B the Change Weekly: May 3, 2019
A new report on mission-driven, employee-owned firms finds that these businesses outperform conventionally owned firms in overall environmental and social impact. These businesses include many well-known Certified B Corporations, such as Eileen Fisher, King Arthur Flour and New Belgium Brewery.
The report from Fifty by Fifty, a project of The Democracy Collaborative, identifies these businesses as “Next Generation Enterprises.” Sarah Stranahan, lead researcher for Fifty by Fifty, says these future-minded companies are diverse but also can be viewed as a coherent group.
“We think that these businesses, individually and collectively, are doing something very important,” she says. “They are demonstrating that businesses that care about their employees, care about the environment, and care about their communities can succeed.”
This week, we focus on why employee ownership plays a role in building businesses for the long term.
Doing Better by the Numbers and Beyond
In Fifty by Fifty’s new report, Mission-led employee-owned firms: The Best of the Best, the numbers tell the story of the benefits of employee ownership. B Corps that are employee owned have:
- B Impact Assessment scores that are almost 20 points higher than non-employee-owned B Corps and nearly 60 points higher than benchmark U.S. businesses.
- Environmental scores three times better than benchmark businesses.
- Worker scores twice as high as their B Corps peers.
Plus, 82% of these employee-owned B Corps were named Best For The World, compared to 42% of all B Corps. Sarah Stranahan, lead researcher for Fifty by Fifty, says in addition to scoring higher on the B Impact Assessment, these B Corps are doing transformative work that will help reshape the global economy.
“Mission-driven employee owned firms are here on the curve, designing and scaling new thriving and resilient systems,” she says.These B Corps care about profitability, she says, but are not designed to maximize profit at the expense of other all other goals.
Learn more about the report and why employee-owned B Corps are among the companies leading by example in their environmental and social impact on B the Change.
Sharing the Power
Namasté Solar knows the power of community. As an employee-owned cooperative, its business structure is the sum of its parts. As a solar-electric company, its product aims to reduce community impact on the planet. And as a B Corp, its ties to other certified businesses create natural connections.
Co-founder Blake Jones says B Corp certification connected Namasté Solar with other like-minded businesses and a larger mission.
“Prior to being part of the B Corp community, we felt like we were all alone, flying solo in our efforts to do business in alignment with our values and our multistakeholder model,” he says. “As a B Corp, it now feels like we’re part of something much larger than ourselves.”
On B the Change, Jones shares how Namasté Solar sees an opportunity to take a leadership role in the transition to clean energy and employee ownership.
The Business Benefits of Employee Ownership
Heritage Aviation is a fixed-base operator at the Burlington, Vermont, International Airport, providing aircraft inspection and maintenance, a pilot lounge and heated hangars. With over 60 employees, it’s a good-size operation that has grown rapidly over the past several years.
That growth has been fueled by several decisions, says CEO Dave Stiller, including becoming employee-owned. Heritage Aviation’s employee owners also recently approved the decision to become a Vermont benefit corporation.
“Making business decisions that give weight to both profit and social impact has made us a more successful company because it has made us a more meaningful organization to our customers, vendors, employees and community,” Stiller says.
Learn more behind Heritage Aviation’s decision to become an employee-owned benefit corporation on B the Change.
Book of the Week
Renovating Democracy: Governing in the Age of Globalization and Digital Capitalism
By Nicolas Berggruen and Nathan Gardels
The rise of populism in the West and the rise of China in the East have stirred a rethinking of how democratic systems work — and how they fail. The impact of globalism and digital capitalism is forcing worldwide attention to the starker divide between the “haves” and the “have-nots,” challenging how we think about the social contract.
With clarity and conviction, Renovating Democracy tears down our basic structures and challenges us to conceive of an alternative framework for governance. To truly renovate our global systems, the authors argue for empowering participation without populism by integrating social networks and direct democracy into the system with new mediating institutions that complement representative government. They outline steps to reconfigure the social contract to protect workers instead of jobs, shifting from a “redistribution” after wealth to “pre-distribution” with the aim to enhance the skills and assets of those less well-off.
B the Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
When Workers Own It, Business Does Better was originally published in B the Change on Medium, where people are continuing the conversation by highlighting and responding to this story.
