I’m John Abrams from South Mountain Company in Massachusetts. I was rummaging through some old papers a couple of months ago and I found a letter that I hadn’t seen, that was dated December 16, 1968. And the letter said, Dear John, when you have the $15 that you owe me from the time I bought the grass from you, you can send it to Ann Viber, 642 East 11th Street, New York City. That was before zip codes. And it goes on to say, just send the $15 when you have it, thanks, sincerely, Ann Viber. Well, I read this and I thought I haven’t seen this letter in 38 years. I really should pay back my debt. So I searched the Internet and I found only one Ann Viber, a professor of linguistics at Acadia University in Nova Scotia. And she seemed to be about the right vintage, so I popped a hundred dollar bill in an envelope—a little bit of interest, not really enough—and I sent it off with a copy of the letter.Two weeks later, the letter came back with the hundred dollar bill in it, and it read, “John, as much as I appreciate the gesture, and as much delight as it brought to my day, I’m afraid I can’t lay claim to the identity of the apparently other Ann Viber. In 1968, I was thirteen, living in a small town in Nova Scotia, where grass was still only something to mow. But keep searching because she’ll be thrilled.” And it was signed Ann Viber, the other one.
But the question that occurred to me after I did that is, well, wait a sec. If I sold her the pot, how come I owed her money? And I thought, this might be a parable for my career in business.
Not so many years later, I truly was in business, although I didn’t mean to be and it was hardly worthy of the term. We were building houses on Martha’s Vineyard and losing money on every job we did. The defining moment came for me when a friend, a mentor actually, who closely followed our work, was touring our projects one day and said he admired the work. He said, “It’s good; this is beautiful, beautiful work. Are you making any money?”
I kind of chuckled and said, no way. And he said, “Well, you’ve got a nice idea here, Abrams. It’s novel, anyway—subsidized housing for the rich.”
This blunt assessment triggered the realization that I needed to learn about business but I wasn’t thrilled with the prospect. But I did. I learned enough to know how little we can know. That was many, many years ago, and I’m finding out now that there’s a lot more to know. And some of it is confusing and troubling, at best.
I certainly grew up with a feeling of freedom, which so many kids these days do not have, and then, in the ‘60s, we magnified it; we blew it wide open; we tossed out all the rules, and we crossed all boundaries. We found more ways to fail, we did everything wrong, we shunned history, we reinvented the wheel, we challenged human nature, we took the arrogance of youth to extremes, we overwhelmed relationships, burned bridges, built buildings without foundations, and we did everything wrong at a pace which we couldn’t sustain. But aside from having great times in the doing, something very fundamental was right. By not worrying about results, we gave ourselves the freedom to invent, constantly. We are inventing the future, but this time with the lessons of the past in mind.
Those days for me were the beginning of a path that’s clearly demarcated as a business school grad climbing the corporate ladder, a path which was, as my wife says, not a choice, but pure expression. And, as I matured, sort of, I kept looking for ways to live and work in groups that had foundations and bearings that could endure. We need to feel the freedom and the license that leads to responsible outrageous behavior and leads to invention.
But we can’t keep doing what we’ve been doing if we’re to solve the problems we’re faced with. We know that in the aftermath of Katrina, many of us can sense the approach of the less dramatic but far greater storm of global climate change and peak oil. This one quote from Bill McKibben may say it all:
We’re forced to face the fact that a century’s carelessness is now melting away the world’s storehouses of ice, a melting whose momentum may be reaching the irreversible. It’s as if – this is the part I love – it’s as if we were stripping the spectrum of a color, or eradicating one note from the octave. There are almost no words for such a change. It’s no wonder that scientists have to struggle to get across the enormity of what’s happening.Peak oil’s aftermath is likely to bring more before it brings less, and one of the daunting aspects of the predictions is that it’s difficult to produce an analytic framework that shows how we can continue with business as usual. Renewable energy may not be capable; the same goes for the hydrogen economy. So there will be change, there will be upheaval, and we don’t know. The predictions are very gloomy, but neither did we know that Apartheid would come screeching to a halt, just like that. Neither did we know that the Berlin Wall would fall and the Soviet Union would lose its grip and fragment. Nobody predicted it. And we surely did not know in 1955, in the thick of the Cold War, when people my age were climbing under desks, that in 2006, 50 years later, despite widespread ability, we could look back on a half century, during which humans did not use a single nuclear weapon in anger. Who would ever have thought that? And in the ‘50s, when Senator Joe McCarthy and his cohorts were taking potshots at anyone who moved, suppressing dissent and striking fear in the hearts of all progressive Americans, whoever would have predicted, and, in fact, nobody did, that a time of liberation, the ‘60s, would follow.
