The blind leading the blind? (is it any wonder people are confused about social enterprise structures when national sector bodies' advice is lacking or wrong..?)

Some of you will know that I seem to have a reputation in relation to legal structures and social enterprise. Based on ongoing research and evidences I try to source about all the claims, experiences, and realities made about them, I:

• get asked to deliver masterclasses for university business schools' MBAs on the subject;
• am the lead adviser in some national bodies' mentoring programmes on the subject;
• 'accidentally' changed CIC legislation so it stopped forcing the governance of social enterprises to act in ways that were contrary to the sectors' values;
• am commissioned to create resources and train sector advisers on the subject;
• have created a simple framework that people say is a great way to help them better approach starting to think through/navigate the options available to them;
• help unpick and restructure social enterprises who realise they've incorporated with the wrong form (which they usually picked on the basis of an 'expert advisors' encouragement); 
• have been subject to personal attacks, and investigations by regulators, because I've spoken out about when research and evidence seems to contradict the policy and direction of some sector bodies'...

But whichever of the above guises I'm working in, people usually have the same starting point of feeling "confused by it all" - and after recently sitting in on a national webinar designed to help social entrepreneurs best think about how they choose a legal form, I'm worried that future social enterprises will be in even bigger messes.

Over the course of about 20 minutes the lead adviser of a national social enterprise sector body revealed that:

1. they were unaware of how many options there currently are that a social enterprise can be created with (14);
2. they didn't understand why Companies limited by guarantee, despite being the most popular choice for social enterprises to always adopt, are able to be recognised as legitimate 'social enterprises' (Companies Act 1986);
3. they weren't able to state what the potential benefits of having exempt charitable status might be if you were a Community Co-operative Society (less tax on trading surpluses, greater ability to apply for grants than a limited company, business rate reliefs); 
4. and that they didn't fully understand what the rules around 'Persons with Significant Control' were, which apply to all companies and CICs, and form part of the legal statutory rules which a social enterprise would have to comply with if they chose this form.

On the basis that you don't know what you don't know, and the questions people brought with them to this session highlighted that the lead adviser's knowledge about the scope, range, and detail of what relates to the subject of legal forms for social enterprises seemed to be more limited that they realised it was, is the sector increasingly becoming "the blind leading the blind"..?

social enterprise legal structures for humans

Some people regard me as an expert authority on legal and governance forms for social enterprise, community businesses, and co-operatives - and while I always encourage people not to trust any guidance I offer them on this topic (because I'm not academically accredited in legal stuff, and more importantly because I'm not the one who's going to be legally responsible for administering the chosen form), people take encouragement from my achievements in changing company law, navigating Society Rules with the FCA, and finding paths through charity legislation.

Over the decades that I've been supporting people understand these choices, I've created a few tools/prompts to help focus discussions and reflections ('CHAMP' and 'Adrian's 4-boxes') - but this post isn't about those tools - instead it's about a 3-part limited youtube series I was invited to be part of the 'main cast' for.

A contact through one of my networks had approached me to ask if I could help them explore and understand what the best legal form for a new social enterprise they were developing might be. And as we talked about how I might offer guidance and assistance, we hit on the idea of making this a 'performance piece' - drawing back the curtain on how people usually go through this process as an encouragement to the wider sector, and also a working out of some of their (and the emerging enterprises') values.

So we scheduled 3 afternoons to talk though approaches to not only understanding why this legal form question is so important to get right, but the different ways we can pick and choose between them, and finally, applying all of this learning in real time/live to their nascent social enterprise.

There's an 'official' long post on LinkedIn by Matthew Bellringer (the contact that sparked this) where you can get the official story of how this series came to be: https://www.linkedin.com/pulse/foundations-thriving-social-enterprise-matthew-bellringer/ but I wanted to take the opportunity to reflect on how I found this process, in it being different to the ways in which I usually offer this type of support - to pull out what surprised me that I hadn't considered before, what was an encouragement in allowing more time and space to explore than is usually available, and some of the things which you don't normally hear or read about in this area.

So - the below points are what I think are useful framing/warm-up for anyone thinking of approaching either choosing or reviewing a legal or structural form for their social enterprise - if you want to know more about them, you'll have to follow the links to youtube and watch all 3 episodes...

- Comparing legal structures to buying second-hand car: you wouldn't buy a car without wanting to know some of its history to assure you that it's been built well, and looked after, so why don't we seek the same assurances when deciding between legal forms?

- The risks of using data that maps legal forms used by social enterprise in helping us choose one for our own: as part of the episodes, we looked at research into how far different legal forms are popular/less popular by the wider social enterprise sector. But as you'll see as you watch this segment, this mapping - as undertaken by national sector bodies, often presents a contradictory picture of findings. As with all research, what you find depends on how you ask the question, and whom you ask it of. And it seems that our sector leaders can sometimes do this in ways that might not seem to be that robust..?  

- None of the existing tools designed to help you plan your social enterprise model (social enterprise canvases, specialist business plan templates, etc) help you relate your ethos and values to the legal form you'll pick. Which seems a bit bonkers, because your chosen legal form is probably one of the best ways you have to make sure said ethos and values can be best protected into the future. That's why I developed my 'CHAMP' framework, which is profiled in detail through these episodes.

