Cooperative development, or development of any sector, can be the result of consistent planning, but rarely does any industry’s development follow a textbook-like course to success. With luck and experience, spontaneous growth also helps inspire the next phase of dynamic development. How cooperators can get all those elements to align for the continued development of the co-op sector sparked a round-robin discussion among a group of CDS consultants about what co-op development means in this milieu.
Food co-ops have enjoyed the benefits of a robust economy, as well as reaping the result of efforts on consumer education and increased retail business acumen. On the other hand, as competition intensified, the food co-op sector has lost market share. The potential for an economic shake-up has many cooperators wondering about the next step. Shaping the direction of cooperative development has never been more important.
Of course, cooperative development differs from other forms of business development. We use the cooperative principles as a starting point, as they are the foundation of our business practices. Many of the activities carried out by CDS consultants directly support these principles, ultimately promoting democratic economies in communities. Most people would agree, cooperative development as a concept and reality is at its best when it carries out both democratic ideals and economic parity.
“I’ve always thought of cooperative development as a combination of business development and organizational development, with the aim of strengthening a cooperative both as a business and as a cooperative, or organization,” said Bill Gessner, a business development and project manager specialist. “The aim is to achieve an integrated balance between the business and the cooperative.”
Balance seems to be the key, noted CDS executive director Kevin Edberg, who stressed the importance of viewing the co-op model as a way of doing business. “Co-ops are businesses, and therefore the market orientation is fundamental and crucial.”
Historically, the nuts and bolts of cooperative development are carried out on a grassroots level, where many co-ops start. This is another critical difference that defines co-op development. Quite simply, a group of people identify that they have a common need, and figure out an organizational structure to address them. In many communities, the need for the benefits cooperatives provide is great, although starting them can be difficult.
Cooperative activities carried out for its members is a core motivation for cooperative development.
If and when the co-op is successful at meeting the original need, other needs often emerge. Gessner sited the following example: “There is a desire for more natural food cooperatives by communities and neighborhoods,” said Gessner. “Yet the challenge of creating new food cooperatives is much more difficult than it was 20 or 30 years ago. People desire community rather than more big boxes. Whereas 30 years ago, natural food was the driving force and community was a byproduct, now, in many subtle ways, that is being reversed. Community is the driving force and natural food the byproduct.”
Advancing cooperative development based on community gives cooperators an opportunity to look at how this growth may occur. “My sense is growth lies in expansions of existing stores, followed by expansions to new locations in co-op friendly areas,” Edberg concurred. “The creation of new stores in areas that are not profitable enough for investor-owned stores (small towns, inner-cities, rural communities, transition neighborhoods) are also places where potential growth could occur.”
How then does an organization get to a “market orientation” in order to effectively meet such a need? In addition, how does the cooperative development community as a whole respond to this challenge?
For Mel Braverman, a business consultant with CDS, the process of strengthening individual cooperative operations will enhance the results of the bigger picture, with more resources and attention paid to long-term development. “Using the core competency areas of leadership development, expansion/relocation, and improving operations has helped create a systematic way of approaching co-op development.” This way individual co-ops can come to understand their role in co-op development in a systematic and strategic manner. Braverman believes that CoCoFiSt is one such example of a unified approach to co-op development. By adopting best-practices, co-ops increase their strength from the inside (operations) out (co-op movement).
In addition to the work of strengthening individual co-ops, it is important to look at strategic partnerships that create synergy and opportunity—and the sometimes indefinable work of encouragement and motivation to change. Gessner noted the importance of Cooperative Grocer magazine’s role in this, because it has “promoted a more unified vision of cooperative development in a hands-on way.”
“It appears that food co-ops are working to ‘raise the bar’ in their own development,” said Peg Nolan, a consultant in the core area of strengthening the co-op advantage. “Our ability to build useful and working relationships with co-op organizations like the National Cooperative Grocer’s Association will assist co-ops from start-up to continued transitional growth and development.” Such groups have enormous power to unify co-op development. “The Co-op Grocers Associations have a real opportunity, if they align themselves strategically,” said Braverman.
The future of food co-op development appears to be in the ability to make those strategic decisions that will develop individual co-ops, but also the co-op movement as a whole. “The boards need to get involved in the leadership on this issue, by taking some of their local resources and allocating them toward the development of national programs,” said Marilyn Scholl, a CDS trainer and consultant.
“Should food co-ops be a virtual chain? A merged chain, or just co-ops cooperating? I don’t have the answer, but whatever form this development takes, co-ops must remain responsive and responsible to local communities. Greater cooperation nationally does not need to mean a total loss of local control,” added Scholl.
Scholl views current food co-op development issues in light of leadership development. “We can pool our resources to run better grocery stores. This will free up leaders to build community and link with members.” The benefits of doing so will build co-ops internally and externally, driving out costs, harnessing market power, and ultimately building the cooperative identity.