Three free Brightoneers events and other updates from me

I’ve been very quiet on this blog lately, but there’s been loads going on so here’s an update from me.

The Brightoneers

The community of people working together to build a pioneering new economy in Brighton launched with a bang in January. 100 people came to the first event and we have the next three events lined up. All of them are free to attend and open to all. Just register using the links below.

12 Feb: Alternative currencies and smartcard pilot. Led by Good Money, we’ll be working together on moving towards a pilot of a smartcard system in Brighton that helps the local economy.

19 Feb: How can we use crowd funding to build a better economy? We have speakers covering the use of crowd funding for equity, rewards and lending, then time to break into groups to start making stuff happen.

5 March: The first Brightoneers film night: Shift Change – an awesome film about the power and potential of employee ownership – check out the trailer. I’m planning on making this a monthly event screening documentaries that will inspire us into action.

WorldBlu

I’ve been working as an ambassador for WorldBlu, speaking about democratic business at a number of events (like this) and talking to some awesome companies about them joining the movement. The WorldBlu List of Most Democratic Workplaces 2013 will be announced in April. I’m very excited to see Brighton growing as a hub of certified democratic workplaces following on from my previous company, NixonMcInnes being one of the first WorldBlu-certified companies in Europe. There’s also WorldBlu Live coming up in May in Denver. Get along to this if you can. My involvement in WorldBlu is now winding down and I’ll be focussing more on work locally here in Brighton. There may just about be time to get your organisation assessed by WorldBlu for this year’s WorldBlu List. If you’re interested, drop me a line and I’ll put you in touch with the right people.

Business development help for consulting companies

Having spent 10 years building a consulting company myself, I’m keen to share my experience in marketing and selling consulting work with other consulting companies in Brighton. If you’re a freelance consultant or running a small consulting company and would like to bring in more business, I might be able to help. I’m also launching a little project around this over the next few days. If you’d like to be kept in the loop then please get in touch.

And the rest of life

I’m mid-way through an 8-week course on Mindfulness and meditation with Mindfulness Sussex. I’m loving the combination of ancient wisdom dating back 2500 years backed by modern scientific studies that have shown many benefits to mind and body.

It’s the Brighton Half Marathon this Sunday. I’ve been gradually getting back to pre-travelling levels of fitness. I still have a long way to go and a horrible bout of ‘man flu‘ set me back these past couple of weeks, but the Half is a bit of a milestone anyway.

OK that’s about it. If we’re overdue to catch up for a chat then give me a shout.

A pioneering new local economy for Brighton

This week sees the launch of my new project – a pioneering new vision for the local economy in Brighton. We’re calling it The Brightoneers – a hat-tip to the Rochdale Pioneers who founded the modern co-operative movement.

The Brightoneers isn’t just about co-operatives. It’s about the purpose of the local economy. It’s a project to use business to improve the wellbeing of all of society. That means giving us the opportunity to be happier, healthier, wiser, safer and have better relationships. Our intention is to build a highly collaborative and supportive network of local businesses that work both independently and together towards this aim. As we achieve this in Brighton, we want to create a model that other cities in the UK and the rest of the world can replicate, to increase the wellbeing of people everywhere.

You can check out the vision for The Brightoneers on the website and keep in touch through the meet-up group. We’re having a free launch party and networking event which you’re also invited to. Finally, if you’d like to get involved, please get in touch.

Disadvantages of cooperatives and how to overcome them

McKinsey have produced an extremely useful report on cooperatives. It’s well worth a read if you’re setting up or running a coop, but I wanted to highlight the section I found most useful: The relative strengths and weaknesses of coops compared to shareholder owned companies, and most importantly how to overcome the challenges. I think this is likely to apply more widely to other democratic organisations too.

The McKinsey study showed that cooperatives outperform public companies in many key areas: leadership, direction, culture & climate, motivation and accountability. These strengths are a powerful foundation for a successful business. However, cooperatives lag their shareholder-owned peers when it comes to business agility. Specifically: Co-ordination & control, capabilities, external orientation and innovation & learning. This suggests some massive flaws in how a coop builds on its foundation to actually execute and build a dynamic and successful business.

However, in each case there are examples of coops which have very successfully overcome these challenges and built world-class businesses that can out-compete shareholder-owned enterprises. According to McKinsey, the three areas to work on in order to improve agility are decision-making, pursuing new opportunities and sourcing and developing talent.

Let’s look at how to improve each of these and highlight a few examples of best practice. There are further examples in the full report.

How to improve agility in decision-making

  • Clearly distinguish respective roles and responsibilities of executives and elected officials.
  • Create more efficient processes for consulting with members on strategic direction (in other words, stay democratic, but don’t get too bogged down in the process.)
  • Improve performance-management systems to enable rapid identification and correction of areas of under-performance.

Example: The Co-operative Group in the UK uses technology to facilitate consultation and discussion amongst members to work on issues and gain consensus, which greatly speeds up the process.

I would also add that there are new systems like Liquid Feedback that facilitate mass decision-making as well as more established online social tools like forums and wikis that enable collaboration.

How to improve agility in pursuing new opportunities

  • Expose the coop to more external viewpoints and ideas.
  • Put in place explicit processes enabling different parts of the organisation to work together.
  • Develop opportunities to finance emerging opportunities that might not have immediate benefit to the current membership base.

Example: The Mondragón Network in Spain developed specific R&D facilities to focus on new opportunities. They also convene working groups from across the network to explore new business ideas, and 10% of the coop’s gross profit is diverted to a development fund that finances research, innovation and business development.

I think there’s a huge advantage of coops in that they exist for the long-term benefit of members, not short-term financial results for shareholders, which means they should be able to think and invest more long-term.

