Buy Twitter or Bye Bye Twitter – a campaign for our future

The first phase of an imaginative worldwide campaign, to convert Twitter into a user-owned co-operative, finishes today in San Francisco at the Twitter AGM.

The future of one of the world’s leading social networks has been the subject of speculation for over a year. Twitter’s viability as a business depends on finding new income streams from its users, yet its users look for a clean service with minimal advertising.

There has been a worldwide #BuyTwitter campaign leading to a formal resolution at the AGM to explore turning Twitter into a co-operative, owned by its users. The campaign was kicked off by an article by Nathan Schneider, advocate for a new generation of platform co-ops online, in the Guardian in an op-ed

Danny Spitzberg, an inspired and inspiring California-based sociologist, researcher and now campaigner, picked this up and started the #BuyTwitter campaign – with a @BuyThisPlatform twitter handle and #WeAreTwitter added hashtag.

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I siged up early on myself, and in the run up to the AGM, Co-operatives UK completed market research for the AGM which shows that two million active UK Twitter users would invest in Twitter if it became user owned. That translates into fourteen million potential user investors worldwide.

 

The proposal for the AGM – on https://www.buytwitter.org/proposal/ – was eminently reasonable. Developed by James McRitchie, expert in Corporate Governance at http://CorpGov.net  it asked the Board to explore the option, not to do it overnight – options are set out on the campaign website – buytwitter.org/thiscouldwork. The Board is recommending to vote against.

The context is that Twitter has a commercial challenge, because it can only bring  more money in by cluttering the platform with advertising, potentially losing what has been core to its success. This rant by Chris Sacca, activist investor who recently sold most of his shares sets out some of this. My own analysis is on http://www.huffingtonpost.co.uk/ed-mayo/buy-twitter_b_16623194.html

In recent days, the International Co-operative Alliance issued an Open Letter to Twitter Shareholders, offering to support the conversion with advice and connections. In the UK, the activist investor group ShareAction helped to brief investment funds on the proposal, encouraging them to vote in favour. Catherine Howarth, Chief Executive of ShareAction, explains that “our guidance for Twitter investors, in particular the Socially Responsible Investment funds, is to back Proposal 4, both to promote a visionary new model of co-operative ownership for Twitter.”

The campaign has generated over 100 commentaries in media outlets support and put the idea on the map. One of the most imaginative forms of support is a song by #Jez3Prez – Buy Twitter or Bye Bye Twitter

Twitter is one of a new generation of businesses which do something that goes beyond the market. What future do we want for it? Do we want to try to find ways monetise Twitter in order to provide a return for shareholders? Or do we want to find a way to preserve what its users love?

This has been a campaign for our future.

How do you engage people? Five simple steps

For an event run this week for healthcare professionals by the Electoral Reform Society, I have pulled together some key tips on how to encourage the active participation of users and staff – a process in a UK setting now often called ‘engagement’.

You can tell the story of any society or time by looking at how it handles the health and care of its people. If so, we are in a pretty shocking state today, because, for all the advances in health outcomes over time, we treat people involved in the health system in a shabby way. This is not just the indignities of waits and cancellations for patients, but the sufferance of staff in the system, often, in the care system in particular, on low wages and with poor conditions.

When looking at the UK data for staff working in Government, I find that staff working for the Department of Health have the lowest levels of staff engagement of any main department – down 25% over ten years and now at rock bottom. How did we end up with such shocking levels of disengagement, when people who work in the health sector have such rich motivations at the start, to care and to meet the needs of others?

Slide39So, how do we chart a way back from this?

My full presentation is up on Slideshare, but here are five simple steps that I would pick out. Yes, they will take time, but each of these steps is tried and tested.

Step 1 – Develop an engagement plan

Engagement isa process through which people can interact with an organisation in a meaningful way for mutual benefit.’

So any organisation can ask…

  • Is it a systematic process?
  • Is engagement meaningful for those who participate?
  • Does it lead to positive outcomes?

