A Cooperative Solution
August 1, 2006 | Business & Commerce | Cooperatives | People & Society | Products & Opportunites
An excellent 3,300 word article in Strategy + Business on the cooperative advantage. A very good read.
Cooperatives are often assumed to be merely local affiliations of small and midsized companies, and therefore limited in scope and reach. But their deep roots in their countries of origin — as well as their surprising pervasiveness and stability — are exactly what puts cooperatives in a strong position in the new global economy. Through their highly participative governance models (involving both members and employees in making decisions), the cooperative system is particularly well suited to combining entrepreneurial and social objectives. Because it encourages internal checks and balances and general transparency, cooperative structure also makes it easier to avoid the ethical and legal lapses that have brought down the management of many investor-owned companies.
Also quotes my SoL colleague Arie de Geus, former head of Royal Dutch/Shell scenario planning and author of The Living Company on the value of cooperatives for being people-based and long-term focused. (Thanks Chris.)
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[Local] Dairy Day
June 16, 2006 | Cooperatives | Life
Saturday is Dairy Day at the Co-op. Free food samples, hayrides, music, and big news this year: sunshine! I'll be there around lunch for an hour or two with my board member badge on. It's a great community event.
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Fire Dance With Me
June 11, 2006 | Arts & Culture | Cooperatives | Life | Travel
The CCMA party was held at The Compound in Atlanta. Weird place. Had fun. The tent had fans, but acted like a greenhouse, so it was pretty hot in there. The indoor area had A/C, but they left the doors open so it wasn't that cool. Really loud; hard to talk. Kind of a weird smell in there. Good dance band. There are apparently secret rooms that some people saw before the lockdown that had large beds and huge monster showers with five showerheads and stuff.
Reminds me of the Caravan of Dreams in Fort Worth, TX which had some odd rumors and secrets surrounding it for years—there were tales of rites and rituals and various Magik. Marla and I saw a memorable Horace Silver performance there in 1987. After the waiter stopped by a few times and we hadn't ordered anything, I called him over, put a $20 bill on the tray, and said, "We're not drinking anything but water tonight, but that doesn't mean you shouldn't get a tip." He was very happy at this, and offered to move us to a more private table in a darker spot with a better view. We took it, and he was able to put a higher-profile couple in the prime real estate we had been holding down.
Anyway, back here in 2006, the highlight at the CCMA party was a fire dance.
There were two performers, and they had several sequences. It was pretty fun, and they got a big response. I uploaded eight photos. Four of the photos are at standard shutter speed, and the other four are at eight-second exposures. And here is a low-res five-minute movie of one of their sequences.
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The Difference Between Heaven and Hell
June 9, 2006 | Arts & Culture | Cooperatives | Life | People & Society
I'm at the Consumer Cooperative Management Association conference in Atlanta. This morning Peter Couchman from the Midcounties Co-operative in England (near Oxford) presented a (probably well-known) parable during his keynote address. I paraphrase:
There once was a highly developed Buddhist guru who had the ability to transport himself to any place in the universe. He decided to investigate Hell. Upon arrival he found a lush green valley with perfect moderate temperatures, beautiful flowers, clear sparkling water, and snow-covered mountains. In the middle of the valley there was a large table with every known delicious food available. But the people at the table were moaning and screaming in agony. All they had to eat with were six-foot chopsticks, and no matter how hard they tried, no matter what technique they used, they couldn't get the food into their mouths and it was driving them insane.
The guru decided to visit Heaven. When he arrived he found a scene much like the first. A beautiful valley, green and lush, with flowers, trees, and plants of all varieties. In addition, there was a similar table piled high with fantastic food from all over the world. The people gathered at the table were happy and joyful, laughing and talking. They had the same six-foot chopsticks to eat with, but instead of trying to feed themselves, they used the chopsticks to feed each other.
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Pragmatic Technology Strategy
May 23, 2006 | Cooperatives | Life | Software | Technology
Yesterday Mark and I drove down to Andover MA to meet with Walden. We three are running a (pro-bono) session for a Coop consulting group next month on technology strategy. Because Kate wasn't feeling well, we went to Panera for three hours. The place was hoppin' with businesspeople!
Above you see Walden coaching Mark on the use of an important strategic technology tool – the pen and paper. They're really amazing! You can write in any light, without any battery power, on both sides of the device. You're not restricted to "documents" or linear formatting. You can create an unlimited number of pages no matter how little memory you have. There are a whole raft of accessories to collect, sort, organize, and store your notes – and they're all cheap! File folders cost a nickel or something, nothing like the cost of a hard drive upgrade. And you can use pen and paper on any surface, even including a computer tablet!
