Abu Dhabi ICEM 2009 Mondragon Education & Entrepreneurial Teams

MONDRAGON EDUCATION IN A KNOWLEDGE INTENSIVE GLOBAL ECONOMY A Corporate experience based on “ Entrepreneurial Cooperative Teams” ICEM 2009 international conference – Abu Dabhi – October 7 th 2009 Dr. JM Luzarraga Mondragon University [email_address]

How do we create more knowledge? Are we ready for “optimal disconfort” co-creation ?

CHECK IN: Who am I? What are my passions? What is my life dream?

Index

Mondragon Cooperative Corporation (1956-2006)

1.1 Historical background

1.2 Leading thoughts and cooperative principles

1.3 Hightlights at December 2007

1.4 Mondragon University & Corporate education

Current challenges of a Knowledge Intensive Global Economy & how Mondragon faces it (2007-)

Mondragon University European official degree on “Entrepreneurship & Innovation”

Mondragon Cooperative Corporation (1956-2006)

Starting point (1940)

Massive unemployment & social crises : Spain dictatorship after civil war.

Lack of any education: technical or in business

Steel-mechanic industrial roots , small & local

Closed and protected market

Lack of any technology

A shared dream…

EDUCATION & CO-OPERATIVE ENTREPRENEURSHIP TO SURVIVE & TRANSFORM THE SOCIETY!!!

Mondragon education: Leading thoughts

“ The world is not there to contemplate it but to transform it”

“ Share knowledge & education to democratize power”

“ A technical school that it is not at the same time a school for human being development, is caving its own grave”

“ Work and study hast to go hand by hand”

“ God ideas are those ones who transform into real actions”

“ Se ha dicho que el cooperativismo es un movimiento económico que utiliza la acción educativa. Pudiéndose también alterar el orden de la definición diciendo que es un movimiento educativo que utiliza la acción económica”

JM Arizmendiarrieta

Prior to industrial co-operatives creation:

1943: In-factory technical training

1948: Engineering Technical school

1956: First industrial co-operative ULGOR (13 years later)

1966 : First local co-operative cluster ULARCO (inter-cooperation)

1974: Degree studies / international university agreements

1998: Mondragon University -3 faculties: Engineering MGEP – Business ETEO – Education HUEZI

Academic course: 1974-75 2007-08

International experience: 2 110

Post-graduate: - 459

Graduate: - 3.248

Courses: 237

Technical: 815

Mondragon education: historical facts

Number of companies : 107

Workforce: 103.731

Worker members: 80.9%

Female/male members: 42.2%

Abroad: 14.261

Total sales: 15.056 M. euros (57% international sales ind.)

Business ranking if listed:

Spain: 7 th

Europe: 32 nd

Forbes 500: 462 nd

Highlights at Dec 2007 Group activities: Mondragon University, 12 Technology Centers & Garaia Innovation Park Body Builders Components Construction Elevation Household Goods Engineering & Services Machine Tools Industrial Division Financial Division Mondragon Presidency / General Council Source : MCC - 2006 Industrial Systems Tools & Systems Industrial Automatisation Automotive Equipment Mondragon Group Mondragon Congress / Permanent Commission Distribution Division

Mondragon background & leading thoughts

A worker cooperative network started by Father Arizmendiarrieta in 1956 in Mondragon, a 30.000 people village in the Basque Country (Spain)

Named by several academics as one of the best examples of democracy at the work place (Macleod, Vanek, Williamson, Malone, Whyte & Whyte,…)

VISION: The companies that make up MONDRAGON share their commitment to cooperation and democracy in the workplace , backed by a unique system of worker participation .

VALUES:

Cooperation: owners & main actors

Participation: management involvement

Social Responsibility: fair distribution of wealth created

Innovation: permanent change

Mondragon Worker Co-operative principles

Worker Co-operatives : working people are the heart of the companies

Committment to the local environment & society: continuous experimentation to satisfy society needs (Alecop, MU, Eroski,…)

Business excelency , assuming the leadership & maximum competitiveness using the cooperative legal form

MONDRAGON CO-OPERATIVE PRINCIPLES:

1. Open membership 6. Incomes/wages solidarit

2. Democratic member control 7. Inter-cooperation

3. Work over ownership 8. Social transformation

4. Capital as a tool 9. Universal character

5. Management participation 10. Education and training

Devoted to employment creation: Mondragon net-job growth: 1956-2006 Source: ex novo - Adaptation from MCC - 2005 0 10000 20000 30000 40000 50000 60000 70000 80000 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Years 1) 2) 3) 5) 1) First production plant abroad 2) MCC holding structure creation 3) Started Eroski Group expansion all over Spain / 5 production plants abroad 4) 26 Production plants abroad 5) 57 Production plants abroad 4)

Companies created on diverse sectors & industries:

Avoid companies shut-downs: every Mondragon company has suffered a critical difficulties period over its history

Committed to “companies creation & survival” through inter-cooperation Number of Mondragon cooperative companies: 1956-2003 Source: Clamp 2003

Mondragon Factories abroad

International “multi-localization” industrial strategy –“ Creative vs. destructive international trade” 1) 2) 3) 5) 4) Source: ex novo - Adaptation from MCC - 2007 Years 1) First production plant abroad 2) MCC holding structure creation 3) 26 Production plants abroad 4) 65 Production plants abroad 1) 2) 3) 4) Total employees Employees abroad (since 99)

What about the Retail division?