- Your legal structure as a social enterprise can influence your credibility to lobby and speak out on social issues. For example, charities and CICs are banned from undertaking political activities: but if we're serious about creating systemic change as a social enterprise, then at some point we have to engage with the policy and law makers (which perversely, our chosen form may actually prevent us from being able to do!).

- The problem with all of the toolkits designed to help making the process of picking a legal form easier is that they assume you understand the jargon, and underlying concepts associated with legal forms and governance. Which most of us don't, which explains why these toolkits are so underutilised by the wider sector.

- There's a confusion about Members, members, and membership, that knots so may people up when approaching social enterprise legal forms: one has legal power over you, one is a supportive friend, and the other is about collective activism that influences your decision making. Can you tell which is which?

- Stickers and badges, or legal power – which would people prefer to have in your social enterprise? And which would you want people to have? (remember that there are wider trends going on in society that means formal membership bodies are generally seeing their numbers start to plateau and decline - people may be more interested in being part of you for specific periods, rather than for life).

- We managed to compress over 400 years of legal structures for social enterprise into just over 10 minutes. A new personal best for me!

- How the regulator for your chosen social enterprise legal form can strengthen others' trust in your venture. None of the toolkits or other materials 'out there' that I come across to help you decide about legal forms ever talk about the regulators: what they can do to you, how they can support and protect you, and how they may influence how others see you. But this is also a far wider issue and problem: I also see it a lot of start-up programmes, where social entrepreneurs are supported and encouraged to start-up and incorporate their ventures, but then given no support in knowing how to 'look after it' with their respective regulator - leading many early stage social enterprises to suffer fines, penalties, and even enforced winding up because no-one explained to them about the regulators... 

- It turns out that knowing how to bake cakes can be very helpful in informing how we approach designing different membership models in social enterprise legal forms.

- Campfire songs can be equally important in the selection of choosing a legal form for a social enterprise.

- and finally - why every social enterprise should be wary of S&M clubs if they’re going to be a CIC.

I've found myself enjoying this process of working with a group to find an answer to a question, and also that it's encouraged us to take more time in how we consider the options and implications - despite doing the whole thing remotely to each other with video calls, etc, it's felt like it's helped to make choosing a legal form a process that's allowed us to be more human. 

Episode 1: what's a social enterprise, and why do I care?  

https://youtu.be/5T7TzanQh0s 

Episode 2: what do social enterprise legal structures mean to me? 

https://youtu.be/EaRRsWPfDK0

Episode 3: social enterprise in the real world. 

https://youtu.be/JmEi3b6f9_g 

Co-ops will never succeed until they start demanding more money from people who want to join them

The co-operative movement is often referred to as having emerged from Rochdale in 1844 (although it's history goes far further back than that) - a time when the average life expectancy was a mere 21 years; and most people died in the streets wearing nothing but rags.

The co-operative society that was formed then did two very powerful things that have since resonated through history: one has defined the movement globally (documenting a set of core values and principles); and the other has come to limit the interest of people in not only becoming members of co-operatives, but subsequently also not being interested in being actively involved in their governance (the setting of a membership fee of £1).

Whilst those values have gone on to be argued about, expanded, refined, and ultimately codified by the International Co-operative Alliance as the acid test of what makes a co-op a co-op, that membership fee has largely remained resolutely steadfast at £1 in nearly all co-ops.

Today, most people in the movement would argue that it should remain £1 - this is the lowest amount the law will recognise and allow, and allows for inclusivity: after all, no matter what your circumstances, you can scrape £1 together relatively quickly and easily.

But adjust for inflation, and that £1 should actually now be £128.

However, inflation only looks at the nominal buying power of that £1 - it doesn't recognise the extremes of poverty and deprivation people whom that co-operative in Rochdale was created for, and how those might transpose to our society of 2021.

A couple of quick google searches identifies that in 1844, people were most likely to be factory workers or labourers, with an annual earning of around £20.

Compare that to the average UK salary in 2021 which is £29,600 (as at 18th March).

And suddenly we start to some some big differences.

If I were to join a co-op in 1844, it would cost me 5% of what I could hope to earn in a year = roughly 3 weeks earnings (nearly a months wages) .

3 weeks wages today would be equal to £1,700.

Suddenly it becomes apparent just how radical the co-op of Rochdale was, in what it represented that meant people were willing to give up so much of what they would have otherwise spent on their rent, meals, and health (no NHS in those days!).

If you invested nearly £2,000 or a month's wages in something, you'd want to make sure you were getting value for money and a return on what you've otherwise have been spending it on (insert your favourite vice here). You'd want to make sure your voice was heard: you'd engage with any and all opportunities the organisation offered you to be part of its governance and decision making.

In short - you'd be actively involved, because it had hurt you financially to be part of it.

Most co-ops today struggle to not only recruit members, but also to encourage and maintain their involvement and engagement in their co-op's governance and activities.

Could it be because the movement hasn't paid enough heed to its history, and forgotten just how much it asked of people who wanted to be part of it, in order to keep this cost of membership current and relevant?

