Dorothy and Dawn: two extraordinary women and what they teach us about entrepreneurship

Two women of extraordinary commitment and ability have been named recently for their work over decades in the cause of entrepreneurship. Dorothy Francis, chief executive of the co-operative development agency CASE in Leicester is the one and only person this year to be given a lifetime achievement Queens Award for Enterprise. And Dawn Whiteley, chief executive of the National Enterprise Network has been honoured with an MBE, again for services to enterprise. 

Their work has been at the front end of business support and advice. They are not the business leaders at the public helm of FTSE companies. They are business leaders in another sense, of having supported, nurtured and inspired hundreds of small and medium sized businesses, private business, social enterprise and co-ops, whatever works, whatever creates jobs, uses skills and expresses hope and opportunity.

The origins of both institutions is also interesting as it is entwined. Many of the early enterprise agencies, as Adrian Ashton reminded me this week, were formed by the co-operative development agencies that already operated locally, from the 1970s. Just as, in later years, it was London co-operative development bodies that were the key force in the arrival of social enterprise agencies.

Also linked are a few other progressive institutions. The story is told to me by one of the prime movers of the early enterprise agencies, John Davis. John, author of Greening Business, keeps in touch with me from our time together at the New Economics Foundation, when he was Chair of Trustees. His letter is below.

Fritz Schumacher, author of Small is Beautiful and once named by Keynes as a preferred successor, asked John Davis, on leaving a global role at Shell in the late 1970s, to lead a programme on intermediate technology in Britain (the work of the charity Schumacher founded out of an Observer article, ITDG now Practical Action, had been focused overseas). John started work to support enterprise agencies – to catalyse and support local small business. One of the first was in St Helens, but there were soon many more: by 1981, 30 agencies.

The model appealed to the Chair of Pilikington Glass, Sir Alistair Pilkington, who visited them and inspired him to found Business in the Community, explicitly to spread the practice across the country. Oh, it would be wonderful to see that noble charity return to those roots of practical community economic development, away from the back slapping world of social responsibility reports and awards.

By 1986, there were 250 local enterprise agencies, but that was perhaps close to the tide turning. Rather than embedded micro-economics, government turned to a national advice agency, business link, and then when that failed to demonstrate the same track record (and yes, enterprise development is notoriously hard to evaluate, as this report from the state-endowed NESTA concludes), ditched it in favour of austerity-friendly websites, unpaid mentors and hopeful social investment. 

It is true, there is a different story in Scotland, where enterprise and community enterprise trusts have their own proud history – and to an extent also Wales, with the leadership of the Wales Co-operative Centre. People-powered prosperity is a recent book by David Boyle that tells more of the story of community economic development across the UK.

John was writing to me to welcome the new Community Economic Development programme we had launched with NEF, Locality and Responsible Finance (in liaison with many others, such as CLES and the Reconomy network), backed by the Department for Communities and Local Government. Through this we have supported fifty neighbourhoods across England with their community economic development plans, rooted in a holistic and participative approach to livelihoods and enterprise development. We are now in our second year, inspired by the communities we are working with.

At national level, over three decades we have an extraordinarily patchy record of support for enterprise. But look at the story of Dorothy and Dawn. Look at the grassroots as the most innovative and persistent of enterprise, social enterprise and co-operative agencies still show us the way, if ever we wanted to move from an economy of dependence to one of true, mass entrepreneurship.

Do raise a glass to Dorothy and Dawn.

91 million and rising means that we’re a nation of members

A country of shopkeepers? The suggestion, often attributed to Napoleon Bonaparte, was certainly made, in derogatory tones, two hundred and twenty years ago (on Saturday) in the National Convention in Paris.  Bertrand Barère de Vieuzac declared Britain to be “une nation de boutiques”. The contrast I guess that he wanted to make was between a democratic republic and a market state.

Although shopkeeping is probably a tougher livelihood now than then, there is one way in which the description holds. The UK is a nation of members – and many of these are member owners of co-operative and employee-owned retail shops across the UK.

We have just released the UK co-operative economy 2016, annual data on the sector, which point to a significant increase over the five years in the number of members of co-ops.

