WHAT NEEDS TO CHANGE? - Cooperative Principles PLUS

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Cooperative leaders need to have strong sense of purpose, a clear vision for the future and a real appetite for change. This demands that we learn to question ourselves and test our beliefs, so we can discover when we are wrong. Only then can current and future generations become the much needed pioneers within a new breed of dynamic purpose-driven cooperatives. The first and most important step in this process is the development of a clear understanding of the cooperative enterprise model.

Cooperatives need to focus upon specific markets. All of the international examples of successful large-scale cooperatives are focused upon a specific market or marketplace; this is confirmed by Prof. Johnston Birchall's report prepared for Cooperatives UK. A conglomerate is not an appropriate form of organization for a cooperative, because it will usually mean that such expansion will take it outside of the level of competence of the member-directors who need to control the enterprise.  A conglomerate can only be controlled by using the financial controls and the management systems used by investor-controlled businesses. The benefits of scale for cooperatives are best achieved by means of separate cooperatives, focusing upon a specific market-place, working together with other co-ops. In many cases this means the proven model that works for cooperatives, which comprises primary level co-ops focused upon specific marketplaces and secondary level co-ops providing central services.

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If cooperatives are to prosper then some very fundamental issues have got to be addressed, including that:

1.  All co-ops need a well understood, clear and simple explanation as to the purpose and function of their enterprise. Co-ops are frequently totally misunderstood, this is often the case not only in respect of their members, employees and the general public, but most crucially also in respect of the directors and executives charged with running them.

2.  Every successful co-op is built upon a viable market intervention strategy, this provides the means of securing a better deal for its members. Co-op leaders need to be absolutely clear as to what this is and how it will be implemented in practice.
Renewal and resurgence within coops is an important process that must take place systematically, otherwise when changes take place within their markets and marketplaces they are very often marginalised.

3.  Inadequate guidance is currently provided to co-ops about the critical requirements for a successful cooperative organization. It is most important that all co-op leaders properly understand the ten critical features of a cooperative organization, which include the need to work within the framework of the cooperative economic system and to provide an adequate system of oversight

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4.  Cooperative leaders often expound the theoretical benefits of cooperative enterprise but fail to deliver what the ordinary members want, which is a better deal, a better organization and a better future for themselves and their families. Co-ops need to be led by people that are passionate about getting a better deal for their members.

5. That the answer to both financing problems and to successfully engaging with members is usually to be found in organizing co-ops that implement market intervention strategies in specific markets/marketplaces. Members that are enthused by the results achieved on their behalf by their co-op are most likely to be ready to both engage with their co-ops and to contribute finance.

6. The declaration of Cooperative Principles without the necessary policies and systems required to support them, this often means that these 'Principles' are not implemented in practice*  
* A good analogy is to compare this situation to a country that has well-drafted laws but has neither the justice system nor the policing system to ensure that the populace benefits from the sound laws that have been enacted.

Whether or not real change can be achieved in cooperatives is contingent upon high quality, committed and informed leaders being available and willing to lead them. The current generation of leaders have a responsibility to develop their own competence and capacity as leaders, but also to develop future leaders. All cooperative leaders need to fully grasp how human organizations actually work in practice, comprehend the cooperative enterprise model, and have a clear understanding the dynamics of the markets in which they seek to intervene on behalf of their members.

September 2014 © Edgar Parnell 2014

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