If co-ops today suddenly made the cost of membership £1,700 (after all, they all echo nearly everything else that the Rochdale co-op mandated and advocated), I suspect we'd seen an initial drop in member numbers. But those that did become members - how active and dynamic would they be in the democracy of their co-ops?  

Why I think Ed Mayo got it right (but mostly wrong) about co-ops and charities

Ed Mayo blogged recently about how he saw charities and co-ops being able to learn more from each other than is traditionally thought (after all: charities are based on philanthropic gifts and a desire to help out other people, whereas co-ops are based on an ethos of mutual self-help through economic trading).

And I was interested in what he had to say because I've also often thought that many other movements and sectors are more aligned to co-ops than might appear at first glance (for example - trade unions; but more on that later...).

But as much as I like Ed (after all, he did buy me a round of whiskey after I called him out at a conference he was chairing!), I can't help but feel he only scratched the surface - and I think that co-ops and charities are much more aligned with each other in more fundamental ways that he argued in his piece.

Ed pointed to 3 areas that related to how many charities are seeking to encourage more open memberships and participatory governance (both principle tenants of co-ops), and exploring 'social investment'. But these could equally apply to many other types of organisations within the wider and broader social enterprise movement.

Sorry Ed, but I have an idea that co-ops and charities are much more closely related, and at fundamental levels:

Firstly, lets look in general terms, starting with the values that define co-ops - 

• self-help, self-responsibility - internal to co-ops and their members, these are both things that charities would agree that they try to encourage and nurture within the people they support
• democracy - as Ed highlights in his blog, participatory governance is something that's a growing trend amongst charities
• equality and equity - are both enshrined in charity law to ensure that charities support people and communities in a transparent and fair way, regardless of circumstance
• solidarity - it's extremely rate to find a charity that isn't working collaboratively with other charities, or part of bodies such as the ncvo (the charities' counterpart to CooperativesUK)

And going on from that, lets then look at the principles through which co-ops enact these values - 

• voluntary and open membership - charities offer support without any condition of a person being a member, in much the same way as many co-ops
• democratic member control - membership charities have AGMs and other governance functions that mean their Trustees remain accountable to the members
• member economic participation - OK, so you got me on this one. This is pretty much co-ops only (although I do know of lots of co-ops where members aren't engaged economically with what their co-op does...)
• autonomy and independence - just like co-ops, charities are required by law to be free from any undue control or influence over them by means of corporate membership or private ownership
• education, training, and information - just as co-ops need to ensure their members are supported to be able to fully discharge their responsibilities of being such, so charities also need to be offering the same 
• Concern for community - a principle of co-ops, this is a mandatory expectation on charities through the public benefit reporting requirements that they're subject to

But the correlations don't stop there:

1. There are examples of recognised co-ops also being registered charities (for example the Co-op College)
2. The development and support needs of co-ops and charities are often the same 
3. Co-ops and charities are both recognised as being pillars of the wider social enterprise/Third/social sector (as typified by the mapping undertaken by the likes of Social Enterprise UK, and ncvo grouping them together)
4. In manifesting and managing their values and principles, some co-ops have created separate charities
5. Just as charities can trade, many co-ops can also access and be awarded grant funding 

So - charities and co-ops are closer bed-fellows that some might care to admit. And that means that when we think about who we should look to for inspiration and models of practice to learn from, each shouldn't automatically dismiss the other.

And to end where I began - co-ops and unions are closer than many might think in many ways, and this is being recognised and furthered through memorandums of understanding being created between some of the federal bodies of each sector. So might we see similar agreements and commitments starting to appear between the bodies that represent, support, and advocate for charities and co-ops in the future..?  

and the least sustainable legal form of social enterprise is...

Anyone who's ever asked me for (professional) advice or guidance will know that I always try refer to what published research has to say about your question - I'd much rather offer option and direction on the basis of objective evidenced knowledge, rather than any personal preference or other bias.

And many know that I also seem to be able to make sense of all the options around legal forms for social enterprises here in the UK (at my last count, 14 options that fall under 7 regulatory bodies depending on which you pick) - something which has led me to be invited to develop and deliver training courses throughout the wider sector, be interviewed for webinars, and also offer some of my famous beer/cake mentoring in relation to as well...

Historically, when helping people navigate these choices as to their legal form, I've always referred to the legal powers of the respective regulators, what published research shows about their apparent success in being awarded grants, and their relative 'popularity' based on sector mapping studies.

But today I add another dimension to this referencing and research about social enterprise legal forms - how they affect your future financial performance!

Given the complexities around understanding and mapping the wider world of social enterprise, there's scant research or monitoring around how any enterprises' chosen legal form may impact on its future potential for success in financial terms - and while there are lots of other contributory factors which means that we can never look at the legal form as the sole indicator of this performance outcome, I felt it might be useful to take an initial look at what the studies that are starting to be published might be suggesting.

To this end, I'm indebted to Power to Change's research team, who have started to track and publish bench-marking data for social and community enterprises around a number of themes, but also a couple of other bodies too. There's not many sector mapping studies that look at the performance of an enterprise correlated to its legal form, but the initial ones I've been able to draw on are:

• Follow the Money (2017), Power to Change
• CIC 10 year survey (2016), CIC Association
• Open source economic data set (2017), Co-operatives UK
• Charity Register Statistics (2017), Charity Commission

And yes, the data from these will be subjective - for example, Power to Change will only be reporting on data from social/community enterprises that it has directly engaged with and supported; but as I said already, this is a first go at seeing what might be gleaned and identified from cross-referencing what these studies and mappings appear to be finding.