The co-operative and then we can add in also the mutual sector – powered by the likes of mass member owned high street businesses like the Co-op Group and Nationwide – form the largest part of the UK’s wider membership figures.  This is going to get larger too. The Co-op recently relaunched its membership scheme, so that 5% of own brand purchases are returned to members, and 1% to their communities – and aims to recruit one million new members over the next period.

The rise and rise of co-operative members

Being a member of a club, a community or a cause is part of who we are. It is rare to find someone who does not belong to any group. It is also rare to find someone for whom being a member doesn’t also change, in subtle ways, how they interact with others and how they view themselves. There is such a thing as society, and membership is one of the building blocks.

Membership, in fact, is part of a wider field of civic participation. You can sign a petition, click to like an online campaign or donate money. All these actions are part of a healthy democracy and are acts of citizenship, but they are not necessarily rooted in membership. Because the term ‘membership’ is used in so many varied, and sometimes shallow ways, we have also done some research on what the public thinks count as proper membership.

Good membership, it emerges, can be seen most clearly as a two-way relationship between an individual and an institution. We find that people think the best membership organisations do five things:

  1. keep them informed,
  2. give them a say,
  3. treat them with respect,
  4. allow them a vote and
  5. offer them opportunities to get involved.

What underpins this, in terms of social psychology, appears to be that great forms of membership are ones that offer identity and control.

We can this as a way to select across that mix of membership schemes to weed out membership schemes that are really only one-way models. Having a loyalty card for a coffee chain gives you no voice. Being a friend of a museum gives you no vote. For the most part, anyway. From this, I have had a go at identifying the top 15 membership networks in the UK. These are:

  1. Building Societies – 25 million
  2. Co-operatives – 17.5 million
  3. Neighbourhood Watch – 10 million
  4. Sports clubs – 9.1 million
  5. Mutual insurers – 8 million
  6. Trade unions – 6.4 million
  7. Christian churches – 5.5 million
  8. National Trust 3.7 million
  9. NHS Trusts – 2 million
  10. Wildlife Trusts – 1.1 million
  11. RSPB – 1 million
  12. Political parties – 812,000
  13. Freemasons – 600,000
  14. Girl guides – 538,000
  15. Scouts – 450,000

There has never been a Doomsday Book for members in the UK, so this is far from the final word. What are the next fifteen? Or fifteen hundred? Our intention has been to open up the conversation on membership, rather than close it down, and we would be delighted to find others.

In England and Wales, for example, the Charity Commission estimates that there are around 80,000 charities that have a membership structure. These come in different forms.

A number of the disability charities have members, often with a democratic model where members are able to vote on who gets on the governing board (even if that the board remain in formal terms trustees of the charity rather than directors acting as representatives of member interests). In the disability field, over many years, this shift has been key to the move away from a tradition of paternalism, acting ‘for’ people with disabilities to a model in which action is led by people with disabilities. The great participatory slogan has been ‘nothing about us, without us’.

The New Citizenship Project, led by Jon Alexander, is working with six associations on the theme of the future of membership organisations: Amnesty International, Soil Association, NASUWT, Tate, National Union of Students and House of St Barnabas. This looks a fresh and contemporary version of an exploratory venture with fourteen membership charities coordinated by Katherine Hudson for NCVO with the RSA a few years back.

So, how many members are there in the UK? Just drawing on our top fifteen membership networks, I conclude that there are over ninety one million in total. Not surprisingly, there are more members than people in the UK, because we are members many times over. But still, this is a dramatic number – for comparison, it is ten times the number of individual shareholders in the UK. Can we imagine the television news, where member ups and downs were treated with the same profile and respect as stocks and shares?

With technology platforms making it easier and more cost-effective to operate membership systems, members are likely to be part of national life for years to come. With ninety one million memberships and rising, we are a nation of members.

Note: An expanded version of this blog was first published by Democratic Audit – I would welcome additions you may have to this list of top membership organisations and will credit you. What is missing?

Mutuals are ageing well

The UK is an ageing society and with that comes a growing recognition of the needs and aspirations of older people.

There are more people over the age of forty five than under, more people over sixty five than under sixteen. That means changes to the way that business operates, says Mark Beasely, from the Mature Marketing Association, who presented to cooperative retailers in the UK last month. 