But the issues, along with peak oil, the progression of global climate change, and the concentration of wealth stand out and are disturbingly complex. They cry out for bold solutions, outrageous behavior, and they won’t just go away if we somehow disregard them. Government’s not doing the job. My view is that businesses and communities must step up with local solutions that meet the challenges head on. Big business has taken big knocks in recent years with good reason. Meanwhile, small, socially responsible businesses have become a beacon and a breath of fresh air. In many cases they’re thriving, gaining strength, beginning to make an impact, but we must do more and we must do it for a long, long time.
So I come to these conclusions 30 years into my business career as the cofounder of this small, employee-owned design-build company that now has six million in sales, 15 owners among its 32 employees, and a dedication to this kind of enduring connection to community and place that we hope will survive.
In 1987, we restructured from a sole proprietorship to an employee-owned cooperative corporation. It was a dramatic hinge-point in the history of the company. Ownership has become available to all employees, enabling people to own and guide their workplace. The responsibility, the power and the profits all belong to the group of owners. There are no outside investors, no non-employee owners, and we decide what kind of business ours will be. Those decisions are partly economic and partly philosophical, and the people making them have well-aligned interests.
At the time of that restructuring, the full implications of what I was doing were hardly apparent to me. Some have a hard time understanding why I gave up sole ownership and control, but only because they do not understand the tremendous rewards and benefits that derive from that decision for me and for the company. I have the best job I can imagine, and that is due to the colleagues who share ownership and share this ride with me. The potential freedom that we can gain is alone a compelling reason to sell our businesses to our employees. The great thing is you still get to own it, partly; you still get to run it, partly; and yet you’re freed from full responsibility, partly. Nearly 20 years later, I’m fully convinced that the conversion to employee ownership has been a critical factor in the long-term success of our company. I’d like to suggest a few more reasons why people may wish to consider selling their companies to their employees sometime soon.
By the way, when we made the conversion to employee ownership, at that time, there were two million people in this country who were working for companies partly owned. Today there are thirty million. So employee ownership, which flies below the radar, and which has not been wholeheartedly endorsed and accepted and embraced by socially responsible business is, however, under the radar growing exponentially.
Once the entrepreneurial leap of starting a new business has been achieved without constraints and a viable company’s been established, restructuring to employee ownership can be a natural part of the maturation process. Employee ownership is the ticket to good legacy and smooth transitions. By sharing ownership early on, the difficult question that comes when founders are ready to retire, what to do with this business that we’ve put heart and soul into, and often half a lifetime, is taken care of. The inherent injustice of our current economic system—all wealth goes to the owner or the shareholders—can be tackled through employee ownership by shifting wealth to the real stakeholders, those who actually create it, by using a system of internal capital accounts through which the profit is shared and equity is measured, employee owners can accumulate a healthy nest egg that they take with them when they depart.
If the people who make the decisions are the people who will also bear the consequences of those decisions, better decisions are likely to result. For example, the vexing issue of growth, the gospel of growth, is no longer a given. The employees decide whether the benefits outweigh the detriments.
