Friday

Five Community-Owned Businesses That Are Thriving

Marjorie Kelly's latest book explores a new model of ownership where an entire community shares a business which in turn gives their best interests (and not shareholders' interests) priority and focuses on long-term growth and yield over short-term profits.

The model is already working successfully in different communities all around the world. Here are just five examples:

 1. Community-owned banks – like credit unions of the U.S., building societies in the UK, and cooperative banks found across the globe, all of which are owned by their depositors. At a time when the mega-banks of the U.S. were receiving billions in bailouts, the vast majority of the nation’s 8,000 consumer-owned credit unions needed none. In Europe, the cooperative banking sector holds 21 percent of all deposits. In the Netherlands, the enormous Rabobank holds 43 percent of the country’s deposits. These cooperative banks are member-owned and run democratically in the interests of their customers.

2. Community-owned wind – like Lynneten Wind Farm, standing offshore in Copenhagen harbor, where three turbines are owned by a local utility, four by a wind guild. Wind guilds are owned by small local investors who joined together to fund and own wind installations, with no corporate middleman. Denmark today generates 20 percent of its electric power from wind, more than any other nation. And many credit that success to the grassroots movement of the wind guilds.


3. Community-owned forests of Mexico – where the rights to govern and profit from the forest are often held by indigenous peoples, like the Zapotec Indians of Ixtlan de Juarez in southern Mexico. At Ixtlan, the problems that bedeviled other forests in Mexico, like deforestation and illegal logging, have become relatively unknown. The reason is community members have incentive to be stewards, because forest enterprises employ 300 people harvesting timber, making furniture, and caring for the forest. Community forests represent 60 to 80 percent of all forests in Mexico. Worldwide, more than a quarter of forests in developing nations are managed by local communities.

4. Community land trusts – like the Jewish National Fund, a public but nongovernmental institution established over a century ago to hold land that, as its founder said, would be “the property of the Jewish people as a whole.” Today the fund still holds title to substantial land in Israel, overseen by trustees who lease portions to kibbutzim and others who use it in the public interest. Mexico once had the ejido system, involving village control over communal land. And traditions of common land ownership were known in ancient China and Africa. Today these traditions survive in the British custom of the town common in New England. There are also community land trusts in the U.S. where a cluster of families own their homes, while a community nonprofit owns the land beneath those homes. In the housing crisis that began in 2008, community land trust homes in the U.S. had foreclosure rates one-tenth those of traditionally owned homes.

5. Community-owned restaurants and grocery stores – like the County Seat Café in Gove, Kansas, which is housed next to the GCIA Grocery Store, both of which were created by the community after a local restaurant and store closed. A group of citizens formed the Gove Community Improvement Association (GCIA), and built a new building with volunteer labor, local donations, and a loan from the local electric cooperative. Local residents can join the GCIA for $25, which brings certain purchasing privileges at the grocery store, such as the right to charge. Different from cooperatives, community-owned stores can tailor their ownership structures to meet the unique needs of their communities.

Monday

Roles and Responsibilities of Leaders in the Future.

Carol Pearson worked with the top minds in leadership research to edit and create the edited collection, The Transforming Leader. Here she lists the Five Most Important Things Leaders Should Keep in Mind When Addressing the Roles and Responsibilities of Leaders in the Future:
 
1.  Have a strong, positive intent but let go of the illusion of control.
The pace of modern life and the reality of interdependence make it increasingly unrealistic to think we can predict the future or accomplish linear goals and objectives.  However, if we are not clear about our intent, we can simply be tossed to and fro by changing circumstances.  Effective leaders today must recognize that moving toward their goals will be more like an adventure than a controlled project.

2.  Always stop and take stock of both yourself and the groups you lead.
Effective leaders today practice mindfulness to know themselves better. Similarly, they must take time to understand the social network within their organizations, identifying opinion shapers and current direction of thinking and trends.  They also recognize that while they are influencing their group— the group is also influencing them, resulting in both negative and positive tendencies within the system that should not be ignored.

3.  Find a way to harvest intelligence wherever you find it in yourself.
Because our unconscious minds track and process more information than is available to our conscious minds, effective leaders facing unpredictable situations today find ways to access and evaluate intuitive guidance from the unconscious, paying attention to their hunches, gut feelings, dreams, and/or images that suddenly arise into consciousness..

4.  See greater possibilities by getting rid of projections and appreciating the dual nature of things.
Effective leaders today must develop the capacity to help themselves and the groups they lead to question and even potentially withdraw projections in order to move beyond limiting dualistic patterns of thinking such as right/wrong, good/bad, inferior/superior.   In doing so, such leaders foster greater empathy for other people and groups, and gain an enhanced understanding of why they think and feel as they do.

5.  Demonstrate the narrative intelligence to choose the stories you tell and live.
Most people interpret the experiences they have through the lenses of certain familiar story lines, thereby confusing their stories with reality. Many leaders who have been very successful in the past, are stymied, not only because they’re inadequate to what is required today but also because they are oblivious to the fact that their stories are not reality.  But effective leaders today must notice what stories they are telling and living and how and if they are relevant and have impact to the groups and people around them.







Wednesday

Five Ways Shareholder Primacy Hurts the Very People It Is Supposed to Serve


As author and professor Lynn Stout has pointed out numerous times, shareholder primacy -- of always focusing on maximizing shareholder returns -- remains one of the most detrimental and dangerous myths operating in business markets today. But just in case anyone tries to dismiss her argument as "liberal leftie talk," she outlines below five ways in which shareholder primacy actually hurts shareholders themselves:

1. Shareholder Primacy Erodes Long-Term Returns. Shareholder primacy leads corporate managers to focus obsessively on raising the next quarter's earnings.  Often the most reliable way to do this is to defer maintenance, cut safety corners, or reduce customer support -- short-term strategies that harm long-term business performance.

2. Shareholder Primacy Stifles Innovation. Because so much focus is put on today's stock price, potentially innovative and revolutionary research and products are neglected as requiring too long-term an investment. Instead of creating groundbreaking products or services, companies settle for less ambitious projects that produce modest but reliable profits without challenging the industry -- meaning only modest returns for shareholders.

3. Shareholder Primacy Undermines Employee Effort and Loyalty.  In the relentless drive to raise today's share price, companies reduce their workforces, outsource good jobs, and relentlessly drive the employees who remain into exhaustion.  Employee dedication and loyalty suffers -- and eventually, so does the business.

4. Shareholder Primacy Hurts Investors' Other Assets and Interests. In the quest for more and more profit, companies take on leverage that hurts bond values, pursue anti-competitive strategies that raise consumer prices, and create mortgage bubbles that hurt real estate values.  The price of some stocks in the investors' portfolios may go up, but the value of their other interests and assets go down.

5. Shareholder Primacy Makes Corporations Act Like Psychopaths, and Makes Shareholders Look Like Psychopaths.
  When managers feel they have to focus only on profits without regard to ethics or the welfare of others, they cause corporation to act like conscienceless psychopaths: maiming employees, polluting the environment, breaking the law.  This works against the interests of the many shareholders who want their firms to earn profits honestly and ethically.