It can also track the journey to systematic engagement over time.Slide06

Step 2 – For service users, start by focusing on the experience of the service  

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Step 3 – Create decision making that is responsive, based on short feedback loops

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Step 4 Pass over power and decision making to users, to the extent to which they want it Slide32 

I call this the Participation Fruit Tree, rather than the classical Participation Ladder, as users may want different forms of power and participation than straight self-management.

When it comes to the top of the ladder, and high on the fruit tree, with self-management, then the best organisational form, which embeds member engagement at its heart, is a co-operative.

Step 5 – Invest in valuesSlide42

As I explore in my 2016 short book, Values, the way to engage people at a deeper, emotional level, whether employees or customers, is through the purpose and values of what people do together. We engage more if we feel we belong.

And three conclusions

These five steps come together into an engagement value chain.

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What I have learned from my work on engagement over time, with the National Consumer Council, Co-operatives UK and as Chair of the participation charity Involve, are three facts that are hopeful that we can do better in health and public services and in society more widely.

1.Engaging users is not a trade-off, because a user focus is key to the satisfaction and motivation of staff.

2.Engaging staff is not a trade-off, because empowered staff are better able to satisfy service users.

3.Engagement works. We need to harness its potential to improve the daily public services that are so essential to people’s lives.

Comments welcome!

A co-op compass – or how to measure progress when you are different

Sometimes when you are walking, you have a clear sense of direction. Sometimes you don’t really need one because the paths, the pavements and the signs lead you on. Sometimes it helps to have a compass.

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Co-operatives are unusual businesses, because all the usual pathways and signs don’t necessarily point in the right direction for them. Making money for investors counts less than meeting member needs, even if trading and competing successfully matters for both. Co-ops need a compass.

Britain’s largest consumer co-operative, The Co-op Group, has been going through an extraordinary process of change and renewal in recent years. And one of the key innovations has been a new compass for the business, jointly agreed by the National Member Council and Board.

The vision for this came from Nick Crofts, the dynamic and impressive President of the Co-op’s National Member Council. The Council was a new body formed as a voice for members in a new governance structure agreed in 2014. The new rules set out that the Council was charged with holding the Board to account on behalf of members, Nick probed and focused on the key question – how was it to do this?

Nick asked Co-operatives UK, in work led by my colleague Shelagh Everett, to support the Council to develop an accountability and performance framework, anchored back to co-operative values and the principles and co-op difference. What emerged proved to be as valuable for the dialogue that led to it, as the framework that resulted. Across the different points of leadership in the business, Council, Board and Executive, there emerged far more of a shared conception of what success looked like in practice and in depth.

The Co-op Compass is a balanced scorecard, focused on what it means to be a successful co-operative, and the difference this brings. The four component lenses used are:

– member value

– member voice

– co-operative leadership

– ethical and sustainable leadership

compassEach lens then drills down into a set of metrics that reflect the key components of these. In member value, for example, this includes earnings retained for future value & growth. In member voice, it includes active member engagement, measured through a series of interaction points. At the heart of the compass if demonstrating the co-operative difference, and this is used as a further lens to test past and future business activity against.

The compass was set in place last year and has quickly become a key tool to structure reporting and dialogue between the National Member Council and Board. This month, for example, and for the first time, it forms part of the Council’s Annual Statement to members in the new Coop Annual Report 2016 (see page… 91). It helps to organise the diverse work programme of the National Member Council in its role to hold the board to account on behalf of members. It also gives the business a clear set of directional pointers to guide thinking in terms of what matters to the Member Council.

How is the Co-op doing? The compass tells you.

In my experience, measurement can be transformative if you focus on what matters most and you act on the results. The co-op compass is a good example, although to succeed, it also needs to endure and to adapt as it does so. Without that action-focus, as in a generation of work on sustainability metrics since the Stockholm and Rio Earth Summits, measurement can be a displacement or at worst a distraction.