The concept of age, he reports, is almost entirely associated with negative attributes in marketing and yet that is not a good reflection of how it feels to be older. Ninety five percent of marketing, he reports, is focused on people under fifty. 

But that doesn’t mean it makes sense to talk to older people as older people. Age is not how people want to be defined.

The social economy sector has some outstanding examples of people working to redefine age – such as Change Agents – including in sectors such as health and social care, where services based on co-operation and mutuality rather than financial return make all the difference. One of the best exemplars I have seen of action is what building societies are quietly doing to meet the financial service needs of older people.

“Already one in four people borrowing beyond the age of 65 is a first time buyer” says Dick Jenkins, Chair of the Building Societies Association. “The assertion that the over 40s can’t get a mortgage following the changes to mortgage regulation is overstated, but there are challenges.”

Building societies are therefore stepping back from simple age policies, beyond which you can’t borrow. They are working with insurers to help older people get cover for the mortgage risks they face. They are making sure that older customers have good information and advice in terms of their consumer rights.

The Vernon Building Society for example has lent to a married couple, both aged 70, who were renting in Poole, having moved back to the country from Spain. They had some capital and the Vernon lent them £80,000 on an interest-only basis, paid from their pensions (at a lower costs than their rental outgoings) and repayable from the sale of the property on death or if they move into alternative accommodation. They pay a discounted rate for registering a Lasting Power of Attorney to mitigate against the risk of not being able to deal with their affairs. It meant an end to our sleepless nights, the couple remarked.

Another approach is ‘right sizing’ where people move to a smaller house. Although 32% of older people have considered this in recent years, only 7% have done it, according to Legal and General. Having a trusted product designed for their need from a building society could help make a difference – even if we also as a society need to build more homes designed to be suitable for older people.

The origins of the term ‘mortgage’ is of course the grip of death (the words death and debt being similarly intertwined). Because it is a long-term product, building societies like the Vernon are taking on the stigmas of old age – while keeping an astute commercial eye for a growing market. Death may come to all, but as a society and economy, we should do better for all the years of life before it. 

Think of ageing? Think of life and not death.

 

John McDonnell, David Cameron and the growth of the UK co-operative economy

It is great news today that the Shadow Chancellor, John McDonnell, commits that the Labour Party will aim to double to the size of the UK co-operative sector if in power, as a way to boost the economy.

Drawing on figures from our co-operative economy report, he compares the size of the UK co-operative sector to counterparts in Europe, saying “We should be more ambitious about what can be achieved here. We want to see resilient, high-productivity businesses in an economy that is fairer for everyone. The next Labour government will look to at least double the size of the co-operative economy. That’s a £40 billion boost to the economy.”

His suggests mechanisms for supporting the growth of the co-operative sector chime with a number of our policy proposals, including legislation for ‘mutual guarantee societies’ which will enable small businesses to pool resources in order to access much-needed finance and support for self-employed workers to form co-operatives, both of which are recommendations from our latest report on freelancer co-ops that picked up significant media coverage.

I will blog soon on mutual guarantee societies to say more of our work on this innovation for enterprise finance.
The Shadow Chancellor also cites the limited resources allocated to co-operatives in central government, which points to our case for consolidating responsibility for co-ops in the department for business. And he commits to reversing the cuts in support for community energy ventures.

This is the most far-sighted speech from a front rank UK politician since January 2012, the start of the United Nations International Year of Co-operatives – and the speaker in question then was… David Cameron.

Designing in gender equality

Howard Roizen is a successful entrepreneur, confident and accomplished. When his story is studied in Business Schools, students that are given him to assess rate him highly. But the truth is that he doesn’t exist. ‘He’ is Heidi, a real life case study written up by Kathleen McGinn of Harvard Business School. When students are given her story, identical in every other respect, what they perceive is a degree of arrogance and self-promotion.

The reason, explains economist Iris Bohnet in her book, What Works: gender equality by design, is unconscious bias. The stereotype for Heidi is closer to the traditional fables of women and it is this stereotype that frames people’s response. The same unconscious bias can hold back and exclude men from caring roles, she adds.

