many facts, figures, and dates, read their prizewinning entry for a Harvard Business Review/McKinsey management innovation competition.



Member engagement and cooperative culture in Mondragón and Madrid co-ops

Mondragón and the Madrid co-ops had some lessons to share about about how to create a culture of democratic participation. The cooperative model is built for democracy, but “one member, one vote” is only an invitation. Co-op members still need to show up to meetings, and they need to be informed about what they’re voting on. More participation means stronger co-ops that actually reflect the needs and goals of their members.


The cooperative model is a structure, and we have to create culture within that skeleton. In an article titled Worker Co-ops: culture will trump structure, Michael Johnson of Grassroots Economic Organizing writes:


“Here’s my basic take: there is an over-riding assumption that the right kind of democratic structure will produce a high level of high quality participation. I believe this is a faulty and unexamined belief. A lot of hope goes with it, but there is little factual support for it. 

My conviction: high degrees of high quality participation come from a solid democratic structure embedded in a strong democratic culture.


Mondragón had some interesting strategies for maintaining member participation. For example, if a member doesn’t attend a general assembly meeting, they don’t get a vote at the next meeting. While this seems a bit harsh, proxy voting is allowed – one member can cast their own vote and up to two proxy votes. This policy incentivizes members to make sure their vote gets cast even if they can’t attend the meeting.”


Another piece of this strategy is that at large co-ops, there are small group meetings called charlas (“chats” or “discussions”) leading up to General Assemblies. These meetings convene 30 people or so to have a deeper discussion of the agenda and issues of the General Assembly meeting. The actual full meeting can then spend more time making decisions and less time deliberating, although deliberation certainly takes place. The small group meetings give worker-members a chance to ask clarifying questions. The results of this strategy are impressive: at large co-ops, about 70% of members vote on a regular basis, but at small co-ops it’s more like 90-95% participation.


How can we adjust and apply these strategies in our co-ops here in the United States? Making voting more accessible, such as by offering online voting, seems like an easy out – but only if the goal is limited to increasing the number of votes. Clicking a button on your laptop at home doesn’t do much to make you feel like part of a group or community. Engagement has to happen on an ongoing basis before the moment of a vote. In worker co-ops like Mondragón, there are ample opportunities to have discussions with other members and deepen relationships that build community and trust. Many food co-ops use working-member programs to invite members to get more involved in their co-op while also lowering costs.


In addition to working member programs, some Philadelphia co-ops have gotten creative in engaging their members. Swarthmore Co-op and Weaver’s Way Co-op both established programs to engage young co-operators when they come into the store. At Weaver’s Way Co-op, the program is called the ABC Club. Children under 12 who are members of the club receive a free apple, banana, or carrot whenever they visit. Swarthmore Co-op’s program is called Co-op Sprouts. Sprout members receive a sticker book that they get stamped each time they visit, and they can then redeem them for prizes and healthy treats. These programs are a great example of how to create personal connections within a large membership body.


At Mondragón, member engagement flows naturally from cooperative education. In their philosophy, education leads to increased participation and ultimately to social transformation. You are probably familiar with the 7 international cooperative principles. Mondragón has 10 with education placed at the core.


You can explore what they call their “Corporate Management Model” more on their website. Education was certainly an essential part of Don José María Arizmendiarrieta’s beliefs. He wrote, “it has been said that cooperativism is an economic movement that uses education. We can alter that definition, affirming that it is an educational movement that uses economic action.” For an overview of the role of education in Mondragón, check out this blog post on the Adventures in Free Schooling blog.


Philadelphia area co-ops are already offering great educational events to their members, but these events don’t tend to address the cooperative model. Credit unions offer budgeting and credit seminars, food co-ops host nutrition workshops, and healthcare co-ops give webinars on changes to Medicare. Some co-ops are building up their cooperative education programs. For example, I’m part of a book club at my food co-op, Mariposa Food Co-op, that looks at the role of cooperatives in building social justice. At Mondragón, cooperative education is framed as teaching people group process, for example, teaching members how to make decisions together. Cooperative education like that is not currently being offered on an easily accessible basis in the Philadelphia area. This is a need that PACA is hoping to meet. As a start, we have been working on a Co-ops 101 presentation to be used at co-ops of all sectors in the Philadelphia area.


Beyond this preliminary offering, we can begin to develop education that improves peoples’ cooperation skills. I’m looking forward to arranging classes on meeting facilitation, reading financial statements, and group decision making. A presenter at Mondragón made an excellent point that we could declare our co-op to be totally transparent and leave the accounting books out for everyone to see, but it’s a fairly empty gesture if our members don’t know how to read financial statements. If you’re looking for resources on cooperative education, I highly recommend Toolbox for Education and Social Action, a co-op based out of Massachusetts. Check out their 7 steps to a more democratic co-op poster series.


Co-ops telling their stories

As I was leaving Spain, I noticed that I had amassed a pretty serious pile of brochures, magazines, books, and reports from both Mondragón and Madrid co-ops. Professional photographers from the marketing departments came to take pictures of our group’s visit in Mondragón and my visit to a cooperative school in Madrid. These photos would be used in their glossy, full-color magazines. I was impressed by the fact that these co-op organizations are constantly, beautifully articulating their story and their mission both to themselves and to outsiders. As someone who does a lot of communications and outreach work for PACA, I was inspired and also overwhelmed. I still haven’t finished reading all of the materials they gave me. Does a mountain of brochures guarantee that co-op members are engaged and invested? Nope. But having shared stories does create culture.


