Worker Ownership in Practice

A graphic showing connecting lines between different geometric shapes with the title text "Worker Ownership in Practice" and subtitle text "Behind the scenes at our co-operatively operating organization in Detroit"

For many who have never participated in ownership or leadership roles, the practicalities of being a worker owner might be a black box of unknowns. When we started the conversion to worker ownership, only Erica had high-level experience in leadership, and Stephanie and Laura both had apprehensions about expanding their roles from project management to business management.

“When I first got married, my husband was talking about starting a company and I vividly remember saying, ‘I never want to own a company.’” – Stephanie

Fortunately they all came around to build the transition team, and have been building leadership capacity all along. Here’s a peek behind the scenes of what is expected of worker owners at D3 to give you a basic understanding of what it takes to be involved in a cooperatively owned business.

 

What are the different roles of worker owners, and what time commitment is associated with those roles?

There are five core officer roles, facilitator, scribe, administrator, committee coordinator, and alternate. Each role is a one year commitment, and roles are elected at the beginning of each year. Each worker owner nominates themselves for at least two of the positions by putting their name in a box to be randomly selected by the outgoing administrator. Self-nominating for two positions was important so there would be some variety in who holds each role. Everyone comes to the table with their own strengths but we also wanted to leave room for people to develop new strengths by exploring new roles..

The facilitator keeps our meetings on track and focused solely on worker-owner subject matter, and guides our group through decision-making.. The time commitment for the facilitator is mostly constrained to the quarterly meetings.

The scribe creates the agendas that get distributed to each worker owner, takes minutes during meetings and archives the minutes to make sure detailed records are maintained. The scribe must be attentive in taking notes that capture the essence of the meetings with both topics and opinions, so that people absent from the meeting can educate themselves and contribute later. The work of the scribe mostly takes place during the quarterly meetings, with some time before and after each meeting to prepare the agenda and archive minutes.

The administrator schedules and notifies everyone about the quarterly and committee meetings, and distributes all relevant materials to the attendees. The administrator also maintains the records of meeting minutes, important documents like the articles of organization and operating agreement, records of accounts for current and recent fiscal years, a record of worker owners and their roles, and the eligibility and progress of worker-owner candidates.

The committee coordinator maintains the list of each committee, its goals, members, and tasks. They facilitate communication between the committees and the full worker owner group by monitoring and sharing progress of the committees. 

The alternate can fill in for any of these positions, primarily during quarterly and committee meetings, and their time commitment is minimal as attendance and participation of all worker owners is prioritized.

As we continue through our first year of worker ownership, we’ll get a better understanding of the time commitment for each position and tweak responsibilities as necessary.

 

How many meetings are worker owners expected to attend, and what is involved in a typical meeting?

The worker owners have five regularly scheduled meetings each year: four quarterly meetings and one special meeting to conduct a year end financial review. The quarterly meetings have scheduled topics with a quarterly financial review included in each, and also include reports from committee meetings and any other unscheduled special meetings. The first quarter meeting welcomes any new members, does a preliminary year end financial report, and discusses strategy updates.

The second quarter meeting agenda has a quarterly finance review, along with a review of the operating agreement and policy manual. This meeting will also assess the employees eligible for worker ownership and vote to have them join.

The third quarter meeting focuses on welcoming any new members and strategy updates.

The fourth quarter meeting reviews the annual budget for the following year, including a discussion of the pay ratios that are calculated annually to compare the pay of the highest and lowest paid employees and ensure there isn’t an enormous difference between them. This meeting also includes the election of new members, and votes to move eligible employees to the next phase of the candidate process.

 

What voting rights does each worker owner have? Is there a difference among worker owners?

Each member gets one and only one vote on all matters that members vote on, and votes by each worker owner are equal, regardless of role or title. Proxy voting generally isn’t allowed, unless the Executive Directors and a super majority of members approve it.

 

What are some of the decisions that a worker owner is expected to vote on and contribute to?

The worker owners are responsible as individuals and a collective to steward D3 in the best interest of the Metro Detroit residents D3 serves. To that end, worker owners make decisions about the mission and vision of D3, adapting D3’s broad programming to changes in our organizational environment, whether to pursue potential projects that appear worthwhile but fall outside of the current strategy screen, and the finances and budget that makes our work possible. Worker owners also vote on the employment status of the Executive Directors, and the acceptance of candidates to the worker owner group.

 

How does being a worker owner impact on/off time?

Membership activities are not considered part of a typical work week of D3 employees, though for ease of scheduling these activities are often performed during normal work hours of D3 employees. While we plan as best as we can, occasionally effort outside of normal work hours is required to ensure that D3 remains healthy. Worker owners don’t receive any extra or less time off than non-worker owners. 

 

What “heroic actions” might be expected of worker owners outside of normal business hours or responsibilities?

Membership activities are not considered part of the typical work week responsibilities of D3 employees, but we try to avoid emergencies and late nights by planning ahead. When the moment necessitates, as it has occasionally in the past, a worker owner might be called on to work late gathering documents and paperwork for an urgent proposal, swiftly handle the abrupt departure of a worker with access to several key systems, or other critical tasks behind the scenes that are out of the scope of typical workers.

 

How do worker owners without experience running a business meaningfully contribute?

Building the worker owner model for D3’s transition helped the current ownership team become more comfortable with what it takes to run a business. Future worker owners will have time to learn about the business side by going through a curriculum, and also engage with D3’s open culture that values how individual life experiences can bring new ideas and perspectives to the table.

We’ve already seen how each worker owner can make the group stronger simply by being present and sharing their unique insights. For example, Erica has operated D3 for many years on her own and understands the relationship of D3 to the community very well. Stephanie brings finance experience from her master degree program. Amanda has a great understanding of the infrastructure needed to ensure D3 continues operating smoothly. The team approach ensures that all these skills and experiences are leveraged when considering big decisions for D3.

 

What is the level of financial literacy a worker owner is expected to have and learn before becoming a worker owner?

Our worker owners had varied levels of business-related financial literacy when we started the transition. Part of the process was building those skills up, and we will continue that for future worker owners by including financial literacy as a core part of the worker owner curriculum. We also implemented a monthly financial review for the entire team, worker owners and staff, so that we can build a shared vocabulary and promote financial transparency from the beginning of employment.

 

What is an equity buy-in, and what is the D3 worker owner equity buy-in?

Whether an investment in the start-up cost of a new business, or an ownership stake in an existing business, it is common for co-ops to require an equity buy-in for new members. This equity buy-in distributes the financial risk associated with the business and helps determine the distribution of profits. An equity buy-in can be calculated by an equal division among worker-owners, based on one’s ability to contribute, or a nominal amount to represent a worker-owner’s commitment to the co-op. The D3 worker-ownership model does not include an equity buy-in because we didn’t want money to be a barrier to participation in the worker owner process. All voices and perspectives are important in a democratically operating business, including from those without the financial resources to make an equity buy-in.

 

 

Do you have questions about our worker-ownership that we haven’t answered? You can submit requests for more information on any topic via an AskD3 request.

Copyright © 2022 Data Driven Detroit. All Rights Reserved.
TERMS OF USEPRIVACY POLICYCONTACT US