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Ties that Bind: Experiments in Community Business

Blog by Wayne Visser

After graduating in business studies from Cape Town, in 1992 I started a 4-month management traineeship programme with the Royal Bank of Canada in Kingston, Ontario. During this time, I came across the inspiring research of Professor Greg McLeod from Cape Breton University, written up in his Community Business Series booklets (and later, in From Mondragon To America – Experiments In Community Economic Development). Having worked in community development for over 30 years, McLeod was concerned about rootless capital – the trend of companies funded by absentee investors with no stake in the communities in which the business operates.

This is when I first learned of the amazing experiment in community business that had being going on for decades in Mondragon, a small town in the mountainous region of north-eastern Spain. Here, based on the teachings and initiatives of a Roman Catholic priest, a business comprising one electric stove manufacturer with five employees established was in 1955. Today, the Mondragon corporation is a complex of co-operatives with €36 billion ($46 billion) in assets and €13 billion ($17 billion) in sales, employing 80,000 people – all of which actively pursue a philosophy of local community development based on the values of co-operation, participation, social responsibility and innovation. With companies operating across four divisions (finance, industry, distribution and knowledge), Mondragon is today the foremost Basque business group and the seventh largest in Spain. For those who are interested to know more, there is a great series of blogs about Mondragon by co-founder and former CEO of Seventh Generation, Jeffrey Hollender.

Of course, not all community businesses are large. A much smaller-scale venture that interested me at the time was New Findhorn Directions (NFD), established in 1979 as an umbrella body for businesses operating from the Findhorn Foundation eco-community in Scotland. As it happened, I visited the community after my traineeship in Canada, and again in 1996 when I began my Masters in Human Ecology in Ediburgh. The businesses in place at that time included the Wood Studio, Bay Area Graphics, Findhorn Bay Apothecary, Weatherwise Solar and Alternative Data. They also had a pioneering eco-housing project (which included houses made from whisky barrels). What united these diverse companies were that they were all trying to demonstrate a broader community philosophy of ‘spiritual management’ and ‘work as love in action’.

What can we learn about corporate responsibility from these somewhat eccentric experiments in community business? The first point to note is that these businesses exist within a different (some might say counter-mainstream) micro-culture. The common objective in places such as Findhorn in Scotland and Mondragon in Spain is community and environmental improvement, including through enterprise. They are not hungry for short-term profits; rather, they are pursuing long-term sustainable development strategies. The desire is to be autonomous and self-sustaining and, most of all, to promote local self-development rooted in history and tradition. These two examples serve to illustrate that success stories in alternative ways of doing business do exist. The details of exactly how they are different, however, still need more thorough exploration …

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Visser, W. (2013) Ties that Bind: Experiments in Community Business, Wayne Visser Blog Series, 10 July 2013.

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Although it is heartening to note the growing worldwide interest in building sustainable communities for the future, it is at the same time disconcerting that so many of these community visions provide no place for the potential role of business within their working structure.

Community Visions

Instead, a rather predicable and in my opinion limited model seems to have been widely adopted. Its main characteristics are: food-growing self sufficiency (e.g. permaculture); environmental conservation (e.g. renewable energy); volunteer work (e.g. kibbutz-type arrangements); education services (e.g. conferences and work-shops); accommodation services (e.g. retreats and get-away weekends); and the sale of locally-made arts and crafts.

This largely self-enclosed, subsistence type of approach, with its distinct lack of any facilitation of business initiatives other than the most basic kinds, seems to me to fall substantially short of anything which may be considered a large-scale, viable lifestyle alternative for the future. This is because business, in one guise or another, forms a completely natural, necessary and valuable part and expression of any developed society. (This is not, take note, the same as saying that business as it is currently organised and practised is ideal, or that it should not be modified to better serve the needs of both individuals and society as a whole).

What shapes and forms might business take if it were to be integrated into the community vision, with its implicit goal of creating a more sustainable, co-operative, meaning-filled future society?

Before doing so, however, it would be just as well to look at why business has been largely excluded from this vision in the first place. Part of the reason has to do with some ‘community seekers’ simply failing to appreciate fully the basic functions which business serves in a society. But I would suggest that there is a more covert and accurate explanation which goes something like this:

Many of the things associated with modern-day business are precisely those things which community seekers are trying so hard to get away from: greed, dishonesty, stress, lack of meaning in their work, competition, money problems, power struggles, win-lose situations, and generally unwholesome living, to mention but a few. Hence, they remain fearful and suspicious of business and also sceptical about its desirability in any new system of living.

