7 co-op business principles for the open organization

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Open for business


What makes the concept of an open organization so great is not its novelty, but rather of the ways it borrows from already tried-and-true business and organizational practices. In other words, what makes an open organization an interesting concept (and one I think could be a model for others) isn't some unique secret. The notion of an "open organization" is really a compilation of many ideas—related to openness, collaboration, and sharing—that have proven successful time and time again, along with a simple commitment to intentionally follow them.

As I read Jim Whitehurst's The Open Organization, I couldn't help but reflect on my first job out of college. I had taken a position in a local food co-op, working in the marketing department and primarily managing events for three retail locations. But about three months in, when a co-worker left to head to graduate school, I began managing owner services and outreach. I was managing relations with our owners, who happened to be our employees and customers. As a big chunk of my job became both answering questions from existing owners, educating new owners about cooperatives, and serving as executive secretary to our board of directors, I quickly tried to learn as much as I could about cooperative business structure and operations.

When I say cooperative, I don't mean just "an organization that cooperates." Cooperatives are a type of business with very specific criteria defining what they are and how they operate; many countries have their own laws and regulations which lay this out.

Cooperatives come in all shapes and sizes, from insurance and banking cooperatives (think: credit unions) operating at a national scale, to regional farming and rural electrification cooperatives banding together resources to help people for whom other business models failed, to small businesses who want to focus on serving the needs of their employees and customers first and foremost.

The ideas behind cooperatives are hundreds of years old, but most references to how co-ops define themselves date back to the Rochdale Society of Equitable Pioneers, an early consumer cooperative dating back to the 1840s in Great Britain. From the Rochdale Society came seven principles for what cooperatives are and how they operate—what people refer to as either the "Rochdale Principles" or simply the "7 Cooperative Principles."

The decision to organize a project or business as a cooperative depends on a number of factors, but I think even more "traditional" organizations can learn many things from them. Does every organization need to be organized as a cooperative to benefit from some of the things that make cooperatives successful? Of course not. Whether an organization is a traditional for-profit corporation, or even a nonprofit, there are a lot of concepts which can be learned from co-ops. The more I thought about what an open organization meant to me, the more I thought back to my time at a local co-op and how some of the things I saw there were starting to resurface in the corporate world when businesses saw the advantage of "going open."

So let's look at those seven cooperative principles and discuss what they might mean for an open organization:

Open and voluntary membership

This is an important part of most open source project definitions: Anyone can contribute, so long as everyone follows the community guidelines. Some projects take a slightly stricter approach, requiring some formal agreement or membership in an organization before they'll accept pull requests, but the lower the barrier to entry, the more people can participate.

This concept is even more important from a user's perspective, and it's one of the fundamental parts of what it means to be free, open source software. Anyone can use make use of the project's outputs for any purpose they see fit, and, just as importantly, as the controllers of their own machines' destinies, they should have the right to choose not to run a piece of software if they so choose.

Democratic member control

Democratic member control in open organizations speaks to the importance of meritocracy—that the best ideas come about when everybody can fully participate and judge suggestions on their own merits (rather than simply looking at the relative rank of the contributor). This doesn't mean some sort of structural management hierarchy doesn't exist within the organization; it just means that everyone has an equal right to participation and to be heard.

Members' economic participation

The concept of economic participation is the element most unique to cooperatives, but many organizations (regardless of their type) may benefit from making sure that all participants have some "skin in the game." Whether this takes the form of incentive-based pay or a shared pool of rewards to be distributed from the organization's profits, economic participation is another way to build loyalty and trust.

Autonomy and independence

Simply put, an organization can best control its own work when it gets to make decisions about the outcomes of the projects on which it works. People can make decisions at the most local levels possible, whether in the form of developers' deciding how to design a particular section of a project's architecture or a staff's choosing the tools that best enable them to do their own jobs. These principles also speak to the importance of open source projects maintaining control of their own destinies; if a strong faction feels they aren't being heard, they have the full right and ability to fork the code.

Education, training, and information

As much as we might like to believe that openness itself breeds the free flow of information, education is still an important part of any open organization. It ensures that newcomers are able to get up to speed and become full participants as quickly as possible, and it helps create a flow of information which allows other organizations to see the benefits that come from openness.


Open organizations have much to learn from one another, regardless of the sector in which they operate. In the open source world, we frequently see developers from competing companies working side-by-side to build a superior project from which everyone can benefit.

Concern for community

Finally, any organization must recognize that it's not the totality of the world in which it operates, and that it must give back, in a meaningful way, to the community around it. Whether this contribution is code, employee time, or making environmentally and socially conscious decisions about how to operate, giving back builds trust.


Cooperatives and open organizations have much to learn from each other. You need not be one to be the other, but plenty of their characteristics naturally overlap, and those interested in building successful participatory organizations would do well to study both.

Jason Baker
Former Red Hatter. Now a consultant and aspiring entrepreneur. Map nerd, maker, and enthusiastic installer of open source desktop and self-hosted software.

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