Strategic Alignment of Board and GM

Strategic Alignment of Board and GM

  |  July 1, 2013

Of all the important relationships in a cooperative, the one between the general manager and the board is arguably the most critical to the co-op’s long-term success. If the basic elements of trust and accountability are lacking for either party, chances of working together will be fraught with conflict or misunderstanding. It will be hard for the co-op to grow or move forward, and the negative consequences of their inability to work well together can reverberate through the whole organization, sometimes for years.

art-quoteFood cooperators have found great success governing their co-ops by empowering and holding management accountable using written policies and expectations. By and large this has given boards the means to focus their energies on key issues related to the future vision of the co-op, rather than being mired in operational concerns. This has given managers greater ability to develop capacity.

It has represented a paradigm shift in how food co-ops are organized. “It used to be that co-op leadership had a hard time distinguishing between the ‘store’ and the ‘co-op,’ thinking about them as if they were one and the same,” said Bill Gessner, expansion planning and business development consultant. Effective governance helps food co-op boards separate the two. “This has meant a big shift in food co-op vision,” Gessner said toward one that is more focused on the role of the co-op in the community that goes beyond groceries and products.

More often than not, Gessner pointed out, if there is a disconnect between the board and the general manager it will be exacerbated during an expansion project. That’s why the board-general manager relationship is so critical to effective growth. “Until the board and general manager address their issues, the co-op isn’t likely to go anywhere,” he said.
The food co-op sector is on the cusp of yet another paradigm shift that is strongly related to the strength of the board and general manager relationship. The governance groundwork of the past decade has been a very positive step toward board and general management working together more effectively, which has in turn led to growth, even during the ­recession.

Now the sector is strategically focused on promoting food co-op development, be it from startups, existing co-ops adding locations, to more square footage expansions. This effort has been supported by recent initiatives regarding board and management at National Cooperative Grocers Association (NCGA) meetings and the Cooperative Board Leadership (CBLD) strategic seminars. There is a strong recognition that good general manager and board relationships combined with a strategic leadership process can produce very powerful results. Co-op development has the potential to be a dynamic force in communities throughout the country.

Food cooperatives weathered the recession that began in the fall of 2008 by sticking to the basics: continual improvement, member engagement and impact-driven growth. Now they are poised to take things to the next level using those same fundamentals. Cooperatives like Bloomingfoods Market in Bloomington, Ind. and Outpost Natural Food in Milwaukee, Wis. are participating in a strategic leadership process that emphasizes alignment within the board-general manager relationship.

Alignment itself is when everyone agrees on the purpose of the co-op and the means to growing it responsibly. For boards and their managers, this occurs when they work together to share perspectives rather than relying on a power “over” relationship. By building a shared understanding of their roles, they are able to build trust. “People need role clarity to work together successfully,” said Art Sherwood, board leadership development consultant. “But if you hold each other at arm’s length without essential conversations, you start to lose people.”

Sherwood is an advocate for “safe conversations”: planned talks that occur between board leaders and management in which no decisions or judgments are made. The purpose of these conversations is to share knowledge that provides insight, and that can be very useful for building trust and alignment, especially during expansion planning when people have a lot of questions that don’t fall neatly into either operations or governance categories. “We have to believe in each others’ competence, and these conversations can foster that,” he said. “The knowledge transfer fills in spaces on things we used to make assumptions about. When you are on the board of a retail co-op, you do need to know some things about the operation of the business.”

bill-quoteAlignment occurs when people spend time together understanding each other’s worlds. When the board and general manager are focused on a singular vision, Sherwood said the outcome is “powerful.” “Just think about how much more effective the general manager can be if you have that relationship in alignment at the board level. They will be better equipped to drill down that vision to the management team and the staff.”

Sherwood believes that the trend toward boards and managers working in partnership is not only a powerful leadership tool, but an important part of the democratic process. “Co-op boards have gotten better at creating accountability and systems, but if we want the strategic process regarding our vision of the future to work, we have to step up to strategic leadership and greater board-general manager alignment.”

From Sherwood’s point of view, co-op boards and managers on the leading edge are learning how to incorporate oversight and accountability with cooperation and leadership. “If boards can make decisions wisely as the centerpiece of the co-op’s vision and allocate resources while working as a team with their general manager, then the co-op’s Ends start to mean something.”

Have more questions?

Get in touch with one of our consultants.

Support Your Co-op Leaders. Check out the Columinate GM Development Program. Learn more >>