How We Converted to a Cooperative鈥攁nd How You Can, Too

The healthiest and happiest companies in the world are democracies.

At , the project management training company that I co-founded more than 13 years ago, we鈥檝e seen this firsthand. In the more than 13 years that we鈥檝e been working with digital product studios, agencies, and other creative teams, we鈥檝e noticed a pattern. The more companies involve their workers, the healthier their operations are.

In 2021, we decided to put this theory to the test and make the ultimate commitment to workplace democracy. We became a worker-owned cooperative.

Why Become a Worker-Owned Cooperative?

As a society, we fight for democracy in government but settle for dictatorships in our workplaces, the place where we spend 70%鈥�80% of our waking hours. Companies their team鈥檚 movements and actions in the name of 鈥減roductivity.鈥� They use time-scheduling software that dates back to a . They deny workers . They make health care professionals work through a global pandemic without .

In short, many workplaces treat people more like economic units than human beings. Even 鈥渃ushy鈥� jobs embrace toxic hustle culture and lay people off the second things go south in the company.

At Louder Than Ten, we know that worker-owned cooperatives are to be more sustainable, more productive, and longer-lasting. Our conversion to a co-op was the next logical step in our belief and commitment to an equal power structure鈥攁nd it just makes practical business sense.

What鈥檚 a Worker-Owned Cooperative?

In a cooperative, workers own and manage the company. Unlike a traditional structure, where decision-making is at the top level, every worker has one equal vote on all company matters.

Co-ops live by the , and most co-ops do . This means worker-owners determine how profits are generated, used, and distributed. Unlike traditional companies, where CEOs make than the average worker, co-ops experience.

Co-ops aren鈥檛 necessarily anti-profit. It鈥檚 just that they鈥檙e controlled by the workers. They grow sustainably and ethically, providing a living wage for their members and giving back to their communities when they can. Co-ops reject the idea that people are labor. They know that people own labor.

How to Become a Worker-Owned Co-Op

Heads up: Every journey will look a bit different. These steps just worked for (and keep working for) us at Louder Than Ten when we converted to a co-op:

1. Get educated.

The first step on your co-op journey requires educating yourself and all company members about worker cooperatives. Cooperatives either are built from the ground up or are conversions of other kinds of businesses.

Louder Than Ten maintains a list of . If you鈥檙e starting a new co-op or converting an existing business, we鈥檇 suggest working with a professional co-op developer who can help develop the structure and bylaws, strategize the conversion process, and provide facilitation and training.

2. Find the right partners.

You can鈥檛 do this alone.

One of the identified by the International Cooperative Alliance is cooperation between cooperatives. Finding the right partners and professionals who understand and advocate for co-ops can be hard, so it鈥檚 critical to lean on the co-op community for support. Louder Than Ten is based in Vancouver, Canada, so we worked with a local co-op association, the , which provided training as well as access to key connections to co-op developers, cooperative-friendly accountants, lawyers, credit unions, and other cooperatives.

3. Write the rules.

Every co-op has a set of bylaws or rules that define how the organization is run that need to be developed before incorporation. These rules should be collectively decided and must benefit the community, the environment, and the workers.

Your rules will cover things like membership eligibility and requirements, governance procedures, share structures, and other core policies. Every set of rules is different and is a reflection of the values and interests of the cooperative. This was our most daunting task in the entire process and required the founding members鈥� full cooperation, alignment, and vision for the future.

4. Prepare for operation.

This should include discussions about your financial setup and transition plan (if applicable). You鈥檒l also need to form your board of directors, and undertake a number of operational tasks:

Set up bank accounts.
Write the business plan (especially if you need financing).
Form the board.
Issue the initial shares.
Design governance systems, like a corporate minute book used to record board meeting notes and a share ledger to track equity holdings.
Raise money and apply for grants.

This step has a waterfall effect on your business operation. Expect to change your business name and address on everything and anything. Forming a co-op is a layered process, but at the end of it, you鈥檒l be ready to begin operating under the new structure.

5. Convert.

If you鈥檙e converting into a coop, you鈥檒l need to valuate the company, then sell it to the workers. This can be a complicated process depending on a ton of factors (especially if the current owners will continue on as employees of the new cooperative). So you will need to urge everyone, including your lawyer, accountant, and the workers, to make a fair conversion plan for everyone. .

6. Operate (and enjoy your new co-op existence).

Once you鈥檝e completed the conversion, you can begin operating as the fully democratic organization you have been dreaming of. More importantly, you鈥檝e officially become a part of the cooperative movement and the larger . Your workplace is no longer paying lip service to its employees. It is a truly democratic institution that gives more material power to your people than a lifetime of electoral votes ever will.

CORRECTION: This article was updated at 10:50 a.m. PDT on May 12, 2022 to correct the number of stated principles of cooperatives identified by the International Cooperative Alliance.聽Read our corrections policy here.

Rachel Gertz is CEO and Dig颅i颅tal PM Train颅er at Loud颅er Than Ten. She trains tech work颅ers how to trans颅form their com颅pa颅nies through demo颅c颅ra颅t颅ic digital project man颅age颅ment. Her mis颅sion at Loud颅er Than Ten is to give back pow颅er to the peo颅ple lead颅ing their projects so they can trans颅form the future of work. She can be reached at: [email protected].

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