A key element of our approach is hiring future owners as opposed to employees. We envision people who enter the company staying and leading it forward. We don’t know what they, as the perpetuators, will do or produce, but the essence of our collective enterprise will survive in them as they travel into a future we can’t even imagine. So we’re not always looking for people with specific skill sets. We can teach what we need to. We’re looking for the kind of people we wish to share ownership with.
Ownership is a big, big deal. It inspires commitment and responsibility. Tom Friedman once said, in the history of mankind, nobody has ever washed a rented car. And Corey Rosen, the director of the National Center for Employee Ownership says, it’s not about a sense of ownership; a sense of ownership is like a sense of dinner, and in this case, it’s really about the whole meal being shared.
Many ecologists and a few intrepid economists question whether the planet, of course, can sustain a global economy that enjoys perpetual growth, but the advantage of individual enterprise growth is rarely challenged in the world of business. It’s equally unusual to consider the concept of optimal size. In fact, conventional wisdom suggests that small businesses are just those that haven’t yet achieved more success. And in the early days, like most companies, we responded to demand and we grew to accommodate it, but after a time, we came to suspect that we couldn’t retain many of the qualities we value if we were significantly larger, and since then, for many years, we’ve examined growth rigorously and evaluated the benefits and detriments. We grow to achieve specific goals, but we’re aware that when we choose to increase in size, we may disrupt and endanger treasured attributes, and limit good things like invention, personal fulfillment, and the quality of our workplace and our products. Careful control of growth has become a prominent link in our chain of values. It’s a tug on a sleeve that has our full attention, the gospel of unrestrained growth is not for us.
But our inquiry is not just about growth versus no growth, it’s about the quality of growth, and we think about enough rather than more, enough profits to retain and share, enough compensation for all, enough health and well being, enough time to give to the work the attention it deserves, enough to manage, enough headaches, enough screw-ups. To forego expansion opportunities means the employee of this company chooses to value the quality of their work life over the size of the potential compensation that might come with growth, but that doesn’t mean we don’t constantly struggle with our values.
The lure of greater financial success is strong and hard to forego. Sometimes it comes close to our price. But 30 years after our seat-of-the-pants beginning, 30 years after subsidized housing for the rich, we are still small enough to stay closely connected to our roots, to do business on a handshake, to all gather in one small room, to know each other as collaborators and people, not only as coworkers. Living our structure has shaped a dedicated, skillful, compassionate body of decision makers. Nobody’s getting rich, but we’re living comfortably doing the work we enjoy in the location of our choice. All of us are able to make great livelihoods because no one is getting rich.
We have a long-term investment in the small community we work in. All our eggs are in this one geographical basket, with its strengths and weaknesses, assets and issues, this is the place we know best, the place that serves as a laboratory for all our experiments. Making expensive homes in a rural resort community, which is part of what we do, has many significant returns, but by itself it doesn’t directly serve any kind of broad social purpose beyond providing good jobs to a few and good homes to a fortunate few, no matter how socially purposeful and no matter how green and environmental we are in the way we do it. And, in fact, if that’s all that we do, we’re only a part of the problem. We address this reality by using the financial resources and the web of relationships that derive from our work to help solve regional problems, to create desperately needed affordable housing, we balance our high-end work with our affordable housing work, and to limit our environmental impact.
We’ve spent 25 years pushing clients to venture further along the green-building path, and now they’re beginning to push us. They’re asking for net-energy-producing homes, carbon-neutral homes, they’re putting composting toilets in million-dollar homes. It’s rewarding. But still, we need to balance our high-end work by being forces for change in the community, and we do this in many areas.
In the winters of ’02, ’03 and ’04, I took a six-month sabbatical from work to write a book, but also to be away from South Mountain Company and give the company an opportunity to emerge from the shadows and constraints imposed by my leadership. Until December of 2002, never for 28 years had I been away from the company for more than two weeks. A bill never left our office that I didn’t see. There was never a meeting of any substance that I was at, so six months away was very different. I knew I wanted to write a book, but there were two big unknowns: Could I do it? What would it be? I tend to thrive on clamor. Could I sit and quiet myself and write? There were times when I felt like Charlie Brown when he said, sometimes I lie awake at night and ask where have I gone wrong, and then a voice says to me, Mmm…this is gonna take more than one night.
