24 November 2009

Case Study: Zebra Collective

Last week I went to Exeter and Plymouth to visit Co-operativesSW and some other Co-operatives including Co-operative Enterprise Unit, Meta4Theatre and Zebra Collective. Below is a quick look at Zebra Collective a training and facilitation worker co-operative based in Plymouth.

Most of their income derives from delivering training - particularly in the areas of equality, participation and communication skills. Operating mainly with 3rd sector and public agencies in the community, health and social care sectors. Zebra is an organisation motivated by its strong commitment to its values of social justice and consistent in the quality of its work.

Zebra collective was founded in 2003 as a company limited by guarantee and run as a worker co-operative. Three founder members with experience in the health and social care sector wished to set up an independent business that offered good quality employment.

They received generous and excellent support from Co-active (formerly Plymouth Co-operative Development Agency) and chose the co-operative model as they agreed with the Values and Principles.

Coming from a public/grant-aided sector background some members found the culture change of working in a co-operative business difficult “if you don’t deliver work you can't get paid”. Some members did not make this transition and left, but others persevered. The co-operative survived and had steadily grown in strength.

Four phases of development:
  1. Started with 3 founders with 4 more joining quite rapidly after start, structure was informal collective with only a few earning sufficiently for full time employment.
  2. As a number of members were partly or fully employed elsewhere, the co-operative began to split and inadvertently the feel of a management committee merged. This was tackled as the co-operative created a definitive split between the core membership group and a wider group of associates to properly segment membership and improve Governance. Those members not doing paid work for Zebra gave up their membership and became Zebra Associates, an informal collective that exists to this day (see below)
  3. Zebra in the last 15 months has gone through a growth phase and is now up to 7 members (all but one part-time). This can be attributed to a positive cycle of gaining more work, including winning larger contracts, that has enabled them to recruit good people and therefore deliver more work.
Some recent successes
  1. 2008 & 2009: winning contracts with regional government to support local authorities in implementing the empowering agenda, including the "Duty to Involve" their citizens.
  2. Significant growth in demand for its equality and diversity training, including winning and keeping contracts to deliver equality and diversity training for Devon County Council and winning a new contract for such work with Westward Housing. In September 2009, Bernadette Chelvanaygam was recruited as Zebra's new Equality and Diversity Lead.
  3. After receiving some training in solutions focus communication in October 2009, in November Devon County Council began using solution focused techniques to review it strategic plan and asked Zebra for more training.
  4. Facilitated Co-operatives SW AGM, 2008 & 2009.
  5. Attained Social Enterprise Mark, July 2008.
Current Structure
Zebra has a flat management and pay structure. As members all get paid the same irrespective of role; they work pay out as a proportion of two main roles carried out: training/facilitation (4/5) and administration (1/5). At the outset in 2003, in their area the market rate for a facilitator was roughly £30,000 and £14,000 for an administrator, they therefore worked pay out to be £27,000 (it has since risen). Zebra also operate good flexible working conditions like 6 weeks annual leave.

Zebra operate on the more than profit principle and are looking to enshrine this in their governing documents. Any surplus earnt is used to offer free or subsidised work to good organisation with limited ability to pay and to pump-prime new initiatives.

Membership is split into core members (Employee/Directors) and associates. Some associates get the odd bit of work to fill in gaps in capacity, others act like a “friends of” and get involved in recruitment panels and in other more voluntary ways. Zebra organises events for Associates to keep them engaged in their work. The Zebra Associate group exists also for collective action beyond that of the Zebra worker co-operative, e.g. climate change action and other social justice campaigns. etc

The team at Zebra Collective believe in and employ their work, and frequently reflect on the benefits of worker ownership of their organisation. They have great hopes for the co-operative sector and are keen to contribute actively to its development. If you in the SW please get in touch with them.

23 November 2009

Why have the employees bought West Highland Free Press?

This blog was posted at www.businesszone.co.uk by Giles Simon and I have reposted here for members interested in employee ownership.

