Can business ever be the good guy?

Eighteen years ago, I was at the think tank New Economics Foundation and we looked then at the commercial value of being trusted as a business. We found some impressive gains to a number of brands who were consistent at translating trust into customer and workforce loyalty. But as a whole, the field of business saw trust as something to take advantage of, rather than something to build.

In work led by my colleague Alex MacGillivray, we compared data then (2000) with eighteen years previously and found that the proportion of people who believe that companies are fair to consumers was down from 61% to 44%. It was as if to get on in business was seen as getting one over on your customers.

From a customer perspective, if you were trusting, renewing insurance or sticking with mortgage deals for example, then the result tended to be that you got a worse deal. The great withdrawal of consumer trust in UK business is sad to see but it has been rational given the way that business overall has behaved.

Today, we updated the research, repeating the same survey questions of 1983 and 2001. This shows a continuation in the trend away from trust in business. Just over one in three people (36%) now believe that most companies in the UK are fair to consumers.

consumer confidenceAt the same time, some businesses retain high levels of consumer trust. Over six out of ten people (62%) surveyed trust co-operative businesses, such as The Co-op Group or Arla, which are owned by their members who all have a say in how the business is run.

This data follows on from last month’s Co-op Economy report, published by Co-operatives UK, which found that new co-ops are almost twice as likely as start-up companies to survive their first five years.

What are the drivers for this? Digging behind the headline, the results suggested that the strongest driver for whether people trust an individual businesses comes from it is a good employer. Customer service and value comes close behind. This suggests that the decline of trust in business is not that customers are losing out, but gaining as employees. They are losing out in both contexts. Over three out of four people (76%) now believe that big business benefits owners at the expense of its workers.

dogs-567257_1920High street closures, falling profits and uncertainty around Brexit makes this an extraordinarily challenging period for British business, but it will be tougher still if the UK has indeed hit a new low in terms of consumer confidence in business.

The academic research on trust tends to recognise the value of when people turn down opportunities for short-term personal gain in favour of shared benefit over the longer-term. Action like this is good at building trust, because it has a proof point. Over time, the pattern of behaviour can be recognised as the expression of underlying values – and again trust can be rooted over time in the affiliation that comes with shared values.

It may feel that business can never be the good guy – or the good gal. But in a co-operative, this trust-building feature fits very closely two time-honoured commitment devices of profit sharing and giving a voice to those involved in the business.

hand-683909It is no good for anyone for business to be cast as a perpetual baddy. It puts people off from getting involved themselves in enterprise, it puts people off as workers with the UK’s lower levels of engagement and productivity, it puts people off in terms of trying new products and services from good businesses trying to innovate.

Business can’t just be about investors. It is time for UK Plc, before it is too late, to learn to recast its relationship with customers and employees in a more co-operative spirit.

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The clown that said NO – the fable of a freelancer co-op

doll-1792845The big top was full, the band started to play and the ringmaster in his shiny top hat turned to the audience to start the show.

“Ladies and Gentlemen, boys and girls, welcome to the circus! We will begin with the Clown and the Donkey…”

The clown and the donkey ambled on and then stood together in the centre. Nothing happened. The crowd stopped clapping, leaning forward, bustling to see what was going on, talking amongst themselves.

“Jump! Play tricks” called the ringmaster, cracking his whip.

The crowd quietened and then the clown said ‘NO’.

“What are you up to?” asked the ringmaster, as the crowd fell silent.

“I don’t want to play the fool for others any more. I want to tell stories” declared the clown.

“And you?” The ringmaster flew at the donkey, arm raised, whip in hand. “Do you want to tell stories too?”

“No, I just want to listen to my friend telling his stories” answered the donkey patiently.

The clown and the donkey were ushered off by the ringmaster, but each of the following acts, the dancing horse, the giraffe, the lion and the dog followed suit and refused to go on.

“I am not going on with this show – it is a silly exhibition and I am not proud of it” said Ferdinand, the dancing horse.

circus-2885542_1920Sacked straight after the show, with no back pay, the six performers left the circus, and decided to form a freelancer co-operative.

They travelled a long distance together. When they arrived in a small town, the clown painted posters which read “Circus Co-op – for Children and Poets only”.

Three days later, the show began. There were crowds of children and a lot of grownups as well – evidently there were a lot of poets living in this town.

The clown told his stories, the animals listened in and joined in when they felt like it. The children were enchanted. The adults had never seen anything like it. By the close, it had broken all the records for TripAdviser reviews. The circus was magnificent because the clown and his friends could be themselves and play as they had longed to do for years.

Everyone was happy now. The children, the adults and the performers were all happy. And at the end of the show, the clown said ‘YES’.

 

Mischa-Damjan-Gian-Casty+Der-Clown-sagte-Nein


This is a re-telling of a story by Dimitrije Sidjanski, who escaped to Switzerland as a prisoner of war in 1945. Sidjanski and his wife Brigitte started a children’s publishing company Nord-Sud Verlag. Under a pseudonym drawn from the names of their first three children, Mischa Damjan, he wrote the book, The Clown Said No, with illustrations by the distinguished glass painter Gian Casty. My brother, Bob, gave me the book recently, out of his own exploration with writing on the adventures of Pierrot the clown.

Freelancer and worker co-operatives are a growing way in which people can work together without a ringmaster or whip.

Rainbow_fish_original_coverThe publishing house founded by Sidjanski went on to global fame as the publishers of the Rainbow Fish by Swiss writer and illustrator Marcus Pfister. The Rainbow Fish tells the story of a vain and beautiful fish, who learns from a wise octopus that by sharing with friends, he will discover how to be happy.

The best children’s stories, it turns out, can be wise and wonderful fables of co-operative education.

Worker ownership in the USA – a new law for #coops and #employeeownership

There are celebrations across the co-operative sector in the USA, with the passing yesterday of the Main Street Employee Ownership Act. With support from across the political spectrum and championed by Senator Kirsten Gillibrand, this has been signed into law as part of the Fiscal Year 2019 National Defense Authorization Act.

Kirsten Gillibrand, US Senator for New York

Michael Peck, the inspirational founder of the US ‘1 worker, 1 vote‘ campaign in concert with the Spanish co-operative Mondragón, was one of the advocates for the new law, which will encourage the formation and conversion of firms to employee ownership. A wide range of backers came together – in the American Sustainable Business Council’s “Ownership4All” campaign – to argue for the legislation, which is now being heralded as the biggest breakthrough on worker ownership in the USA for twenty years. The Non-Profit Quarterly describes it as ‘historic’.

Peck comments that “this signed legislation shows how broadened and deepened worker ownership emphasizing self-reliance, profit-seeking bootstrapping, stakeholder & sweat equity & workplace democracy, is fully bipartisan and ‘made in America’.” 

The hope is that what can emerge from this is not simply an extension of the Employee Share Ownership models. These offer corporate income tax exemptions but often with relatively weak employee ownership and control. New options, for example, could include tax reliefs for payments of both interest and principal on worker co-operative loans, encouraging more active forms of employee ownership. The legislation should also open up access to loans from the Small Business Administration across the USA.

The moral for the UK and other European countries is to work together in alliances across the political spectrum and across the institutional divides which have held different forms of employee ownership back – from trusts and share ownership schemes through to worker co-ops and new models of freelancer co-ops.

Timed to coincide with the new law, an analysis for the Harvard Business Review, co-authored by Peck, concludes that worker ownership can lead to high performance and innovation. What the USA needs, it concludes, is an increase in worker ownership.

And it looks like it is going to get it.