And, considered from the other side, most business people are too busy pursuing success in the old-fashioned profit-seeking way to be aware of, or concerned about, community initiatives. Others, who may be more aware, are yet to be convinced that there can be any viable alternatives to existing ways of organising and conducting business. So they either opt out of business completely, or remain within its traditional structures while introducing some positive changes inside the existing context.

But what about a full transformation of business? A new community business concept? If this were to materialise, what might the ‘new face’ (and body) of business look like?

Partial answers to these questions can be found among stories of experiments in community business which already exist. Let’s look at two such stories, although there are many more to tell.

Mondragon

The first is an experiment taking place in Mondragon, a small town in the mountainous region of north-eastern Spain. Here, based on the teachings and initiatives of a Roman Catholic priest who taught the application of the gospel to business and the economy, one electric stove manufacturer with five employees established in 1955 has grown into a complex of companies with annual sales in excess of $2.5 billion, all of which actively pursue a philosophy of local community development. The Mondragon Complex, with companies as diverse as a community bank (with assets of $3 billion), various technical production companies, a retail chain (with 264 outlets and annual sales of over $350 million) and an export company, is outstanding empirical proof that local, community-oriented people can launch businesses which are both large and internationally successful.

New Findhorn Directions

The other experiment is that of the emerging community business culture at the well-known Findhorn Community is northern Scotland. This began with the establishment of New Findhorn Directions (NFD) in 1979, a legal entity designed to serve as a framework in which private enterprise initiatives could emerge without violating the charitable status of the Findhorn Foundation itself. Subsequently, many promising business ventures have been initiated, though not all have succeeded; nor have they all chosen to function under the umbrella of NFD. Those currently in operation include the Wood Studio, Bay Area Graphics, Findhorn Bay Apothecary, Weatherwise Solar and Alternative Data. The unique characteristics of these companies are that they are all trying to demonstrate their broader community philosophy of ‘spiritual management’ and ‘work as love in action’.

These two examples serve to illustrate that success stories in alternative ways of doing business do exist. The details of exactly how they are different, however, still needs more thorough exploration.

Principles of Community Business

Firstly, a different set of values underscores the community business. For instance: money is made to serve human development and not vice versa; the business is a means of human and community development and not an end in itself; work is seen as an opportunity for creativity and personal development, as well as a contribution to serving the needs of society; democratic action and consultation are encouraged; integrity and competence in the management and conduct of business, as well as effective leadership, are considered necessary disciplines to be learned; and sensitivity to and solidarity with the local community is a prerequisite for a business operating in any particular area.

In order for these values to be translated into action, however, the community business needs to employ different structures to those traditionally used in private enterprise. For instance, there is a difference in ownership. Whereas conventional companies are owned by shareholders who may live anywhere, the shareholders of community businesses are people who live in the area where the company operates. The use of profit is also different. Whereas the traditional company tries to make a profit to return to the shareholders wherever they may live, the community company aims to use its profits to start new local businesses and to improve life in the local community.

The benefits of the community business approach are readily apparent. Since its focus is local, business will be much more sensitive to local needs as well as local opportunities in a way that traditional companies might not be. With the emphasis of people rather than on money-making, business will naturally be more responsive to human development in its staff and in its community than has been customary in the past.

It would be a mistake to assume that these ideas are conclusive or easy to implement. On the contrary, growing ‘spiritual businesses’ is an open-ended and challenging experimental process, according to Francois Duquesne, past ‘focaliser’ of the Findhorn Foundation and present partner in the Alternative Data software company.

“I thought meditations on Monday mornings and being nice to customers would do it,” he says. “Instead, I had to deal with intense personality conflicts in a system where power is equated with money. Yet there is great excitement. All the problems have had to do with perceptions of power. Power to stifle and manipulate, or to create, enliven and challenge. There is no other way of dealing with power issues except by bringing them out and working them through until there is some result.”

Integrating business into an emerging community vision may prove to be one of the most critical lessons to be learned if we are to evolve further as a collective society. Whether or not this be the case, I endorse Duquesne’s statement:

“I am going ahead in faith, trusting that this path also has a heart.”

Citation and download

Visser, W. (1994) Community Business. Odyssey, Volume 17 No. 5, October 1993 / January 1994.