If you look closely, you can see that Walden is carrying this toolset in his front pocket! Just try doing that with your fancy new MacBook.
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Sometimes It's Better Not To Know
April 23, 2006 | Cooperatives | Life | People & Society
We had our Co-op annual meeting tonight. As board president, it means I'm more or less running the show. The face of the meeting at least. Luckily we have a great staff and I can pretty much show up half-an hour before and everything is all set up. But I have to have an agenda and something to say.
So I was preparing my remarks this afternoon, working from the list I made earlier in the week. I left the list on the dining room table during the week so I could think about it in passing while I went about my days. This works well for less complicated topics – if there's real work to do then I need to sit down for hours on end and actually focus and draft and revise and edit and re-structure and grind it out. But brief remarks I can write from the heart after some background processing and everything tends to work out okay.
The most important section of the meeting tonight, from my perspective, was presenting my friend Bruce Pacht with the Allan and Nan King Award for Community Service. Bruce is a family friend; I nominated him for the award, and as president I would present it. That writing went well, primarily because Bruce has a 30-year resume of community contributions and I could work quickly from his accomplishments.
Then I worked up some notes about the Board's decision earlier in the week to pay itself a stipend for service. This idea failed a board vote a few years ago, but this week we agreed on $200 per meeting attended for board members, and $300 per for the president. During the spirited discussion about voting ourselves a salary, the moral and ethical dilemmas therein, and the potential reaction of our member-owners, someone asked, "How will the members find out?" I said, "I'm going to stand up in front of them Sunday night and tell them, and ask for feedback. Then I'm going to write an article for the Co-op News." Someone suggested we ask the members first, perhaps at the meeting. This is reasonable from many possible angles, but I came down on the side of leadership – we should consider a broad range of material and as leaders decide what's best, then explain ourselves to whom we are accountable, and then just listen. Make adjustments as required. An important component of leadership is making decisions – constant polling and triangulation generates train wreaks like the Democratic party.
So anyway I wrote up those notes, and checked the clock. It was 2:45 PM. I had to leave at 4:30. I was done, save for another round of edits, so I took a break for lunch. When I came back upstairs to check the agenda, I realized I hadn't printed an agenda yet, because I was working from Tuesday's 3x5 notecard. So I printed one out. An then it jumped out at me: The first agenda item was President's Remarks – uh oh, I haven't written that yet!
Um, maybe we could start the meeting by skipping the first agenda item?
Maybe not. So on two sheets of yellow pad paper I wrote everything that came into my head in sound bite format. Not the exact words to say but the main idea and any connect-the-dots language necessary to the other ideas. Then I got in the car and drove to the church basement where we hold the meeting.
Once things got rolling there were perhaps 60 or 70 people there. We had a very nice meal for the $5 fee, and then saw a slide show of a fair-trade coffee trip to Mexico, where an employee and the manager of another nearby co-op had travelled to pick coffee beans as ambassadors of American co-ops. A fascinating personal report. As you might expect, the village is extremely poor. The exceptional houses are constructed of cinder block and are slightly larger than New England tool sheds. They hike two hours, on a steep slope to the top of the mountain, barefoot, to harvest the beans. I saw the photos. Men, women, children; all hands on deck. When they pick the beans they put them in sacks which, when full, weigh about 100 lbs. The sacks have a strap at the top that goes across your forehead, to leverage the weight of the bag slung onto your back – you need your arms free to balance and hold onto trees going down the trail. Barefoot. My chiropractor would be horrified. Not to mention my pedicurist. When the beans make it down the hill, they have to remove the outer skin with a hand-cranked machine, and then they dry the beans out on a cement pad, like a garage bay. The moisture content has to test correctly for the beans to be valuable for export. If it starts to rain, they have to scoop them all up and put them inside then spread them out again later. In the old days, they'd walk them to market, a couple of hours away, and then be forced to take whatever the gringo buyer paid that day. The world market price is set by the commodities markets in New York and Chicago, but the farmers didn't know this number. Sometimes they had to accept ten or twenty cents a pound for their product. And, guess what, the gringo brought his own scales....
I am a tea drinker, no coffee for me, but I wonder what the grim reality is for harvesting the green tea crops.
So now that they have a co-op of their own, they have a laptop in the office that can get the current world market pricing – they have the information. They also have their own scales. And because they're dealing with Equal Exchange, the pioneer of fair-trade, they get $1.25 a lb for their coffee beans, or $1.45 for organic. Score one for co-op's, and score one for fair trade.
My remarks went over fine. The Celebration of Bruce was nice, though it sounded a bit wooden to my ear as I spoke it. Some other things were reported. I opened the "Q&A" section with the board pay bits, and we got some feedback on both sides of it. Some other questions were asked and answered. We even almost came close to approaching the beginning edge of audience dialogue there for a brief moment.