Main facts from 2008:

Total sales 9.013 M. euros

2.440 centers: 115 hyper, 1029 super, 274 travel agencies, 53 petrol stations, 44 FORUM (sport), 300 IF (perfume), 6 ABAC (books). In France: 4 hyper, 16 super & 17 petrol stations. In Andorra: 4 IF (perfume)

2.000 workforce growth (reaching 56.000)

Opening of 164 new retail centers (Hyper, super)

Strategic decision to transform conventional companies into cooperatives:

It might become the bigger cooperative worldwide with more than 50.000 working members

At the end of 2008 already 14.733 people participate in ownership, profits and management (1.475 annual growth)

Prior basement/seed to the industrial companies creation

Devoted to University-Companies integration

Co-operative & participatory University: companies + students + teachers (workers)

Village University: devoted to local community service

Committed to Entrepreneurship & R+D+ innovation

Mondragon University: identity signs

Local community Technical, social & business education

Supports “ education & work” combination (ALECOOP 1966)

Technology Research & innovation

Technology centre IKERLAN (1974)

Innovation Pole GARAIA (2007)

New companies creation & entrepreneurship (1984 – SAIOLAN 1996 – Mondragon Team Academy 2008)

International education: (since 1974, in 2008 (110 + 12)

Mondragon University: main roles

What are the main challenges of our “Knowledge intensive global economy”?

3. Mondragon faces “Knowledge Intensive Global economy” current challenges

Starting point (Mondragon 2007)

Solid group expanded internationally

Successful structures in the past

European production industrial crises: employment threat

Global & interconnected economy

Local communities on threat: urban massification, internal migration & radical social differences among & within countries

Lack and difficulties to create new business

Need of a change/evolution of our competetitive model:

FROM production/manufacturing TO Knowledge-Research-Innovation

FROM local TO Glocal

Current challenge…

INNOVATION & MULTI-LOCALIZATION TO DEFEND LOCAL COMMUNITY STABILITY & ENABLE SOCIAL TRANSFORMATION “GLOCALLY”!!!

Challenges of our global knowledge society

Labour force global competition: employment threat

Western Europe production crises: unemployment threat

Presence in Emerging countries: the power of BRIC countries

Challenges of our global knowledge society Source: UN Development Report 2006 World population by country % CHINA INDIA RUSSIA MEXICO POLAND BRAZIL CZ REP. COLOMBIA JAPAN USA 0% 5% 10% 15% 20% 25% 1975 2003 2015

Presence in Emerging countries: the power of BRIC countries

Challenges of our global knowledge society Source: Goldman Sachs BRICS Europe & Asia - May 2007 BRIC countries contribution to World GDP growth BRICs China India Russia Brazil 0% 10% 20% 30% 40% 50% 2005 2015 2025 2000 05 10 15 20 25 30 35 40 USA Japan Germany UK G8 Italy Japan Germany France Italy Germany France Italy Germany France The BRIC’s race to exceed G6 growth

Threat for Local communities: massive urbanization, internal migration & radical social differences among countries

Source: Human Development Report - UN 2005 Population with less than 1$ income a day by region 1981 1987 1993 1999 2001 0% 10% 20% 30% 40% 50% 60% WORLD Europe and Central Asia Latina American & the Caribbean Middle East & north Africa South Asia Sub-Saharan Africa

Threat for Local communities: massive urbanization, internal migration & radical social differences among countries

Global & interconected economy

Global economic recession & “short-term” “speculative”, “wasteful consumer” & “neo-liberal” economic society model in crises: unemployment global threat

Global economic recession & “short-term” “speculative”, “wasteful consumer” & “neo-liberal” economic society model in crises: emerging countries opportunities

Sustainability threat due to a fossil energetic model & a wastefull consumer society: green energy & production opportunity

Reaching “bonsai” consumers: Social entrepreneurs & Bottom of the Pyramid strategies

Knowledge competitiveness: change management, learning communities, experience economy

Knowledge competitiveness: social networks, open innovation

Knowledge competitiveness: social networks, open innovation

Knowledge competitiveness: learning organizations

Challenges of our global knowledge society SELF-REALIZATION LEARNING SELF-MANGED TEAMS SHARED VALUES MENTAL MODELS SYSTEM THINKING FIFTH DISCIPLINE – Peter Senge (MIT)

