Co-operatives have to focus on innovation, according to Ben Reid, Chief Executive of Midcounties.
“Within co-ops it’s all about constant change,” said Mr Reid. With this in mind, the society looked to change the energy sector and in 2009 started to develop The Co-operative Energy. The greatest risk for the success of the project was for it to become too big for Midcounties to run the entity, according to Mr Reid.
In 2011 the organisation only 2,000 customers, but the energy division now has 146,000 customers. And although it lost money in the first two years, the venture is now profitable.
“We now have a sustainable business,” said Ben Reid, adding that the energy bought comes from sustainable sources only.
He explained that the key to success was keeping it simple, enabling clients to know what they are paying for. Midcounties also offers a fair price, not the cheapest, but one that was not far after.
According to Mr Reid, the scale of the business is the main challenge, the co-operative had to invest £5 million in a new computing system.
Entering the childcare market has also proven to be a successful initiative for the society. Between 2004 and 2011, the society opened five nurseries, hoping they would become sustainable in five years time. Although the initial five nurseries did not manage to sustain themselves, Midcounties did not abandon the project, but rather sought to improve the quality of the service provided.
They now have 50 nurseries that provide highly-rated childcare. The business is profitable, bringing a return of 5.5 per cent, but Mr Reid said it would become even more successful in the future.
Speaking of the success of both ventures, Mr Reid said the common threat was building trust. A key component of innovation, argued Mr Reid, was having the right idea and the right people at the right time under the right brand.
He concluded: "We have to prove that the co-op is the right brand."
In this article
- Ben Reid
- Business models
- chief executive
- Co-operative Congress 2013
- Co-operatives UK
- Consumer cooperative
- Economy of the United Kingdom
- Margaret Heffernan
- Midcounties Co
- Midcounties Co-operative
- Person Career
- Social Issues
- The Co-operative brand
- The Co-operative Group