Then it was a wrap, I thought. But Don, the board VP, snatched the mic and launched into a very nice tribute to me. Because I will not accept a nomination for next year's presidency, this was the last meeting at which I'll preside. I'll stay on the board, but as a past-president. Don waxed eloquent about abstracting up, my leadership and vision, and my thoughtful concern for all things co-op. It was very nice. Then he gave me a whoopee pie as a departure gift, about which I'll have to consider the hidden meanings. Then it was a wrap.
I talked with some members who approached me. I gathered my things. I finished my water bottle. I picked up my coat. Then the GM came up to me and said, "Did you see that crazy guy in the back?"
I had, actually. He had a weird look. The winter parka, the fidgeting, the unkempt hair, the look in the eye. Down from the woods. I had smiled to him on my way to the restroom and I got a sort of vacant return. The GM said, "Did you know he had a pistol?"
What??? No, I did not know he had a pistol. Speaking as the guy in front of the microphone most of the time, I was not excited to learn that the weird fidgety guy with the vacant stare at the back of the room near the exit had a pistol. I was not LOL.
It turns out that employees Tony and Aaron had noticed this situation and had debated what to do. They didn't want to cause a scene. I appreciate this. They work in a public market, and there are discreet ways to handle disturbing situations. I once had lunch at the cafe, where, behind me down the hall an employee was having a seizure, and it was absolutely amazing how the staff handled it. Very calm, loving, professional. So I dig that they didn't want to accost the guy and create a scene.
Tony called the police to see if it was legal. They told him that if they guy had a concealed weapon permit it was legal. How would you know if he had a permit? Ask him to show it to you, they are required to carry it. Okay, Tony tells us now, he didn't really want to ask the guy because that's heading toward making a scene. So Tony and Aaron position themselves on either side of him, in case Something Needed To Be Done. Apparently when I was talking about store expansions, and a couple of other topics, the guy got really fidgety, rubbing his hands and twisting his thumbs and breathing heavily. Eventually he'd had enough and left early. Nothing happened.
I was totally freaked out. I am a very accepting person, but this was over my line. I just don't think weird fidgety guys with vacant stares are being very cooperative when they bring pistols to member meetings.
So next year, when you walk into the Lebanon Cafe and see the sign on the door announcing the annual meeting, you will see at the bottom, "Firearms not allowed." I'm not sure if we'll hire security and do actual searches, but I am just not sitting on stage at the front of the room when weird fidgety guys with vacant stares have pistols under their coats. Not even for $200 a meeting, no way.
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70 Years Ago Today
January 6, 2006 | Business & Commerce | Cooperatives | People & Society
Terry Appleby, General Manager of the Hanover Co-op, of which I am proud to be the current board president, wrote:
On January 6th, 1936, in the middle of the Great Depression, 17 families from Hanover, New Hampshire and Norwich, Vermont gathered to discuss the creation of a society of cooperation to meet their common needs. According to founding member Charles Bagley, "at the close of the meeting they signed the register, paid the initial fee of one dollar and became charter members." They thus formed the buying club that later in the year would be incorporated into the Hanover Consumer Cooperative Society, and joined with consumers in Berkeley, and Hyde Park in Chicago and many other places who were also inspired by the idea of the transforming power of cooperation.
One of the first purchases by the club was for fresh citrus fruit from Florida, scarce in Northern New England at the time. Hanover Co-op still celebrates that purchase with an annual citrus sale in January. Here's hoping you'll join in a symbolic toast (of orange juice!) to the visionaries at each of our co-ops who have kept alive this dream.
Cooperatives present an alternative model of providing goods and services. They are member-owned, and organize around serving member needs. Sometimes members are workers, sometimes the members are customers – sometimes they are both, thereby tying together the combined self-interests of producers and consumers. In an era of so-called "customer-focused organizations" with un-navigable voicemail menu systems, cooperatives provide an honest alternative to greed.
If you're interested in learning more, or even starting a new Co-op, there are some good resources listed in the "Cooperatives" topic on this weblog, particularly around July 2003.
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[SoL] Comments on the de Vulpian Presentation
September 21, 2005 | Business & Commerce | Cooperatives | SoL
Following de Vulpian's talk at the SoL conference, we heard remarks from Anne Murray Allen, the director for Knowledge and Intranet Management at Hewlett-Packard, and Arie de Geus, a former Royal Dutch Shell strategist and SoL co-founder.
