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.
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
Each 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 Measuring 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.