I picked up a few copies of the glossy monthly Mondragón magazine, TUlankide, whose name itself is a statement of group identity. It blends Spanish and Basque, as many conversations and materials at Mondragón do. TU stands for Trabajo y Unión (Work and Union) and “lankide” is Basque for “coworker.” One of the copies I picked up has a great article on cooperative paradoxes which thoughtfully explores questions such as “can egalitarianism be unjust?” and perhaps too-familiar questions like “does trying to reach consensus sometimes paralyze us?”


TUlankide feels like a blend between a corporate publication (there are no ads) and a special-interest magazine. The articles appear to be written by worker-members from various cooperatives. Because it serves a larger readership beyond one co-op, items like meeting minutes aren’t included, so it’s also accessible to someone who picks it up (like me) who is just interested in the sector in general. Gredos San Diego, the network of cooperative schools in Madrid, also has a beautiful magazine called Cuadernos GSD.


Philadelphia co-ops are also producing their own media content. Weaver’s Way Co-op has a monthly newspaper called the Shuttle which is mailed to member households and is also available in co-op stores and other drop spots throughout the neighborhood. With its ads for local schools and businesses, the Shuttle feels like more of a community newspaper than TUlankide. Another example of co-op produced media is The Energy Co-op’s blog. Staff members of The Energy Co-op each contribute articles to the blog. Recent posts include a story about commuting to work by bike, profiles on a local food co-op and a local credit union, and a guide to winterizing your home to keep energy bills low.


Through member engagement strategies like working member programs, education, and media, the co-ops in Philadelphia create culture at their co-operatives. Our task now is to unite these institutions in launching a regional cooperative culture and identity. PACA is leading this effort, and we are lucky to have such a diverse network of cooperatives that are excited about building this culture together. Mondragón’s example shows us that it’s possible to bring cooperation to the mainstream and challenges us to be persistent and creative in finding ways to get there.


Mondragón, global capitalism, and implications for new worker co-op development

Mondragón’s goal is to create employment in Basque country, and they certainly have accomplished that. About 33,000 people in Basque country are worker-owners in Mondragón cooperatives. Overall, Mondragón cooperatives and their subsidiaries provide 83,000 full time jobs all over the world.


A disclaimer here: these are my views and not PACA’s. My basic observation is that within Basque country, Mondragón is a radical social institution and outside of Basque country, Mondragón is a pretty typical multinational corporation. Mondragón has implemented an aggressive “internationalization” strategy because they can’t keep jobs in Basque country without producing inputs abroad where labor is cheaper. Their competitors are doing it, so, to survive and compete, Mondragón has to do it, too. It seems hypocritical to me that Mondragón has 14,000 overseas workers who are not owners, but I also realize that Mondragón is operating in a system that only values profit maximization. A recent article by Gar Alperovitz and Thomas Hanna addresses the issue of Mondragón’s cooperativism colliding with global capitalism by discussing the recent bankruptcy of Fagor, one of Mondragón’s largest cooperatives:


“Almost certainly many smaller-scale cooperatives can succeed, if carefully managed, in small markets. But moving to scale – as Fagor did in entering the global market for appliances – means that the fate of the institution also rests on the fate of the larger market, and on competition within that market, whether global, as in the case of Fagor, or domestic, as in the case of many other industries.”


Another way to see this is to borrow from James Boggs’ criticism of unions in his prescient 1963 work The Next American Revolution: Pages from a Negro Worker’s Notebook:


“It is due to the fact that all organizations that spring up in a capitalist society and do not take absolute power, but rather fight only on one tangential or essential aspect of that society are eventually incorporated into capitalist society. The fact, the key to the present situation, is that from the beginning the union did not take absolute control away from the capitalists.


Unlike the unions Boggs is criticizing, worker co-ops do take control of production, but their transformative power is only as strong as their willingness to use that control to break from the status quo. I observed above that democratic structures alone cannot create strong cooperatives. Similarly, a worker cooperative structure that adopts corporate priorities to better compete on a global stage is likely not fulfilling the radical possibilities of that structure.


On a more practical note, Boggs also predicted the automation of industry which has eliminated the vast majority of factory jobs in the half-century since he wrote. Industrial worker co-ops, like the majority of those in Mondragón, have suffered with the rest of the industrial economy in that transition. It should be no surprise then that our two biggest worker cooperatives in Philadelphia are in the service sector: Home Care Associates provides in-home care and Childspace Management Group operates three childcare centers. These jobs are place-based and could not possibly be outsourced. Worker cooperatives can be high-road companies in these and other low-wage job sectors. Home care cooperatives, for example, can provide higher quality service than conventional companies because they have less turnover (see this University of Wisconsin report on home care cooperatives for more information).


Thinking strategically about where co-ops have an advantage over conventional businesses can help focus our development efforts. Mondragón shows that industrial worker co-ops are still very much a possibility, but perhaps new manufacturing co-ops would be better off producing goods for local and regional consumption and not exporting to global markets where the bottom line rules. Mondragón is an inspiration but also a warning. Co-ops that try to compete in a global market designed and dominated by multinational corporations risk losing the powerful democratic culture that makes them vehicles for change.


Go to the Scaling-Up the Cooperative Movement theme page

Caitlin Quigley is a member of the Steering Committee of the Philadelphia Area Cooperative Alliance. She tweets at @cequigley sometimes.     

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