HP is an interesting case study for what I call The Web as Organizational Mirror™. In the 1990's HP shifted from a decentralized website to a centralized website, to present a unifed face to the world. This, just as the world was discovering the joys of decentralization. They once had a decentralized team culture too, now they are trying to get it back. The web changes foreshadowed the organization changes. I salute HP for being a corporate member of SoL, and I wish them all the best – at one time HP was one of the most important scientific organizations in the world, like Bell Labs – but, like Bell Labs, I fear the financial engineers have taken over, and the best may now be historical.
HP does appear to be doing some interesting things with regard to internal social networks. In particular, two things stood out from Anne's talk. First is that they are trying hard to measure ROI on social connection systems. This is valuable work for those of us who work in the field, who have to make decisions or recommendations for clients. But, as mentioned above, the fact that you have to justify ROI on the value of sharing information with colleagues indicates that the finance types have run amok.
She also mentioned the idea of "finability" as an important aspect of the ROI work that they are doing. I perhaps misjudged the tone, but I got the sense that this was presented as a new idea, perhaps even one that HP invented. I am going to assume I misinterpreted this, because "findability" has been in regular use within my online circles for years. It might have even been mentioned in the O'Reilly information architecture book from 1996.
de Geus pointed out that people change and they change society which changes people..... This sounds obvious, but taken to the end it says that you cannot directly control the direction of societal evolution. Societies change very slowly, and the rules are set by legislation, which is sometimes referred to as today's writeup of yesterday's solution to the day before's problems. This slow wavelength change also has important impacts for corporations (some of which de Vulpian mentions in his article).
Also of note: Only people in a society can change a society. You cannot change a system from outside it. Outsiders have no possibility, and perhaps no right, to make changes to the systems of others. Another way of stating this is, Learning has to be done by the learner.
de Geus then went on to talk, of all things, about cooperatives as a mechanism of distributing power to the "ordinary people." He talked about Mondragon (wikipedia entry) the largest worker-owned cooperative, and about how the most successful management consulting firms (Booz Allen, McKinsey, St. Lukes) all created new mechanisms of power and profit sharing different from the traditional partner hierarchy. Visa International is the ultimate example of this, fully documented in Dee Hock's book, "Birth of the Chaordic Age." (Dee Hock and Arie were both instrumental in the foundation of SoL.)
There was a short table discussion that followed, around: What one question do we want to ask the presenters? Our list was:
- What are the failure modes or danger signs for societies?
- How do we change corporate governance? The vested interests have no incentive, and the "common good" has no truck today.
- How do we represent who holds power?
- Is there a limit to personal satisfaction? Or, perhaps, should there be limits? Or is society simply the sum total of all individual personal desires?
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Minnesota 308B Cooperative Act
October 5, 2004 | Cooperatives | Governance
Some time ago I mentioned a Minnesota law regarding hybrid Coop/LLC business structures that was winding its way through the legislature. It passed (a while back) but I just found the actual statute. Here's the Google query that will bring up relevant results.
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Cooperative Report
March 15, 2004 | Cooperatives
2003 Board President's Report for the Hanover Consumer Cooperative Society, Inc.
Independent and Interdependent — Creating Our Future Together
The Co-op is committed to running a profitable and responsible business. We are financially strong and our increasing sales indicate excellent customer satisfaction. The Board of Directors has a fiduciary responsibility to guarantee the financial health of the business, and we take that responsibility very seriously. But the financial health of the organization is only the minimum baseline of Board responsibility. I'd like to articulate some of the work the Board does, above and beyond monitoring our financial performance.
Independence
In the early stages of human and organizational development, dependence is inevitable. If they are successful, people and organizations can move from dependence to independence. Independence brings various sorts of responsibility. Here are some of the ways we are trying to be responsible to our members.
Local governance and control. In this era of large conglomerates and remote management, local governance and democratic control are valuable and precious. The Co-op has almost 34,000 individual members who can elect our Board of Directors and vote to modify bylaws on a one-member-one-vote basis. This direct control of the organization provides a solid foundation for our outlook.
Transparent and responsive management. Our books are open, our Board meetings are open, and our managers have an open-door policy. Last year our customer service desks had 146,000 interactions with our members and shoppers. We responded to 1,900 requests for information related to food safety, nutrition, products, wellness, and other issues. We handled 1,300 operational comments and suggestions submitted through the suggestion box, 450 through the web site, and 550 through personal interactions. Because of our local control we view this transparency and responsibility as a benefit, not a cost. The Co-op is unlikely to attempt to "save money" by minimizing customer interaction.
Governance by policy. Our Board governs by policy. This simple statement means that the Board's actions are predictable and considered. In the best case, policies don't vary with the transient personalities of the individual Board members. Instead, the Board speaks with one voice and directs the General Manager with as much clarity and flexibility as possible.
