The $20,000 Challenge: A Story of Growth and Leadership

TeamWorks cleaning cooperative members Marissa, Cendy, Leticia, Elizabeth, and Adriana after presenting the story of their co-op's growth at the National Worker Cooperative Conference in Chicago (June, 2014).

TeamWorks cleaning cooperative members Marissa, Cendy, Leticia, Elizabeth, and Adriana after presenting the story of their co-op’s growth at the National Worker Cooperative Conference in Chicago (June, 2014).

TeamWorks Cleaning’s annual revenues grew by 38% in 2013, jumping from $452,000 to $626,000.  As a result, the co-op members’ filled their work schedules, made more money, and created two new member-track “jobs” while they were at it.

What is the story behind this growth?  How did it really happen?

What would you do with $20,000?  

TeamWorks 2013 success was rooted in a debate among members back in 2011: what to do with $20,000 of surplus cash? The money came from prior years’ profits and was just sitting in the bank waiting for investment.  (Great problem!)

I personally was interested in the idea of the cooperative buying a laundromat.  Turns out that even if the co-op could have secured a big loan it was going to take more than $20K for the down payment and other expenses to get into that industry.  As one member put it: “Twenty thousand is not really that much money when it comes to business”.

So together we came up with another plan:  invest in developing the management capacity of the cooperative so it could sustain a larger client base, and invest in building that capacity from among the co-op members as much as possible.

What was that going to mean in practice?  Up to that point, the majority of the marketing/sales, customer service, client and team scheduling, operations management, bookkeeping, training, and administration at TeamWorks Cleaning had been handled by one person –the General Manager (GM) (phew, exhausting list for one person!).  Through gradual growth, the co-op was approaching the limit of this arrangement… it would soon be simply too much work for one individual.

So the plan was to move to a management team model that would share these functions. But instead of taking the conventional route of hiring outside people with the needed skills, TeamWorks decided to invest in developing members who primarily do cleaning work to also play other roles in the office and in training new recruits.

The plan involved something scary:  committing to invest in people while they were learning their roles on this new team before the co-op had the larger client base that would justify its existence.  The co-op would deliberately run losses for six to twelve months.

Doubts

The members approved the plan and moved ahead. One new full-time and three new part-time positions were created (some had existed in an earlier form, but without a significant time/money commitment), members applied and were selected by a committee and the GM.  The full-time position required English fluency, and “dreamer” who had just graduated from college was hired for that spot (the GM at that time was also a dreamer who had immigrated to the U.S. as a young child).

But the three part-time roles were filled from within — they started to be paid one full day per week for their new administrative and training responsibilities while continuing to clean houses the other four days.  I began meeting with the new “management team” weekly as a group to work together on developing their individual and collective roles, in addition to more role-specific individual training that the GM and I provided.

Several months into the plan, we were not yet seeing the increase in revenue growth that we had projected.  Most of us began to wonder if we were just spending a lot of unnecessary money “investing” in people that wasn’t going to really convert into the ability to support more rapid growth and a larger scale of operations.  The team reviewed and refined its plan.  The assistant managers selflessly proposed to cut the number of hours they were guaranteed for their administrative work, but other than that change the team re-committed to the plan.

The co-op then worked with the US Federation of Worker Cooperatives to get on the Kiva Zip crowd funding platform so that it could borrow $10,000 that would supplement the 20K the co-op was putting into this plan.  It also took advantage an interest-free introductory credit-card offer to help manage cash flow while waiting for the Kiva loan to come through.

And then suddenly — finally! — all of the months of planning, training, and development started to yield results.  By January of 2013, the co-op could see that a solid trend of month-over-month revenue increases was taking hold.  That growth only accelerated, and eventually far surpassed projections.  Every members’ income increased as their work schedules were completely filled and then two new positions were created.

A Deepening Ownership Culture

It is of course great to see the co-op’s growth.  But to me the most exciting thing to come out of this journey is the deepening sense of ownership and engagement that members have embodied.  I think co-op members are gaining through direct experiences a growing confidence in their own leadership.  This isn’t something that people learn primarily through workshops or training — it has to be lived.  Members are now talking about when they can hit the $1 million a year threshold and debating other possible options and goals for the co-op.  A new cycle of organic development is beginning.

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