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.

Culture Shock

Hey, long time no see! I’ve been traveling around Papua New Guinea with poor Internet and a broken laptop so haven’t been able to blog. I’m writing this on my phone.

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Will McInnes, my old business partner at NixonMcInnes has had his book Culture Shock published. I finally managed to get the kindle version downloaded to my phone so I could read it. The book is fantastic and covers many of the issues that we discuss on this blog, so check it out.

Here’s the review I left on Amazon. 5 stars:

In 2002 I was fortunate enough to meet Will and we founded NixonMcInnes together. Full disclosure: I’ve left the business but am still a shareholder, however Culture Shock is 100% Will’s.

Will has been a truly inspiring figure who introduced me to ideas that shaped not only our business and my career but also my entire worldview. Big stuff!

He wrote this book from a rare and valuable position of having founded and run a very different type of company AND taught and helped some of the world’s most high profile organisations to be different and better too. He’s no ordinary pundit. His experience is deep, and real. This shines through in the book.

In Culture Shock you can see Will’s simmering and often humourous displeasure for business-as-usual but he doesn’t waste time going into too much detail about what’s gone wrong and why. And although the book cites solid studies and other sources that back up the case for a new approach to business, Culture Shock is from the heart and from experience. It’s not an empirical or academic work and as such it’s not the book to convince the cynical or anyone who has been on another planet and missed the failure of 20th century business (even Alan Greenspan the market fundamentalist said there’s ‘a flaw’… no kidding!).

Instead, Culture Shock is for revolutionaries who know that business can and must be better and want to take action and build incredible organisations, right now. They can also use it to inspire others who have the instinct that things can be better and want to know how.

The book’s scope is impressive, covering both internal and external practices, technology, and the new leadership traits needed to drive these changes. The book is meaty with big ideas, examples and practical advice yet manages to be mercifully concise (revolutionaries are busy!) so you can read it in a few hours. Where readers want to get more detail there are suggestions for further reading.

Will and I had Ricardo Semler’s ‘Maverick’ as our bible on our journey. That book is a wonderful case study but we had no field guide for ourselves. After 10 years of trial and error and learning, Will has written Culture Shock to provide exactly that.

If you read Culture Shock then your path to building an incredible business will be much shorter and easier, and the world will be a better place for it.

Viva la revolución!

Awesome event heads-up: Meaning 2012

Business used to be so simple. Following the philosophy of the great economist John Maynard Keynes, the purpose of business was to make a profit. Nothing more and nothing less. But capitalism, which did lift many millions out of poverty, is now failing. Badly.

There are very fundamental questions to be answered: if the pure pursuit of profit didn’t work out, what is the meaning and purpose of business? How can we create next generation businesses that help to solve the world’s problems and make a profit at the same time? What are the opportunities for building better businesses in the 21st century?

These questions and more are the subject of the Meaning 2012 conference in Brighton, UK on 1 October 2012.

There’s a growing list of fantastic speakers, including: Caroline Lucas, leader of the UK Green Party; Stowe Boyd, the social technologies guru; Alexander Kjerulf, the world’s leading expert on happiness at work; Margaret Elliot, the founder of a series of co-ops delivering care to over 500 people; and Vinay Gupta, an international authority on resilience who sees a volatile and radically altered future for business and society.

I think it’s going to be a really inspiring and thought provoking day – not least because it’s organised by my old friends at NixonMcInnes. If you’re thinking about starting a business, or getting an existing one fit for the 21st century then I highly recommend grabbing yourself a ticket.

10 crazy town ideas for extreme organisational democracy

Crazy Frog

Here are 10 ideas that take the principles of organisational democracy to the extreme. In the context of mainstream business today they seem far-fetched but there are organisations in the world who are pushing the boundaries of democracy every year. If you think that these ideas are just too radical for your business, imagine how you will attract and retain the very best employees if you have a competitor who is bold enough to do these things. Will you be able to stand out and remain relevant when someone in your market is doing this? Welcome to the world of extreme organisational democracy.

1 Purpose and Vision

The radically democratic company has a vision and mission that transcends itself and its people. It describes a world that is richer not just for its shareholders but for all of humanity, and the planet. How about a soft drinks company that sets out to alleviate the problem of thirst and water shortage in all of its forms for every human and animal on the planet. Now that would be a real purpose.

2 Transparency

Radical transparency can build an incredible level of trust both within an organisation and with the outside world. It shows you have nothing to hide and beyond that you invite criticism and input into your business. How about publishing every single line item of expenditure in the business? How about turning the 20th century wisdom of ‘secrecy and closedness unless there’s a very good reason to do otherwise’ on its head and publish every item of income, profit, loss, remuneration and even decisions by default – available to all employees, and anyone else in the world including competitors to see. Opening a pandora’s box? Certainly. But who wouldn’t trust an organisation brave and open enough to do this? And what new insights would the company gain from having their inner workings opened up for others to analyse?