How to improve agility in developing and sourcing talent

  • Identify top talent and create leadership-development tracks.
  • Adopt recruiting and training practices that change perceptions of working in a coop vs. a public company.

Example: The Farmer’s Cooperative in Iowa, USA, rolled out a recruiting programme in conjunction with Iowa State University, working closely to offer education, scholarships and mentoring involving very senior personnel from the coop. This helped them to double their intern pool and improve retention of top people.

At the International Summit of Coops this week, education was a recurring theme. Economics and business degrees simply do not seem to cover cooperative economics despite the huge size and potential of the cooperative sector. The coop movement needs to work in education at all levels to increase awareness and forge links that will lead to more talent entering coops.

My conclusion

All of the evidence I have seen is that cooperatives can perform equally or better than shareholder-owned companies, and have the enormous, unique benefit of directly acting in the interests of customers, employees and wider society – now and for future generations. They do not just make a few external owners better off and hope that an ‘invisible hand’ (which may not be there anyway) will do some good along the way. This is why cooperatives hold so much hope for creating a better, post-industrial capitalism. There are certainly challenges for coops to overcome, but in each case there are shining examples the prove it is possible.

Being a coop isn’t enough. You still need Ambition

The UK’s Cooperative Group CEO (and Ben Kingsley look-a-like) Peter Marks spoke in a refreshingly candid way yesterday at the International Summit of Coops about the challenges the group in the face of hardcore capitalist competition like Tesco and Walmart. As a coop, they don’t have the same access to capital as their publicly traded rivals, and in the past have been out-innovated. However in recent years, with the confidence gained through successful acquisitions which generated an additional £70M in profits, they have had the confidence to sharpen their brand, bring stores up-to-date and are on the path to recovery.

I managed to grab him for a chat afterwards. On my street in Brighton, within 400 metres there were already too many supermarkets, and then The Coop got hold of the lease for the bar next door, knocked the wall through and doubled the size of their shop. This was depressing because we really didn’t need more supermarkets on the road and it just added to the homogenisation of the area.

Thinking about what Marks said about competition I told him that although The Coop has a huge differentiator being owned by members, for their interests and it is not beholden to the stock market, inside the store it’s exactly the same as all of the other supermarkets selling mostly high sugar, fatty, poor nutrition food. I wondered if they were just playing the competition at their own game instead of inventing a new game or taking it to a new level. Fighting stuff competition head on is never a good strategy.

For example, look at the success of Whole Foods – selling nutritious food instead. Tesco have tried to copy them with their Fresh & Easy brand, but it’s failing badly because they’re faking it. Tesco doesn’t actually stand for anything other than making money. However, The Coop has a big advantage in that they genuinely care for their customers because they’re the owners. The Coop could pull off something far more meaningful than their rivals.

Marks, who was charming and approachable, dismissed the idea out of hand, crushing me like a naive idealist, saying that Whole Foods is tiny and The Coop just sells customers what they want – which they believe to be the same poor food that everyone else sells. I walked off feeling deflated.

But reflecting on this afterwards, I realised it’s not just about selling better food. That’s just one possible ambition that the Coop might work towards. What they seem to lack is any sort of inspiring ambition to challenge them and strive for. A vision for a better world that they want to bring about for their members.

Take Walmart as a counter-example. For all of their evil, Walmart has some incredible ambitions to become a zero waste company; to use 100% renewable energy and to only sell products that benefit people and the environment. If you think this is just green-washing, think again. They have NGOs and pressure groups working inside the company with the power of veto over products and practices to make sure that they stay on this path. Walmart realise it’s in their long-term interest to become sustainable.

I’m sure that The Coop could use its unique position as a member-owned company to strive for a much higher ambition. They will never be inspired to innovate and reach greater heights with a defeatist attitude that settles for me-too mediocrity. Marks is actually on his way out of the company next year, and I understand that they have been working recently on an updated ethical policy, so perhaps the new leader will channel some Gandhi and take this the challenge of developing a greater ambition. I hope so.

Cooperatives need bottom-up thinking

I’m at the early stages of working on an idea to see many more cooperative businesses in Brighton. I’m at the International Summit of Coops in Quebec to learn more and make some new connections in this area.

Coming from the traditional private ownership business world – even though I have long been a fan of democratic business – I’ve realised how I naturally gravitate towards top-down thinking. People smarter than me keep correcting me and getting me to think bottom-up. Here are two examples:

1) Thinking about how to go about building a network of cooperatives (like the enormously successful Mondragón in Spain) I thought I needed to put together a group of people to work on a constitution, then recruit or set up coops to join the group. Classic top-downness. I did have a nagging doubt about the approach – it felt like I was creating a bureaucracy. Actually, the best way to do it is to start with people: The needs of the people in the local community and with people in existing and potential new coops. Once you are fully engaged with the people involved you can start setting up a network from the bottom, with one coop, linking to the next one and so on, and eventually build whatever group structure might be needed.

2) Ownership & Finance. I’ve mused about innovating business ownership models before – how you can structure ownership of a business in a combination of employee, customer, community and private ownership. In top-down fashion, I’ve been trying to figure out the most optimal model which could then be applied to coops in Brighton. Again, the far better approach is to accept that there’s a lot of flexibility and many possibilities and to work with the people involved to find the best route as needed. For example, more capital intensive businesses like manufacturers may require more private investment; those in service sectors could be more employee-owned; and those selling to consumers may benefit from greater customer and community membership.

I’m sure there are many more examples of where bottom-up thinking will provide a better approach, and although cooperatives may formally delegate power for some centralised decision-making which at times may be more effective, I’m going to make it a rule to make bottom-up my default approach.