Measuring results. Board presidents frequently serve for more than a single year. Often, some long-term work that one president begins is not completed during his or her tenure. Ruth Sylvester began the move to policy governance, which then was solidified and completed under Steve Maker's leadership. Steve moved us to begin measuring more of the work we do, trying to quantify so many of the important but qualitative aspects of our organization's value. This proved to be a challenging initiative for both the Board and Management, but we have made progress this year.
Measuring our financial health is relatively straightforward. As a $52 million organization, it may involve a lot of effort, but there are entire industries devoted to specifying the rules and regulations of reporting financial performance. By any financial standard, the Co-op is healthy and stable.
It is much more difficult to measure our Ends Policies. Our Ends define what effect we want to have in the world. It is tempting to simply translate everything into a financial measurement. I even did that above: Customer satisfaction? It must be good because sales are increasing. But our desired effect in the world goes beyond increasing sales or net savings or the patronage refund. The Co-op exists to serve its members, and our members want a diverse and complex mix of products, services, and experiences. Throughout this report, I try to quantify these qualitative aspects of the Co-op, based on information provided by our managers when they monitored our Ends policies. We don't think we've captured everything, and I report here only a portion of what we're now attempting to measure, but we're committed to measuring our outcomes, and we expect to improve our quantitative metrics each year.
Interdependence
Once people or organizations have achieved a level of independence, they may choose to create interdependencies that strengthen themselves and their organizations. Some of these "second-order" interdependencies can be intricate and subtle, as in a marriage, or they might be blunt and obvious, as in a business supplier agreement. We are almost always individually and organizationally dependent on others—in acknowledging this we can turn our interdependence into a valuable asset.
A range of stakeholders. At our Board retreat in January 2004, we agreed that when determining the Co-op's Ends—our desired results of continuing operations—we would consider the interests of a range of stakeholders. This decision will soon be encoded in our policies. As a locally owned, locally governed organization, we have "multiple bottom lines" to balance stakeholder needs. We have the luxury of financial stability, and the duty of our neighbors’ trust, to do this fairly.
Co-op members. Our Co-op members are our most important stakeholders—we put their interests first. The share capital that members invest is critical to the stability of the organization. As the organization grows, this capital becomes ever more important as a "ballast" to the Co-op ship.
Non-member customers. Approximately 20 percent of our sales are to non-members, and we welcome the opportunity to demonstrate the Co-op principles and their tangible effect on the shopping experience. Many people think of the Co-op simply as a very good grocery store, and we value their support of the organization through their purchases.
Co-op staff and their families. The Co-op employs 360 people, 82 percent of them full time. Benefits are provided to all full-time employees working at least 32 hours per week. These statistics stand in dramatic contrast to traditional grocery stores, where full-time staff and the requisite benefits are minimized to increase profit margins. Instead, our members and shoppers know that excellent customer service and product knowledge costs more in pay, benefits, and on-going training. Providing stable and humane employment means that 360 Upper Valley families can have a predictable living and participate in opportunities for growth. We are proud that our staff turnover rate is only 32 percent—down from 40 percent last year and significantly lower than the grocery industry average of 52 percent.
Local suppliers. The Co-op loves working with local suppliers, and we do everything we can to help them succeed. Merchandisers at the Co-op provide meetings, product evaluation, market advice, and business consultation for a wide variety of local and regional growers and producers. Our radio advertisements often feature local farm stands, and every month the Co-op News has a Local Producer Spotlight on the back page. Our finance department has set up special payment programs to expedite invoice payments to local suppliers who are very sensitive to cash flow. Some vendor checks are specifically sorted so that small vendors can personally pick up their checks at the Co-op instead of waiting for mail delivery. Other small vendor checks are mailed weekly and include payments for deliveries made through the previous day. Local and regional growers and producers represent over half of the vendors to the Co-op—nearly 200 out of approximately 360 vendors. Look at the following chart and reflect on the diversity of products produced in our region:
Department NH / VT Vendors # Of Items Grocery 59 650 Dairy 21 340 Produce 15 250 Floral 20 237 Health / Body 17 194 Bakery 21 120 Frozen food 7 68 Beverage 14 59 Meat 5 55 Cheese 19 32 Total 198 2,005
Traditional grocery stores make it very difficult for small suppliers by charging "slotting fees" to gain shelf space. For many small vendors these “real estate” payments can eliminate any potential profit, effectively keeping them out of the market. The Co-op does not charge slotting fees to anyone.