And what they seem to show is:

1. Charities are consistently the best performing legal structures with average turnovers having the least variance of all legal forms between the different studies (£450k - £650k); they also seem to generate the highest profit ratios from trading activities (averaging 11%)
2. Companies limited by guarantee have the lowest reliance on grant funding (averaging 48%), but also a lower profit ratio of 4% of income
3. Co-op Societies seem to struggle to generate profits (2% of turnover), but in having the largest average turnover of all the legal forms (£7.2m), this equates to far larger cash amounts than the other options do

The biggest surprises though, come in relation to CICs - the Power to Change study shows them to have an average turnover of nearly £2m, but the CIC Associations own mapping found the vast majority generate less than £10,000 a year. This clearly shows that there's HUGE variances between individual CICs that are trading: there are a few 'unicorns' out there, but most are 'zombies'. 

And I use the phrase 'trading' loosely, as these various studies also highlight that CICs are the most grant reliant and dependant of all the legal forms (58% of all income is grants - for comparison, it's 53% for charities; and grants are used as the main route by the majority of CICs for raising any investment). Worryingly, they are also the only legal form whose average enterprise seems to be generating a loss - Power to Change's mapping found that the average CIC makes a loss every year of -1.5% against its income...

I've blogged before about how the 'honeymoon' for CICs may be waning, so does this add further weight to my concerns about the viability of this legal form to best enable social entrepreneurs to achieve their vision? (especially when 1/3 of all CICs also report that this legal form has been a hindrance to them doing so...).

I don't know, and I don't think that this quick snapshot across a handful of others' published data can offer any real answers. But what it hopefully does is to help further add to our knowledge about the best routes through which social enterprises can best realise and fulfil their potential. Hopefully it will also generate more and more useful questions for those undertaking future studies into this wider sector.

"ain't nothing like a Dame", forgotten legacies, and growing lettuces in space... (the future of the co-op movement from a regional perspective)

I was recently invited back to my old stomping ground of Cambridge to speak at the Regional Co-op Council's annual conference - as some may know, I spent several years turning around the fortunes a local co-op and social enterprise development agency there, and somehow initiating some ideas that have since become national flagships...

And the invitation was too tempting to pass on: in 1997, The East of England was the first in the country to form a regional co-op forum (which became the regional Co-ops Council model today), and in doing so inspired every other region in the UK to not only form a corresponding Council model, but also informed every region to then go on to create a wider regional social enterprise partnership too! (and I was involved in the forming of both this first regional council, and the subsequent first regional social enterprise partnership too, so nice to go back and see how it was getting on)

The East of England was also the first to create a 10 year strategy for shaping the future of the co-operative movement from a regional perspective (which I still have a copy of!, although sadly just about everyone at the Coops East conference seemed to be unaware of just how influential they've been in shaping the wider movement and beyond through these things in its history...).

Therefore being able to return to remind them of their history and legacy seemed an important thing to do in encouraging the next wave of the 'co-operative revolution'.

(and it was also personally encouraging for me to be able to see some people I originally got to know 15 years ago still active and impacting the world through their roles - Austen and Sally: yes, that's you I'm referring to!)

While the day itself may have seemed to have had too many speakers for some people's comfort (8 main presentations, 2 facilitated round table planning activities, and a break for lunch - and all in the space of about 5 hours), my impression is that many also felt that they wanted more... and my overriding impression was that rather than blinding people with stats and policy headlines, all of the speakers more appropriately drew on stories and histories of their respective co-ops - its stories that capture our interest and imagination much more powerfully, and make it easier to share these ideas with other people, than any set of quantitative data and mapping reports ever can.

So to try and summarise what impressed upon me most from the day means I'll omit some things that others felt were the highlights for them, or focus on some aspects that others felt were more of an irrelevance. But that's part of the joy of blogging - encouraging you to subsequently read others' write ups and form your own view, and a reflection of the diversity of the co-operative movement itself. However, for me the 'highlights' I'd like to share are as follows:

1. Co-ops were highlighted at being at the forefront of the next agricultural revolution with the workers co-op, Delta T Devices, sharing how their equipment is helping to grow lettuces on the international space station
2. Dame Pauline Green passionately argued how co-ops have become the UK's greatest ever export, revealed how she's now a good mate of the Pope, and had people highlight that a musical about her work for the movement is already well know - "There is nothing like a Dame" from South Pacific
3. Tweets that people were making on the day drew interest in what Coops East were doing from the co-operative movement internationally
4. It's impossible for nearly any co-operative to fully cover all of the impact and ways in which they are contributing to making the world a better place in only 9 minutes
5. While some co-ops may be accused of having too many aims for their own good, and people encourage them to therefore reduce them in number; if you were a parent with 'too many children', how could you choose which of them to give up?
6. People's ideas for what a 'paradise region' might look like if the East of England were to be transformed by the co-op sector struck me as being reminiscent of the role that Co-op societies held in their communities at the start of the 20th century (community social events, everyone being aware about what co-ops are and using them as their preferred suppliers and shops, schools being explicitly linked with coops and teaching children about them, local businesses being encouraged and supported by them...)
7. Some co-ops present (and who spoke) seemed unaware of the national programmes and influence they'd created over the years until I referred to some of these during the Q&A panels
8. I also found myself being volunteered to chair the conference in lieu of my father who was too unwell to do so, and so naturally took the opportunity to do some table-top dancing as part of the official proceedings...

