A small workers’ cooperative in the town where I live asked me over the weekend if I would write a short article for their forthcoming customers’ newsletter. They were concerned that the media coverage of the Co-operative Group’s trading and governance problems would be encouraging the idea that all cooperatives were badly run. Could you point out, they asked me, that workers’ coops are still an excellent business model?
I’ve been happy to send across a short piece which I hope does what they’re after. Because they’re right: it is very important that the message gets through that the Co-op Group is only one of around six thousand coops in Britain, even if it is far and away the largest.
We don’t knock the whole plc model just because a company like Woolworths hits the buffers, and we shouldn’t allow the cooperative business model to be dismissed on the back of the Group’s shortcomings. (But having said that, the Group should make us think very carefully about how management and corporate governance is to be organized in coops.)
I’d define a well-governed coop as one which is true to its cooperative principles, one which gives its members real engagement in its strategic management, and – not least – one which also is successful in trading terms.
There are, I’m pleased to say, quite a few cooperatives which could make a case for being in the short-list when it comes to being well-governed. I’m going to mention one, and it’s not because they bribed me with a free vegetarian lunch when I visited their headquarters at Elland just off the M62 a week or two back.
Suma, the wholefood wholesaler which operates as a workers’ coop, had its most successful year in its thirty-something year history last year, increasing turnover from £30m to approaching £34m. Net profit was up too, so the coop was able to pay its members a significant bonus. (Suma practises wage parity, by the way).
There’s clearly some entrepreneurial flair at work, and I was interested to be told of the way they are working to grow their export trade which is now responsible for more than a tenth of turnover. But they also have worked hard to make their strategic management structures work, without having other obvious models to follow. Suma’s six-strong management committee is responsible for the strategic direction of the coop: members are elected to serve a maximum of two two-year terms, and there is built-in gender balance. Operationally, Suma has Function Area Co-ordinators, responsible for the different areas of the business.
Suma talks of its aim being to provide a high-quality service to customers and a rewarding working environment “within a sustainable, ethical, co-operative business structure”. It looks like they’re not doing too badly in meeting these aims.