Bret Keisling is joined by EO/Co-op Advocate Rodney North to discuss the interplay between the shared tenets of democracy and employee ownership.
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Episode 117 Transcript
Bitsy McCann: 00:02 Welcome to The EO Podcast, where we amplify and celebrate all forms of employee ownership.
Bret Keisling: 00:11 Hello, my friends. Thank you for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. Welcome to the first episode of Season Four of The ESOP Podcast. We are so glad that you've joined us. We do want to thank everybody who has supported us in the last three years as we've now exceeded 55,000 listens in three years, and we couldn't be more proud, but more importantly, more grateful to the listeners, to the guests, to the EO advocates who have given us so much support and encouragement over the last three years.
Bret Keisling: 00:47 Today's guest is Rodney North. He's a passionate advocate for employee ownership in his own right. He spent 20 years as a worker/owner at co-op Equal Exchange and he spent the last four or five years as a consultant to existing co-ops as well as co-ops startups.
Bret Keisling: 01:05 Like many of us Rodney believes passionately in employee ownership. And as we'll discuss today, Rodney believes very strongly that the tenants of democracy and employee ownership are interchangeable and if we take these ideas, including education engagement, and participatory governance and make it stronger in the workplace, that that will make our democracy stronger as well. Enjoy my conversation with Rodney North.
Bret Keisling: 01:36 Thank you so much for joining me on the podcast. How are you today?
Rodney North: 01:41 I'm great! Looking forward to talking with you Bret.
Bret Keisling: 01:43 Well, I appreciate everything that you have done. I spoke a little bit about you in the introduction before you came on, but why don't you tell us a little bit about how you and I got to be on the phone, going back some 25 years?
Rodney North: 01:59 Oh, so my introduction to employee ownership is, I think, the way it goes for a lot of people where I stumbled into it. There was a company that I wanted to join called Equal Exchange and I knew them, they were still a small company at the time, this is 1996, and I knew them because they were a leader in the fair trade food world, they were a pioneer. I didn't understand that they were also employee owned, more specifically a worker cooperative, but for me that was kind of neither her nor there -- got my foot in the door and only after I joined that I learned about this other interesting aspect and interestingly, at least I think, especially given where I am now, I wasn't that kind of like smitten with the worker ownership or coop idea initially. It was something the grew on me over time, the people there, especially Irvin Kroll who is a leader in the co-op world - still. He kind of brought me along, got me excited about it. And within three years, I think I had a leadership position, it was either three or four years, I had a leadership position there as the coordinator of the Equal Exchange worker co-op. Now fast forward, it's 24 years later and I'm still very committed, passionate about, worker co-ops, but employee ownership more broadly.
Rodney North: 03:27 And you and I found each other through Twitter. So Twitter does have some redeeming qualities! And one is that people like you and I can find each other through it.
Bret Keisling: 03:38 And Rodney, if you don't mind, let me just interject. You're absolutely correct. And I think that's very cool and I love the communications. You reached out to the podcast a couple of weeks ago on Twitter. You and I then were put in touch by my team and you and I started conversing, but you reached out -- and first of all, I want to thank you. You had very constructive comments about the podcast and our website -- generally positive some constructive stuff as well and I'm grateful of that -- some great show ideas, et cetera, for future episodes. And you and I had a conversation and I wanted to bring you on the podcast.
Bret Keisling: 04:11 My self promotion here is for anyone else listening, who's passionate about employee ownership in any aspect of it. It really is that easy -- reach out. Let's have a conversation and then come on the podcast because your story is interesting.
Bret Keisling: 04:23 So we want to talk today. It's election season, Rodney. We've got, you know, the country is obviously caught in it. It's an election of great consequence and we're not really going to get into the political aspects of the election per se, but you believe very strongly that your experiences as a worker owner through the co-op, ties in very much with being an educated, good citizen. Am I saying that right?
Rodney North: 04:51 Yeah. And so to get back to these ideas that I had when I reached out, and for the audience I can attest that Bret will respond. You're not just sending a message into the void.