The signs are positive for the Co-op Compass. Not only is the National Member Council committed, but the Board and the new Chief Executive has put ‘being a better co-operative’ at the heart of plans for the next round of commercial renewal in the business.

There has been a growing effort around tools such as this worldwide in the co-operative sector, set out in the book Co-operatives for Sustainable Communities compiled by the MeaScreen-Shot-2015-08-12-at-3.01.05-PM-e1439406130427suring Co-operative Difference network -http://www.cooperativedifference.coop/tools/ Researchers involved in this and related work will be coming to the UK next month in a conference in Stirling under the auspices of the International Co-operative Alliance Research Committee.
Later this year, Co-operatives UK will follow up its work on metrics with The Co-op by issuing a complementary set of guidance on narrative reporting for member co-operatives, developed by our Co-operative Performance Committee.

Where do you head for, when you are trying to do something different?

At such times, we all need a compass.

Re-imagine the economy

We are working towards one of the most exciting co-operative events for years, Co-operative Congress, which takes place on Saturday July 1st in Wakefield, West Yorkshire.

It is a special day, because it is not just the culmination of the UK Co-operatives Fortnight, it is the UN International Day of Co-operatives.

On the day, we are also launching a new National Co-operative Development Strategy, under the theme of Do It Ourselves.

The title for the event is ‘Reimagine the Economy’. The event aims to bring together a wide range of people working to build a fairer economy to share ideas, get inspiration and take action.

congressposternoborder_1It features speakers on the gig economy, work, housing, technology and social care among others, a host of workshops an Dragon’s Den style pitches from co-operative entrepreneurs.

The location, Unity Works, is a special, co-operative venue, purchased by people in Wakefield in recent years using the model of community shares that with many partners, we have been able to champion.

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Come along!

Humanity at work

It has been a day full of values as I was taking part in the launch of a new research report in Westminster, which retells the extraordinary story of Mondragón and its network of co-operatives in the Basque country as a social innovation.

The event was in collaboration with the Young Foundation and Mondragón itself. The founder Father José María Arizmendiarrieta declared that justice can not be practiced where human dignity is ignored.

It was these values, of humanity at work, concluded the research team at the Young Foundation, led by ethnographer Dr Mary Hodgson, that underpinned an eco-system of innovation that is flourishing today – with 260 different companies and subsidiaries, with over 75,000 workers in 35 countries and annual revenues of 12 billion euros.

‘Social innovation’ as Mary characterised it, is best when it is ‘social in means and in ends’. She stressed that the ownership and democracy were essential ingredients in the continued success of Mondragón today as a social innovation.

The research demonstrates three key features:

  • the economic and social benefits of worker ownership and control along co-operative lines
  • the viability and value of co-operative entrepreneurship
  • the huge positive impact worker ownership can have on values and cultures, and mission, within commercial businesses

In addition, it shows how worker co-operation can result in Swedish levels of equality, without Swedish levels of taxation (the Gini coefficient in the Basque region is as low as Sweden’s, but the tax burden is at the EU average).

Mondragón operates with salary ratios, from top to bottom, of no more than one to nine. This was on the day when the Business Select Committee has declared, on rocketing CEO pay in British business, well into the one to hundreds, that “we do not have confidence that progress will be made without further pressure being exerted”. Sadly the honourable Select Committee members overlooked the idea that if we have different forms of business ownership, we might get different behaviours.

In the launch questions today, people asked about challenges that had come up – such as the closure of one business under the Fagor label and the threat of automation. In every case, the response of Mondragón was helping to turn those challenges into opportunities to develop and to compete, in line with its values (redeploying, for example, two thousand workers from the closing co-op in other co-operatives in the nexus). Mondragon has demonstrated, and intends to demonstrate further, how decent work can be secured even as competitive pressures and technology change looks to disrupt and destroy work.

What was their advice for us here? Ibon Zugasti Gorostidi was clear – “build up inter-co-operation between co-operatives, to help make them more competitive and more successful.”

