7 Cool Companies

By Gar Alperovitz and Steve Dubb and Ted Howard, YES! Magazine. Posted September 11, 2007.

The Best Alternatives to Corporate Power

Restraining corporate power requires changing the way we think about business. This means changing who owns, controls, and benefits from it. Profits, for instance, can flow to workers, consumers, or the community -- not just to outside investors. And these businesses succeed! Examples from outside the United States include worker-cooperatives in Argentina; Grameen Bank of Bangladesh (which, with its founder, Muhammad Yunus, won the 2006 Nobel Peace Prize); and the Mondragón cooperative in northern Spain, which employs over 75,000. In the United States over 120 million co-op and credit union members form the beginning point of a growing continuum of ownership forms that controls trillions of dollars in assets. The range is vast: from small worker- and community-owned firms to state pension funds, many of which are flexing their ownership muscle to force changes in corporate policy and target investment to meet public needs. What follows are seven of the best current models.

Employee Ownership

W. L. Gore
Newark, Delaware and 45 locations worldwide
Founded: 1958 / Employees: 7,500 Annual Revenue: $1.84 billion

Employee ownership and a highly egalitarian workplace culture make W.L. Gore very different from your typical corporation. A worker may be a team leader on one project and follow others on another. Compensation is not determined by "the boss," but is tied to your contribution and decided by a committee, like many law firms. The firm regularly ranks on Fortune's "Best Companies to Work For" list.

Gore is best known for its Gore-Tex fabrics, but also is an industry leader in other areas. Gore's heart patches and synthetic blood vessels have been implanted in more than 7.5 million patients. When Gore was founded, there were fewer than 300 employee-owned businesses in the United States. Now workers own a growing share of nearly 10,000 American businesses. All told, 10.5 million employee-owners own $675 billion in business assets. This ownership stake is financed by workers' pension contributions through Employee Stock Ownership Plans (ESOPs). Workers do not "run" most ESOPs, but federal law gives them control over "major decisions" such as merger or dissolution, which leads ESOPs to keep jobs and capital anchored in home communities. Many ESOPs, like Gore, informally give workers considerable say. ESOPs also financially benefit their employee owners. The average value of an ESOP retirement account now exceeds $64,000, far greater than most people's 401(k) holdings.

Social Enterprises

Pioneer Human Services
Seattle, Washington
Founded: 1963 / Employees: 1,000 Annual Revenue: $60 million

We tend to think of nonprofits and businesses as opposites, but Pioneer Human Services shows that the mission orientation of nonprofits can blend with the financial savvy of business with impressive results.

Pioneer, which offers drug- and alcohol-free housing, employment, job training, counseling, and education to recovering alcoholics and drug addicts, finances 99 percent of its budget through fees for services and earnings generated in the manufacture, distribution, and sale of products. Businesses include retail cafés, sheet metal fabrication, aerospace precision machining (it's a contractor for Boeing), wholesale food distribution, and contract packaging.

Not only do these enterprises stabilize funding for Pioneer's social services, the businesses themselves are central to Pioneer's mission of helping "people on the margins of society" stay out of prison and off the streets. Its businesses enable Pioneer to give jobs to more than 700 men and women drawn from the ex-offender, homeless, and drug-recovery populations that it serves.

Pioneer forms part of a growing "social enterprise" trend. Using IRS data, a National Center for Charitable Statistics researcher estimated that, in 2001, U.S. human service sector nonprofit commercial income totaled $41.6 billion.

Creative Cooperatives

Weaver Street Market
Carrboro, North Carolina
Founded: 1988 / Worker-owners: 92
Consumer-owners: 9,794 / Annual Sales: $20 million

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Gar Alperovitz, Steve Dubb, and Ted Howard are leaders of the Democracy Collaborative at the University of Maryland. Gar Alperovitz's recent book, America Beyond Capitalism, is now available in paperback. For additional examples of alternative corporate models, see their website at www.community-wealth.org.