Business Namaste Solar; Case Insight Namaste Solar

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Namaste Solar; Case Insight

Namaste Solar is a successful solar energy company located in Boulder Colorado. Founded in 2005, the firm was set up by three people who all shared a vision; a firm where there was shared risk and reward, corporate social responsible ethics and democratic decision making. The firm has been highly differentiated in the developed culture that is based and extends these ideals, with a commitment to shared equity where and employees bought shares and ownership was vested over five years. 37 employees owned equity and no owner had a majorly share. The democratic decision making was facilitated with big picture meetings (BPM). However, the initial direct democratic process required adaptation to include indirect processes as the firm expanded. By 2008 the firm achieved 20% - 25% of the residential and small commercial solar market in Colorado, and with the growth of U.S. solar energy installations expected to grow by a further 45% the firm was strongly placed for the future. In 2008 the firm received interest from, with the management and owners facing three choices, to accept the offer, to reject the offer or a hybrid, where there was some investment accepted only.

Examining the issues of the case it is apparent that one of the key success factors of the firm is the unique culture. By developing a democratic approach where ownership is shared there has been the creation of a highly participative and committed workforce. The employees have a direct interest in the success of the firm which has resulted in a very low attrition rate and the ability to tap into the employee knowledge through collaboration which has been tapped into through the BPM's. Notability, these ideas came form both the share owning and the non-share owning employees.

The firm may have been successful, but it was also facing some challenges. With a solar market growing rapidly there was obvious expansion potential. The firm was already on track for revenues of $14 million, and of the firm was to grow in line with the general trend this would need to almost double. Growth would require capital investment in excess of the existing resources. The investment may have the potential to provide the capital needed to find that investment and enable the firm to increase the number of installations. The investment may also provide a nice return on investment for the equity owners. This may be attractive for some of the employees, especially as the only way of selling the shares appears to be by leaving the firm. However, if the investment was taken it is highly likely the collaborative corporate culture would be eroded as the new owner would want to exercise their own control, with the benefits and general high level of engagement associated with the shared ownership may be undermined. This may result in increased attrition and a lowering level of interest in the success of the firm by the employees. It is notable, when the firm started; one of the frustrations of the founders was their involvement in privately owned firms that had sold out in order to make money. If this offer was accepted it may be argued the same pattern would be repeated. In addition to this, other measures adopted by the firm based on values, such as the corporate giving to non-profit organizations, the waste recycling and the long guarantees to customers may also be at risk.

If the hybrid option where some investment was accepted many of the same issues would exist; as the owner would still wish to exert influence. Furthermore, it is likely that a partial agreement would have to contain an option for the purchase of further shares at a later date. While, the partial option may be seen as allowing for capital investment without ceding control, the sake risks exist.