Getting Paid with Purpose: South Mountain Company

The Purpose

John Abrams started his first building project as a young dreamer in 1975. Ultimately, his idealistic vision of a company for the greater good of the community has led South Mountain Company through 35 successful years on Martha's Vineyard. "What interested me was design and building, and building community, not business." - John Abrams

The first project that John and this partner, Mitchell Posin, landed was building a house for John's parents on Martha's Vineyard. As parents do, they put all of their confidence into their son. In doing so, they gave him the opportunity to make mistakes, prove his ability and a first project that would showcase his talent and devotion to sustainable building. After delivering the project six months behind schedule, and with a few bumps in the road, people took notice and new business started rolling in.

At its core, South Mountain Company is a design/build and renewable energy company. They plan and develop residential and commercial buildings (and small neighborhoods) along with designing and installing solar and wind energy systems and energy efficiency improvements. After transitioning his company to an ESOP in 1987, he became more and more passionate about employee ownership and workplace democracy. Abrams explained to Tonic the importance of both these principals in his own company and how they play out on a regular basis.

"In 1987 I re-structured South Mountain Company, the design/build company I founded in 1975, from a sole proprietorship under my ownership to an employee owned co-operative corporation. It was a dramatic hinge point in the history of the company. Ownership became available to all employees, enabling people to own and guide their workplace. The responsibility, the power, and the profits all belong to the group of owners.

At the time of the re-structuring I was frightened but energized; I had no idea where this path would lead. Two decades later I am fully convinced that the conversion to cooperative ownership has been a critical factor in the long-term success of our company — tremendous rewards and benefits derived from that decision, for me and for the company.

It's all about the recognition that when the people who are making the decisions bear the responsibility for the consequences of those decisions, and also share in the rewards that derive, better decisions will result.

Owning our work, and finding meaning there, is as essential to a good life as it is to own our homes.  When the employees, who live in the community, and are part of the civic landscape, are making the decisions, it is less likely the business will be sold, more likely that it will stay rooted in place, and there is more incentive to be a positive force in the community. We are a part of the place we are raising our children, and we have a long-term commitment to it.

Ownership is a very big deal. Columnist Tom Friedman once said, 'In the history of mankind, nobody has ever washed a rented car.' At South Mountain we are sharing ownership of our future."

South Mountain Company became a B Corp in 2008 solidifying their dedication to being a responsible company and joining a community of like-minded companies that now numbers over 300. Employee Ownership is not news — the concept has been around for a long time, but as corporate social consciousness seeps into American mainstream culture it's a step that more and more companies are taking. Want to own a multi-million dollar company? Start working for the right company and you can.

The Profit

Today South Mountain has annual revenues of $8 million and 18 owners among its 32 employees. Abrams doesn't see true profitability measured by ROI figures, it's measured by impact. With 23 years as an employee-owned company and 35 years in business, the value of this company is its staying power and its impact on the environment and community year after year.

The Road Ahead

If John Abrams is anything, he's frank and honest. When Tonic asked him about the plans for the future of the company in the next five years not only did he provide a candid answer, but also one that is impressive and noble in its ambition:

"For 33 years, every SMC employee has come to work each day of each week of each month of each year and had productive work to do. The economic crash of the last two years brought the sobering possibility that this legacy might some day be in jeopardy — the unthinkable might come to pass.

But so far so good, and the events that made this year so dramatically different from any other were also incredibly invigorating, and inspired us to open our minds, to think differently, to act differently, to dream differently, and to address tough issues. Difficulty and opportunity mingle; at times it is hard to distinguish one from the other.  Sometimes you win, sometimes you learn.

As we grapple with the absolute and fundamental imperative of putting weekly paychecks into the accounts of 30 families and providing rewarding work for all, we are also juggling two long-term imperatives:

1.  The journey from Generation One to Generation Two, as we expect that the work that we have begun will continue for generations and will never be done, much like the people who once worked on cathedrals they would never see completed.

2. The challenge of becoming a carbon neutral company. As a nation, it feels like we really only have five years to start making big changes, and 20-40 years to get the job done. As a company, we take seriously our need to do our part to halt climate change, the most vexing problem humankind has faced thus far."

Want More?

To learn more about the benefits of ESOP and find out more of what's on John Abrams mind pick up a copy of his book The Companies We Keep: Employee Ownership and the Business of Community and Place.

Read more Dollars & Sense.

Photos courtesy South Mountain Company.