Two mistakes co-operatives make in business

Co-operatives are making two mistakes in business, according to the managing director of the Boston Consulting Group.

Yves Morieux, who made a presentation on Smart Simplicity at the International Summit of Cooperatives, said co-operation is an important driver of the business world.

He said “co-operation is an accelerator of intelligence” for the workforce. This is especially needed in a time when employees are not happy at work. Mr Morieux said a recent survey showed 80% of workers were not engaged with their workplace. This is compared to survey in 1987 that showed 60% of workers were happy to go to work.

“We have to find a new way to use our people’s intelligence,” he said.

“Use their judgement, their common sense, their energy, their problem solving skills.

“Today we have to liberate people’s intelligence. Co-operatives are very well placed to do this especially when you think of democracy, solidarity, autonomy and co-operation. This is the co-operative way. We are talking about Smart Simplicity. People are not employees; they are members.

“But there are two mistakes that co-operatives make. They confuse real co-operation with getting on well, friendliness. This isn’t the case.

“Secondly, all too often co-operatives lose their doctrine. They try to incorporate the best practices from other types of businesses by adopting various KPIs. But, there is no way to measure co-operation.”

He added that through research at BSG, Smart Simplicity has uncovered six rules to better manage business. These are:

1.  Understand What Your People Do.
   Know the contexts that shape behaviours — what’s really happening in your organisation. Learn how your people co-operate, find resources, and solve problems — or fail to do so.
2. Reinforce Integrators.
   Find out how co-operation happens — and who makes it happen. Identify the “integrators” — the people and units who bring others together and drive processes. Eliminate layers and rules­ and give the integrators the power, authority and incentives to make the entire task succeed.
3. Increase the Total Quantity of Power.
   Power isn’t a zero-sum game. Increasing the total quantity of power allows managers to think about and act on more performance requirements. This supports strategy and leadership and helps organisations respond to the demands of complexity. Creating power can be a small matter — like giving store managers control over staffing — and it doesn’t necessarily look “strategic.” But it can have a real impact on performance.
4. Increase Reciprocity.
   Work is becoming more interdependent. That means that people need to rely more on each other — and co-operate directly instead of relying on dedicated interfaces, coordination structures, or procedures. Those things make life complicated — while “reciprocity,” which ensures that people have a mutual interest in co-operation (and that their success depends on each other), makes people co-operate more autonomously and, therefore, makes organisational life simpler.
5. Extend the Shadow of the Future.
   Increase the importance to people of what happens tomorrow as a consequence of what they do today. By making simple changes, you can manage complex requirements while making the organisation less complicated.
6. Reward Those Who Co-operate.
   Blame and risk aversion are at the heart of organisational culture. But smart organisations accept that problems happen for many reasons, and the only way to solve them is to reduce the payoff for those who don’t contribute to a solution. Performance evaluation and reward systems are the key — but instead of using them to punish failure, use them instead to punish failure to help, or to ask for help.

• Read more:  https://www.bcgperspectives.com/sixsimplerules.