Local community. At one extreme, if there were no local community, the Co-op could not—or would not—continue to exist. At the other extreme, a vibrant and thriving local community makes the Co-op vibe and thrive with the best of them! Within our resources, we do our best to educate, encourage, and support many local community organizations. Some highlights from last year:
- We conducted 60 educational presentations for over 2,000 people at local businesses, colleges, schools, organizations, and healthcare facilities.
- We provided opportunities for learning through a summer externship, 14 job shadows, 15 store tours, and on-going support to the Upper Valley Business and Education Partnership (UVBEP). Our Education Director, Rosemary Fifield, is Treasurer of UVBEP.
- We provided child car seat safety inspections and served as a New Hampshire center for distribution of free car seats to eligible low-income families. Last year we provided 42 inspections and 10 car seats.
- We organized and coordinated 630 volunteer opportunities to facilitate giving to local food shelters.
- We offered 58 cooking and other classes to 812 members and non-members.
- We facilitated 75 uses of Co-op space for fund-raising by local non-profit organizations.
- We supported 151 local community organizations with $4,700 in small cash donations and gift certificates.
- To maintain the fun factor, we hosted our annual Dairy Day and Harvest Festival events, bringing over 5,000 people together for food, fun, and family enjoyment.
An important aspect of our community involvement is the Hanover Cooperative Community Fund (HCCF). The HCCF provides the Co-op with a long-term community giving solution. As a permanently endowed fund intended to grow over time, a portion of its annual return is available to be donated to qualified organizations of the Co-op's choice. As the endowment grows, it will provide a source of community funding that is not dependent on year-to-year Co-op sales or operations. This year we will exceed $100,000 in principal endowment.
Larger cooperative community. Our thriving Co-op is but one member of a larger cooperative movement. This cooperative economy, operating under the cooperative principles and balancing the demands of multiple stakeholders, works within our larger capitalist economy. By working together, we can learn from each other, avoid each other's mistakes, and continue to grow as individuals, organizations, and as an industry. As one of the largest consumer cooperatives in the United States, Hanover has the privilege and obligation to participate in the larger cooperative conversation. Last year we supported the larger cooperative community by:
- Serving on the Boards of Directors of other cooperatives, including Associated Grocers, the Cooperative Grocers Association of the North East, and Equal Exchange.
- Contributing materials, information, and ideas to the Cooperative Grocers Information Network (CGIN) listserve and website, benefiting 400 listserve members and 130 co-ops.
- Participating in the Common Cooperative Membership and Marketing group (CoCoMaMa), giving marketing and membership presentations to 95 Co-ops at two national conventions, plus listserve participation.
- Participating in the National Cooperative Grocery Association (NCGA) advisory group on development of a cooperative branding program benefiting 150 member co-ops.
- Providing speakers, panelists, and displays for the annual Consumer Cooperative Management Association conference. Last year, we presented on 3 panels for 350 attending co-ops.
Through all of this work we have learned much and gathered new ideas from co-ops larger and smaller, locally, regionally, and nationally.
Past and future generations of Co-op members. At our January retreat, we watched the Co-op history video “Hand in Hand" detailing the founding in 1936 and the initial growth of our Co-op. If you haven't seen this 25-minute program, it's highly recommended. (You can borrow a copy from the Co-op lending library.) When the Board thinks about our Co-op's future, we try to think about the past and future generations of Co-op members and shoppers. This perspective helps keep our egos in check and hopefully helps us take decisions that last through time.
Systems of Interdependence
Individuals and organizations can create systems of interdependence when several interdependent groups choose to work together. This is an exciting development because it indicates we are healthy enough as people and as organizations to maintain our independence, cultivate our interdependence, and pursue systems of interdependence that create "third-order" benefits. From an evolutionary perspective, systems of interdependence help us to learn faster and increase our chances of survival. Three examples:
National Cooperative Grocers Association. An exciting current development is the re-organization of the National Cooperative Grocers Association (NCGA). Previously, the Co-op participated in a regional CGA, which was a member of the NCGA. If the current proposal is ratified as expected, the regional CGAs will be merged into the new NCGA, providing our Co-op with direct representation at the national level. Functioning like a combination of a trade organization and a shared business services organization, the NCGA will represent a "virtual chain" of over 300 co-ops across the country.
Management-level co-op cooperation. In the past year, our general manager and other management team members have provided time and consultation to other co-op managers from the Putney Co-op in Putney, Vermont; the South Royalton Co-op in South Royalton, Vermont; the Onion River Co-op in Burlington, Vermont; and the River Valley Market in Northampton, Massachusetts. Because Hanover is an older, more established co-op, we have management systems and information that are both easy to share and valuable to other co-ops. We are glad that we can support other co-ops this way.
