When Phil Ponsonby was appointed CEO of Midcounties Co-operative in 2018, little did he know the rollercoaster his first five years would be.
“If I could go back and tell myself something on my first day, it would be: ‘Expect the unexpected’,” he says wryly. Even before the triple whammy of a global pandemic, Brexit and the aftermath of the war in Ukraine, Midcounties had to deal with a crisis in its energy business. In 2018, the domestic energy supply market was hit with a number of issues leading to record losses for Co-op Energy.
“That felt quite personal,” says Ponsonby, “insofar as everyone else has got normal stuff going on, and then we’ve got this big problem in Energy. I quite quickly realised it was going to dominate my first year as CEO. But the board of directors here are forward thinking, open-minded, and have a strategic approach to things that allows you to work through problems pragmatically. With the energy business, we were able to work through options properly and come to the right answer.”
That answer was a partnership with Octopus, “which at the time was still quite a small, new organisation”, he adds. “It was a bit of a leap of faith, but has proven to be the right decision. We concluded the transfer of customer data onto the Octopus systems in January 2020, and it felt as if we could draw a line and move on. Helen [Wiseman, Midcounties president] said to me, ‘Well, look on the bright side, you know we’re never going to have another year like that!’”
Covid-19 was a totally different challenge. “For us, the pandemic brought home more than anything else possibly could have done. The complexity of trying to run several different types of businesses – and the need to take different approaches, depending on the business.” Alongside food and energy, Midcounties has childcare, post office and travel businesses, and offers broadband and mobile services.
“During the pandemic we saw absolute extremes, with a food business that went through the roof and a travel business that collapsed overnight,” says Ponsonby. “In the middle, we had a nursery business where we wanted to do what’s right for parents while being frightened stiff about exposing young children to this horrible virus none of us knew anything about.”
At the time the society was also operating pharmacy and funeral businesses (since sold); to keep on top of everything. The executive met seven days a week and focused on the mantra “survive, revive and thrive”.
“In March 2020 it was all about surviving: protecting our colleagues, customers and income, and trying to make the right decisions as a co-operative CEO, not just a CEO. For example, in Childcare, our contracts with parents clearly state that if nurseries are closed for reasons beyond our control, they still have to pay any fees. But there was no way we were going to charge parents fees. That was a decision based on what’s fair, rather than what contracts said.”
For Ponsonby, the most vivid need during this time was to understand the effect the pandemic had on colleagues: “I don’t think you can underestimate how concerned we were about their welfare.”
What did they do with that concern? “Constant communication, talking to them and listening to them. Making sure if they had questions or challenges, we answered them fast. We put out a daily bulletin and kept our core values at the heart of our decision-making. Our board meets once a month but we were talking to them much more frequently. And actually, as a senior team, we came out of it stronger, with a consolidated rigour; it feels like after what we dealt with during the pandemic, we could face anything.”
The senior team Ponsonby built around him included the early appointment of Pete Westall as chief values officer, in 2019. “I think we’re still the only co-op to have a CVO,” he says. “It was a really important move for us and a statement for me as CEO to demonstrate I see the co-operative values as an important part of the way we operate. Pete is able to do things as an ambassador for Midcounties and on my behalf that perhaps other CEOs might get involved in – but he can put a lot more time into it.”
He also brought in Sara Dunham to head up the organisation’s travel division. Midcounties is the only co-op society with its own tour operation – Co-op Holidays – which Ponsonby describes as “purposeful and meaningful and increasingly about education and learning”, offering tours while providing more ethical choices of travel and accommodation, voluntourism options, and visits to other co-ops.
But like with of other co-ops, sustainability and the environment are high on Midcounties’ agenda. How does Ponsonby square this with selling global flights? “I think it’s about how you do what you do and what impact it is having.
“If Co-op Holidays are helping communities overseas to thrive, then the positive impact on those communities – such as better education, increased standards of living, reliable access to food, providing local employment – can be weighed off against the impact of sending someone on an aeroplane. We’re also working with eco-friendly hotels, and have more train travel options.