It’s well known that local newspapers are in crisis. Advertising revenue is down for many in the industry, we’re seeing big changes and vibrant discussions across the newspaper industry about alternative business models. Journalists and employees of a local paper in Scotland – the West Highland Free Press – think they’ve hit on to a viable option. Whether it will work across the industry is a different question, but this option looks set to work for them.

The paper was founded by five friends in 1972 as a weekly newspaper. But as they began to pursue new interests they felt the time had come to sell their shares in the newspaper. Rather than selling the business on the open market, they approached the employees of West Highland Free Press to see whether they would be interested in buying the shares.

Ten employees now own and run the business, and the creation of an employee benefits trust will hold the shares for the employees and ensure that the paper continues to run at the heart of the community.

One of the biggest challenges facing innovative business models like this is securing finance, so when the traditional bank route closed, the Baxi Partnership, which controls a £20 million fund specifically for facilitating employee buyouts, was able to bring together a funding package that allowed 10 employees to purchase the title from the paper’s five founders.

Baxi also worked with other specialists, including Co-operative Development Scotland, which works to increase the number of employee-owned and co-operative businesses in Scotland, and Co-operative and Community Finance, which has been providing loan finance to co-operative enterprises since the 1970s.

Employee ownership is no panacea for a failing business or industry – they have to compete and make a profit like all businesses. So why do the employees at West Highland think that employee ownership can work for them?

Paul Wood, Managing Director there, explains:

“Despite what is happening in the wider industry we are optimistic about the future. The Free Press has always been a breeding ground for talent and employee ownership will not only help us retain that talent but make even better use of it.

“Our readership is loyal and discerning and we think we can build on this base and further develop the business through the greater participation that employees will have in the way the business is run. Through our staff we are already identifying opportunities for developing content, utilising new-media and developing a news agency side to the business.”

This has always been one of the strengths of employee ownership – employees that are motivated, care about the business, put effort in and go the extra mile to ensure that the business continues to grow.

As Ian Taylor of Co-operative and Community Finance puts it, “West Highlands Free Press is a fine example to show how employee buyouts can increase the motivation and job satisfaction of staff. For this company, employee-ownership was the only business model which would enable the paper to continue running at the centre of its community and ensure all members of staff job security.”

Sarah Deas, Chief Executive of Co-operative Development Scotland (CDS), agrees: "Research shows that employee-owned businesses [like John Lewis Partnership, Eaga or Loch Fyne Oysters] are more productive and sustainable, so there is enormous potential for this type of ownership model to contribute to the development of Scotland's economy.”

Employee ownership might not be the answer for every local paper. But as West Highland Free Press have realised, if there’s a market then an employee buyout can create more motivated and committed employees who actively help grow and develop the business.


04 November 2009

Case Study: Whomadeyourpants?

I always enjoy supporting new co-operatives and hearing their story. Here is a case study of Whomadeyourpants? by Becky John one of the founder members.

I had the idea in May 2006 to start a co-operative underwear business and started making formal enquires to CAN (Co-operatives Assistance Network) in January 2008. I quit my job on June 30th 2008, and started full time work on this on July 1st 2008. We were incorporated and registered with the FSA on the 12th December 2008.

We are based in Fairways House, Mount Pleasant Industrial Estate, Southampton, SO14 0QB. Currently just three founder members, with40 volunteers around the country. We are training 25 women who will become members when they are employed by us and complete probationary periods.

Why did you choose to set-up as a co-operative?
I believe in the concepts of fairness, equality, democracy and also sharing responsibilities and rewards.

We set out to empower marginalised women. We basically mean women who have had little opportunity or who have had opportunity taken from them. We define this as women marginalised by their status as refuges or up to 20% may be marginalised by other factors such as being taken out of school as a child due to abuse (at the discretion of the committee).

This came from a number of things. I had become empowered through 2.5 years counselling at Rape Crisis and wanted to share that feeling. I knew there was a huge refugee population in Southampton. And I knew that women are, even within marginalised groups, some of the most marginalised.

