As you read in my last post, the recent research conducted by two scholars, corroborates earlier studies and concludes that the worker co-op model goes beyond just providing an employment opportunity (which is in itself a vital piece of successful reintegration) but its culture and relational environment “provide(s) holistic and individualised resettlement support for both former/prisoners and their family… which create(s) opportunities for social participation” and “a sense of self-efficacy, of agency as active participants in the social world.” From my own experience, which includes hours of chatting with and listening to prison inmates and those who have been released, I would add to that the vital importance of gaining a sense of hope, dignity and pride in being part of a viable, pro social entrepreneurial venture.
The choice of the co-op model seems to be supported by research that shows that it can be a more resilient way of operating than a traditional non-worker owned operation:
Co-operatives in British Columbia between 2000 and 2010 had a five-year survival rate of 66.6 per cent compared to conventional Canadian businesses what had a 43 per cent and 39 per cent five-year survival rate in 1984 and 1993, respectively.
Alberta co-operatives created in 2005 and 2006 had a three-year survival rate of 81.5 per cent compared to 48 per cent for conventional businesses in that province.
A 2008 study in Quebec showed that co-ops had a five-year survival rate of 62 per cent and ten-year survival rate of 44 per cent, compared to 35 per cent and 20 per cent, respectively, for other Quebec businesses.
Why? Studies point to 3 factors:
- Lower worker turnover
- Low absenteeism
- Better quality of products and services.
The Co-operative Learning Centre states that “this is the result of the high motivation of workers. They know that the business belongs to them. They know that the better their work, and the greater the surplus the enterprise generates at the end of the year, the more they can increase their income through returns.”
In an article entitled Worker Cooperatives Are More Productive Than Normal Companies, Michelle Chen pens “A close analysis of the performance of worker-owned co-operative firms — companies in which workers share in management and ownership — shows that, compared to standard top-down firms, co-ops can be a viable, even superior way of doing business.”
So, what needs to be in place for a worker co-op to be viable? Hilary Abell, a leading American expert on cooperative development in low-income communities published a report in 2014 Worker Cooperatives: Pathways to Scale, in which she identifies the following factors:
- Ongoing training and cultivation of co-operative culture
- Design for business success
- Effective long-term support
- Patient capital
- Strong management and social entrepreneurial leadership
- Good governance
In the next post, I will outline the enterprise that I am proposing and the reasoning behind that.
I highly recommend watching the interview of Ms. Abell in which she speaks about the transformative impacts of co-ops, their role in the ecosystem, keys to success and issues relating to funding. Click here to see the video.