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Comment by tomatowurst | Hacker News Reader

can somebody explain how these organizations handle a bad actor or collusion towards bad goals?

Say somebody comes along and wants to use Oracle suddenly, what sort of measures exist to prevent that from happening, how is arbitration, enforcements and distribution of profit calculated?

The only successful corp i can think that is similar to this is Valve but it isn't quite worker owned, it seems to distribute profits more fairly.

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Whether it's a hostile board takeover, or a bad hire in a CxO position (or even any regular employee with influence), those risks exist everywhere.

Actually, I think a co-op is better protected.

A co-op should have founding principles, and acting against them should raise red flags.

For distributing profits, etc, again, standard legal docs. Here in Quebec, there are orgs who can help with that (reseau.coop).

The biggest challenge is growing: I'm in a 5 person co-op. In a previous life, I was in a 25-person collective which became hell to manage, as everyone wanted to be heard, but few wanted the responsibilities.

So in our current co-op, two of us tend to enforce the bottom line, in our respective areas. I mean, legal structure and org structure, while there may be influenced, can be pretty orthogonal.

> The biggest challenge is growing: I'm in a 5 person co-op. In a previous life, I was in a 25-person collective which became hell to manage, as everyone wanted to be heard, but few wanted the responsibilities.

yeah but you see the problem here? without a central leadership, everybody will have equity and you can't really steer the ship anymore.

I don't know too much about reseau or how it functions but i have a lot of difficulty with say a SaaS being run like a coop. 25 developers divide equally the loot? But there will be disagreements and disproportionate equity right off the bat. How do you remove somebody who plays politics and is able to win consensus but you know its going to impact your business? How do you arbitrate disagreements over distribution or spending of resources or the manner in which they conduct operation?

> How do you remove somebody who plays politics and is able to win consensus but you know its going to impact your business? How do you arbitrate disagreements over distribution or spending of resources or the manner in which they conduct operation?

Who is this "you" in "your business"? The business is as much "theirs" as it is "yours". If they can convince enough people of a course of action, even if somr are not convinced, why do you assume that the course of action will be bad?

The biggest weakness of traditional companies is exactly that a sibgle hair-brained boss can wreak havoc on the whole organization below them. Democracy solves this problem, it is much more resistant to a bad actor than autocracy is.

I think top-down and bottom-up organizing styles create essentially two different, but similar, versions of this particular failure mode.

In top-down there's always the risk of someone coming in and making a long string of bad decisions and essentially wrecking everything by leading everyone on a wild goose chase, while in bottom up the risk is someone obstructing good things happening by either being a drag or exercising whatever veto or FUD power they have (whether designed or organic) to prevent action. This looks less dramatic as it's happening but stagnation is just as powerful a force as havoc in the long run.

There's a really tricky balance to strike somewhere in there.

I like the concept of shepherding, not leading. Being on the sidelines, encouraging people to take the lead, but bring them back on track when necessary.

>So in our current co-op, two of us tend to enforce the bottom line, in our respective areas. I mean, legal structure and org structure, while there may be influenced, can be pretty orthogonal.

In some sense, then the two of you may extraordinary - a combination of ethics, IQ and integrity. Your biggest challenge will be handing over the reigns when you are ready to leave (usually only due to bad health or age, it's life long thing). More specifically the task has to begin decades before you leave. If it's not done (often the case) the enterprise's morals rot, even if it continues to be financially successful.

Yep, I see this in small shops of older friends. Some just close shop, or sell their business for almost nothing. Although there are ways to exit profitability from a co-op, I don't expect much. If it survives, I'll be happy.

We're not a big SaaS with exponential growth. We're based on Free Software and I often help competing shops because it helps an otherwise dying ecosystem.

I make most of my money off consulting and my co-op pays me well, and I'm generally really happy with work. Good enough for me.

I can’t provide a generic answer but in my experience, there were two mechanisms. First, people are hired partly based on their political values and through word of mouth, which limits ways for bad actors to join. In the same vein, the pay is below market-rates, which reinforces the phenomenon of ideological homogeneity. Second, decisions are made through consensus using formalized methods. Frequent meetings that are prepared in advance following a set of rules, disagreements that are discussed using techniques that minimize the subjective dimension of it and are solution-oriented, elections without a candidate (in French: “élection sans candidat”), etc.

but what happens when its not in the interest of the business to make consensus based decisions? like what you described can quickly devolve into "how do we get everybody to keep their responsibilities unchanged and still make payroll?" vs "how do I delegate responsibilities and adjust payroll to resources that generate revenues vs expenses"?

I just have a hardtime believing this could work. Corporations reflect militant hierarchy for a reason because effective decisions often cannot be made through consensus or utilitarian drivers. Corporations thrive when they are lead by profit incentives of executives who are beholden to profit incentives of liquidity/capital lenders.

You simply do not see a "collective" trade publicly.

It works though, and typically when these cooperatives grow large enough they easily outcompete the privately owned businesses where the profits are siphoned out to people who contributed nothing and who have no knowledge or clue about the actual business. In cooperatives the owners actually know what is happening on the ground because they work in the company, and the profits don't flow out of the business.

https://en.m.wikipedia.org/wiki/Mondragon_Corporation

The business are the owners. And, unless they are woefully mislead or incapable, the owners will vote what is in their best interest. If the best thing for the business is NOT to grow, because a majority are happy with the current state, then the business shouldn't grow, especially if that would require sacrificing the desires of some of the workers.

This is identical to how privately owned companies are often run, especially family owned small businesses, which can be extremely successful.

Profit is at best a proxy for success, it is not a goal in itself.

It does work though.

In the UK for example, we have the John Lewis Partnership (10.5billion GBP revenue), Co-operative group (11billion GBP revenue), and many in the 50+ million revenue bracket like Suma Wholefoods.

We've also had many major public or private corporations rescued from collapse by worker co-operatives that were able to maneuver out of problems that the centralised organisation could not. See for example Meriden and National Express.

Also, many people's financial services are provided by building societies and other co-operatives. Many of the largest banks have been these kinds of organisations at least once. HSBC for example.

That's just in the UK - it would be astonishing if there weren't many more examples disproving your conjecture from every other country.

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