Case Studies – Erin copy

Once Again Nut Butter (OANB) is a 100% employee-owned food manufacturing company with 80 employee-owners, an employee stock ownership plan (ESOP), and annual revenue of $50 million. Located in rural Nunda, New York, they make nut and seed butters that are sold in stores throughout the United States. Between 2011 and 2014, the company saw double-digit growth in annual revenue, sometimes growing as much as 40% annually. In that same time period, the number of employees doubled from 30 to 60.

Despite this there was dissatisfaction among the employee-owners, who expected to have a voice in company decisions. There was however no transparent structure for doing so. The result was disappointment, frustration, and anger when things went wrong. People would point the finger at each other to assign blame, rather than cooperating to find solutions.

The Board of Directors set up a Governance Committee in 2014 that included board members, the General Manager, and two other employee-owners. Those employee-owners were selected using a consent-based sociocratic election process in a meeting of all employee-owners. The Sociocracy Consulting Group facilitated that process, and then trained the Governance Committee in sociocratic meeting processes, so that each member would have a voice at their meetings and the Committee could make decisions by consent.

The Governance Committee developed a decision matrix to clarify which individual, committee, or group would make which decisions. An Employee Owners Manual Committee now reviews the decision matrix annually. The Board of Directors and some of the committees and groups use rounds and consent decision-making practices from the Sociocratic Circle-organization Method (SCM) in their meetings. In addition, each committee or circle now has a charter defining its domain of decision-making and consistent with the decision matrix.

The new system has improved communication at all levels and involved people throughout the company in making decisions. It is clear to everyone who does what. The change in culture is palpable. Finger-pointing has subsided, and people collaborate to find solutions when there are difficulties. For more information, including specific examples of the culture change, see the full case study, Distributed Leadership Changes Everything in a Manufacturing Company.

Hertzler Systems Inc., located in Goshen, Indiana, has been a leader in Statistical Process Control, SPC software, and Six Sigma for over 30 years, serving a diverse customer base in service, transactional, and manufacturing environments. The company’s software and services enable clients to build an infrastructure for making data-driven decisions - reducing costs, cycle time and errors, and increasing profitability.

The Sociocracy Consulting Group has provided management and staff training and structure and process consulting for Hertzler Systems' implementation of sociocracy, as well as external expertise for a custom Community of Practice circle supporting the implementation team.

According to Hertzler staff and management, benefits of using sociocracy include:

• Improved meeting efficiency and effectiveness.
• Increased involvement - and ownership of outcomes - by all
  stakeholders in decisions.
• Increased transparency in decision-making.
• New opportunities for people to test and develop their leadership
  skills.
• Increased capacity for organizational change resulting in rapid and
  continuous improvements.
• Broader sense of “we” in the organization - an experience of “we’re
  in this together” (instead of “us/them,” as in “what are they going to
  do to us next?”). This translates into a more positive and productive
  work environment at all levels.

Creative Urethanes is a plastics manufacturing company in Winchester, Virginia, with about 50 employees. They have been using sociocracy since the late 1980’s, beginning with the help of a sociocracy consultant. They saw increased profits within the first year of using the method. As they applied it to the company, they have seen better communication throughout the company, lower employee turnover, more energy in staff members due to increased involvement, more creative ideas that help them them thrive in their industry, and continuous improvement within the organization.

Richard Heitfield, the CEO, credits sociocracy with the company continuing to exist. When sales dropped 50% during the 2008 financial crisis and he felt overwhelmed, the management-employee general circle sprang into action and created a plan to deal with the downturn. The result is that the company is still in business, and they have bounced back. Because the general circle chose by consent whom to lay off, all remained on amicable terms with each other - such is the power of everyone having a voice in organizational decisions.

Since opening the doors to their first Level III residential care home in 2004, the nonprofit Living Well Group has grown from one to three residences in northern Vermont, and more than quadrupled the number of residents served. They organized sociocratically from the beginning, when a small group of people purchased the first facility from its previous owner. The Executive Director, Dee DeLuca, and the other founders wanted an alternative to the usual "command-and-control," "top-down" method so as to tap into the creative potential of all the employees and other stakeholders. With training and consulting from The Sociocracy Consulting Group, staff members made the transition from passive rule followers to proactive rule makers.

