Substantial co-operative opportunity ahead

I’ve had a couple of opportunities already in my short tenure as Director-General of the International Co-operative Alliance to attend gatherings of UK members.  Each time I’ve come...

I’ve had a couple of opportunities already in my short tenure as Director-General of the International Co-operative Alliance to attend gatherings of UK members.  Each time I’ve come away with a renewed appreciation and admiration for the roots of the co-operative movement.  And I want to report back to you today that the principles and values that emerged from this place a century and a half ago – and that have been kept alive and enhanced and brought current here, and that from here were spread throughout the world  – are today alive and well across the globe.


We are entering a period of substantial co-operative opportunity, a time that could rival the growth and acceptance that we experienced in the first decades of the last century.


We don’t only hope for this future; we see both economic and social changes that lead us to believe that such an opportunity is before us.


In his book “Lords of Finance” published two years ago Liaquat Ahamed described how the finance ministers in England, France, Germany,  and the U.S. struggled to maintain the gold standard following WWI, and how their failure to recognise that they were living in a fundamentally different world than the one they had known before contributed to the Great Depression.  For over a decade they attempted to sustain and resuscitate an economic corpse.


It’s difficult to avoid feeling that we are in a similar decade today.  The excesses of capitalism continue to erode confidence in that model, and yet those excesses have even today not been adequately addressed.  At the same time, the collapse of centralised government planning in the final decades of the last century is still fresh.


The time is ripe for a model that isn’t business as usual.


In addition to these economic changes that encourage ICA about the relevance of our message, we see similarly encouraging social change.


Technology has allowed collaboration and co-operation to emerge as a dominant form of action.  Wiki-pedia, and its mischievous brother wiki-leaks, are examples of co-operation for collective benefit.  Facebook and Twitter are tools for forming communities with people of common interests: not just to share photos, but to achieve urgent action.  The uprising of people who just couldn’t take any more in Tunisia, Egypt, Libya, Syria have all been facilitated by this technology.  People have begun to trust everyone more than they trust anyone.  “Asking the audience” gives them better results than “phoning a friend.”


Successfully acting in this way on matters of urgency predisposes people to the merits of the co-operative approach on a daily basis, to improve their lives, as a social and business model.


A shift in favored economic models, of course, isn’t without historical precedence.  Shaun Tarbuck, the CEO of ICMIF, ICA’s insurance sectoral organisation, shared a slide with me recently that suggests there is a cyclical pattern in modern history to the ascendancy of different economic models.


It’s hard today to remember that we didn’t always live surrounded by a corporate ideology, that perhaps unbridled capitalism really only began to gallop away in the 1980’s, in response to a perceived excessive regulatory environment that in turn was a reaction to a period during and just after WWII when we looked to government to take on big things.


And prior to that we witnessed a period of the flowering of co-operatives, mutuals, labor unions, which grew itself in part from a realisation that the industrial revolution had come at too high a price.


It was during that heyday of co-operatism that ICA was founded, in 1895, and in the middle of that period, in 1921, 90 years ago this year, that the rainbow flag that still colors co-operatives around the world, was adopted.


If we’re reading the signs correctly, and if there is some legitimacy in this cyclical pattern of reaction to excesses of the past, then we might be at the beginning of a period that has the potential to see co-operatives respected and favored.  The ICA global board is beginning to explore the vision that the co-operative could become, by the end of this decade, the fastest-growing business model.


For one, co-operation might replace consumerism as the dominant rhetoric.  The prevailing business model today perceives of individuals as “people who consume things.”  Even the poor are seen as a business opportunity at the bottom of the pyramid.  They simply consume things in smaller, more frequently purchased packages.  When did we become calloused to this imagery?


The insistence of sustainability could drive this change.  The threat of climate change cries out for immediate collective action, and each generation feels the pressure of that urgency more keenly.  There is a growing confusion or even embarrassment around being known as a consumer.


Second, a co-operative decade could be accelerated if there is an increasing demand for transparency.  Not only are co-operatives inclined to be transparent, not only does our governance structure encourage this; we also have substance when you look through the lens.  We benefit competitively from transparency.  Our products are sustainably produced and reliably sourced.  They hold up to scrutiny.  As a result, in an era of transparency, the co-operative name will serve as one of the indicia of trust, both on the selling and on the sourcing end.


In this next period, co-operatives could become more global.  Over time, the value we place on “local” as a proxy for “trusted” will give way to increasing confidence in globally-sourced products and services — in part, because technology will make it practical for shoppers to identify the specific source of global products.  As shoppers can today in some co-operatives scan the individual meat package and see the farmer who produced it, so they will be able to do with products sourced from overseas.


It will change, too, as governments who today expect the co-operative marketing organisations in their countries to sell domestic agricultural co-operative goods come to acknowledge their inability to be food self-sufficient — and allow their domestic co-operatives to source some products from foreign co-operatives, as an acceptable policy compromise.


As a result, co-operative to co-operative business will grow.  Already we see this emerging.  The BRICS co-operatives (from Brazil, Russia, India, China, and now South Africa) have begun to meet regularly and have recently agreed to develop MoUs on co-operative trade.  This will drive the co-operative development agenda, because it will require reliable product sources and predictable market access.  Co-operatives will lead this agenda, rather than respond to compromised government and IGO agendas.


Fourth, co-operatives will increasingly be seen as a solution.  We will see them operating increasingly in difficult sectors.  The entry of Midcounties Co-operative Society into electric utility services is an example of this.


Finally, a co-operative decade would be spurred by continued recognition that the governance structure of a business really does make a difference.  There is today an awareness that CSR (corporate social responsibility) is too often an attempt to add a veneer of respectability to a business model driven singularly by profit.  It’s just putting lipstick on a pig, as we say back home.  We need to remind the public that true accountability only comes from a different governance structure.


The opportunity for a co-operative decade ripens as we see these trends harden:  impatience with consumerism; the insistence of sustainability; a demand for transparency, for information; global co-operation; seeing co-operatives as solutions; disgust at unprincipled excess.  If disgust at the recent excesses turns to resignation or acceptance, the co-operative decade dissolves.  Keep disgust alive!  Demutualisation should be a dirty word, akin to default and bankruptcy.


The time to shape the next quarter-century is now.

The above is an excerpt from Charles Gould’s speech to the Co-operative Congress 2011 in Birmingham 24-26 June


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