In the UK, working as a co-operative isn’t always part of business culture… But perhaps it should be
DISRUPTIONHUB spoke with Jess Thomas, Project Manager, and John Atherton, Head of Membership, at Co-operatives UK about how co-operatives work and their benefits to business…
For as long as humans have wanted to survive, they have co-operated with each other. Co-operative values have shaped enterprise for hundreds of years, but it wasn’t until the 19th century that the formal co-operative movement was established. In 1844, the Rochdale Society of Equitable Pioneers laid out the basic blueprint for modern co-operative businesses. Today, there are three million co-operative businesses worldwide.
“A co-op is a business democratically owned by its members. Its members usually are the customers or the employees and they run that business with some rules,” explains Atherton, who has worked with Co-operatives UK for over 10 years. “Something like 80 per cent of fair trade products like coffee, chocolate, and tea are supplied through co-ops, and even Arla Foods who make Lurpak butter is a Danish co-op. Co-ops also supply some of the big brands like Birds Eye and Ribena.”
The structure of a co-operative business is simple, and follows the premise that, when alone, individuals have little market power. However, there is strength in numbers. When acting together, individuals have more leverage to get better treatment, and are less likely to be exploited. For example, a group of craftswomen in a rural community could work together to get a higher price for their work.
Exactly the same concept can be applied to businesses. A single dairy farm might not be able to convince a supermarket to pay a higher price for milk, but if a cohort of dairy farmers collectively refused to sell milk for anything lower than a certain price, the supermarket would be forced to make concessions.
In many respects, co-operative businesses are beneficial by nature. Members are equally valued, equally respected, equally responsible, and often equally paid. Another huge benefit of co-operative movements is that they ensure the survival of local shops, libraries, and even pubs. Not only are members protecting themselves economically, but they are strengthening communities.
Co-ops: like football?
While co-ops are commonplace in some parts of the world, the UK lags behind. For Atherton, it’s just like football. Despite being the home ground of co-operative businesses, the co-op pitch has struggled to make an impact.
“Even though we invented football, we’re less good at it compared to other countries,” he says. “The whole concept of a co-op is that you’re sharing the wealth and the ownership of the business with lots of other people, and we don’t like doing that.”
The case for co-ops
There are various different motivations for becoming a co-op, one of which is necessity.
“It’s a huge global movement which is really successful in places like India and Africa,” says Atherton. “One of the reasons there are lots of co-ops in India and Africa is because they have to help themselves.”
“There are examples of where co-operatives have really thrived, quite often in places and spaces that are perhaps distant from their national identities,” adds Thomas. “You’ve got the Basque region which has this strong, individual identity, and places like Scotland and Wales where there are signs of growth. In Central and South America there are lots of thriving co-op infrastructures, kind of because there is a fragmented economic infrastructure.”
Communities in need and deprived areas are hotspots for co-operative growth, but there is also a case for co-ops in more developed areas. Emerging trends like convergence, open data and open innovation all tie in with the democratic mentality of co-ops. Businesses in which employees feel valued are more likely do well, so while it might be difficult to let go of the hierarchy, there’s a very strong economic argument for doing so.
So, why are there not more co-ops?
In a UK specific context, the lack of co-operative businesses can be partly attributed to an individualistic culture. For Thomas, another potential factor has been previous government funding campaigns to make local economies ‘more like London’.
“My theory is that when a lot of the industrial economies collapsed, or were destroyed, what replaced them were central government funds around a particular model of economic development, which was either enterprise coaching or extracting investment,” she says. “Money was coming in to build things, but then it was disappearing out. We had that from the 80s up until the 2010s. That formal economic investment has not developed anything, but in that period people were told to be entrepreneurial. What we’re beginning to see is, in some of the conversations we’re having today, that it clearly hasn’t worked.”
The importance of language
A key part of encouraging more co-ops is effective communication – in other words, making people understand the benefits of using language they can understand. In the UK, the same words that are used to describe co-ops are also associated with the far left of politics. The prominence of the Co-op supermarket brand has also added another challenge. Changing these connotations is no easy task.
At Losing Control 2019, Atherton and Thomas hosted a session which addressed the ways that language can be turned from problem to persuasion.
“Even when you use a word like solidarity, people think, ‘that’s a bit Communist’, whereas elsewhere solidarity is just a term you use to describe people coming together to support each other,” comments Atherton.
That said, some businesses are predisposed to understand the co-operative mindset. Particularly in the tech sphere, companies are increasingly considering the benefits of power distribution, shared ownership, and collaboration.
“Interestingly for us, one of our growth areas is setting up co-operative businesses in the digital space,” says Atherton. “What’s happening in that particular world is that there is a whole concept of flatter management structures and team based working. It’s all about the skin of the individual working in a team to produce a product. When you explain the co-operative model and say, you’re creating all of that wealth and some entrepreneur is profiting from your hard work, you could be a co-operative and work in a collective way, they get it really quickly.”
“For tech workers, it’s in their language,” Thomas agrees. “There’s a concept there that is just being applied, whereas we have to work to build that language in other places. So many conversations that I’ve been involved in were about ‘but what do you mean by that?’”
Creating a co-operative culture
Co-ops represent a powerful global movement that, when viewed in light of trends such as open innovation and flatter management, can’t be ignored. The UK may have been slow on the uptake, but in certain sectors, the co-operative movement is experiencing considerable growth. The number of co-ops could continue to rise, but this depends on communication and changing cultural assumptions.
Hopefully, organisations and individuals will continue to see the value of co-operation. In rapidly changing economies, working together and sharing wealth could make all the difference between having enough and having nothing at all.
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