Living Well Group has a number of innovative practices that, according to DeLuca, could only be made with the active involvement of the entire staff. LWG offers residents options for holistic medical care, serves freshly-prepared whole foods that are locally grown when possible, and offers a range of activities and community involvement for residents to participate in as they wish. Results include residents needing fewer medications, medical costs decreasing, and residents’ health often improving both physically and mentally - highly unusual in that population. "After we had been in business for two or three years," says DeLuca, "people from much larger health care institutions started coming to us saying, "You have accomplished more culture change than what we have been able to do in twenty years, and we want to know how you’re doing it." Two aspects of sociocracy have made our changes possible: (1) We have a way to get everyone’s ideas, and (2) we maintain a focus on outcomes at every level of the organization - what do we want and how do we get there." Sociocracy has supported many more innovations such as integrating Alzheimer’s residents with the rest of the population and a farm to care program in which residents travel to the supplying farms to participate in farm activities. Both Living Well Group and DeLuca have won program quality awards from the state of Vermont.

After this initial year of work, the PULSE Fellows wanted to continue their collaborative work on departmental transformation, and needed a structure that would allow them to function effectively. The PULSE Fellows adopted sociocracy because they saw in it a governance system that values shared leadership, open communication, and goal-aligned productivity, and that ensures all voices are heard. The Sociocracy Consulting Group provided consulting and training for PULSE on their organizational structure and meeting processes, and trained a group of PULSE members to coach their sociocratic circles. As a result, PULSE Fellows have been able to move forward quickly to accomplish their organizational goals, develop new leaders, add members, obtain additional funding, and incorporate as a 501c3 nonprofit.

Before adopting sociocracy, RCS had a flagging reputation and struggled to fill empty enrollment slots. The Sociocracy Consulting Group helped them set up their circle structure and trained the teachers, staff, management, and board in sociocratic structure and meeting processes. Responsibilities were delegated lower in the organization. Lectica, an educational testing service, found that the students scored markedly higher on several parameters than any schools they had previously tested. The school’s enrollment has increased to the point where there is a long wait list. The size of its campus has doubled, and the school has gained a reputation for being an innovative community leader.

The school is planning to build a high school and has spawned the Rainbow Institute. The mission of Rainbow Institute is to inspire a holistic education movement through transformative learning experiences, resources and research. This adult education arm of Rainbow Community School serves as a nexus between research, education and practice by supporting individuals and institutions as they discover the critical role that holistic practices play in child development.

The Harvest Bounty Restaurant project was designed to bring together the whole school, which included 83 students, with the youngest being four years old. Sociocracy provided a structure that involved children from all classes and teachers. Everyone took a part and ran with it.

The Sociocracy Consulting Group trained the students, who learned how to work in semi-autonomous groups called circles. They also learned how to write and work with clear aims and domains, and how to use the principle of consent to elect representatives to the general or next level circle. Senior students facilitated and ran circle meetings. On the night of the event, eight to eleven year olds ran the restaurant guided by the policies they had written, with little adult supervision.

Academically and socially the benefits and outcomes of the project mapped to every subject area in the Australian curriculum. Using Sociocracy, students expanded, questioned, and clarified proposals and collaborated in a way that promoted a deeper level of respect for each other. The real life experience allowed for building skills in a way that was led by the students.

The project benefited many types of students, from those struggling with language difficulties and a lack of conflict resolution skills to those ready for leadership roles and for analysing decisions. One teacher said "I can teach the kids to garden, I can teach them about the planet, but teaching them to get along together and make decisions is probably a far more valuable skill."

The Sociocracy Consulting Group is providing training and consulting for ACF’s implementation of sociocracy for its employees. We are coaching individual circles in their application of sociocratic principles using the approach “learn by doing”. As a result, clear and precise structures, responsibilities and lines of communications are in place.

*Term used to describe the French-speaking community of Saskatchewan.

The TÉRF meets three times a year in person to review the successes and challenges of the community. The Sociocracy Consulting Group provides facilitation and on-going coaching for those three meetings and for the working committee that meets virtually the rest of the year. The increased involvement of all the representatives and accompanying sense of connection have resulted in new creative initiatives, beyond what was possible when a few people were doing all the work. The representatives report greater synergy among the 25 organizations in the form of more partnerships; they report faster progress in attaining their objectives and have higher satisfaction with their roles as a result.

*Term used to describe the French-speaking community of Saskatchewan.