Top Co-op Issues 2018 Comments and Action Items

Nora Russell

As noted in the first post on this topic, Top Co-op Issues 2018 surveyed CEOs, board members, managers, and academics across Canada to obtain a snapshot of the most pressing concerns facing co-operative organizations today. This post will discuss some of the many action items suggested by respondents. Although they provided clear advice on all twenty themes, we will focus here on the top six.

To address issue number one — the lack of public awareness of the co-operative model — one respondent observed that “few established co-operatives prioritize sufficient resources to educate their members about the co-op model or to educate staff recruited from outside the sector; over time this can undermine a co-op’s identity and purpose and erode its democratic governance.” Many participants suggested that co-ops should take more time to educate members, employees, and the public about the differences between the co-operative model and other business models, and they should also make more effort to publicize how much co-ops give back to their communities. Another person commented that “many co-operatives do an excellent job of realizing mutuality, supporting the community that is their membership. However, too many co-ops, particularly large ones, struggle with sociality — working with other co-ops to serve the objectives of the movement as a whole, including the creation of new co-operatives and greater public awareness of the model.” Finally, a perennial complaint since we began this survey in 2016 is that there is little co-operative education in the school system at any level, and co-ops should lobby appropriate bodies to rectify this situation.

The second top theme — concerns about the relevance of co-operatives to contemporary needs — made a strong showing this year, moving up from number seven in 2017. Respondents were enthusiastic in their suggestions on how to improve the situation. One person noted that “consumer behaviour is changing through new tools and new access channels,” and that co-ops needed to make better use of e-commerce and social media. Another participant suggested that co-ops could learn to compete and thrive better by studying the competition, while a third commented that co-ops could improve their credibility by promoting their successes, a common theme last year as well. Many respondents mentioned the importance of paying close attention to members, suggesting that co-ops could do more to promote the value of membership and make better efforts “to stay connected and relevant to member needs.” Most important, perhaps, in concerns about relevance, is the need for co-ops to learn how to compete more effectively in ever-changing markets, social conditions, demographics, and regulatory environments. As one person observed, “Competitors are making those changes and chasing our members.”

Governance, ranked third this year and up from fifth place in 2017, was a common theme throughout the survey, although participants had more confidence this year in making concrete suggestions for improvement rather than simply reflecting unease at the state of affairs, as they did in 2017. And many of their suggestions are relatively easy, though not quick, fixes: include more member engagement in the decision-making process; increase diversity on boards; improve leadership skills at the operational and governance levels. More challenging were the recommendations to create unity among an “increasingly diverse membership,” to “strengthen governance by adopting rules based on their co-operative nature,” and learning to “make decisions and implement change in a more timely manner.” One senior leader summed it up nicely: “The governance structure of co-operatives requires time to function in a meaningful way. It’s a balance of many interests.”

Three themes tied for fourth place in 2018: responding to broad economic trends, globalization, and the issues posed by the sharing economy; member commitment/engagement; and changing technology.

Addressing the first of these — broad economic trends, globalization, and the sharing economy — participants had few positive recommendations for action but many specific comments that could explain why this particular issue rose so significantly this year among co-op leaders. Several people commented about the continuing increase in costs, especially in labour at entry-level positions, and the perennial challenge to find and retain good, qualified employees. Other major concerns included the massive general disruption and competition in the retail industry and the uncertainty around the NAFTA negotiations. And underlying many comments was anxiety about the constant changes in the regulatory environment and the difficulties of managing a business in the face of these ongoing complexities. Overall, this issue seemed to reflect co-op leaders who were not quite sure about their best options in such an uncertain environment. This is an exact mirror to the case with the comments around governance matters in last year’s survey.

Respondents had more confidence in making constructive suggestions for improvement to the issues around member commitment/engagement. One person lamented that many co-ops “no longer act like co-operatives” in terms of “responding to the needs or acting in the interests of the membership.” Another echoed this complaint, asserting that “there is a lack of real attention to member engagement and democratic participation.” Several people commented that co-ops could do a better job of communicating effectively with their members and the communities they serve so as to make them more aware of the co-operative model. There was also the suggestion to find innovative ways to increase the membership and to bring value to members, “not just when they sign up but on an ongoing basis.”

There were many concerns around emerging and ever-changing technology, both using it and managing the risks. Some respondents felt that co-operatives were not clear enough about where they stood in the use of e-commerce and were consequently not making the best use of it. There was anxiety about the rise of new competition through on-line channels and the fear that co-ops were not only not keeping up but were also having difficulty adjusting to the “digital disruption to our business model.” Looking at the larger picture, one person commented that co-ops should look more closely at the threats and opportunities posed by artificial intelligence and Big Data. One senior leader commented eloquently as follows: “On technology I fear we could fall behind. We talk about it a lot and we do a lot, but others are maybe doing more, and I worry about great lateral leaps that could change the very nature of business (e.g., Uber and other like services). And, of course, cyber risk is like a disease, which is bound to get you someday. Serious stuff!”

Our intention here is to provide both a snapshot of the issues as well as comments and suggestions that will be of interest and use to practitioners across the country. Further analysis of the results is underway. Watch this space for more details.

You can find more information about Top Co-op Issues 2018 here.

Nora Russell, publications and communications, Centre for the Study of Co-operatives, University of Saskatchewan

 

 

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