But at some point, seamlessly, I began to write, and at the end I had a book proposal and a few draft chapters. Returning to South Mountain I found that things had gone well, no disasters at all, but there had been a collection of stresses. The management system we had put in place was ill conceived, it felt slippery, like things were seeping through the cracks. Between my return and my second departure, we worked on it, adjusted, tinkered, re-rigged and realigned.
As I said, there were two parts to the sabbatical—to write a book and to give the company some space—and as far as the second one goes, the thrilling part, is that I came back to a far better company than the one I left. It’s a different company, a new company, and managing the company in my absence gave people in the company a new sense of legacy and brought visceral meaning to the idea that this company will truly endure beyond my tenure.
But we’re still clearly a work in progress. In fact, we’re only at the beginning of a long journey. We continue to decentralize management. We sense new urgency and great progress in new endeavors we’ve begun. We seem to have new determination to honor our long-term commitment to restoration improvement of the region where we work and live.
There’s nothing to keep us from building the cathedrals. Right now on Martha’s Vineyard a wonderful effort is underway that speaks to this. Our regional planning agency, which has unusual powers that have only partially been used over the years, has convened a diverse steering committee to create a long-term island plan. When the steering committee convened, the members said loud and clear, our shelves are full of well-meaning plans. We need to do something different, something bold and compelling that shakes up current reality—a 50-year plan. So we are trying to create a synchronized philosophy of sustainability for a vibrant local economy that produces as much of our essentials as possible, with a recognition that we can invent the future we want. It’s not a static plan, but an iterative process that will constantly cycle back to re-imagine and adjust, and that will have achievable, measurable actions that we can assess in 2010, in 2025 and in 2050. And as we’ve begun to fashion this plan, it’s occurred to me that our work at South Mountain for many years has been to be model makers for that plan. That’s what we do. We make models.
When people say that affordable housing is beset with problems, we say, let’s make beautiful affordable housing that will change their minds. When people say composting toilets can’t work, we build a whole neighborhood and find that people adapt well and appreciate them. When people say wind turbines will be a blight on the landscape, we say how do you know? And now, we’re doing the same at our local high school because people have embraced it. When people say it can’t be done, whatever it is, if it’s something that should be done, we say, oh, sure, of course it can be done. But then you’ve got to do it, and it’s not easy to do it. In fact, it’s sometimes very hard and downright scary.
So we need to have good, strong, healthy organizations full of dedicated people, with ownership, who feel good about their work and about their workplace. We have to think like cathedral builders. We have to learn how to make decisions, how to engage in good teamwork, how to collaborate, and we have to stick to our guns. In the end, it takes as much energy to say why something can’t be done as it does to figure out how to do it. And when it comes to the so-called devil’s advocate, forget it. As a friend of mine says, the devil has all the help he needs.
I don’t pretend to know how much we can build on the foundations we’ve created, or to what extent our experience in business can help others toward a path to economic democracy, environmental restoration and local community commitment. I have great hope, and hope is different from optimism. It’s not the conviction that something will turn out well, but the certainty that something makes sense no matter how it turns out. And although this kind of hopefulness seems not to be the currency of the day, I look around me and I see wonderful ideas and forces stewing at the edges of our society, a mosaic of new institutions and approaches emerging.
As we unpack the tools and concepts of true community, we may ultimately change the chemistry of our culture, and that’s what gatherings like this are all about. Science fiction writer, William Gibson, says, the future has already arrived. It’s just not distributed yet. I hope we’ll all continue to peer into those corners where we find that it’s here, drag it out in the open, and broadcast it widely. Together I sense that we may be able to invent a future we can all embrace.