Rodney North: 05:05 Yeah. And it really is very much a nonpartisan idea. It's about the bigger idea of just democracy. And I was reflecting on how my time at Equal Exchange made, in the sort of in the fullness of it, made me a better citizen. And that, to the extent that any employee owned business embraces participation, sharing of information, democratic methods, and there's a spectrum there. It's not just binary. There's a spectrum of democratic participation possibilities. To the extent that employee owned businesses do that they can be making their, their employee owners better citizens at the same time. And again, this has nothing to do with right/left, Republican/Democrat. It's just about that the workplace can be a place that actually sort of helps to bring along better citizens. It gives us another opportunity to practice democracy and then bring that back to the larger civic democracy that we all live in.
Bret Keisling: 06:19 And Rodney, am I correct in thinking you had mentioned the three years into your time at Equal Exchange that you started getting involved in the committee work and that sort of thing, and that is the same thing as about being involved as a good citizen. In other words, there was education, you learned a lot more about it and I'm making statements. I actually mean them as questions. Did you find that the sharing of information with employees, which is part of an educational process, what is it about the setup of the co-op Equal Exchange specifically, but co-ops and other forms of employee ownership generally, that ties it together? Like, you know, to make them a better employee or a worker owner, it's the same traits as making you a better, more engaged citizen?
Rodney North: 07:06 Yeah. There's a lot of parallels between making your democratic workplace work better. A lot of the same stuff that makes a democratic society work better, you know, function better as a democracy. So I'll use the example of Equal Exchange, which shares a lot in common with other worker co-ops and share something in common with ESOPs.
Rodney North: 07:32 So at our worker co-op, it all works on a basis of one share of stock, one vote goes with it per one worker. And we elect leaders from amongst our own ranks. And we make a lot of decisions as worker owners, as opposed to those that are delegated to the board, or those that are delegated to management. And so a couple things - like education, and I'm not going to get the sharing of information, but as we know, for those of us who grew up here in the States, by and large, you're not exposed to employee ownership, let alone democratic workplace practices in school or maybe anywhere until you find yourself in such a business.
Rodney North: 08:19 So we knew that our worker owners, we the worker owners, we would have to educate ourselves and educate new employees in, how does this work. You know, how do you share power with your colleagues in a sort of responsible, fairly efficient way? So we created a very robust in house education program, especially on the front end with picking people who, you know, recruiting, hiring people who could appreciate what we're doing and thrive in and be responsible contributors -- people who are going to responsibly use the voting power that they're about to get -- but also heavy on the orientation once they're in the door. And then ongoing training. It never stopped. So I was still learning things in my final 20th year at Equal Exchange, you know, learning about how to be a better participant in this workplace.
Rodney North: 09:22 So orientation, training, sharing of information. So if we worker owners are going to responsibly wield our ownership prerogatives, we needed to know what was going on. We needed to understand our industry and a lot of stuff I think your audience will be familiar with. Like, how do you read balance sheets and income statements? How do you understand some of these sort of bigger market trends that our business would have to navigate? And so there's the education, so you can understand this stuff, and then you got to be exposed to the stuff. You know, finance department has to be sharing this information. We had weekly staff meetings every other week and yeah, a lot of numbers also a lot of effort to kind of make me break it down so that we can understand how this relates.
Rodney North: 10:13 We maybe trying to make a big decision soon -- and this is a for instance -- we might have to make a decision about are we going to rent another big warehouse, which would be a big investment of time and money. So we're going to need to know, you know, why do that? What are the pros and the cons? What are the risks? Should we maybe support a new startup or an internal startup, like start a new food division or a new product line? You don't sort of entrust some of those decisions to folks who haven't been trained for it. They need to have regularly gotten critical information and, you know, you can't hold back a lot. So we were, we would practice Open Book Management, which is I'm sure a topic you all talked about.
Rodney North: 11:07 So, you know, you put that sharing of information with the opportunity to ask questions. So it's not just one way, it's a dialogue, it's a conversation, sometimes a debate. So it's not just a one way communication. And first, you know, you set the groundwork with that education and also the setting of a culture and the perpetuation of a democratic culture. So that you have a place where you can like civilly, responsibly, and efficiently raise issues, consider options, the debate it and make decisions and being able to like live with each other afterwards. Because you know, some percentage of people aren't going to get their way.