Board-level Co-op Cooperation. In the past year, our Board has visited and/or hosted Boards from the Upper Valley Community Credit Union in Lebanon, New Hampshire; the Upper Valley Food Coop in White River Junction, Vermont; the Brattleboro Food Coop in Brattleboro, Vermont; the River Valley Market in Northampton, Massachusetts; and Equal Exchange Fair Trade Coffee in Canton, Massachusetts. We invited the Brattleboro Board president to our Board retreat, and Terry Appleby and I attended the Brattleboro Co-op Board retreat, along with Board presidents and general managers from five other co-ops.
Some of this interaction is simply "meeting your neighbors." Sometimes we've learned that we can save each other quite a bit of time, as when Brattleboro provided us a copy of their recently finished Board Member Information and Nomination packet—something that we need to create this year. It is valuable work for Boards to connect with other co-op Boards and explore how we can help each other survive and thrive.
Thank You!
By choosing to become a member and to shop at the Co-op, you not only support a transparent, responsive, fun, and successful business, you also demonstrate how locally owned and locally governed businesses can contribute to a web of community that benefits everyone. (Insert your own thousand points of light reference here.) Instead of waiting for someone else to create what we want, we're doing it ourselves and have been since 1936. Instead of a single focus on the financial bottom line, we are balancing our efforts among many important stakeholders. And instead of trying to exist in isolation, we are actively networking and building connections with other like-minded organizations. Thank you for continuing to support your co-op and your community.
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News Update From World Coop
February 8, 2004 | Cooperatives
It's been a busy two weeks for me as regards Co-ops. Last Saturday, January 31, our co-op held a board and management retreat. We invited the Brattleboro Food Co-op Board President up to participate. Yesterday, February 7, the Brattleboro Food Co-op held a board retreat, and invited the general manger and board presidents from five regional co-ops (including me) to join them.
We're writing up detailed notes from both events, but here are my initial overview thoughts.
First, all this inter-coop participation is fantastic. We all share a vision of a cooperative economy, fair trade, local food supplies, a humane workplace, etc. It is so thrilling to be in a room of colleagues with similar progressive ideas as the baseline for discussion. It's a very hopeful environment.
A dominant background issue is a proposal on the table to merge several regional Cooperative Grocer Associations into a single National Cooperative Grocer Association (NCGA). This cooperative entity would be a business services and trade group for it's members. It would offer services such as a national purchasing program, to leverage our combined buying power for better pricing and terms. As a trade group, a single voice speaking for our members would unify and make coherent our business goals to both government and consumers.
To get a sense of the scale, if the proposal is approved, the new NCGA will represent 300 cooperative grocery stores totaling over 400,000 member-owners (consumers), with annual sales of over $625 million. That would make us, as a virtual chain, the second largest grocery chain in the US - behind Whole Foods and ahead of Wild Oats. Also realize that many people shop at Co-ops without becoming members, so the consumers "touched" by co-ops is somewhat larger. Our co-op has sales to members of around 77%, which is quite high in comparison to other co-ops. Some are as low as 40%.
These stores, and their members, are interested in many things, but the broad spectrum includes safe, healthy food; multiple bottom lines of profit, social responsibility and ecological sustainability; fair trade with partners; a living wage for employees; higher standards of customer service; community creation, support and participation; and strong educational programs (as opposed to marketing efforts). Any one organization may weight these issues differently, and have additional items on the list (I'm working from memory) but this is the general thrust of the mindset. Detailed market research has been done, which I'm not at liberty to share, but this "enlightened consumer" currently represents a fringe of society, but we expect that concerns of balance and fairness to continue to gain traction. I'm sure Candida is laughing at us, but we continue in our work.
It is extremely unfortunate, but helps our cause, that mad cow disease has people worried about the beef supply; mercury levels have people worried about the ocean fish supply; farmed fish have their own problems; and Asia is destroying literally millions of chickens to try to quell the spread of avian flu. Beef, fish and chicken are the three dominant sources of protein. Other than tofu and nuts (you have to eay a lot of nuts to get enough protein) there's nothing left. Protein is a critical component of human survival. So where is your protein coming from these days? My recommendation is to buy the most local food you can, as often as you can. Buy from people you trust, not based on the lowest price.
There's more to write in the future.
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Co-op CCMA Conference
January 11, 2004 | Cooperatives
The 48th annual CCMA conference will be held June 10-12 in Minneapolis, MN. The Consumer Co-operative Management Association conference is a highlight of my annual business travel. More details as they arise. If you're interested in tuning in to a vibrant, progressive, open and enthusiastic group of business-people, this is a highly recommended event.
