John Abrams: Employee Ownership in a Time of Economic Hardship
Posted Oct 17 2008 11:19pm
When John Abrams started South Mountain Company 33 years ago, his anti-commerce, anti-business ethos seemed at odds with the idea of success as measured by growth and profit.
But as he adhered to a deeply held set of principles—community, cooperation, fairness, and faith in others, along with a healthy dose of self-criticism—his business did grow—from a humble cabinetmaking and woodworking shop to a $9 million dollar a year design and construction firm. Co-workers gradually became co-owners. And the principles of fairness and cooperation endure.
In “Companies We Keep,” the revised and expanded edition of his 2005 release of “The Company We Keep,” Abrams further develops his idea that companies flourish with employee ownership and workplace democracy when they become “communities of enterprise.” The idea is that when employees share in the rewards, as well as the responsibility for the decisions they make, the company gets better results.
Abrams considers the role of business in promoting community, creating social equity and maintaining ecological balance. He challenges conventional business concepts of “bigger is better” and “profits over people.” The narratives in his book demonstrate that one can bring high personal values to the workplace, protect natural resources, uphold high standards of craftsmanship, control growth and still make money.
Abrams is co-founder and president of South Mountain Company on Martha’s Vineyard, an employee-owned design, building and renewable energy company committed to responsible business practice. Started in 1975, the company now has 17 owners among its 33 employees and annual revenues of $9 million.
“Nobody’s getting rich,” Abrams said. “But everybody’s doing the work they love in the place they love, so everybody, instead, is doing well.” When asked why his business model works on Martha’s Vineyard when it hasn’t caught on elsewhere, Abrams said, “Pure, dumb luck.”
Despite current economic hardships, Abrams said he’s optimistic that businesses don’t have to fail. “Nothing’s in the way of doing what we want to do and making things the way we want them to be,” he said.
Abrams suggests that businesses should outlive their founders. This is a timely topic. Most of the baby boomer generation, which include the owners of millions of American businesses, will retire within the next two decades, and their businesses will change hands. Employee ownership is one option, and this book examines how it can be done as one of eight basic principles that Abrams has developed.
He said his company welcomes new people in and keeps them. “People don’t leave. They just don’t leave,” he said. Also, Abrams said, with the recognition that Wall Street is “not working,” now is the time to look at reindustrialization. He believes wealth should be distributed more evenly, through employee ownership, and businesses should be doing “good work.”
His company has made a long-term commitment to preserving community and helping solve the regional affordable housing crisis. South Mountain has been responsible for some groundbreaking affordable housing projects, such as the first LEED (Leadership in Energy and Environmental Design) Platinum single family affordable housing units in the nation.
“The key to the preserving of our community is affordable housing,” Abrams said. “Without it, it disappears.” He said affordable housing constitutes about one-third of the work his company does. This housing should be smaller, less detailed and financed differently than luxury housing, he said, but it should be of the same quality.