Is there any gain in pain? Reflections on the Co-operative Group in the news

It has been an extraordinary period for the UK’s largest co-operative over recent months and weeks. Commercial challenges, financial losses, capital constraints are not uncommon in business. But what has turned this into a very modern celebrity business crisis has been internal conflict, played out in such a public setting.

When I was young, I was told ‘if you can’t say anything nice, don’t say anything’ and it is fair to say that those words have come to mind more often recently, as the leaks, briefings and comment spill over. As I wrote in the Huffington Post recently, it is an odd form of corporate self-harming, as many of those involved and reviews conducted are or were paid for by the Co-operative Group itself – so that’s either honesty (one of the co-operative values) or an overly masochistic view that there’s no gain without pain.

At the same time, of course I accept that this is a legitimate public topic. There is a need for radical change, to raise standards, cut costs, borrow less and then invest more, innovate again. And when a business is owned by millions of members, then there is going to be public interest in what those changes are.

Although this story is far from complete, with results and reviews to come and capital calls to cushion the Co-operative Bank, I do at least get a sense behind the scenes of an emerging consensus over the need for change. Far more of the talk is about the right kind of change – how, in other words, rather than whether. If so, that in itself is a corner turned.

I am interested too in how those most closely involved have also instinctively rallied round to support each other. I am astonished by the resilience and character showed by staff at the Co-operative Group, with the awful drama they have faced. I am proud of co-operative members who pop up at random in the media, unscripted, unpaid for, but with a passion and hope for the Co-operative that is the signal of something still special that has been tested but not broken. And of course there is the reminder in my daily work and contact with our own members that this is just one co-operative and there are six thousand that are trading well, ahead of the economy at large.

This idea of resilience is an entirely contemporary and compelling business issue. Companies that go from good to great, and that last are resilient. The great strength of the Co-operative Group is precisely that it has faced real crises a number of times over its long life. The corporate raiders, for example, have tried before, are trying and will try again.

Each time, the Co-operative Group has emerged stronger, more agile as a result of the experience. Each time, it has drawn strength by becoming more distinctively co-operative rather than less. No-one can take the same outcome for granted – it has to be earned. But for all the foibles, its character and values as a mutual business have always been a source of renewal.

Some years ago, I contributed a chapter on co-operative character to a book by the think tank Demos, focusing on individuals rather than enterprises. In more recent work, nicely supported by the employee-owned, mutual business Arup, Demos now defines resilience as “the capacity of an individual, community or system to adapt in order to sustain an acceptable level of function, structure, and identity.” The subtle point is that survival is not about continuity, but about the change that enables that continuity.

Robert Owen, the pioneer of co-operation, was also fascinated by the idea of character. Penning the first of his “Essays On The Formation Of Character” in 1812, Owen saw character as a set of habits, behaviours and beliefs that were formed by the environment in which people operated. Character was not fixed. It emerged from people’s circumstances, but could in turn shape or reinforce the context and community that people lived in.

On January 1st, 1816, Owen opened the New Institution for the Formation of Character — two buildings financed out of company profits for learning and leisure, including the world’s first workplace nursery, or creche. As soon as children were able to walk, they were taken into the creche and, at the age of three, they entered the infant school. The teachers were specifically instructed to be kind and encouraging to instil self-confidence.

Is there any gain in pain? Probably not. But if pain is a symptom of a great business bringing itself to a point of change and the chance of renewal, then pain for now, it just has to be.

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