I think my overriding takeaway from the day was that as a movement we have a legacy (and future) that is far more impressive and powerful than most realise, but we risk losing it all if we forget our history and don't keep regularly sharing and reminding ourselves of our stories.

But the whole day was also tweeted and instagrammed about by various other people there - just check out the day's hashtag to see other's pictures and stories via #acoopregion; and Coops East have also uploaded all of the speakers notes and presentations to their website: http://www.cooperatives-east.coop/events/acooperativeregion/

turns out being one of the UK's top10 business advisors isn't as impressive as you might think...

One of the things that makes me a little unusual as a consultant is that wherever possible, I don't give my clients a bill - instead I prefer to work as an associate of other agencies who hold contracts with various funding bodies and can cover my fee on their behalf (a very equitable arrangement: groups can access the support they need, funders get their boxes ticked, and I get to keep the cats fed!).

And one of the bodies who I've been working with through this arrangement with for about 10 years now is the Plunkett Foundation - a body built on knowledge (rather than money), and who believe that democratic ownership and accountability of rural enterprises to/within their local communities makes them not only more sustainable, but more successful in addressing the social issues those communities face.

And although I've always had a good working relationship with them, I've never actually had any formal induction to 'the Plunkett way' - at least, not until now!

As part of their refreshing of their associate list and expanding this family of advisors who can be deployed throughout the country to support rural co-operative enterprises, they're having a roadshow to allow us to all start to meet each other (and get to grips with their new reporting systems!).

I was able to get to one of these events earlier this week, and (despite the lack of cake at lunchtime), found it a really enjoyable experience to be able to spend time with some of my peers and also reflect on the proud history and role Plunkett is committed to making today in improving rural lives together. It was also great to finally find out exactly what 'the Plunkett way' of doing this is, and to also realise that this family of Plunkett advisors I find myself being part of are a very exciting bunch. After all, where else would you find people who are:

- descendants of kings,

- tv celebrities,

- best selling authors,

- castle owners,

- vampire bat handlers,

- professional revolutionaries,

- football club club owners,

- supporters of Rochdale FC (the team my dad used to play for!),

- accidental train drivers,

- dog sitters for political party leaders, and

- speciality pig breeders?

I used to think that my opening professional introduction of being named as one of the UK's top10 business advisors was pretty impressive, but in light of the above, realise that there are far more exciting vocations and credits that get us excited. Thank goodness people are still calling me a 'social enterprise sex god' on twitter...

whatever happened to the Conservative Coops?

So, its party season again, and with a general election looming, every sector seems to be vying for attention with all the separate parties to become the solution that they’re each hoping to find that’ll help them to deliver on all their aspirations but won’t bankrupt the economy in the process...

One such sector which every party (at least in recently history) has embraced and talked up are co-ops: marrying social justice with economic independence and free market economies, they seem too good to be true and have often been cited in many a politician’s speech as to their ‘fab-ness’. Recently, co-op sector bodies such as Co-operativesUK have also started to more explicitly publish the ways in which co-ops can help each party deliver on their conference promises too.

But how far can we really hold faith in these political parties’ interest? Historically, government and political parties were so anti-coops that the movement formed its own political party to ensure that the sector wasn’t discriminated against in parliament! In more recent history, the Conservative party launched its own co-ops initiative. “The Conservative Co-operative Movement” (CCM) to capitalise on politicians’ interest in co-ops and to help keep this sector at the heart of parliament and to their policy and thinking. And they even set it up as a co-op society! (Intrigued, I even became a Member of this society, despite my father being a Labour councillor and a Co-op party Chair...)

But fast forward 4 years. In that time as a Member, I’ve had 3 general emails; 1 item of post (with postage underpaid on it); no notifications of Members’ meetings (or minutes from them); and I also spotted that they’ve been identifying themselves by another co-op society’s registration number in their stationary. Their website seems to have disappeared and I’ve not been able to get any response to messages I’ve sent to contact details I have.

What can I conclude from this?

In the absence of any response that may suggest otherwise, it seems like the CCM were an opportunistic political attempt to cash-in on the integrity and hard work of the co-op sector over the last few centuries. It’s obviously not understood what it means to be a co-operative by not acting as one. And it doesn’t seem to notice when it stops being able to deliver what it was set up to do.

Some might say the above analysis and conclusions are reflective of this wider political parties approach in general, but I couldn’t possibly comment...

why not all coops should live to be 100

There are any milestones in the life of any business: the first (and 1,000^th?) customer, the opening of new sites, and the length of time that the venture has continued to trade (this is no mean feat given that most fail within the first 3 years...)

