Richard Jernigan -> RE: Economical Crisis in Spanish Luthiers (Jan. 20 2014 18:01:52)
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ORIGINAL: Ruphus We can have authentically employee-owned enterprises like Isthmus that work just great for everyone involved: http://www.isthmuseng.com/company/worker-owned-cooperative/ Ruphus I was a member of an employee-owned company for several years, and I still own stock in it. The stock forms about 10% of my net worth, and provides about 15% of my annual income. The company is in the defense business. You dismissed its financial success out of hand, due to what you claimed to be outrageous margins in the defense business. In fact the company's main product is studies, advice and exploring the feasibility of advanced concepts, which involves little risk. Government procurement regulations strictly limit the profitability of such contracts to a percentage considerably below that of ordinary commercial enterprises. It was the best job I ever had. I believe there were three main factors at work. Of course one was joint ownership of the company and profit sharing among all 35 employees. But I believe two other factors were at least as important. The company had intentionally grown very slowly, being exceptionally selective in the choice of new employees. New technical employees were chosen among those who worked on projects that the company was involved in. They knew me and observed my work for at least four years before I was approached. This was the usual pattern. New employees were chosen for their technical ability, and for the likelihood that they would get along well with the rest of the group. The other main factor puzzled me slightly for the first few months I worked there. Everyone got along. There were no factions or cliques. Everyone treated everyone else with complete respect and genuine thoughtfulness, including the secretaries and the receptionist. This puzzled me because the company was started by a single individual, who was the main owner for a number of years. He didn't strike me as the type to have created such a harmonious atmosphere. A couple of weeks after I started to work, a person whose name I knew, but whom I had not met, stopped by my office. He introduced himself as the chief financial officer, and said he worked part time. He said he had owned a small business, had retired and sold it to his employees, and now had a management consulting business. I asked him whether he had any interesting clients. He said that he did. He was working for one of the academic departments at the University of California Los Angeles. "Which one?" "The Management Department." My puzzlement evaporated six months after I started to work there, at the picnic in honor of the original owner's retirement. In his brief speech, he thanked the financial officer/management consultant. "When I started out, I knew I would need some financial advice, so I hired Xxxx. He gave me very valuable financial advice. He also taught me that a small company could be run like a happy family. As some of you know, I had previously not been particularly successful at the happy family part." So when I worked there, and in succeeding years, there were three major factors in the company's success: careful selection of employees, not only for ability, but for compatibility; employee ownership; and a carefully nurtured culture of mutual respect and cooperation. I think all three factors were essential for success. RNJ
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