Is innovation back on the Co-op agenda?

TWO recent pronouncements by co-operative leaders offer a prospect that the retail movement could at last be emerging from its prolonged retrenchment and heading towards a new era of innovation. A fresh mindset might, just might, be emerging from the gloom of cutbacks and retreat that characterised the past 40 or 50 years.
The first indication came with the announcement by Co-operative Group boss Martin Beaumont that they are moving into a completely new field and establishing Co-operative Legal Services.
The aim is to create 150 new jobs over the next five years by competing as a national brand against complacent (and arguably overpaid) local solicitors in a sector that, in Beaumont&#039s own words, "hasn&#039t always enjoyed the total confidence of consumers". He can say that again.
If this service takes off, as it deserves to, it moves the Co-op into an area with greater potential than projections might suggest.
The second hint that change is in the air came from Co-operatives UK chairman Ben Reid, who talked in his Congress address about "increasing profitability and the rising self-confidence that brings".
Phrases about growing profits and self-confidence are not generally associated with the consumer movement – so could this indicate a shift towards the sort of business climate in which innovation might thrive once more?
‘Innovate, don&#039t emulate&#039 is a phrase attributed to David Packard, co-founder of a backyard business that grew into one of the mightiest multinational technology corporations of the 20th century, Hewlett-Packard.
The words have since become a mantra for aspiring management trainees – and yet they would certainly have a familiar ring to those involved in the early Co-operative Movement.
Best
Innovation is what the Co-op, arguably, has always done best. Back in the 1840s the Rochdale Pioneers didn&#039t have any business models to follow, so when they decided to expand from a shop in Toad Lane to a branch system throughout the town, they had to make up the rules as they went along.
Innovation was the name of their game as they created new concepts such as vertical integration, customer loyalty schemes and a federal structure.
And the tradition of invention continued for the next hundred years with the introduction of own-label goods, self-service and later still experiments with new-fangled ideas such as superstores and deep-discount grocery retailing, long before Tesco, Sainsbury&#039s and Aldi became major players.
Then Co-op retail innovation stopped – for obvious reasons, it has to be said. As competition developed and threatened to overwhelm us, survival became paramount while the ‘luxury&#039 of investment in new ideas was wisely put on the backburner awaiting an upturn in our fortunes. Divestment of businesses became the only thing we seemed to be good at: getting out of manufacturing, department stores, superstores, doorstep milk delivery – you name it, we found an exit.
To be fair, this wasn&#039t the pattern followed by the entire Movement. Few organisations, for example, have been as inventive as the Co-op Bank, which uniquely established ground-breaking credentials as an ethical business and then went on to create a whole new brand in a competitive market with the smile internet bank. These were truly brave and remarkable achievements.
Innovation
We have seen innovation, too, in the wider movement, where co-operatives have become firmly established in fields such as renewable energy and telecoms.
Among retail consumer co-ops, though, innovation was notably lacking – the only significant examples from retail societies that spring readily to mind are the CRS Homeworld stores – way ahead of their time in terms of scale and aspiration, but ultimately a heroic failure; the entry into the childcare market in 2002 by the then Oxford, Swindon & Gloucester Society – a move that might have huge national potential if only the resources can be found for rapid expansion – and a fairly low-key foray into internet retailing.
While there&#039s not been much invention it has to be conceded that retail co-operatives have at least survived, albeit much slimmer and weaker than in their heyday, against formidable odds. Yet while survival was achieved, many exciting growth opportunities and market niches inevitably passed us by.
We don&#039t sell many computers, mobile phones or other electrical goods; we don&#039t run a chain of organic food shops; and we can&#039t even manage grocery home delivery on a significant scale any more.
Innovation in a climate of self-confidence is the key for developing any business and if both innovation and self-confidence are returning to the retail Movement, then there is a real chance the Co-op might start growing once more. Of course there will be massive risks involved.
So these recent straws in the wind, if that is what they are, could indicate a crucial turning-point in the Co-op&#039s fortunes – after all, mere survival is simply not enough.