What are worker cooperatives and sociocracy?

Mar 31, 2022

What sets us apart?

Worker cooperatives like VME are democratic firms owned by the people who work in them. The leadership is elected on a one-worker-one-vote basis, and the profits are shared to the workers in a fair way. Because people working in the company have a say and a stake in the business, worker cooperatives have been shown to have a higher productivity and lower risk of bankruptcy. That is also one reason they are increasing in popularity - in the early 1970s there were only around 20 worker cooperatives in the UK. Now the number is more than 400 and growing. While some might assume that democratic decision making would only be suitable for small firms, the success of many worker cooperatives show this is not the case. For example, the largest company in the most prosperous region of Spain, the Basque country, is a 80,000 workers strong Mondragon worker cooperative.

However, we at VME take democracy even further than most worker cooperatives. In addition to having employees elect the leadership of our firm that makes top-level decisions, the day-to-day decisions are also made democratically using a method called “sociocracy”.

In a sociocracy, an organisation is divided into “circles”, small groups of people that have a responsibility in one area of operations (sales, product development, marketing, etc.) with clearly defined aims. The circles meet regularly, report to each other and are small enough to form a consensus on decisions. If consensus cannot be formed, a vote can take place - although this is rarely if ever the case. All members can join any and as many circles as they want, with circles being reorganised every 6 months. If there are more applicants to a circle than there are positions, then an election takes place. In these elections all employees can cast their vote. The Management Circle also has the ability to appoint employees to circles to ensure each circle has the required mix of expertise, but the majority of circle members are always directly democratically decided by the employees. Employees who are not members of a particular circle can still submit ideas or topics of discussion for the circle. However, only circle members have the power to make decisions.

Whereas in a conventional company, the CEO and the board make decisions that others implement, in VME we have another, somewhat opposite, approach. The circles are there to make decisions and not merely to ‘do’ what others have decided - the role of our CEO and the board is to preside over the circles, ensure company law compliance and act as a safety valve on critical decisions. We believe that a top-down command based management is not only unfair, but more inefficient - when everyone can participate in decision making, better decisions are made and people are more satisfied with the decisions. It also fosters innovation by encouraging people to take initiative and come up with new ideas that they can implement.

By joining VME, not only do you become an employee - you also become an owner and manager of our enterprise.