 

Many ventures mark their trading histories with parties and such like at 25, 50, and 100 years (although there’s not many of that last group!). And as a supporter of various types of enterprise, it’s always gratifying to see how some business forms seem to survive the ‘test of time’ better than others – I’m not sure the empirical data has been collected to prove it beyond shadow of doubt, but my hunch is that proportionately speaking, co-ops tend to last a lot longer than any other form of business model.

And that’s important, because it shows there’s recognisable value and merit in specific types of business over others that make it easier to argue for them on the groups of sustainability, long-term impact and benefit, etc...

But – that might cause a problem for some co-ops.

Co-ops are created by groups of people to meet common shared aims or addressed shared needs, (rather than the ‘traditional’ motivation of private businesses which is to keep making money for as long as possible...) Once those aims have been achieved, or needs have been met, is there a benefit to it being continued?

Some aims and needs will always be ongoing (creating opportunities for employment, ensuring access to healthcare, or supply of energy), but what of those that can potentially be ‘fixed’ within a given time (supporting each other gain access to financial services through rebuilding credit ratings, or building members’ profiles in their respective marketplaces)?

As well as supporting them to start-up, I’ve also been involved with supporting co-ops wind-up because they were so successful in addressing the needs that they were created to address, that their members agreed there was no point in continuing it for the sake of it.

So while a long-standing business may be a cause to celebrate on the face of it, it might also suggest it’s been very ineffectual in achieving what it was set up to do: let’s therefore start to celebrate the impacts that co-ops create rather than how long they might have been trading for.

Making the tea – the most important skill for being part of a co-op?

As some will know, I'm involved in supporting the start up and growth of co-operative enterprises of all types through various programmes, contracts, invitations, (and 'personal accidents'...). And having done do professionally for nearly 20 years at local to international levels, I'm of the view that often, the support offered to co-ops doesn't emphasise enough the importance of “co-op working” skills.

 

On the face of it, co-ops are much like any other business – they buy and sell stuff, keep accounts, pay taxes, employ people, and so on. But at their core is a set of values and principles which set them apart from all other types of organisations. And it’s how the Members and workers in co-ops understand and apply these values and principles in their work and relationships with others that usually determines whether the enterprise will succeed or fail.

 

Now I know of fellow co-op enterprise supporters who have written at length on what these co-op working skills are and what's involved in developing and encouraging them. I know of others who offer detailed training programmes on them (myself included!). There's even been a scientific formula for co-operation developed and endorsed by the national body for Co-operatives in the UK.

But I have an idea that like all great ideas and systems, they can all be summarised in a simple concept – for me, that concept is making a proper 'milky brew' (cup of tea).

 

Making a round of drinks for your fellow co-op Members and workers involves various things that are crucial to establishing and sustaining appropriate working relationships: knowing when the best time of day is to step away from the servicing of customers for a time without risking losing their trade to brew up; knowing that there's enough tea bags, milk and clean mugs to hand; knowing how people like their tea (I'm a “leave the bag in for ages, then lift it out before adding a splash of milk” type myself...); and knowing when they prefer to receive it. All of which can be taken as clear allegories for establishing the basics of the systems, procedures, and knowledge of others that underpins good working relationships in any context (and if you can't see what they are, then I'll explain it to you over a cuppa sometime... ;-)

 

Of course – not everyone likes tea; some prefer coffee, or even gin as their afternoon tipple. But in my experiences so far, it’s usually the things that appear inconsequential, like making the tea, that turn out to be the most important in revealing the state of workplace relationships and corporate culture.

 

 

(Oh yes – and my proper first office job was as a tea boy: within a year I was supporting the firm to gain new business and had discretionary control over budget spends, but always made sure that everyone kept getting their tea on time, just the way they liked it and as a result I became one of their longest-serving and most trusted employees...)

 

great co-op myths of our time (or why we need more competition and less collaboration...)

Co-ops: they’re great, right? Everybody seems to love them, and they’re often held up as models of enterprise that can fulfil some of the most challenging aspects of our societies: creating sustainable employment, empowering the disenfranchised, addressing poverty, ...

But sadly, there are many myths and mistruths perpetuated about them through ignorance, which are probably part of the reason why co-op enterprises have never really ‘taken off’ in this country like they have in others, and are often treated with trepidation by the wider business community.

There’s plenty of material already out there (if you only look or ask for it) that helps to dispel some of these myths that relate to decision-making needing to involve everyone, all employees needing to be paid the same wage, etc, but I wanted to pick up on one that seems to be creeping in to not just rumours about co-ops, but also has implications for the wider economy too: competition.

Co-ops are defined by a set of universal values and principles, which include ‘co-operation amongst co-operatives’: the sense that the sector grows stronger by actively supporting each itself and each other. But this isn’t the same as not competing with each other as some seem to think (based on a few recent twitter conversations...)

Competition, if open and honest, between co-ops is actually quite important and vital: it forces them to constantly question assumptions about how things should be, what customers want, and if there might be a more effective way of achieving the end goals. That doesn’t mean co-ops have to undercut or metaphorically backstab each other, but as part of co-operating with each other, it should mean that there’s a healthy and open discussion about what each might be able to do that’s different to the others, and which will ultimately also mean more choice and benefit for customers and the wider community and society.

