How beer barrels, teabags and salmon became an alternative to reporting on profit… with a new guide to Key Performance Indicators for co-ops

It can be a liberating exercise for any organisation to talk about what success looks like.

For co-ops, set up to meet a wide variety of needs, it is also an essential task, because the pressures are always to behave like any other business. So, it is good that we have new guidance out for co-ops on one building block, which is about finding the right Key Performance Indicators (KPIs) to track how you are doing.

Barrels of beer is one indicator of a social club I visited in Yorkshire. The more barrels, the more people, the more sales and the more use made by the community. Not perfect, but simple and memorable. Tea bags used is another one, in a community setting.

For Rochdale Boroughwide Housing, a key indicator is keeping properties in use, with tenants staying longer and lower levels of vacancies.

For the largest co-operatives, it is about measuring things that, added together, make for what is most important. I visited VanCity Credit Union In Canada at the very start of their efforts to measure their difference – we acted as their first ‘social auditor’ when I was at the New Economics Foundation. Today, VanCity is a recognised leader in social and environmental reporting, active in the growing Banking on Values movement. Their 525,000 members hear about how the credit union is doing against three headline measures, with a scaffold of targets and indicators underneath:“we measure three connected outcomes – impact, confidence and integrity.”

There is a growing wealth of metrics out there now, particularly at the neighbourhood level. One indicator I recall that was chosen to capture local quality of life was the number of salmon in the local river. Measures are like these are not just numbers, they are indicators in the sense of being resonant of something larger.

And like all numbers, if you follow them blindly, you lose the line of sight with that larger sense of what success looks like. I have written an article on “what is the best way to prove your social impact” for Co-op News in which I contrast the corporate and sustainability reporting of Shell – more pages put together than Sense and Sensibility by Jane Austen, published new every year – with the Blockley Village Shop and Café in Gloucestershire, which keeps everything short, because members can see how it is doing when they drop by for their shopping or coffee. For the village shop, indicators are part of a short chain of accountability, part of the conversation. For the oil giant, necessarily complex perhaps but unnecessarily opaque, the numbers are a substitute for accountability.

In the new guide, written by Shelagh Everett and overseen by the Co-operative Performance Committee, what is invaluable is the linking of potential indicators with the underlying values and principles of co-operatives. It complements guidance Co-ops UK published last year on ‘narrative reporting’ – beyond the numbers and the annual accounts.

There are many alternatives to relying on profit as the key metric for reporting. An example is metrics around the co-operative principle of democratic member control:

So what is right for your organisation? Beer barrels or impact and integrity? As Shelagh concludes in the guidance:

“The best KPIs can provide the common thread that links purpose, strategy and activity to the work of the board, employees, members and volunteers. But be careful. The wrong KPIs will hinder you if they are not embedded in the way the organisation works.”

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