That is likely to be one of the key themes in the coming National Co-operative Development Strategy that we have been working on with members, for launch later this year.

We have also worked with the Young Foundation to develop a national policy agenda for the UK, that learns from the experience of co-operation in the Basque country. This includes our proposal for a Co-operative Entrepreneurs Programme to help entrepreneurial people coming together to own and control their own livelihoods through co-operatives and social enterprises. And a Worker Buyout Fund designed to address the growing challenge of  business succession, not least as the option of foreign investment in domestic firms dries up in the context of Brexit.

Back to Father Arizmendiarrieta. Another of his sayings was that the idea is to institutionalize honesty. Better yet, he then went on to add, the idea is to institutionalize human greatness.

Mondragon

Dust to dust or… making wealth from waste

John Davis is a big man in my life. I am not sure he ever retired as such, but in his nineties he writes me letters from the South Coast of England with his plans and analysis – all in line with work he started with Fritz Schumacher, the author of Small is Beautiful, in the 1970s. 

John was Chair of the New Economics Foundation, and a wonderful guide, when I worked there in the 1990s.

John’s latest letter to me was prompted by the partnership and programme we have started on community economic development, working with support from the Department for Communities and Local Government.

“The aim and purpose of community economic development”, he writes “is to enable the populations of each local community to be as self-reliant as possible in the basic necessities of life.”

One way to start, he suggests, is to “make wealth from waste” in domestic energy by reducing its cost for all. The advantage of this is that it doesn’t require investment or a change of habits. “It simply requires central heating thermostats to be set at 12 degrees C instead of the higher, comfortable level, by having the higher level only in rooms when occupied using a top-up source heater.” He calls this ‘rational central heating use’.

Domestic energy is a major part of the nation’s total building energy consumption, accounting for 40% of inland UK energy consumption and CO2 emissions. To move towards zero emissions by 2050, to meet the overall 80% CO2 reductions needed, “there will need to be community energy service supply co-operatives that can ensure that every property is fully insulated, double glazed and operating rationally on natural gas or solar voltaic cells; and purchasing energy wholesale from suppliers to be shared between householders at lower annual costs because of the savings made.

In John’s area of Purbeck, for an average family in rented accommodation, 44% of their income goes on rent, in an area that has incomes 20% below the national average. “A self-build housing co-operative is needed to help make housing affordable”, by replacing high construction costs and speculative market prices for houses and flats with low cost technology and shared ownership of land.

To make wealth from waste in food, he recommends food delivery co-ops, to cut the waste of delivery systems for supermarkets, sourcing locally where possible. In transport, what is needed are co-operative car clubs, using reconditioned cars – making wealth from the waste of scrapped cars, which he estimated to be at the level of around 1,000 for a community of 60,000. Cars are the largest single item of waste people own that can be turned into wealth. His estimate is that up to 75% of the original sale value can be recovered through reconditioning – a process that is labour intensive so that the wealth is in part circulated through wages.

John recognises the need for these to go hand in hand with system changes – including for him, a dual currency system separating out the production and use of local essentials and national currencies for non-essentials. But what he explores is not a policy agenda but a mindset change, that what we thought was waste could turn out to be tomorrow’s wealth.

And conversely, that in a carbon constrained future with the imperative to meet basic needs for all, what is wealth today could be seen tomorrow, as no more than waste.

Dust to dust, ashes to ashes, we know that circle. Perhaps, in our generation or the next, we can create a new story and a new circle, from waste to wealth.

The next chapter for co-operative banking

The Co-operative Bank announced its results this week, with a further spread of red ink since its troubles began in May 2013. It is the right time perhaps to reflect on what next for ethics and co-operative banking.