Competition stops us stagnating and being overtaken, and surely better to be in ‘healthy competition’ with people who share our underlying values, than a faceless corporation whose only interest is in making as much money out of people as possible?

And this sense of competition being something we should encourage amongst ourselves shouldn’t be limited to just co-ops - collaboration is being increasingly encouraged between businesses within all sectors and industries, so as with so much else, the co-op movement would seem to have some useful learning for other these other marketplaces and enterprises to draw upon and be inspired by.

 

Competition – it shouldn’t be a dirty word for co-ops, but rather one which should be encouraged and celebrated as a means to make sure we keep upping our game so we can have ever greater impacts on our communities and the wider world.

why are private businesses supporting and promoting models of enterprise that are completely opposite to their own?

there’s a lot of talk and examples recently of how big business is starting to explore ways in which it can support and encourage the next generation of social enterprise and social entrepreneurs – either through direct sponsorship, or, as in the case of Coca Cola, using under-utilised capacity within its supply and delivery chains to reach those people that others just can’t reach...

and that’s great – right? Governments and NGOs don’t have the resources alone to address the needs of our world, so it’s great to see resources and cash being mobilised out of private hands into the public good.

but... I'm struck by a historical parallel and a philosophical question in all of this. What’s in it for them, and why are they promoting models of business (social enterprise) that are at odds with their own ownership and profit distribution structures?

Go back a little while in history and we see the British Empire setting up co-ops in all the countries it ‘managed’, telling everyone that these were the way to go in terms of economic prosperity for all, sustained wealth, etc, etc – but why then did the British Empire not do more in Britain to promote and support co-ops for its own citizens?

Tellingly, although credited with succeeding in shifting cultural attitudes to the co-op enterprise model, these ‘Empire co-ops’ have largely struggled to realise their potential. And its only now, several generations on, that bodies like the Co-operative College are having the opportunity to be able to revisit these nations and seek to fan the flame of what remains of the co-op legacy...

Without a clearer lead from national and international social enterprise bodies, I'm concerned that we’ll see big private corporate firms start to rush in, create loads of social enterprises that will ultimately collapse (or be stifled in what they could really achieve) – so perhaps the most pressing question is for those private firms like Coca Cola: why are you promoting models of enterprise that are opposite to your own? If you really think that they’re so great, why aren't you changing the way you’re structured as well?

Why we’re to blame when our leaders fail us

A lot of media coverage has been given in recent weeks to an ex-chair of a national ethical bank, and it strikes me as interesting for a couple of reasons that you might not expect –

1) what finally ‘tipped the balance’: this is someone who’s expenses claims on the boards of several charities where they served as a trustee were seriously questioned over the years, and who’s Council computer they used in their duties as an elected councillor were apparently found to contain images that would breach most company’s IT usage policies... but it was only after they were ‘caught’ buying (not taking!) drugs that they were ousted: both as Chair of the Bank and as a Minister of the Church.

Does this mean that as a society we have a scale of (un)ethical behaviours that we’re prepared to accept? (probably - I've written about how pornography is more ethically acceptable than tobacco before...)

2) And given the above, how were they allowed to keep holding (and gaining) the positions of power and authority that they did?

And these questions get me thinking about how they were able to fall so far – why did no-one intervene sooner or spot warning signs?

I think it may be something to do with the way we treat and support those in authority: the higher up an organisation you rise, the less support you have available and offered to you.

For example: think about volunteering for a charity, or being the shop-front worker in a small business – there’s clear induction to make sure you know what you’re doing, regular check-ins to see if everything’s going well, and lots of legislation to make sure that employers are properly looking after you. But become a Director or a Trustee and all that seems to vanish... there are few formal inductions or reviews at the Board level in private, social and charitable enterprises I've walked alongside over the years – and this is echoed by the Charity Commission who've found that the majority of complaints they investigate are due to governance failings, and the need in the private sector over the years to introduce Codes of Conduct for Directors.

So – as the troubles of an ailing bank are heaped upon one person who succumbed to human weaknesses, do we really only have ourselves to blame when we've set them up with no means of helping to support them do the jobs we're asking and expecting of them?

Is there an ideal size for a co-op business?

The co-operative brand and model of doing business has taken a bashing in the public and media realms recently – the co-op bank being bought out by private investors; its board being found to lack the skills and awareness needed to manage such an enterprise; the co-op groups' collaboration with Thomas Cook over the future of its travel business turning sour, and plenty more besides… all things which anyone who's a member of any co-operative enterprise will feel shamed, embarrassed, upset, and angry about because they show that our ideals and hopes for this alternative model of doing business have been 'betrayed' by one of our largest number...

Many are commenting and writing elsewhere on the implications and reasons for these fall-outs, but I find myself wondering about the question it raises about the dangers of a co-op enterprise of any type becoming 'too big' and in doing so, too distant and removed from its members who are the reason for its existence, and if by extension that means that there might therefore be an ideal size for any co-operative enterprise?

Anyone who's been involved with any co-op will know that people become members of it for all sorts of different reasons: ideology, need, economic gain, community, employment, … and with those different motivations come different expectations as to how they want to be involved in, and influence, that co-op's trading and development.

