Welcoming Managers New to Cooperatives

Welcoming Managers New to Cooperatives

  |  June 13, 2018

Remember the first time you walked into a food cooperative? Maybe your initial reaction fell somewhere along the continuum of “I found my people” to “what in the world is this place?” Maybe you liked the food. Maybe you liked the mission. Or the people were nice. And that convinced you to stay. Ultimately, when people walk into a food co-op, we want them to feel they are in exactly the right place.

Now let’s say you are the new general manager of a food co-op when your primary career experiences have been outside of cooperatives. Or maybe you are on a board that needs to establish a brand-new relationship with the co-op’s manager. Creating an atmosphere of learning and accountability, coupled with sincere appreciation, is important to building trust and collaboration.

New leadership personnel means change for the co-op’s significant relationships. No matter what your leadership role, it’s important that everyone is respected and understood—especially during transition times.

How do new people navigate current co-op culture and contribute to its adaptability and acceptance of new leadership? How does the co-op deal with possible resistance to “outsiders”? What are positive ways to establish a relationship of mutual respect and collaboration amongst all co-op groups? As more startup co-ops open their doors and established co-ops experience turnover or retirement of their leadership, it only makes sense to look outside the food co-op sector for talent. Effectively bringing in new people, whether they are co-op leaders or customers, requires openness to change and doing things differently.

While food retailing is a very specific occupation, many professional people could manage a food co-op, especially values-driven people hard-wired with perseverance and commitment. According to human resource systems and training consultant Carolee Colter, “There is now more acceptance than in the past that people can share cooperative values from different places in their career, so boards are more likely to believe in the value of outside candidates. ”

When it comes to making a decision about who to hire, Colter said, whether it’s an inside or outside candidate, “It’s important to hire the one most able to handle change management, who can listen to people, make decisions to do hard things, share things people need to hear, and bring people along. ” And last but not least, “take the Co-op Principles seriously. ”

The leadership capacity to build teams and enact a long-term vision on behalf of a community is one of the most important aspects of being a successful general manager. It’s not an easy job, but one that can be very rewarding for the right person. Part of what can make it an attractive prospect is having the proper support to do the job, most especially for those who are new to the cooperative business model.

“It really helps to have a mentor or a coach,” Colter said, whether it’s a formal relationship through the CDS Consulting Co-op’s General Manager Success coaching program, or through a local mentor or nearby co-op. “Assemble a small group of people for feedback, those who will speak honestly with you about what is going well and what could get better. ” She noted that this makes all the difference to new general managers establishing themselves, and training and coaching should be enthusiastically supported by boards of directors.

But she also cautioned that there are still people who are fearful of change, and part of supporting a new general manager is recognizing that disapproval could potentially occur. “We see this all the time in society. ” She thinks that boards especially need to be aware that the flip side of change is criticism. “Especially for a general manager that will lead and make change, boards need to be prepared to back their GM and to have a system for taking feedback. Usually I advise that boards not get too reactive, and to use data and research to find out more before making decisions or reaching conclusions. ”

Getting good support also includes doing what it takes to develop and support a strong understanding of the financial underpinnings of the co-op. Managers need to know how to read and understand income statements, balance sheets, and cash flow statements. They must be able to spot worrisome trends and manage problems that emerge, all with a grounding in cooperative business practices.

These are skills that can be learned, and it’s important for the co-op’s long-term viability and success that managers can handle the financial aspects of co-op management. Don Moffitt, expansion and business planning consultant said, “In order for the co-op to carry out its larger mission, the store has to be financially viable at all times. No profit, no mission. General managers need to understand the reports that are available, as well as how to interpret and learn from them. ”

Moffitt said that retailing requires a strong understanding of margins. “If you haven’t dealt with gross margins it’s important to know how they are calculated to understand it and manage them. That’s often a starting point for new general managers. They need in-depth knowledge of how margins are derived, how to set appropriate goals and how to evaluate results, as well as how to problem-solve when the goals are not met. ”

Of all the other expenses of the co-op, personnel is by far the largest. “Like margins, the cost of personnel is determined by a lot of people making a lot of decisions frequently. It’s a critical area that general managers need to understand, monitor and manage. ”

Moffitt also pointed out that expansions and relocations place even more demands on a manager to do financial analysis and project management for situations like negotiating leases, evaluating facilities and reviewing market studies. “No general manager should risk the co-op by not having support for this work. These are specialized skills, and these issues will impact a co-op’s financial health for years to come. Don’t undertake it without the required support. ”

One area where managers from outside the cooperative sector may also need further education is on cooperative economics. “If you come from outside the sector, you may not know about patronage dividends, or understand the tax implications of that, so that would be something you’d want to consult with experts about. ”

Balancing all the demands of co-op leadership and business acuity is what being a co-op manager is all about, and onboarding people new to cooperatives is a process co-op leadership needs to establish. Having a fundamental understanding of the cooperative business model, and being able to articulate how it’s different—from being able to say how the co-op distributes profits to why community ownership is important—puts those values into practice every day. Colter said, “The social mission is not an add-on. It’s integral to the co-op. ”

Navigating Change in New GM-Board Relationships

Here are some resources for co-op leaders to embrace change and develop new relationships especially amongst board and managers.

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