With the growing trend for collaborative organisations, informal co-operation in conventional businesses is on the rise. What are these trends, and will they herald a new era of co-operation?
Co-operatives don’t have a monopoly on co-operation. In fact, there are a growing number of organisations using very co-operative processes to organise and manage themselves.
This is most evident in the rise of ideas such as collaborative consumption, open innovation and co-working, which seem to signal the emergence of a new organisational trend in which workers, consumers and suppliers engage with one another directly, without hierarchy.
An area where this is becoming particularly obvious is among freelancers. Latest figures from the Office for National Statistics estimate that the UK has 4.5 million self-employed people – 1.7 million more than five years ago.
These range from traditional self-employed tradespeople, such as plumbers, to unskilled workers in social care and retail and a rising number of skilled freelancers in areas such as IT and the arts.
Writing for the freelancers’ trade association PCG, Prof Patricia Leighton explains the rise by saying that freelancers “find this way of working fulfilling. Many choosing to work in this way have rejected standard employment, which they feel requires conformity and represses creativity”.
Research from the Resolution Foundation, however, shows that 450,000 of those who have become self-employed over the last five years would rather have secure employment.
This emerging generation of freelancers has been referred to as the ‘precariat’ – a new class of workers occupying an insecure place in the labour market, while journalist and author Paul Mason coined the term ‘graduates with no future’ to sum up this group.
Sion Whellens of Principle Six provides support to arts collectives and co-operative start-ups in the creative industries. He agrees that we’re seeing “the dismantling of employment. There is a rise in freelancers, but you’re really talking about the self-employed and underemployed”.
He says that among artists and designers, however, “there is a groundswell of people interested in co-operation”. They are collaborating, forming collectives and co-ops – “but it is not necessarily the same model as the co-operative movement, as it stands, thinks”.
“They have ideological commitments to co-ops and the commons,” he says, “but they are organising out of need and necessity. These groups are in constant flux because they are operating in a context of crisis. There’s a group I’m working with that has had three revolutions in three months. It’s like a furnace of activity. By its nature it’s very volatile.”
One place this sense of movement and collaboration is being demonstrated is at The Cube, a co-working space in central London that is emblematic of the new trend for collaboration.
Although it meets the practical needs of around 90 freelancers by providing them with desk space, meeting rooms and networking events, its users value it for much more than this.
“You’re not coming in for the space,” says Araceli Camargo, one of the two founders and owners of The Cube, “you’re coming in for the community.”
Established in 2009, The Cube is designed to foster collaboration. “There’s an interview process,” says Araceli, “so we don’t take people from the same industry. That gives people the opportunity to collaborate.”
She adds: “Collaboration doesn’t happen if the environment isn’t conducive to it. Our spaces are open plan and designed so that everyone sits on a long table, which allows people to talk.”
For Araceli, collaboration is at the heart of The Cube. She thinks that the more flexible approach to work it embodies is natural for younger generations who “don’t want to be employed. All of my friends work like this. This is new to business, but in the creative industries, this is what was always done.”
It is not just freelancers that are becoming more co-operative. Some large and successful businesses are pioneering new models of working, too.
Valve, the US software and games developer behind the Half-Life and Portal titles and digital community gaming platform Steam, has a radical approach to management. “We’ve been boss-free since 1996,” its website announces. “Imagine working with super smart, super talented colleagues in a free-wheeling, innovative environment – no bosses, no middle management, no bureaucracy. Just highly motivated peers coming together to make cool stuff.”
The formal way to describe their structure is ‘open allocation’ – a management style in which the workers choose what they work on. Until last year, Google famously had an 80:20 rule for its engineers: 80% of their time was allocated by management, 20% free to develop their own projects. New products such as Gmail and Google Reader came out of this.
At Valve, workers decide how they will spend 100% of their time. The workers decide which projects they will work on. Valve has put wheels on everyone’s desks, symbolising the worker’s right to move between projects.
Yanis Varoufakis – a Professor of Economics at the University of Athens – was the ‘economist in residence’ at Valve in 2012, observing up close how the business operated.