Sometimes co-ops can focus on their members' interests over maintaining a profitable enterprise which leads to trouble, but conversely those co-ops who neglect their members' interests in pursuit of a profitable business also find themselves in danger...

But does this mean that as well as an ideal size, there should also be an 'ideal type' of co-op member? After all, doesn't it get too messy otherwise to be able to manage? But pursuing this line of thought likely leads to madness: we live in a wonderfully diverse world, and its because not everyone thinks the same that new expressions and ideas and opportunities can emerge.

So – back to the original question: should we limit the size of a co-op? I know of several worker and housing co-ops who've wrestled with this question in the past, and decided that 'yes', there are natural limits to how large a co-op should be allowed to become before it has to enact formal democratic structures that would dilute and stifle their members' voices and influence  to levels that they deem to be too low to be acceptable.

But conversely, scale brings advantages despite its governance and regulatory challenges, the Co-operative Group has been able to support thousands of local community projects with grants, campaign globally on numerous issues, and help hundreds of existing and new startup co-ops across the UK through its Enterprise Hub initiative solely because its large enough to be able to generate the levels of trading surpluses it needs to commit itself to these national programmes as part of its manifestation of the defining co-op values.

Co-ops exist for the benefit of their members. 

Co-ops need to be answerable to their members. 

Co-ops should be informed by their members. 

Co-ops should therefore regularly review how well and appropriately they are ensuring this in light of changes to their business models, marketplaces and wider societal expectations and pressures. If not, then co-ops fail to properly evolve, and just like dinosaurs will quickly become extinct after an all-too-brief parade and flurry of excitement.

new support for local communities to raise startup finance from their neighbours

The consultancy.coop, a small Co-operative Development Body (CDB) based in south Wales has recently set up a new website aimed at helping new and growing co-ops with their Community Share Issues.

Alex Bird, one of the partners in the co-op, realised after working with a number of community co‑ops trying to finance projects through share issues, that whilst they could market themselves easily to local people, communicating to the wider public wasn’t easy on a small budget. He and his colleagues have worked with community shops, community centres, pubs, football and rugby clubs, festivals, food co‑ops, bike shops, off-road cycle centres, recycling projects, gyms and energy co‑ops, and all had difficulty marketing their share issues. Many didn’t proceed with a share issues because they couldn’t see how they would get sufficient share sales and the activists involved looked to other sources of finance such as grants and loans.

Some projects they’ve worked with have been very creative in their share issues, linking up with credit unions and CDFIs to enable people to get lines of credit or save up to buy shares, but they still find it difficult to contact their diaspora, and you can only raise so much from local people.

Many projects have a wider appeal than just their immediate neighbourhood, and there is a large body of people across the UK and further afield who don’t have a project nearby but would like to support one.  Real ale pubs, vegetarian and vegan shops, football clubs, and of course ecological and green energy projects are examples of projects with a broader appeal, but many such projects weren’t getting through to their potential share buyers, and at times weren’t hitting their finance raising targets.

After many discussions about who wasn’t doing what and whose job it was to sort out this problem, and why “they” should be doing it, consultancy.coop did what co-operators always do in the end – got on with it themselves. Using the well-known open source software from WordPress and with the help of Co-operatives UK Internet Services they have set up a .coop site from their own resources.

The new website is up and running at www.shares.coop and features all the Community Share Issues they know about free of charge in a classified style listing, plus lots of advice and guidance. The site is presently entirely self-funding, although as it develops they hope to bring some sponsorship on board in order to raise income and grow the site, so they offer paid for features as well as the basic free listing.

The day I became a hashtag on twitter…

You may already know that I’m on twitter; you may know that I occasionally tweet ‘live’ from events I’m at; and you may even know that a few months back someone did a survey that identified me as one of the top500 influencers of social enterprise in the world based on what I do on twitter.

But what you probably don’t know if that earlier this week, I became a ‘#’ (hashtag) on twitter.

Hashtags are funny things - they let you easily find other tweets of similar subject matter, and also to help place the content of a tweet in some kind of context. They range from the celebrity, to campaigns, to movements, and even the ridiculous.

And the list of them has just been added to with one that’s all about me! And while many people know I have a gift for self-publicity, on this occasion I can’t claim the credit for it: it was someone else who, unprompted, began this new tag. I’d just finished having a chat with them about some ideas around the LiM tool that allows small enterprises to more easily and better identify and report on their social impact and value, and they tweeted about it, adding the hash tag #chattoadrian

A couple of other people picked up on this and retweeted the tag pretty quickly, meaning its moved from one persons random idea to something that others think is genuinely useful and helpful.

What does this mean for me in practical terms? Well, I’m realistic enough to know that I’ll never trend on twitter, but it is a way that people can more easily see who I’ve been speaking with and what they thought of me. And I like that - I’ve always been open about trying to be transparent and accountable in how I work and offer my support and services, and this new hash tag means that its even easier for people to say and see just how good (or otherwise) I’ve been. It’ll keep me on my toes more, and that can surely only be a good thing in the long run.

So - thank you Graham Gardiner for making a new rod for my back, and contributing to my notoriety!