 US companies spend $8 billion every year on diversity training, she estimates, and yet little if any of this is proven to change attitudes or outcomes. What is needed instead are tools and techniques to remove bias in a systematic way.

Iris is a lecturer at the Kennedy School in Harvard, and I have had the privilege of being taught by her on two short courses over recent years. In her book, eagerly awaited, she opens with a wonderful example of how to de-bias decisions:

“As late as 1970, only 5% of musicians performing in the top five orchestras in the United States were women. Today, women compose more than 35% of the most acclaimed orchestras, and they play great music. This did not happen by chance. Rather, it required the introduction of blind auditions. The Boston Symphony Orchestra was the first to ask musicians to audition behind a screen, and in the 1970s and 1980s most other major orchestras followed suit. When they did so, usually in preliminary rounds, it raised the likelihood that a female musician would advance by 50% and substantially increased the proportion of women hired.”

It is not enough to believe in equality. In our unconscious, we inevitably draw on stereotypes, shortcuts, that we have drawn from the culture and tradition around us. Changing those is possible over time, where there are new role models and new rules set, but in the meantime, to act on equality – for gender, race or other difference – means finding intelligent ways to bypass our unconscious bias.

Self-employed? Join a co-op.

The new tax year is starting and will see record numbers of people over the next twelve months filing returns as self‑employed workers.

Our new report, Not Alone by Alex Bird, Pat Conaty and Philip Ross tracks current levels of self-employment and the ways in which co-ops can help freelancers meet shared needs.

4.6 million people are now self-employed – the highest numbers in the UK since record began – and the numbers are likely to rise further, not least because it is an option that appeals to many people. One in four people (27%) of employees in medium-sized firms in research for the report say they would rather be self-employed.

In response, freelancers are starting to club together to form co-ops where they are better placed acting together rather than operating alone.

An example is RICOL. The service for interpreters in London was shaken up when the Government in 2011 moved from a national register of public service interpreters to a contract for all of England and Wales from a single provider, won by Applied Language Solutions, owned by Capita. To deliver on the contract, the firm then offered court interpreters work at what was in effect between 25% and 40% of the established rate.

There was a mass refusal to sign up and a protest group was launched, Interpreters for Justice. Many new interpreters hired by ALS were poorly qualified. Severe delays and chaos in the courts were widely reported in the press.

With help from Co-operatives UK, RICOL was established in November 2012 as a London-based interpreters and translators co-operative. They are now generating new work and contracts with law firms, commercial companies, human rights organisations and media companies.

It is early days for co-ops like these in the UK, but there are inspiring examples from overseas to learn from, such as the Self Employed Women’s Association in India, a trade union and co-operative network giving voice and opportunity to 1.7 million members.

Self-employment means that you take on the risks and the opportunities that the economy affords you. By coming together in co-ops, freelancers can share the risks and pool the opportunities.

You are on your own, but not alone.

 

School children benefit when parents have a voice in their schools

The Education White Paper launched this week has its strong points, but being pro-parent is not one of them. Alongside the headline policy objective of moving all schools to become academies, whether parents approve or not, it announces the Government’s intention to remove the obligation to include parents on the boards of schools.

The best boards, whether in business or in public services, have an outstanding mix of skills and expertise. If you get the governance right, you are improving not just performance, but also the sustainability of the organisation over time. But that doesn’t mean that accounting, finance and HR are the only skills that a board can benefit from. From my work across the co-operative sector, including over eight hundred co-operative schools, I know that being a parent can be a form of expertise, to be used alongside the other skills that board governors can draw on as a team.

Public services have rarely celebrated the role of the user. Years ago, Anthony Crosland declared himself staggered after local visits by the extent to which statutory services depend on the volunteer. Today, this includes, in England:

  • 170,000 volunteers who work in the NHS, befriending and counselling patients, driving people to hospital, fund raising, running shops and cafes…
  • 12 million meals a year that are prepared by volunteers to people in care
  • 85 million people who are regular blood donors, with 8.2 million signed up as potential organ donors
  • 750,000 people who volunteer in schools
  • Around 145,000 tenants and residents who are involved in user groups in social housing
  • Over two million people who are members of NHS Foundation Trusts.

