Allow Regions to Innovate

The main function of regional boards seems to be to protect the Group board from the area committees, restricting and filtering the flow of information and influence - arguably the very opposite of what is intended.

Meanwhile, the remaining independent regional societies often outperform and out-innovate the Group. Midcounties Co-operatives has grown through the recession, manages to run big stores at a profit (where the Group has mostly given up), and has launched a highly successful energy business.

The belief that only by having one big society can the retail movement take on the competition is plainly mistaken.

We are not saying the Group should be broken up, or that the hard work developing a consistent, national presence should be abandoned. But perhaps we should give our regions much more autonomy and scope to innovate and regain some of the flexibility and community focus that the independent societies use so effectively. In this situation there might be a greater chance that we could work more closely with independent societies and learn from them.

 

Comments

Innovation is required at all levels of the Co-operative. Work is underway in the Wales and South West Region. This is being driven by Chris Hall, but more work required to progress

The business has often missed long term opportunities by failing to utilise alliances with other co-operatives nationally and internationally especially where these businesses have been farmer or employee rather than consumer owned. Now is the time for co-operation to flourish as the gap between rich and poor has reached obscene levels. The business needs to look at the way that it has been rewarding staff - front line workers are not well paid and often work long hours, middle management are generally paid fairly but overburdened with work, the higher levels have been reaping rewards which are not justified by their performance. It is time for the rank and file members to be question how the salaries and bonuses are determined, whether there have been rewards for failure etc. and hold the management to account. Midcounties is a relatively large society and has maintained independence by being prudent financially and keeping control of its own assets.

Can people help me understand why many co-operators, not least tCG Chair, retain independent societies such as Lincoln, Midlands and Mid-counties within the Group? Others such as Scotmid exist outside tCG governance and yet are sizeable shareholders in it. What works for their governance, and what are the problems they face? People talk of Federalism and Regionalisation but I'm not sure what is meant by each. Are there lessons for the Co-operative Group as a whole?

Whilst working out of Head Office in the early 90's I was dispatched to Aberdeen to review some issues relating to the demise of Norco - this could have been a blueprint for what has now happened at tCG and lessons should have been learned. There were many stories around the way that CWS had acquired SCWS and it's retail stores (sassenach subterfuge was suspected by those north of the border) Norco were on an expansion programme, preferring to bank with BoS rather than through Manchester and as with tCG some hailed the leaders as having great vision - Norco over leveraged and made promises to its supply chain which it could not keep, as the debt escalated the BoS decided to pull the plug and Norco looked south to be rescued. It is the only time that I am aware of that the CWS failed to take in an ailing society and it went into administration and was sold off to pay the debts. All the societies are affiliated through the Co-op Union and tCG has ownership of the co-operative branding all of the societies within the trading group were in financial difficulty with losses on the balance sheets but rich in asset value. tCG is following a long established pattern, it may be that the independents have managed to stay that way by reacting to local needs, but partly also by employing some keen traders who could work outside of the confines of the ethical strategies imposed on the HO teams. When in the regions Peter Marks was very anti head office and wanted devolution to the regions, in the CEO position he adopted an untouchable 'Fred Goodwin' style approach and any dissenters were dismissed his new vision created the new Camelot head office delivered a 'businessman of the year award' across the board redundancies which were not targeted to the retention of competent staff and allowed a major loss of talent to the rest of the market. This has left the organisation with real issues as the senior management structure remaining are all lackeys. There is great talent within tCG and it is not hard to find if you know where to look, I would start by ignoring all the staff who were given significant bonuses under the Marks regime......... If you look out at the regions you will likely identify another Peter Marks, Martin Beaumont or Ursula Leadbitter. If you look out to the other retail plc you have Euan Sutherland .

I'm sure there is a lot of Co-operative history out there that is relevant to the Group's current crisis - has it been recorded and is it available in an accessible form? What I mean is, a warts-and-all account of the UK movement that would help us to learn from past mistakes, rather than a PR exercise depicting an innovative movement striding from strength to strength. My impression is that the UK movement has been in relative decline at least since the sixties, in terms of its market share and in terms of active member participation and democratic control. Is that the case?

The English region boundaries are curious, carving up the Midlands, so that Worcester is part of South & West, Birmingham part of the North West and Coventry part of Central & Eastern, though residents of all three cities would normally think of themselves as in the West Midlands. If the regions are to have more autonomy, shouldn't they reflect the regional boundaries that people are familiar with from other areas of their lives? My guess is that the Midlands have been divvied up like this because they are a stronghold of the independent societies, with few Co-operative Group stores, but, if this is correct, would greater autonomy facilitate co-operation with the independents?

This proposition seems fundamentally flawed. It should be remembered a major reason tcg is so large is due to merger / bailout of regional co-ops. It makes sense that the remaining regional co-ops are successful, otherwise they would no longer exist. Independent / regional does not immediately mean better, history is littered with regional failure too. The suggestion is we learn from co-ops like Midcounties, but as we are ten times the size of them we have some challenges they do not have to face. It should also be remembered that tcg operate CRTG that supplies the smaller societies and also runs or supplies some IT / supply chain / logistics for some of them too. They benefit from our scale and central function as well.