“Employees have the capacity and freedom to choose how to allocate all their time, rather than a fraction such as 20%. The only constraint is their own expectation of what is worthwhile and, additionally, of their own image in the eyes of others in the company.”
Explaining how the employees respond to this structure, he says “there seems to be broad satisfaction with this type of flat management organisation. Valve employees have put a great deal of effort and personal investment to working within that type of organisation.”
Dave Boyle, of Principle Six, has studied Valve in detail. He points out that in fact, its two founders own the business.
“Quite a lot of people involved in open businesses think something is wrong with the way things have been organised,” he says. “In Harrington’s case [one of the founders], it’s very much ‘we don’t want to waste time with structures’. They are not in the business of changing the way companies are run, they just want to make great software.”
Open allocation works for both small and large businesses; while Valve has around 300 employees, Gore is a global firm with 10,000 employees, or ‘associates’ as it calls them, in the US, UK, Japan, Germany and China.
Famous for its high quality outdoor gear and specialist medical and electronic products, it is less well known for its non-hierarchical approach to management. The business was founded by Bill Gore in 1958 and remains a family business, although an employee stock ownership plan was established in the 1970s that has given the associates some ownership. The company does not want to disclose how much control its employees have, but confirms that the board of directors contains family members and associates.
As Henri Bryan, a UK associate at Gore, explains: “Bill Gore worked at DuPont [a large US chemical company] during the war when there were more direct communications and less hierarchy. He found that the flat structure aided the development of ideas and promoted collaboration.”
He started Gore with what the company calls a ‘lattice’ management structure. Instead of managers and employees, there are leaders and followers. The structure pre-dates the idea of open allocation but operates in much the same way, with teams forming around leaders with strong ideas.
“Leadership is a natural progression,” says Henri. “People follow someone if they are the most knowledgeable, informed and trusted. This principle works at all levels of the organisation. With our chief executive, the board gained support and followership among business leaders and associates before she became CEO. It wasn’t a straight appointment by the board.”
Communication and self-responsibility play an important role in Gore’s flat structure. “As we all work in a team, no-one wants to let the team down. This is a crucial thing at Gore – you are responsible to your peers.”
The rise in co-operative working in conventional businesses has received a cautious welcome from the co-operative movement.
For Sara Horowitz, the founder of the Freelancers Union – a co-operatively run membership organisation for freelancers in the US – they are all part of what she calls ‘new mutualism’.
“We’re not looking to be purist,” she says. “There are institutions such as food co-ops, credit unions and non-profit artist spaces all across the world which are not described in a way that people understand. We’re trying to show that they are around you everywhere, and that you can choose to not consume in the mainstream.”
Ed Mayo of Co-operatives UK has emphasised for a number of years that although “not every business should be a co-operative, every business can benefit from being more co-operative.”
But these new collaborative organisations have largely been held at arms length from the co-op movement. This is in part because, although they have some degree of informal co-operation, ultimately their ownership is not necessarily democratic.
In the case of Valve, for example, the founders retain ownership and make the strategic business decisions. As Yanis Varoufakis explains, “ownership and management are separate, as with most corporations. Only in the case of Valve, it seems that the separation is complete. While ownership is concentrated, control over production and what people do in the company is widely dispersed.”
We can learn from organisations like Valve says Dave Boyle, but that is different from embracing them, unless they become co-operatives. “Here’s a company challenging the orthodoxy of capitalist-owned hierarchical businesses. We can see no reason why we wouldn’t see them going into the co-operative family. They could move to co-operative workers or co-operative owners.”
Many of the collectives of freelancers, meanwhile, have no formal structure and there is an on-going risk that these organisations will not remain democratic. Yet, as Sion Whellens argues, the future of co-operation might lie in part with these organisations.
“I’m trying to connect the official movement with the unofficial movement. The people I’m talking to are aware of it, but I do think the future of the co-op movement is to make more links with what’s going on out there – with people who are naturally organising around the commons, co-operation and mutual aid.
“The co-operative movement needs to develop roots in real social movements. Not as someone sitting at a distance telling them what works, but on a level with them.”