By Susan Arterian

In our last post we introduced Capital Institute’s Field Guide to Investing in a Resilient Economy series, which utilizes the power of narrative to recast the story of our financial system, chronicling the progress of transformative, scalable, real-world investment models that support the creation of a more just and resilient economy.

We also highlighted the first Field Guide study, Grasslands, LLC. This week we explore the subject of Capital Institute’s second Field Guide study, Cleveland’s Evergreen Cooperatives.

A network of employee-owned, for-profit companies, the Evergreen Cooperatives initiative of Cleveland, Ohio, deserves high praise as an ambitious experiment in worker-ownership, anchor-institution-based “green” job creation, and wealth-building in an impoverished urban neighborhood.

But we at Capital Institute see Evergreen as that and much more….

Read the full story here >

Bill McIntyre

“On average employee owned companies are more efficient, innovative, and profitable,” explained Director Bill McIntyre, “but the biggest gains come when companies nurture an ownership culture. For an employee owned company to reach its full potential, workers – and managers – need to unlearn old habits and develop new ones.”

Karen Thomas

That’s where the training comes in. With an ownership culture, employees offer ideas for new products and services as well as ways for the company to work more efficiently. Karen Thomas points out, “In a traditional business, management develops plans and implementation. In an employee owned business every member has responsibility and influence.”

Not all worker owned companies are organized as cooperatives. Most operate under what is called an Employee Stock Ownership Plan or ESOP. There are about 11,000 ESOP companies in the U.S. Many do not have a strong ownership culture, and the day to day experience for employees is not much different than in a conventional firm. But others truly encourage employees to participate in making the company better and the results can be striking.

We filmed at the EBO Group, an ESOP near Akron, Ohio. They design and build specialized industrial machinery, such as drive trains for heavy mining machinery, and clutches for the tunnel boring equipment used to create the Chunnel between England and France.

Dave Heidenreich

EBO also produces an innovative motorized hospital stretcher/chair. That product was suggested by one of the employee owners, who meet individually with their supervisors on a quarterly basis to offer their ideas to make the company more efficient and innovative. EBO was originally privately owned, but when some of the original partners were ready to retire, the owners decided to turn the company over to its employees. “It’s one of the best decisions we ever made,” according to Chairman and Chief Technology Officer Dave Heidenreich.

The success of the EBO Group helps other Ohio companies since EBO contracts with manufacturers in the region to produce parts for the equipment they design and build. And as the worker/owners at the EBO group aren’t interested in closing the Ohio company and moving it overseas, it remains a stable element in the local economy.

Keith Parkham

Last week we filmed in Cleveland, at the Evergreen cooperatives which are a significant part of an ambitious plan to turn this rust belt city around. Once Cleveland was thriving with lots of good jobs for working class people, but now it is impossible to ignore the abandoned factories and run down neighborhoods.

With support from the city and many civic institutions the Evergreen Cooperatives began with a commercial laundry that serves nursing homes with state of the art laundry services in a facility owned and run by its employees. Keith Parkham, facilities manager and cooperative member showed us around. From the entry room where the soiled linens get unloaded from the trucks, sorted and weighed, through their folding and assembling to return to the health care institutions, we filmed a state of the art process that conserves energy and water.

Washing takes place in the “tunnel”, a giant machine that works much faster than a conventional washer, and uses the heat recovered from one wash cycle to raise the water temperature for the next. Instead of spinning, a giant press expels the water, leaving 150 pound disk shaped cakes of laundry that enter the dryers two at a time. After 20 minutes, the drying is complete and the load moves on to be pressed, folded, and shipped. Each worker owner knows how to do all the jobs that are involved, so they can trade off to keep the work interesting and help each other when someone falls behind. “We’re all in it together,” said one worker/owner, “the more efficient we are, the better we serve our customers, and the better off we’ll all be. This is our company.”

Tracey Nichols

Another Evergreen business that is up and running is the Ohio Solar Cooperative with crews that install solar energy collectors and provide home weatherization. And a third coop will soon break ground on a giant greenhouse and food production facility in a once abandoned area to provide fresh healthy food for inner city residents.

These coops have attracted interest from many other cities who like this model of civic institutions, city government, and inner city residents working together to improve the community. Says Tracey Nichols of the city’s Department of Economic Development, “We used to offer all kinds of tax abatements and other incentives to get businesses to move here, but then after a few years another city would offer other encouragements and many would move away. Now we are looking to support businesses that are a good fit with what we already have, to build a healthy economic environment that will endure.”

India Pierce Lee

India Pierce Lee works on community development with The Cleveland Foundation, which has provided key financing for the Evergreen project and helped gather support from longtime Cleveland institutions such as the Cleveland Clinic and Case Western Reserve University. Technical advice and training have come from the Ohio Employee Ownership Center at Kent State University. And an advisor to the project, Ted Howard of the Democracy Collaborative, was drawn to the Evergreen Cooperatives for reasons that should concern us all. He is troubled that the growing inequality in wealth and income is undermining our democracy. “We are proud that our country is a democracy,” he says, “but most people have to check their democracy at the door when they go to work.”

It was reposted by the Democracy Collaborative. Alperowitz co-founded The Democracy Collaborative which is helping to develop the Evergreen Cooperatives in Cleveland where we will be filming next week.