Changing business as usual through an active, engaged membership, and with the Companization

I've been thinking for some time (a year perhaps) about the relationship between the Association changing how business operates with the Companization as a model, and balancing that with its mandate to develop its own independent income. How does an organization which is supposed to be not for profit, do good work, and make profit? I played around with the idea a bit, read the Business As Usual Book probably 100 times by now, and looked at how current social entrepreneurship and crowdfunding (or other forms of microfinancing) groups propelled their missions, while financially benefiting. 

Here is my attempt:

 

1. Membership, and more specifically Closure Right members. With more members who have Closure Right, there is a longer term commitment to the viability of the Association. This isn't to disregard the value placed on 1, 2, or members who are associated for years in between. The right though of a Closure Right member is different (review the Closure Right link for more information).

Further, paying the dues of 10 years upfront, gives immediate income to the Association. Income, which will be needed in the future phases which I will begin to develop and detail here.

 

2. Let's take an arbitrary number, 1,000 for instance. Assume there are 1,000 Closure Right members. Assume further that the yearly membership fees stay at the current price of 10 Euros/year (roughly 13 USD). A Closure Right member, upon fully paying their dues, would have contributed 100 Euros (130 USD) to the Association. Multiply that by the 1,000 Closure Right members, and the Association now has 100,000 Euros (130,000 USD). The more Closure Right members there are, the more that value increases. Note: there is a current limit of 100,000 Closure Right members. If this were maxed out, that would bring 10,000,000 Euros or 13,000,000 USD into the coffers of the Association. I hope this is beginning to make sense. 

 

3. Statute 3: "The Association's activities shall include...risk projects..." The purpose of the association is to maximize its social influence through....a strong economy of its own and an activity that contributes to a long-term sustainable development of society....The association shall manifest the evident possibilities of a company has to be of benefit to society and through this activity contribute to the development of profit-making organizations..." (Business as Usual is Over)

So what the hell does that have to do with anything? Particularly, with what was mentioned above? For me, its rather simple.

If one of the purposes of the Association is to engage in risk projects, why couldn't a share of the Association's funds from Closure Right members be used to help create and propel new for profit enterprises which the Association would have a stake in? Using the for profit company's network and business relations, the Association could seed the project and once it reaches maturity, sell its shares in the new venture to this network or other interested parties. A stipulation though, would be to create this new entity as a Companization. And this is where I believe influence and a strong economy would coalesce. Further, it fulfills the obligations and purpose of the Association as articulated in Statute 3 as best as I can understand it. 

 

4. Crowdfunding and new companizations: This is where I begin to get really excited. The prospects of using Association's funds as risk capital to propel and develop other Companizations begins to make perfect, logical sense to me. As a crowdfunding platform, the Association could perhaps present a challenge to which there is a call to submissions for solutions. Upon review of the solutions, and the development of a business plan (a business plan competition), the Association would either seed the money as a grant, a loan, or some other funding tool.

The winner(s) would have to go through training on the companization model, mentorship with members of the network of the for-profit and nonprofit. This would be the business incubation stage. I propose, as articulated in Business As Usual is Over (Appendix 3) to seed the funds in exchange for equity in the new Companization. A Shareholders agreement would articulate that 50% ownership would be for the innovator, 50% for PNA. Further, it would stipulate that each would have to donate 5% ownership to creating a new nonprofit association, which would have 10% ownership and 50% determination of the Board of Directors in the new for profit. In other words, they would be creating a new Companization.

Once the new Companization has created this nonprofit association with these stipulations, PNA would begin to sell its stake in the new Companization. Ownership would go from 45% (after the development and sharing with the new nonprofit), to perhaps 35% or less. It would be wise though, to keep a large enough stake to earn profit, but small enough to reduce risk. I would guess 10% would be suffice. But this of course depends on the new business model.

 

5. Keep doing this. If done enough times, with enough viable business solutions, the Association as a risk capitalist, would have the potential to create a significant number of Companizations, fulfilling both the mandate to influence society and doing so while making profit. Business as usual my friends, would be over, as there would be a new type of company in the world. A company with a different set of values. This would have to be constitutionalized in their bylaws and statutes of course, but theoretically, it has the potential to make significant, long-term impact.

 

6. Why members are so important. This cannot be done without committed, informed, and engaged members. Having a Closure Right assumes that you have the long term interest and stake in the Association and Plantagon in general. This shouldn't just be a privilege or responsibility. It should have benefits and create opportunities for normal, average people, to make lasting impacts on the world. That is how it has always been done. This is how I see it happening. But what do you think?   

 

  

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  • commented 2013-11-12 19:52:03 +0100
    Actually Shrikant, I’m in the process myself of organizing my startup as a companization. I think this begins in part, by educating people on the model, how it can work, and creating the kind of public awareness needed to get people to see the viability in it.
    Of course, I’m willing to subscribe to this idea because I believe, as many of you do, that now is the time to tap into the growing conscious consumers that are itching for change. The book that Hans published (Business As Usual Is Over) articulates how to change and reorient business and gives the tools for creating companizations. Again, I am experimenting with this in my own startup. I want it to be at its core, a good corporate citizen, recognizing it has the responsibility to not just seek profits, but to seek public support and influence by being a force of good. Not idealistic, but a concrete example of how the bring a new generation of companies for this market.
    What do you think we can do to bring awareness to this? And moreover, how can we all work collaboratively to leverage our networks to make and be the change globally? Besides joining the 3GCSR movement of course
  • tagged this with Companization 2013-11-01 18:25:11 +0100
  • commented 2013-08-19 21:54:21 +0200
    Would love to hear more this concept. Any headway yet.?
  • commented 2013-07-21 06:55:06 +0200
    I like the mentorship concept and how it holds a strong place as opposed to mentorship models that treat the mentorship opportunity as superfluous and less important. I look forward to your developing thoughts on this. I also like your closing thoughts about creating space for opportunities for real people. What do you think the role of the PNA holds enacting the ‘influencer’ role in attracting the truly committed member and/or closure right member? How do we do this?
  • tagged this with Companization 2013-07-11 13:10:06 +0200
  • @YusufAQ tweeted link to this page. 2013-07-11 13:09:48 +0200
    Your ideas!: Changing business as usual through an active, engaged membership, and with the Companization http://www.feedingthecity.com/yusufaq/changing_business_as_usual_through_an_active_engaged_membership_and_with_the_companization?recruiter_id=50
  • posted about this on Facebook 2013-07-11 13:09:48 +0200
    Your ideas!: Changing business as usual through an active, engaged membership, and with the Companization
  • published this page in Connect 2013-07-11 13:09:15 +0200

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