There isn't a good URL, but the event sponsor is The University of Wisconsin at Madison College of Agriculture and Life Sciences
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Programmer Cooperatives
December 16, 2003 | Cooperatives
New discovery: There's a Yahoo Group for programmer cooperatives!
http://groups.yahoo.com/group/programmercoops/
And one on worker-owed co-ops in general:
http://groups.yahoo.com/group/workerownedcoop/
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Tough competition
July 28, 2003 | Cooperatives
Well, I see the conversation over at Wealth Bondage didn't stop while I took the weekend off. Some very good discussion in the comments to this post. Mike Edwards has some especially good points. Great new weblog to track.
To capture my own thinking in one place, I'm going to post comment(s) to other blogs here. Possibly edited for context.
Credit Unions are co-ops. I'm meeting with the manager of the local CU next week to investigate building closer ties with our grocery co-op. Then a few board members will attend each other's board meetings. I'll report what I learn.
I can tell you that at the national level, the banking industry is constantly trying to shut down the credit unions. This takes the form of trying to limit their geographic reach, customer demographic or number of offices via legislation. The National Cooperative Business Association (www.ncba.coop) works really hard to publicize and lobby against all this hooha.
Re: competition: What's amazing to me is that co-ops thrive, if you can call it that, in the grocery business. This is a business with 25% gross margins, 1% (!!) net margins, and a business model highly sensitive to labor rates, perishables and continous margin maintenance. For contrast, Microsoft has something like 85% gross margins and on the order of 70% net (from distant memory; please correct if you know current numbers). Software CDs don't rot after four days (some might say that MSFT software rots on day one, but that's a different topic), the margins allow for lots of slop and experimentation, and although labor is expensive it's a relatively fixed cost.
What this says to me is that passion can compete in one of the toughest businesses round. Yes, Whole Foods and the like can put a co-op out of business pretty easily, but we're talking about pockets of resistance here, not taking over the world. Part of good market research (sorely lacking in most non-profit ventures) is analysis of demographics, consumption habits, geography, etc.
If an industry of ex-stoners can stay alive at 1% net margins, there is hope for alternative business structures, no matter what the big guys do.
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Meta Co-ops
July 20, 2003 | Cooperatives
Co-op Atlantic is a "'second-level" co-op -- that is, it is a co-op made up of co-ops. To quote: "Co-op Atlantic is the second largest regional co-operative wholesaler in Canada, and has a membership of 135 co-operative enterprises. Co-op stores serve over 200,000 member families in Atlantic Canada and the province of Quebec."
Many co-op organizations join the National Cooperative Business Association. In addition to providing educational services, they are also the official registrar for the .coop Internet domain, and provide a voice in Washington to elected officials. In other words, they're the lobbying arm of the movement.
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Cooperative Service Providers
July 20, 2003 | Cooperatives
Cooperative Development Services is a nonprofit organization created and governed by the cooperative community of the Upper Midwest for the purpose of developing cooperative businesses in all sectors of the economy. Note: I have worked with several people from CDS and they are great.
The ICA Group Provides employee ownership, business development, and job retention services.
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Unique Cooperative Businesses
July 19, 2003 | Cooperatives
Isthmus Engineering is a cooperatively-owned engineering and manufacturing company.
Independent Frabrication is an enployee-owned designer and manufacturer of high-end bicycles.
The Associated Press is a cooperative. Huh.
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Cooperative Resources
July 19, 2003 | Cooperatives
Here is a good starting point for cooperative research: http://www.wisc.edu/uwcc/
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The Cooperative Principles
July 19, 2003 | Cooperatives
One: Voluntary and Open Membership
Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
Two: Democratic Member Control
Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights - one member, one vote - and cooperatives at other levels are organized in a democratic manner.
Three: Members' Economic Participation
Members contribute equally to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. They usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefitting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
Four: Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
Five: Education, Training, and Information
Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of cooperation.
Six: Cooperation Among Cooperatives
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
Seven: Concern for Community
While focusing on member needs, cooperatives work for the sustainable development for their communities through policies accepted by their members.
(Source: North Dakota Association of Rural Electric Cooperatives.)
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The Cooperative Potential
July 19, 2003 | Cooperatives
The Happy Tutor has an inspiring essay over at Wealth Bondage. it started me thinking about how important Coops could be to The Change. It's an existing business structure and relatively easy to set up.
Many people assume that Coops are just small-time natural food stores, but there are also producer coops (like Land-O-Lakes and Cabot). Even in the food sector, my Coop has five locations, 350 employees, and does $46MM a year in sales - this in a population density of ~50K. I'm currently researching how a producer coop would work for software engineers and software products. (Pointers welcome!) Coops are locally-owned, democratic (one member/one vote) and community-oriented.
