ORG DESIGN: the Harmonized Co(rp)Operative

TITLE: ORG DESIGN: the Harmonized Co(rp)Operative

TEAM MEMBER NAMES: Nathan B. and Nathan V. (Nate & Nate)

SHORT SUMMARY OF IMPROVEMENT IDEA:
In the world of business organizational models, corporations and cooperatives have stood on nearly polar opposite ends of the spectrum, with fundamental differences in how the protocols of ownership, profit distribution, and governance operate. Each model has strengths and deficiencies that have been the source of not only individual business failures but also public harms. What if there was a better way to design an organization which harmonized these traditional models such that the unique strengths of these models were preserved and their weaknesses mitigated?

We believe a hybrid organizational model is achievable today in ways that were previously not possible. Both advances in technology and economic changes have opened the door to new possibilities. We aim to promote and test a new protocol for business organizational design which harmonizes the strengths of both corporations and cooperatives, leading to more sustainable and responsible business practices while preserving innovation and dynamism.

Q1: WHAT IS THE EXISTING TARGET PROTOCOL YOU ARE HOPING TO IMPROVE OR ENHANCE?

Governance frameworks for corporations and cooperatives, which form the high level basis for how organizations make decisions and operate.

Q2: WHAT IS THE CORE IDEA OR INSIGHT ABOUT POTENTIAL IMPROVEMENT YOU WANT TO PURSUE?

The core idea behind this protocol improvement is the realization that many of the factors that have historically forced business leaders into a forced choice between organizational models that were either aligned with corporate or cooperative frameworks are more addressable today than they were before because of changes that have occurred in technology and business operations.

We would like to build out a functional framework through which a “Harmonized Co(rp)Operative” would function so that it can be piloted and tested. While we reserve the right to adjust the scope of this model based on findings, this protocol improvement could involve testing and experimentation of ideas around:

Ownership and Profit Distribution- Implement a stakeholder governance model where ownership is shared between investors and employees, choosing from a full range of tools at our disposal. This can include familiar elements like employee stock ownership plans (ESOPs), and also explore more novel mechanisms like “tokenization of value realized” on either a project and product basis.

Governance- Implement a governance structure that includes directors elected from amongst shareholders and employees, while allowing some decisions to be made through distributed coordination mechanisms such as ranked choice voting or quadratic voting.

Q3: WHAT IS YOUR DISCOVERY METHODOLOGY FOR INVESTIGATING THE CURRENT STATE OF THE TARGET PROTOCOL?

expert interviews, field research, historical data analysis, failure event analysis

Q4: IN WHAT FORM WILL YOU PROTOTYPE YOUR IMPROVEMENT IDEA?

Our initial ambition would be to produce a functional, realistic set of governing documents and articles of incorporation (bylaws, shareholder agreements, employee agreements) and, following legal and expert review, make them available for public comment, improvement, and adoption. We would seek candidates in the form of established businesses looking to restructure or alter their organizational frameworks or startups looking for novel ways to organize themselves for competitiveness, innovation, and good

Q5: HOW WILL YOU FIELD-TEST YOUR IMPROVEMENT IDEA?

The Harmonized Co(rp)Operative organizational model would be tested in a number of ways:

  • Legal Test - testing of the legal soundness and potential risks with experts in business and corporate law
  • Business Test - testing of the theoretical feasibility and potential operational challenges with experts in the field of business frameworks and operational models
  • “On the Ground” Test - implementation of the organizational model (even if at a smaller scale, such as one business unit within an organization)

Q6: WHO WILL BE ABLE TO JUDGE THE QUALITY OF YOUR OUTPUT?

Judges should have expertise in fields such as corporate law, business model theory, organizational design, and corporate governance.

Potential judges who have been dabbling in this space could include:

  • Griff Green (Commune, The Common Stack)

  • E. Glen Weyl: Economist, co-author of “Radical Markets”, explores concepts like quadratic voting and data trusts. Strong on alternative governance.

  • Nathan Schneider: Professor specializing in platform cooperatives, media, and democratic ownership. Web3-adjacent, and well-known in the cooperative space.

Q7: HOW WILL YOU PUBLISH AND EVANGELIZE YOUR IMPROVEMENT IDEA?

There are many groups and publications already aligned with and seeking to innovate in this space, as evidenced by the rapid growth of B Corps, the U.S. Cooperative Extension, and others. At this stage, we believe that partnership certification bodies and networks such as these will provide an excellent means of evangelizing and finding adoption of our protocol improvement idea.

Q8: WHAT IS THE SUCCESS VISION FOR YOUR IDEA?

Our success vision would be to see Harmonized Co(rp)Operative business begin to emerge and with it a community that seeks to iterate and improve upon the base protocol that we will create.

In our wildest dreams, Harmonized Co(rp)Operatives become the standard model for most businesses as governments, business leaders, and societies catch on to the benefits that these types of organizations are able to bring to a wide range of stakeholders.

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For others scratching their heads: Stigmergy means indirect coordination.

Economic Value Creation: from firms to digital stigmergy

OR

How to we created IRL Dwarf Fortress!

Watch them tantrum spirals.

Jokes aside, this is pretty interesting. On the one hand it sounds like usual economics on the other this could provide tangible knobs and buttons for setting up incentives and value flows.

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Thanks for the feedback @aneeshsathe! I wasn’t familiar with Dwarf Fortress and I’m both curious to check it out and hesitant to get sucked into something that looks so fun :slight_smile:

We’ve been digging into Coase’s Nature of the Firm and feel like there is fertile ground today for re-envisioning how economic value is generated and captured in a nascent post-firm world where the underlying concepts like information asymmetry, bounded rationality, and commoditized information are increasingly outdated.

We’d love to get more thoughts! What are some potential pitfalls we might encounter? What are some avenues that we should consider exploring?

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