3 Dialogue & Listening

What would happen if you invested in training every single person – from the cleaners to the CEO in an organisation – to a professional level as relationship counsellors? OK it might fill you with fear to think of a business full of shrinks and endless meetings on comfy chairs with tea and biscuits. But what would the outcome be when you have truly professional standards of listening and understanding other human beings and a deep ability to forge and maintain great relationships. What would it be like to work somewhere like this? What would relationships with customers and other stakeholders become?

4 Fairness & Dignity

Decisions that impact fairness happen every day in businesses, from allocating work to setting pay. Typically its people with power (managers, directors) who make these decisions and others have to live with being treated fairly or not. How about having a rule that states that any decision made in the company which could impact feelings of fairness or dignity to a group or individual must be scrutinised by a peer-selected group of their colleagues. Yes, it will slow down some decisions, but the gains in loyalty and the removal of the politics of favouritism or discrimination will more than make up for it.

5 Accountability

Democracies are not soft. As Worldblu puts it, ‘they are crystal clear about who is accountable to whom and for what.’ In most businesses, employees are accountable to their managers. In an extreme democracy, people are accountable to everyone they work with or even influence indirectly, AND the outside world. 360 degree reviews don’t go far enough, especially for senior managers. People need to be able to hold anyone to account where necessary, regardless of who they are. Local communities and even activists can be brought closer to the organisation to create deeper accountability with the outside world. But accountability isn’t about blame. In extreme democracies, accountability creates a tight support network.

6 Individual & Collective

Google and other companies famously have ‘20% time’ where they are able to work on projects of their own choosing for one day per week. How about upping this to, say, ‘100% time’? In other words, employees choose ALL of their tasks and projects. To get this right, the collective mission of the company will have to be not just well-defined and understood, but genuinely bought into so that all work supports the mission. You also need to have good accountability in place from peers.

7 Choice

Throw away the rulebook for dress code, working hours, work location, pay reviews and holiday entitlement. Take a punt on assuming that employees can be trusted to make decisions that are fair to them, the business and their colleagues and customers. Crazy right? Not really when you think that this is how millions of freelancers and self-employed people work. Many of the most talented people in the world opt out of the corporate world because they have more choice by going it alone. It works because they are ultimately accountable and have direct alignment with the purpose of their 1-person business. But if we can create this alignment and accountability in a larger business, then why not give them this freedom and choice? The business that is brave enough to do this may never lose a talented employee to a competitor again.

8 Integrity

Google started a change in the corporate world with their mantra ‘Do no evil.’ But that’s just the foundation. ‘Extreme integrity’ is about doing GOOD in all your actions, not just avoiding evil. Imagine a company that has a set of ‘values’ that are more than just filler on the boardroom wall. Values that were created by, and truly believed in by every person throughout the organisation. What if in your culture, every decision and idea is checked against these values as a matter of everyday routine such that it becomes instinctive and automatic. Could you build extreme integrity such that a company can be trusted as much as a close family member or friend? Businesses are made up of human beings with the capacity for enormous integrity so I believe they can.

9 Decentralisation

Do away with the ‘centre’ or ‘top’ of an organisation altogether. A network structure is the ultimate in decentralisation. It is possible to create an organisation that has no ‘top leaders,’ board of directors or even any sort of legal entity. In the extreme democratic future there will be large organisations with the power and impact of large publicly listed companies today that are a mesh of individuals and relationships. The network can swarm together around projects and customer needs, then disassemble and re-form as needed. No formal ‘lines of responsibility’ or control, just agreed roles, responsibilities and accountability that are completely dynamic. Networks are incredibly resilient. That’s why it’s hard to fight al-Qaeda and BitTorrent because there is no ‘head’ to cut off.

10 Reflection + Evaluation

Why not reverse the current trend of business needing to become faster, faster, faster and instead spend more time reflecting and evaluating than actually ‘doing?’ Sounds hopelessly inefficient? Well how about all of the rushed, high-pressured years of ‘doing’ that led to the effective collapse of the global banking system? What would the world look like now if more time had been spent reflecting and evaluating? Perhaps sanity would have prevailed. At Mindvalley, a company in Malaysia, they already hold group meditation sessions to envision the future and reflect on what they are doing. Sounds almost cult-like, and it’s uncomfortable to expose our souls at work, right? But imagine the wisdom and breakthroughs that could surface if we slowed down more, and became more mindful. Perhaps not so crazy after all.

DALAI LAMA