Bret Keisling: 11:52 How many people were at Equal Exchange -- by the way, kudos, you were employee number 13 if I remember correctly -- so you were there very early. When you left, how many employees were there? How many worker owners?
Rodney North: 12:05 I think that we were getting up to like 140 or 150 employees. Over a hundred were worker owners by that point. There's a probationary year, so depending on how fast we were growing, there would be some number who weren't yet worker owners.
Bret Keisling: 12:24 And by the way, for regular listeners if I'm remembering correctly, one of our guests a couple of months ago was Hilary Abell, who's one of the co-founders at Project Equity. Am I correct that you and she crossed paths at Equal Exchange many, many years ago?
Rodney North: 12:39 So for 1996, that was a year we overlapped, her last year, my first year. And that was great. That was one of the things caught my attention about your podcast was that you had had her on and I have a tremendous respect for her work.
Bret Keisling: 12:54 She's great. And it's also a sign of, you know Equal Exchange besides having great worker owners and doing a great job at what they do. They've also done a nice job of spreading some ripples throughout the EO world.
Bret Keisling: 13:10 So let me ask you this. And it ties into kind of our electorate, everybody gets a vote. Now in the co op, I think you indicated that not everybody had a vote, but let's say two thirds, around a hundred give or take, had had voting power. I know that education is very important. We have talked about open management. We can chat about that a little bit because there are different levels of, you know, how open is open. But was there a problem - I guess what I'm trying to say is the people who may not have taken the time to educate themselves about the new warehouse or what have you still had a vote right?
Rodney North: 13:44 Yeah.
Bret Keisling: 13:44 In a microcosm of society, I imagine it was even more important to make sure that your colleagues were voting with education and with knowledge.
Rodney North: 13:54 Yeah. And one thing we've found that was for those who maybe weren't paying as close attention, they did not tend to have really strong opinions. You know, a danger when you have people who, for whatever reason are really worked up about something and lack information. Thankfully, I don't remember that coming up very often. Now one thing that we ran into was regarding voting in the new members. So unlike an ESOP, at a worker co-op often the current members are going to decide whether to bring in a new member. You know, do they seem like that they're a fit? And as we got bigger and bigger, by the time I left, we had people spread over 10 states. So it gets harder to know the new people. You may have never met them.
Rodney North: 14:45 And I'll spare you some of the details about how we dealt with this, but the takeaway here was we had to be, people were hesitant to vote. This was a really important decision and affects somebody else's life and it was hard to make informed choices when you had not met Betty, the new person in the Oregon office, for example. And so we had to change around how we voted basically became instead of getting a certain percentage of yeses you had to clear a bar. Like, so long as not too many people vote against you, well, then you'd get in. And there was lots of changes we made over the years. And essentially our little democracy and how we carried it out how we kept it going, had to keep sort of flexing and growing and adapting. You know, we stub our toe. About the third time that we would stub our toe, we'd say okay, we really got to deal with this and come up with some new way. And I found that that flexibility really helped us over the years. And so sometimes people can treat their democratic process as too precious. And they think that whatever it was when they arrived, is etched in stone and can't change. And I would recommend against that.
Bret Keisling: 16:10 You know, it's kind of funny because in many respects, co-ops and collectives are presented as more democratic in many ways than ESOPs. Where an ESOP can literally be as simple as a retirement benefit and the employee owners get no say about anything. But the one difference that caught my attention is, you know, an ESOP, as long as you work enough hours and had been there long enough, you are a participant fully. I didn't realize that at least in some cases there had to be a vote to be admitted to be a worker runner. That to me is very interesting. Yeah.
Rodney North: 16:48 And I think the one reason why there is that extra layer of control, like control of membership is because so much more is entrusted to those new members. They're going to be nominating people for the board. They may be running for the board. And so you just got to vet them more carefully and to be sure that they really fit for your place.