“One of the things I did quite quickly back in 2018 was take us out of business travel, because I didn’t think constantly flying people for business was what we were about as a consumer co-operative. We also have a tree-planting programme with [climate action organisation] Ecologi, and we support the Go Beyond charity, which helps children who have been bereaved, abused or bullied, who are living in poverty or are young carers, have holidays.”
The link with Go Beyond, and the Bright Future initiative (which helps survivors of modern slavery gain independence through returning to work) are a couple of ways Midcounties proactively supports the vulnerable quarters of its communities. Another is a new initiative set up in Walsall: Fairer Futures.
“I joined Midcounties from the south of England eight years ago, and as I’ve gotten to know the area, I’ve seen the local legacy of co-ops,” says Ponsonby. “I asked myself: how can we make a meaningful difference in our communities above and beyond running convenience stores or nurseries, or travel? Our Walsall town centre store is bigger than a conventional convenience store and I wanted to see if there was a way for us to improve our presence and make it more about social purpose.”
In his first week as CEO, he met Rosie Ginday MBE, founder and CEO of Birmingham-based social enterprise Miss Macaroon, a bakery which helps people who have fallen on rough times get back into work. Midcounties partnered with Miss Macaroon, and Fairer Futures launched at the Walsall store this year.
Through the programme, a cohort of six to eight people – referred through partners including the JobCentre, social housing groups, and local charities Street Teams, Just Straight Talk and Steps to Success – complete an eight-week training programme, with time on the shop floor, work in the attached coffee shop and classroom sessions where they learn a range of life skills, such as interview techniques and conflict management.
“We help them learn to communicate and build their confidence,” says Ponsonby. “It’s a hugely impactful programme, and the expertise of the Miss Macaroon team has blended really well with our store team. One thing I didn’t expect would happen is the profound effect it had on our colleagues there – they feel so proud to have been part of helping these people transform.” All the participants successfully applied for jobs with Midcounties, and two more cohorts are already scheduled.
“It’s a brilliant programme, and I’m really glad that we’ve been able to get it off the ground. We hope to replicate it in other areas too.”
Another area of development for the society is its childcare business – led by chief operating officer Sally Bonnar – and the launch of workplace nurseries at NHS sites, the Body Shop in Sussex and Midcounties’ head office in Warwick, which is opening in October, offering 60 places to parents working in the surrounding business park.
“There are lots of organisations still struggling with the concept of hybrid working,” says Ponsonby. “Our view was: how do you create facilities that give people more reasons to go to the office? Workplace nurseries can be set up in surplus space that’s available because people aren’t in full time – and that gives extra benefits too, in terms of being more attractive to young parents, and additional tax benefits.”
The society has been buoyed even further recently by a revised purpose statement: Through the power of co-operation, we’re building a fairer, more sustainable, and ethical future.
Why was a new purpose needed? “Because we wanted to be clear about what we as a co-op want to achieve. Is it just running a business, making a profit and sharing that with our members, or is it something more than that?”
The purpose was developed by a delegated board team, with members and non-members taking part in listening sessions, and qualitative and quantitative research. The society is now developing a communications plan – led by chief marketing officer Alison Bain – to introduce the new purpose to colleagues, members and customers. In September, the society will also be announcing a change in its approach to share of profits (more points will be allocated for more ethical choices, such as Fairtrade products) and a new points threshold will be introduced (the first 1,000 points earned by a member will go towards their community).
Midcounties’ community fund will also be increased. “We’ll be able to upscale our community grants significantly. I think there’s a lot coming which is going to fulfil our purpose of building a fair and ethical future.”
Ponsonby acknowledges that other co-ops are saying the same thing, “but I think, right now, we genuinely all feel the same way. That’s so refreshing: that on a national basis, consumer co-ops are serious about this and we’re seeing change happen”.