Women who have had really hard times, and have very little opportunity offered to them in our society often become isolated and develop mental health issues. It can be hard for people to feel powerful and involved. We believe that supporting the women to feel strong and capable is critical to their real and full empowerment.

How did you start?
By talking to Nathan Brown of CAN, and then Chris Funnell of SACDA. We received support around everything from co-operative structures and how they work to bid writing and registration. We also use the SACDA office as our registered office which was handy as before we had premises I didn't want it to be my house!

What issues have you faced?
There has been constant headaches and waking up at 3 in the morning moments. In particular funding is a nightmare, so many people don't understand social enterprise or worker ownership and the effects of that, ie, that we can't take equity funding.

We never seemed to be at the right stage to get this or that fund and funders all want the same information in a different format. It takes AGES to get grants applied for and decisions made, which is understandable, but it would help to plan ahead a bit more than I did - I tended to be firefighting today's problems rather than planning ahead to prevent the ones coming in 6 months.

Grants being paid in arrears by some funders makes for a huge cash flow problem. As we are a start up, we deliver training up front before we are making pants to sell - so we are spending but not generating income. Cash flow has become a word I dread.

Negotiate with suppliers on utilities - ask to spread bills over a few months. If you don't ask you don't get and they can only say no.

Bureaucracy and paperwork - tedium that is vital

Being REALLY busy means mistakes and cock ups can happen - getting more people involved as volunteers if 1) they are good 2) they don't need micromanaging and 3) they know you can't pay them is brilliant.

Juggling all the balls in the air - project managing everything from finances to supplies to premises to which kettle to buy to which bows to designs to training to recruitment to the day to day stuff like answering emails- it takes huge amounts of time and mental energy. I'm almost constantly exhausted.

But the joy is, I love it. I know I'm doing this because I want to and so, yes, it's a headache and yes it's hard, and yes some days are truly awful - but I still know I want to come to work every day.

What do you do?
To the public - we make and sell gorgeous ethical pants.

To marginalised women -

We provide opportunities for work, learning at various levels, computers, social space, advice space - all in a safe women only environment.

We provide access to a range of advisers from partner agencies on languages, personal finance, safety, computer training, supporting family dynamics - whatever the women want.

Have you had any major achievements or recent successes?
Happily they seem to be coming every day:
  • Just been offered an interest free loan by a venture philanthropist
  • Got through to last stage of level 2 UnLtd award completion (interview 5/11/09)
  • Been approached by a shop locally to sell our products.
  • It's a massive success that we are here - we are supported by volunteers working on bookkeeping, web design and build, photography, professional PR, copy writing, marketing materials design, IT suite set up, PA.
  • Invited and gave a lecture to a local Univeristy MSc Entrepreneurship course and got 10 willing volunteers out of it - their voluntary work for me is coursework for them.
  • Received a bursay from NCVO to visit and learn from the lovely Infinity worker co-op.
I love that people just want to be involved.

What approach have you taken to starting up?
My approach tends to be 'I want to do that, what, who can tell me what I need to do' and then talk to them. Talking to people is vital - they know stuff you don't.

Find people involved in any areas you want to be involved in and talk to them, ask questions, make sure there is always someone you can call whatever you need to know about. DO NOT try to know everything yourself. We are linked with CLEAR, a local refugee organisation, Solent MIND, various community groups, various churches, local Universities, Southampton Women's Forum.

Don't presume anyone is 'not your type' - talk to ANYONE about what you're doing and see what they have to say. If you are passionate people WILL help.

Any pros and cons associated with choosing a co-operative model?
We probably could get more money if we were a charity, but I still think this is the only way we can achieve our social aim. Members controlling the direction of the business democratically is key and I think the women will benefit from seeing their work pay off rather than just getting stuff given to them.

What are your future plans? Loads! whomadeyourbra? in 5 years time. Potential for global expansion, in times of resource scarcity let's look at keeping skills in each country in case there's a day when we can't import everything from china.