Bret Keisling: 17:09 Something you feel strongly about is you saw the balance between the majority that makes the decision and the rights of individuals. And also there's some experience with how do you handle and what is your path in dealing with those who weren't successful? You know, who might have strongly opposed an action and lost the vote. Can you talk a little bit about, you know, the majority slash minority viewpoints and how they fit together?
Rodney North: 17:38 Sure. There's two things going on in there. One about, it's not just majority- I think I'm going to say this right - majoritarianism. You know, it's not just majority rule. Because that can then run roughshod over rights of the individual. And so, you know, we have that in the US and most Western style democracies where both are critical elements. You try to, you know, you've kind of figured out, okay, what decisions are going to be made by the polity, the citizens, but not everything is. Some things we delegate to others to decide for us. But regardless of who's making the decisions, you know, we have safeguards on rights of the individual. And I think there needs to be a place for that too, in democratic workplaces. So like maybe for whatever reason, nobody likes this, or, you know, a majority of people don't like this employee, that doesn't mean they should just be run out of the company.
Rodney North: 18:39 You know, it's not a matter of just a popularity contest. People have, they have rights within a business -- in this case, of a worker owned business -- in an analogous way to the way they have rights within society. So, for example, privacy might be one. The employees had influence on setting wage scales or ratios from the least paid person to the most paid person. We didn't talk about, you know, John or Maria's salary. That was kind of between them and their manager. And I'm simplifying it a lot, but the point being that by and large, there was a lot of, you could still maintain privacy and other individual rights while exercising a lot of group democracy.
Rodney North: 19:29 The other thing that you alluded to was like, well, how did it go when people didn't get their way? And the takeaway that I would share was if people really understand the process and if they believe that the decision making process is fair, they're so much more likely to accept the outcomes. And I don't think Equal Exchange was perfect, but I think we did a pretty good job on those fronts.
Rodney North: 19:57 And I remember some, for example, I was a board member for six years. There were some issues that I thought were going to be really contentious. One of them came up and I thought, you know, fur is going to fly and there's going to be a lot of raised voices, et cetera, but we talked it out, we had a vote, and those who didn't get their way, they could live with it. And I think it's, you know, I didn't take a -- I didn't interview all of my coworkers -- but I have a pretty strong conviction that it was because we believed in the process that people were okay with not getting in their way. And I know that many times I did not get my way and the process made all the difference. And it will allow us, okay, we can still move together forward and just be excited that, you know, like we had a chance. You know, you have a chance to make a proposal or to advocate for this or that side of a decision. Maybe you don't get your way but you know it was still special that you had those opportunities because, you know, in 99% of the workplaces, you wouldn't.
Bret Keisling: 21:05 When you talk about sharing the information and you've made several references to it, and you're right on previous podcasts a number of times we've discussed Open Book Management. And one of the things that I struggle with, and struggled with as a trustee, is philosophically I'm in favor of Open Book Management, just as you know, in the government example, I'm in favor of the Right to Know laws. You know, we should know what's going on. But I've also been in business long enough to know that there is competitive information or some whatever proprietary information that if it were released either carelessly or otherwise could do great harm. How do you find the right balance in your mind of how much information to share versus this is too much?
Rodney North: 21:53 I don't recall that too often there was like some information that were it released it would cause like a competitive problem. Like a trade secret. Now, one thing is that I think often this is more of a meta observation that those who are withholding information and they're concerned about other people having it, like other people in the business, that maybe they're not respecting that other people were they owners would be just as responsible as they are. You know, there's a risk, they have a little paternalism like, well, I know I'm going to do the right thing, but I'm not sure you're going to do the right thing and protect this. I think that at Equal Exchange and in many, at least, co-ops that by and large people are very responsible and proud of the ownership and they're going to be just as responsible as the traditional sort of gatekeepers of information.