Over the last year, Co-op Group CEO Shirine Khoury-Haq has been vocal about the need for co-ops to work better together – particularly around technology – and Ponsonby confirms a number of different joint work streams have been set up around operating platforms, with pilots being developed for the end of the year.
“Clearly we’ve got to be careful around competition law, but if you’re working together to improve efficiencies, which will reduce your cost to operate, and should ultimately reduce prices, most people will see that as a good thing. And within co-operatives, we naturally want to co-operate with others where we can.”
Recently, Midcounties has been collaborating with other co-ops on the issue of colleague safety – “sharing best practices, learning about and implementing different technologies, looking at what’s working and what’s not” – and encouraging others to work together to support co-operation : East of England Co-op has recently joined Midcounties, the Co-op Group and others in becoming a member of Bright Future Co-op, facilitating the employment of survivors of modern slavery.
Ponsonby sees principle six – co-operation among co-operatives – as “very important, not just in the UK, but internationally as well”.
The society is a direct member of the International Cooperative Alliance (ICA). This summer Ben Reid (former Midcounties CEO) was elected to the ICA board for a second term, representing the society. Reid and Pete Westall sit on Co-operatives UK’s International Working Group – and the organisation has also been a strong supporter of the Global Innovation Cooperative Summit, to be held this year in Montreal at the end of September.
“We run a Global Innovation Cooperative Summit competition,” says Ponsonby. “This year, we asked colleagues to nominate a UK co-op that our society could partner with to help us build a fairer, more sustainable and ethical future. The winner was Sam Webb, store manager of our Lydney Petrol Filling Station, who suggested working with the Big Solar Co-op to help identify, design and implement solar photovoltaic (PV) opportunities across our trading sites, while exploring community ownership options to help finance this activity.”
As the winner, Webb is heading to the summit with Westall and Michaela Cryer (head of Younity, Midcounties’ joint venture with Octopus Energy).
“We believe in co-operation, wherever it is,” adds Ponsonby. “We want to contribute on an international scale and, in turn, you can learn so much by sitting and having a conversation with international co-operators.
“I had some conversations earlier this year with Finland’s SOK Group about petrol filling station format development. We’ve got some exchange visits being organised for nurseries in Barcelona.
“Building global networks and relationships also puts you in a good position to support other co-ops when big challenges in the world emerge, like in Ukraine or Haiti.”
Ponsonby is positive about the future, but acknowledges the need to be proactive in the face of accelerated technology and a changing work environment. To that end, the society has created a new future leaders board.
“We need to stop thinking about development programmes and start thinking about leadership environments,” he says, “because I genuinely don’t know what the world is going to look like in five years’ time. The growth in AI is going to change our lives beyond all recognition. Jobs that are important today may no longer be there – but new jobs will come up. So we’re looking at how to develop people with creativity, who can address challenges by thinking outside the box.”
With so much on his plate, how does Phil Ponsonby focus his energy in the right areas? “I think firstly you’ve got to make sure you have a good team around you, because like most leaders of organisations, you can’t be involved in everything all the time. So you have to make clear choices about what you spend your time on. Having a strong team gives you that option.”
Peter Kelly, who stepped up as chief finanancial officer last year, is another member of that team. “He’s done some great work,” says Ponsonby, “which is providing a solid platform for us to continue investing in growth, opening new food stores and nurseries and investing heavily in new technologies to support Co-op Holidays and our wider travel business.”
His other point of focus is people. “I think about our colleagues, members and customers all the time. Are we satisfying them? Are we meeting their requirements, and getting the right levels of service?”
He adds: “As a CEO, you know that one day you’ll walk out the door. When I walk out the door, what do I want to look back and see? For me, having clarity around our businesses and the proposition and formats – and how they link to our purpose and our communities – has been really important.
“It’s a real honour to be a CEO of any organisation. You don’t really know what you’re getting yourself into. And I’ll never lose sight of that. It’s a peerless role and a real privilege.”