Challenges and Downsides of Worker-Owned Cooperatives

Challenges and Downsides of Worker-Owned Cooperatives

About 7,000 working people in the U.S. today are living in some version | https://institute.coop/what-worker-cooperative | of this dream, employed by one of the 300-400 worker-owned cooperatives in the country. This dream, however, has some challenges and downsides in reality: no boss also means no central decision-maker. 
When a group of fed-up pastry chefs decided to found a vegan donut cooperative | https://www.theatlantic.com/business/archive/2015/07/no-bosses-worker-owned-cooperatives/397007/ |, they hoped for a space in which to create high-quality donuts without being under the tyrannical thumb of a head baker. The result was Red Rabbit Cooperative Bakery | https://www.bizjournals.com/austin/blog/retail/2015/10/wheatsville-rescues-vegan-doughnuts-from-failed.html | in Austin, Texas, which soon gained a cult following.
What they soon discovered, though, was that instead of one boss, they each had four colleagues, and thus four sets of different opinions for each of them to clash with. Because they were all bosses, none of them were, and decision-making and planning suffered accordingly.
Red Rabbit went under, but the Austin community, desperate to save their favorite treat, searched for a way to save it. Wheatsville Food Co-op | https://www.bizjournals.com/austin/blog/retail/2015/10/wheatsville-rescues-vegan-doughnuts-from-failed.html |, described as Red Rabbit’s best customer, stepped in and bought the bakery. 
Worker-owned cooperatives have the upside of democratic ownership and decision-making. This absence of a boss figure is both the great selling point of worker-owned cooperatives, and the source of their greatest challenges, as the chefs of Red Rabbit learned the hard way.
There is absolutely no reason that a worker-owned cooperative cannot succeed and achieve great things. However, a key problem that a cooperative must solve up front is the question of decision-making: without a boss figure to dictate policy, how will decisions and plans be made?
Beyond the practical question of who makes decisions, there is the deeper question of organizational culture and experience | https://groundfloorpartners.com/worker-owned-cooperatives/ |. Plenty of people dream of owning their own business, but the skill sets needed to be an exemplary employee in practically any industry are not a perfect match for the skills needed to be an exemplary business owner. 
This challenge points to the essential logic of the boss role: the reason that having a boss is the norm is that not everyone has the mixture of wisdom, skill, experience, and daring to not only found their own business but also lead it to success. 
Workers can learn and adapt to a new set of rules and decision-making processes, but it is no light challenge. 
Getting funding | https://groundfloorpartners.com/worker-owned-cooperatives/ | is another challenge. Cooperatives commonly use multiple financing sources, including banks, Community Development Financial Institutions (CDFs), vendors, and others. 
None of these challenges and shortcomings should be taken lightly. However, all of them are potentially surmountable: it is quite doable for workers to learn how to become co-owners and bosses, make decisions, and get financing. 
 
Sources: 
https://www.theatlantic.com/business/archive/2015/07/no-bosses-worker-owned-cooperatives/397007/ | https://www.theatlantic.com/business/archive/2015/07/no-bosses-worker-owned-cooperatives/397007/ | 
https://institute.coop/what-worker-cooperative | https://institute.coop/what-worker-cooperative | 
https://www.bizjournals.com/austin/blog/retail/2015/10/wheatsville-rescues-vegan-doughnuts-from-failed.html | https://www.bizjournals.com/austin/blog/retail/2015/10/wheatsville-rescues-vegan-doughnuts-from-failed.html | 
https://groundfloorpartners.com/worker-owned-cooperatives/ | https://groundfloorpartners.com/worker-owned-cooperatives/ | 

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