Rodney North: 22:57 And I do remember, you know, like big, it could be either a meeting of all the owners or a staff meeting, you know, by the time I left that was way over a hundred people and over many locations, that we would say, okay, the following is private. It's just for Equal Exchange, you're not to be sharing this, and we could be fairly confident that no people weren't going to share whatever that was. And a lot of the information, just again, like the blending recipe of our "Mind, Body, Soul" coffee blend, you know not many people even inside the company knew it or were going to ask, and those who did, they weren't going to share it with the competition.
Rodney North: 23:41 So I think that the real the takeaway is to, you know, it's a variation of the Golden Rule. You know, treat others as you would want to be treated. Expect that your other employees are going to take their ownership responsibilities just as seriously as you do. And if you do, and there is that other -- like preparation education, the building of an ownership culture -- then there's no reason why they wouldn't be as responsible as the traditional business leadership.
Bret Keisling: 24:18 If the question is, how much are you willing to trust your team? There are bigger questions, you know, at play, you know, that that trust potentially could be, or should be fuller than a lot of companies might do it.
Rodney North: 24:32 What's the cost of not trusting them? I don't hear that asked often enough.
Bret Keisling: 24:37 The funny thing is, because my first response is how do you prove a negative? But the reality is we know for a fact from the data that when information is shared, and I'll say the more information that's shared, the more engaged, the more active, the more seriously the employees take their job, you know, they feel more truly like owners.
Rodney North: 24:58 And when you withhold information, you're implying, well, you're not as much as an owner as I am. You could be undermining your, the ownership culture you seek, even if you don't realize it,
Bret Keisling: 25:11 Your point of just fundamentally bringing it down to trust and believing, I almost said hoping that's not right, believing that everybody will take it as seriously as you do. That's a very powerful point, Rodney, and really ties in with what we're trying to do with employee ownership.
Bret Keisling: 25:27 Let me by way of taking a couple of minutes to wrap up, can you tell me from your view in all of the hats that you wear. Why should employee ownership matter to society? We talk a lot about economic justice, social justice, et cetera, et cetera, but for you as a passionate advocate, what's making you keep doing what you're doing? Why do you think this is better, you know, will make our country and our world better if there was more employee ownership?
Rodney North: 26:01 I've got a few different reasons how it would. One, is to the extent that employee ownership is married to some degree of democratic practice we can, as we've described, deepen our democracy by giving people a chance to practice democracy at the workplace.
Rodney North: 26:26 So, we in the US, care a lot about democracy -- we have fought wars over it and we educate ourselves in school about it a lot, but then we leave it at the door, we leave at home when we go to work. If it is such a great thing, why can't we bring it to the workplace with us? So, so one answer is, is that more democracy is better. So if you can bring it to the workplace that's an expansion of the democratic practice.
Rodney North: 26:58 Two, regarding employee ownership. You hear a lot kind of across society concerns about like, is the current system working? There's a lot of concern about growing material inequality and inequality of opportunity. And so one way while working within a free market system, one way of gradually of reducing inequality is through employee ownership. And yeah, and it can take all different forms as you've discussed over the show. Worker co-ops are, you know, at one end of the spectrum in terms of sort of the profound quality of one member, one share, one vote with a lot of participation. But all of it is good and all of it, I think, is a step forward. And if it can reduce inequality, I think that it can help reduce tension and it gives us this, I think, peaceable way to make some progress.
Rodney North: 28:04 And I think there's a fairness element. I think people who show up at a business aren't getting the kind of due credit and reward for all that they contribute. And so if they can have an ownership stake, then I think they get more credit to get more of like an upside financial upside to their contribution. And I think everybody comes out the better for it.
Bret Keisling: 28:29 I think that's great. And you've made so many good points throughout this conversation. It's a matter of, you know, all of us trying to make progress and moving in the right direction. One of the things that struck me for example is an interesting balance is you mentioned at Equal Exchange that salary data wasn't released that it was kept between management and the worker owners or the employees. And I absolutely, for much of my career, my response would have been, damn right. It's kept private. And now I, and I still think that it is, I'm a work in progress, but now, as I've talked a lot about employee ownership, addresses, or helps to address pay inequality, both gender and racial, just as popping in my mind, as you were talking of, well, maybe releasing that information to everybody is one easy way to make a relatively quick fix to the pay inequities. So it's finding that balance.