For anyone who wants to know more about the state of the Bank, there is an investor presentation which tells the story. Put simply, the original plan was to trade out of the troubles back into full health. That has not been possible in current market conditions, despite plenty of hard work and practical achievements. The losses are exceptional – bad loans for example from the past that tend to go bad as they mature – and should be non-recurring costs. But the bank is not covering its operating costs in the current market conditions of interest rates lower for longer, even though those costs have come down, and that can never be a permanent state of affairs. And the bank has to operate with a sufficient capital cushion to satisfy the regulators, who, even if what happens to the bank is not classed as a systemic risk, will be watching like a hawk.

So, we are into Plan C now. The announcement last month of a search for a new buyer, or new capital, means that the next period will be one of flux for the bank.

‘What do I do as a customer?’, asked a friend yesterday evening (I think I encouraged her into the Bank in the first place many moons ago).

Of course, consumer protection in banking gives a guarantee of safety. Plus, the ethics are also strong and that remains a distinctive offer in a pretty despised banking market overall.

Of course, with values, no-one is perfect. You can choose whatever yardstick you like personally, or as a campaign group, to run the rule, but the Co-operative Bank is different. Its ethics are enshrined in the articles and the priorities are those chosen by the customers: that’s pretty much as democratic as you get.

The Bank is also engaging proactively with the rest of the co-operative sector, in particular supporting the cost effective but high impact programme of co-op business support, The Hive, run by Co-operatives UK. We have an agreed voluntary programme of compliance around the use of the word co-operative, in line with criteria that we drew up with the International Co-operative Alliance and in consultation with our members.

One option as a customer is to join the Customer Union formed by the Save our Bank campaign – or just link to it on Facebook. Customers who care what happens can then act together rather than individually.

The investor presentation by the Co-operative Bank CEO Liam Coleman makes it clear how critical it has been to the survival of the bank that it has remained and indeed strengthened its ethics (health warnings of course – nothing is perfect) and the customer base of around four million people has stayed loyal.

One day, that may be a Business School case study for ethical business, but for now that means that the ability of customers to come together and act together is critical for what happens next to the bank. Whether the suits in the Bank of England or potential buyers or investors appreciate that will be the flip side of this – this could yet turn from a survival epic into an unqualified tragedy.

And when we look at what is happening to co-operative banks worldwide, this is the story in every case. If you are owned by your customers, then your customers will tend to keep you on track, whether in terms of integrity or when things go wrong.

In Japan, the Norinchukin Bank made losses that were exposed during the 2008 banking crisis, having purchased worthless US securities at a time when the rating agencies were saying these were triple A secure. The bank turned to its members, who are farmers, to return it to solvency. The financial gap was around $900m, and the members made up the loss.

There are over four thousand co-operative banks in Europe.

A recent study led by the distinguished Professor Hans Groeneveld at the Tilburg University looked at sixteen co-operative banks across around a dozen countries in Europe and North America. The total membership is on the rise, with around sixty million consumer owners. Since 1996, the ratio of co-operative bank members to the population at large has risen from 14 to nearly 19, so that one in five adults in those countries are member owners of a co-operative bank.

Since 1997, their market share of deposits and loans has risen by around six percentage points to just below 25%. The cost-income ratio was comparable to the wider banking sector at large. Since 2008, return on equity has been higher than the wider sector (6.3% compared to 5.9%) – and I expect that is not an iron law but an indication that co-operative banks can perhaps behave differently in tough times, when they are needed the most.

There are regulatory threats and pressures – some moves to consolidation in countries like Denmark and Germany. Those pressures will be recognised by the wider UK mutual sector of building societies and credit unions – and the fledgling community finance sector too. It is great to see that Nationwide, full of confidence and purpose, has taken up membership of the European Association of Co-operative Banks. There will be a convention of European co-operative banks, large and small, in two weeks time.

The key point here is customer owned banking is a good and practical alternative to investor owned banks.

The UK Co-operative Bank is something of a hybrid, and was arguably never fully owned directly by its customers, but it has been a trailblazer on ethics for twenty five years and it matters a lot what happens to it next.

And however this does now play out, the next chapter of banking in the UK needs to be more mutual, more co-operative rather than less.