Knowledge competitiveness: learning schools

Knowledge competitiveness: not inidviduals or groups but TEAM PLAYERS, Not makers but CREATORS

Digital working, learning & living collaborative environments: sinergies among paper-paperless office, user driven experience,…

Time management & atention economy: Everyone become Leaders & Caordic organizations

50% to lead yourself

20% to lead your colleagues

20% to lead your superiors

10% to lead yourself

Starting point (Mondragon 2007)

Solid group expanded internationally

Successful structures in the past

European production industrial crises: employment threat

Global & interconnected economy

Local communities on threat: urban massification, internal migration & radical social differences among & within countries

Lack and difficulties to create new business

Need of a change/evolution of our competetitive model:

FROM production/manufacturing TO Knowledge-Research-Innovation

FROM local TO Glocal

Current challenge…

INNOVATION & MULTI-LOCALIZATION TO DEFEND LOCAL COMMUNITY STABILITY & ENABLE SOCIAL TRANSFORMATION “GLOCALLY”!!!

Many inititaives in place…

Self Managed teams: New MONDRAGON corporative Management Model

New business promotion strategy : Corporative promotion centre

Corporate funding for internationalitation, innovation & new business creation

Intra-entrepreneurship : create from inside strengthes “re-invent”

Education on entrepreneurship & innovation: Mondragon University European degree & Master

Business incubation: local &global business, international networks (Saiolan)

Mondragon International clusters : China, India, Polonia,..

Business inteligence

Open Innovation: OBEA research center

Customer devotion: mass customization & co-creation

Experience economy: industrial services & experiences

International Multilocation (sales, production, research, education & entrepreneurship) & Multicultural management

Digital tools: web 2.0 (blog, wiki, social networks …)

Align by a new Mondragon Corporative management model: “self managed teams”

1996 – First Corporative Management model based on “Total Quality” model (EFQM).

1997 – 2000 in practice developing new management tools.

2002 Best Corporative Practices

2006 new management model based on “self Management teams” with “Basic Cooperative Pinciples” at the heart

How can we create/trained the next leaders for our Knowledge Intensive Global economy? ?

4. Mondragon University European Degree on Entrepreneurial Leadership & Inovation LEINN

Why LEINN has been created?

Because European companies need young professionals capable to:

Work in entrepreneurial self-managed teams

With global mindset & international experience

Able to lead the organizational change

To lead the innovation process

To develop new business and innovative products

LEINN key elements 1) Team Learning 2) Finish education (Team Academy) 4) Internacional Experience (Finland, USA, China, India, … ) 3) Real Team companies 5) PASSION & ENTHUSIASM

Partner of Team Academy Network

Entrepreneurial unit created in 1993, award as Excelence higher education unit in 2000 by Finish Education Ministry

Educational model based on Teamwork, real companies creation, customer relations, reading books & team self management.

Students sale an average of 10.000 euros before graduating inidvidually

30% of graduate students become entrepreneurs (4% average in Finland, 0.5% in Spain).

60 graduates annualy, more than 40 companies created since 1993.

Learning methods applied in 17 universities

An International network with more than 1500 peole (SOL network).

TA FINLAND Mondragon TEAM ACADEMY Languages: english, chinesse, basque & spanish Paperless Office: Tablet PC + digital environment International learning journeys: Finland, BRICM & California Real Team Learning Cooperatives Customers + Investors relationship R C C T L Learning contract Dialogue Sessions Customers Team Coaches Rocket Model Basic learning tools Books

NOT Teachers… but TEAM COACHES

ROLE OF TEAM COACHES

1. Ask questions 6. Transmit enthusiasm

2. Create space for dialogue 7. Lead by example

3. Suggest books 8. Commit mistakes

4. Share inspiring stories 9. Feel ridiculous (Socrates)

5. Connect companies network 10. Mentoring

Método finlandés: Team Academy Nuestra forma de aprender - Diálogo - Libros de lectura - Acción: Proyectos con empresas Not students… but “Team Entrepreneurs”

Weekly activity: example 8 - 12: Training Session Monday Tuesday Wenesday Thursday Friday 14 - 15: Customer Visit 15 - 17: Work on Projects 8 - 10: Team leadership meeting 10 - 12: Project meeting 12 - 14: Reading books 8 - 12: 14 - 18: Work on projects 10 - 12: Customer Visit 14 - 18: Write and Essay of last book read 8 - 12: Work on projects 14 - 16: Work on shared tasks 16 - 18: 15 - 17: Work on Projects Training Session Project meeting 8 - 10: Financial leaders meeting

Not Teachers… but “Team Coaches”