Rodney North: 29:37 Yeah. And by the way, on that point I, too, am an advocate for transparency in pay and salary. You know, in our government, in the military, et cetera, this stuff is all open and it's no big deal. And especially in a place like a co-op that has a compressed wage scale, you know, where there's little space between the very top and the very bottom, it should be sort of less of an issue.
Rodney North: 30:03 And it happened, and as I think of some co-ops, it is shared and it certainly could be. And I was just using it as an example, because at Equal Exchange it is not. But other things there are still private, like your, your job review, you know, not everybody gets to see, "Bob's job review." So there's still this individual right to privacy.
Bret Keisling: 30:27 This has been great. Are there any points that you had wished we, we covered a lot of information, but is there anything that we kind of hovered around, but I didn't let you get to?
Rodney North: 30:38 I would just leave folks with some of these sort of like, highlights about how so, like again, in my experience learning the importance of education and that it doesn't just happen on its own. So we made a point of educating our staff so they could be responsible democratic participants in our workplace. The importance of sharing information and encouraging people to take advantage of that, you know, come to the meetings, you know, read the annual report, read the financial statement. Clarity about process and that if people buy into the process, there'll be less acrimony. And, you know, thinking again about our larger sort of democratic experiment, you know, we have a lot of acrimony in the States these days and so anything that can sort of take the tension down would be a good thing. Learning, and like anticipating, compromise. And we had that a lot at Equal Exchange. And I think that that part of the culture really helped not just the company sort of get ahead and stay in business, but to maintain a positive culture and a positive workplace, you know it helps to keep at bay -- it's like a vaccine against toxicity. So, you know, being ready to compromise and having some culture of civility where you respect other people to have their own opinions, and yet you're still working together towards some larger goal. So that kind of transparency, a culture that embraces compromise and civility, reduces acrimony, improves just happiness and help all these other things work better.
Rodney North: 32:25 And so I think those are some lessons that we can take away that can be applied at other employee owned businesses and make those millions of employee owners, maybe a little bit better citizens in the country.
Bret Keisling: 32:40 I think that's a wonderful summation, the values that we hold dear to us as citizens here, you're really just talking about bringing them into the workplace in a mindful way. And all of the benefits, you know, the payback to bringing the democratic principles more into the workplace is the workplace will be a stronger part of the economic base of their communities and states and that sort of thing. And that will also strengthen democracy.
Rodney North: 33:08 And those employee owners become better citizens. I feel that I'm a little better citizen, better informed and more appreciative of our larger democracy, because of what I experienced at work.
Bret Keisling: 33:23 I think that's great and Rodney, let me tell you something I'm very proud of in this day and age, and it is a tough time and a tough political season, but we've been able to talk for a little more than half hour about the importance of the democratic principles and employee ownership. And we didn't do so in any sort of a partisan or rancorous way, you know, that this is to me, the future of the country. And when it's one issue that a conservative Republican and a progressive Democrat can agree on, let's find ways to keep the dialogue going and get more agreement going on in the country.
Rodney North: 33:59 Yeah, yeah. Love it.
Bret Keisling: 34:02 All right, Rodney, thank you so much for coming on the podcast. Thanks for all of your great suggestions and, perhaps most importantly, thank you for being a great worker owner for 20 years and all the great work you've done in the, in the four or five years since then on growing co-ops and therefore employee ownership. What you're doing very important and I just want to thank you for it.
Rodney North: 34:23 Well, I appreciate that and I really appreciate this invitation and look forward to talking again sometime.
Bret Keisling: 34:29 All right my friends, that's going to wrap up another episode of The EO/ESOP podcast. If you're an employee owner, a practitioner, or a passionate advocate, drop us a line. We're always looking for guests and show ideas.
Bret Keisling: 34:46 Thank you so much for listening. This is Bret Keisling. Have a great day.
Bitsy McCann: 34:51 We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email Bret@KEISOP.com, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling.
Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.
A note on the transcript: This transcript was produced by Temi, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.