Cooperatives Can Succeed
The two foundational pieces for the success of any organization
are:
1. Proper vision, statement of purpose, or mission
statement
2. Proper leadership behaviors
Clear vision and proper leadership behaviors will lead an
organization to many more good decisions than bad ones.
A good clear vision, mission statement, or statement of purpose
must:
1.
2.
3.
4.
5.
6.
7.
Live forever
Be clear, concise, short, and compelling
Easily remembered by everyone
Not too specific
Direct all decisions of the organization
Should be the very first thing the organization does
No other actions toward forming an organization should
be taken until the “Statement of Purpose” is completed
Purpose is a far more powerful vision than projected return
on investment or earnings.
If .coms can secure investment dollars, then the woodlot
owners’ movement should rain money from heaven.
Cooperation isn’t natural, particularly in today’s
environment of heavy competition, peer pressure, and
technology that strives to make the individual a complete
unit.
Today, committees are struggling to run anything
effectively.
Schools
Businesses
Churches
Co-ops
What are the proper leadership behaviors for success?
1. Value human beings above all else and preserve
everyone’s dignity at all costs. This must be done in
harmony with the community and the environment.
2. Know that proper behaviors will always be more valued
than accomplishments or results.
3. Subordinate.
4. Encourage others to go ahead of you.
5. Consider thoroughly what everyone has to say and
remember that the person speaking measures your
consideration, not you.
6. Never make personal agendas the priority.
7. Become passionate for win-win solutions.
8. Focus on solutions, not judgment.
9. Put understanding first, resolution second.
10.Be inclusive, not exclusive.
11.Make unanimity a way of life instead of expediency.
12.Know your place, know what is expected, know how you
will be measured.
13. Go for the long-term fix, not the short-term gain.
14. Let patience and understanding prevail and find the joy
that is within it.
For some, to embrace these behaviors will require them to
change their view of the world.
(Suggested reading: The Last Word on Power by Tracy Gross, an
excellent book on how to make the impossible possible.)
Additional requirements for successful cooperatives:
1. Effective boards
Proper size of board
Proper profile for selection of directors
Clear understanding of board responsibilities
Election process to select qualified members
Clear distinction between an executive board and a
working board.
2. Good managers
3. Profit is a must for long-term existence
Profile for selection of good board or steering committee
members:
1. A person who understands and can give examples of how
they have exhibited all of the leadership behaviors
previously listed
2. A person who believes in the vision of the coop and can
be a constructive not a destructive influence
3. A person who has exemplified good organizational skills
and ability to prioritize
4. A person with successful business experience
5. A person with a strong work ethic
6. A person who can balance diverse opinions and who
values diversity of opinion
7. A person who can balance courage with consideration in
dealing with people on a wide range of subjects
8. A person who can help to set expectations for the board
and management and hold them accountable
9. A person who understands the need for profitability
10. A person who desires knowing and respects their board
or committee role and who can operate within it
The ultimate measure of whether a coop is doing the right thing
or not is:
Will a majority of the members say that they are
better off after becoming a member of the coop than
they were before, or are things at least headed in that
direction.
Following are some comments on a couple of subjects I was asked about
after my talk .
Profitability
First of all, profitability should not be the mission of the coop or
mentioned in the Statement of Purpose. For those coops who are
operating for profit, profitability should be a result of their vision or
Statement of Purpose. Profitability as a vision or mission and as the end
goal is almost a death sentence.
However, no activity or decision should be implemented without
taking future profitability into consideration. Profitability will most
likely not be a result in the beginning or maybe for some time. However,
decisions, policies, services, and businesses implemented in the
beginning may have as much or more impact on future profitability as
actions taken later. Activities implemented in the beginning, when profit
is not achievable, and activities never intended to contribute to
profitability later, may be very hard to eliminate in the future once they
become a significant part of the coop.
Every single decision will have an impact on achieving future
profitability, even those made in the very beginning. The earlier
profitability is taken into consideration and a vigil is kept for it, the
sooner it will be achieved and the greater it will be. Ultimately,
profitability will be the single factor that will most benefit members,
either directly or indirectly.
Executive vs. Working Boards
Every board of directors should be minimally an executive board. Some
may also become a working board. Simply put, the executive board
decides the “What” while the working board decides the “How”. The
risk is that as the activities of the working board are handed over to
management and employees and they become less involved in the
“How”, they can stay uninvolved in the “How” -- the operational
activities and decisions.
A board is most likely to be a working board in the beginning when
there are not enough employees to get everything done. It is very
difficult for boards to remember that they should act only in a strategic
and policymaking role. Operational decisions and activities should be
saved for the management and employees or the working board.
The primary responsibilities of the executive board are fairly narrow.
They are:
Defining the purpose of the business or organization
Establishing the corporate by-laws
Establishing the corporate culture and the defining policies
Presiding over all stockholder issues
Hiring and evaluating the general manager
Approving asset expenditures
Approving all financing
Strategic planning and annual budget
Ordering and reviewing an annual audit
Start-up methods and activities are different from those of a coop that
has been in business for a long time.
The biggest difference is the lack of a proven track record. It is
always difficult to look and act like a business when you are still
becoming one. People, especially members and stockholders, are very
skeptical, and all criticism can sound like fact in the absence of a track
record. In the beginning, diligence and well-thought-out decisions and
outcomes are a must. Above all else, courage must prevail. Adherence to
good business practices and disciplines must be the order of the day.
Good business practices need to become institutionalized for the future,
though in the beginning they may seem unnecessary and a bit of
overkill.
Talking about profit from the very beginning, when it is quite unlikely
there will be any for quite some time, institutionalizes and validates it in
your vision for the future. Omitting profit from initial discussions and
activities may not just put it off for the future but may put it off forever.
At start-up you talk about the business you want to become, then you
act like it in every way you can as soon as you can. In the meantime, you
adapt where necessary, never taking your eye off of what you want to
become and how you want to do it.
Communication with members
Here are a few rules for good communication with members:
 Never too much, never too little
 Never too soon, never too late
 Members will always want to know more than they need to because
they never know how pertinent what they don’t know is to what they
wanted to know. Therefore, communicate what they are adequately
prepared to handle.
 Be true to your purpose of serving your members and relate every
topic and response back to how it serves that purpose.
 The complexity of communicating with the members is inversely
proportional to how well you are serving the needs of the members.
 Communicate to the majority, not a vocal minority, and try to help
the minority understand that.
 Always determine first if you are addressing a response from the
minority or the majority.