In the health service, patient involvement began in 1974 with the establishment of community health councils. In education, during the 1970s most schools began to encourage parent governors. By 1979, 90% of schools had parents on the board, and it was due to parental pressure that in 1980 that they gained the statutory right to be represented.

Having a parental view at the Board can bring the school closer to parents, who are after all the key partners in their children’s learning. The new White Paper does recognise this, and calls for improved engagement by schools with parents, but it misses the way in which having parents involved in school decision-making and not just at the school gates, makes this easier to do. With the move to multi-academy chains, there is a risk that the only accountability that pupils and parents will be able to call on is an uncertain and faceless performance and inspection regime.

One school in West Sussex sent out attendance letters to parents. When some parent read letters that said that, their children had only an 85% attendance record, they thought there was something to celebrate. After all, what did the percentage mean? They compared it to exam results, in which case 85% was excellent. At a suggestion from a parent governor, the head teacher changed the letters, to colour code them, as red, amber and green. In talking to parents, she explained that 85% was almost one whole year of education in five missed. The conversations with parents changed overnight, to how they could move their children from red to amber, or amber to green.

The co-operative schools sector is, in the main, an exemplar for this kind of partnership approach. Today over 250,000 young people attend co-operative schools in England, primarily as trust schools but a few as co-operative academies, such as my local school, Corelli Academy.

What is a co-operative school? There are two key features. The first is that the co-operative values of democracy, equity and fairness are applied as an ethos across the school. The second is a governance model that directly engages key stakeholders through membership of the trust, where it is a trust school. This model provides a formal way to include not just parents and carers, but also staff, the local community and the pupils themselves. Together they form a community-based mutual organisation.

The growth of co-operative schools reflects a growing attitude that expect public services, not least in the context of financial pressures and changes to service delivery, to work with them, rather than just for them – a real partnership.

co-operative_economy_2014-page-019_483x640_0When you ask people, what marks out the best public services – what is the public service ‘X Factor’ that differentiates them – then people speak about empathy, compassion, warmth, the human touch, respect and focusing help on people who need it most: “If I go into a school, I want to feel as if I have been listened to.”

But there are urban myths that have always gone hand in hand with parents as school governors, some of them kept alive by the part of the educational establishment that sees parents as a problem in schools rather than a partner. These are that:

Myth 1: Parents will demand everything. But there is good research that that this is simply not true. If anything, some may not demand enough, both because of respect for the profession of teaching but also because of a professionalized discourse that at times takes the focus away from children and their learning.

Myth 2: Parents are not interested. Wrong. They are not apathetic. They care about their children and their peers, but they may not care for the way for the questions and language that professionals tend to use. Research across public services suggest that seven out of ten people express a view at some stage, but don’t then feel they are listened to or engaged by the process.

Myth 3: Parents will look out for their own private interest, not the public interest. Again, wrong. They will speak for each other, not just for themselves. And when they speak from experience, that experience is often shared.

It seems to me that this government is in a complete muddle when it comes to consumer affairs. It wants to believe that competition and business will give consumers a voice – so much so, that it will remove the voice of parents at board level in education to help pave the way to a more commercial market. Where that has patently failed, such as in energy, it falls back on regulation and market investigations. Where that in turn has patently failed, such as in football, it has encouraged a move to direct representation of fans on boards. Sports Minister David Evennett said recently that “the FA is embarking on a review of its governance, and we hope genuine progress will be made, including on giving supporters greater representation on its decision-making boards.”

Whatever the future for education policy, surely parents need to be more involved in education not less. In other countries, such as Sweden, Spain and Canada, pre-school education and childcare is delivered by successful parent and employee-led co-ops. In the UK, regulations get in the way of having parent-led children centres. Rather than step back at board level and hope to push forward elsewhere, it should be time to widen parental involvement at all levels.

The National Governors Association has collected evidence on the case for parent governors. A wider campaign petition has started to oppose the forced transfer of schools in England to academies. The Co-operative College and Schools Co-operative Society are supporting co-operative schools in the context of change.

Having school parents on boards was an innovation introduced by Margaret Thatcher in 1980. She took school milk away. But she supported school parents as governors, because they bring schools closer to those they are there to serve. I think she would still support them today.