Better Than What?

Something tells me that, in the coming months, we @ The Weave are going to be told by senior management that we should be happy with what is happening (or not happening) in our co-op because "we're doing better than..."

Better than what?

Better than other grocery stores? Better than other co-ops? Better than other businesses in Orange County? Better than conventional capitalist big-box stores?

Better than what?

What is the measure by which we should be measuring the sanity of the decisions being made in our co-op? And what standard should we apply to the manner in which those decisions are being made?

Since we are told, over and over again, that we are better than conventional capitalist enterprises, I think it fair to make the comparison between strict capitalism and the sort of social entrepreneurship I believe we espouse.

And frankly, I'm troubled that we are not seeing a lot of difference between the way our senior management is responding to the troubles facing us, and the manner in which conventional grocery stores are reacting:

1) We're seeing a lot of decisions being driven by fear. When instead we should be spreading the responsibility for decision-making, and enrolling our owners and workers. So that the burden does not rest on just a few shoulders.

2) As a consequence of the fear, we're seeing a lot of knee-jerk, short-sighted reactions. Instead of calmer, more long-term planning. Which can only be engaged in if you have on board with you all those upon whom the long-term planning will depend. Namely, our workers, our owners and our customers.

3) Too many decisions are being made incommunicado. The support that we seek for the long-term answers can only be forthcoming from people who are fully informed of the real situation.

4) The biggest asset we have over conventional capitalist corporations is the loyalty of our workers, owners and customers. You can only retain that loyalty with communication. You will lose it if you poison it with measures that upset your owners (such as removing the Consumer-Owner Discount) and your workers (being made to work harder and more days, for less money - with no incentive at the end of the year).

So. At the moment, and in my opinion, we are acting like any other conventional capitalist chain store. We may be acting a bit better than Wal-Mart. But is that what we want to be the measure of our success in dealing with these challenging times?

Or should the measure be that we are acting as the best co-op we can be? And in that regard, could we @ The Weave - as a co-op - be making better decisions, in a better way?

More co-operative decisions, in a more co-operative fashion?

SEVEN DAY WORK WEEK @ The Weave

A little bird tells me that senior management are thinking of making more efficient use of staff in this recession by introducing reduced shifts and a seven-day work week.

Of course, I could be wrong. I hope I am. I was enjoying my little moment of retirement after this past year of contribution to the governance of our co-op for free.

If, however, I'm right, then respectfully it is time for all workers and their department managers to join as one and say to senior management: Enough is Enough!

Enough of this nickel-and-diming. Enough of squeezing the workers, without asking them what they think. Enough of asking us to work harder for less money - when I see no evidence that one senior manager has taken a similar pay-cut.

Enough of trying to make minute savings at our expense, when not one sensible thing is being done to reduce the two enormous costs that are sinking our co-op - the operational costs of the Food House, and its attendant debt.

It is time to wake up and smell the roses. Expansion was a mistake. It is time to stop, take breath, and then devise a plan to split up what we have created, and spread the cost around more manageable chunks.

Frankly, if we do not decide to do this right now, then before the end of this year, our creditors will be forcing it upon us.

In any event, if my information about this latest nonsensical move is correct, then I will be demanding that we have a full meeting of the co-op, where all of the financial information is put before us, and we can quiz the people who are making these idiot decisions.

I would remind senior management one more time of the decision-making process that exists for employees. Important decisions that affect our workplace are supposed to involve us. So. Involve us. Re-institute the full co-op meeting you canceled earlier this year.

Board Election 2008

Democracy has spoken. And I congratulate Jacob on his victory in the Election for a Worker-Owner Director.

The voting figures were:

Jacob Myers - 42

Geoff Gilson - 20

I am truly delighted that we managed to increase the number of Worker-Owners who chose to vote this year, as compared with last year.

I thank all of you who voted for me - and everyone who took part in the democratic process. It is that democratic process that sets us apart from conventional capitalist corporations.

Every single vote cast is a statement. And I know that Jacob will ensure that the voice of every Worker-Owner - and every Worker - is heard on the Board.

I would like also to thank all those on the WSM Elections Task Force, the WSM Elections Oversight Committee, and everyone in the Marketing Department, all of whom worked so hard on this Election.

Yes Weave Can @ Chatham Marketplace

It's the last week of all sorts of election seasons, and the following excerpt from Lyle Estill's "Small is Possible" serves as a timely reminder that...well...yes, we can! And it also reminds us all of what we love so much about "The Weave":

"Weaver St. is an established food co-op, which has been highly successful at building not only its brand, and balance sheet, but also the community in which it resides.

It has spawned cooperative housing projects, and a community radio station, and it has become a remarkable anchor for the Town of Carrboro.

To their credit, the folks at Weaver St. wrapped their arms around Melissa as Chatham Marketplace took shape.

Somewhere in the Co-op creed is the idea that startups should get an assist from the established, and Weaver St. Market did just that.

Instead of worrying about competition, or about whether or not they would lose valuable organic food eaters if a new grocery store were formed, Weaver St. Market lent a hand to Chatham Marketplace.

Their founders offered free advice, and they had a feasibility study on a Pittsboro location sitting on the shelf collecting dust, which they passed along.

Weaver St. freely gave power away to Melissa, and as a result they became more powerful.

Now Chatham Marketplace exists in the world, and for that Weaver St. Market deserves a large slice of credit."

"The Weave" is a treasured icon within the national co-operative grocery movement - particularly, when it demonstrates the unity and democracy of purpose that is co-operation at its best.

At this tender moment in our own affairs, it doesn't hurt any of us - me, at the top of the list (!) - to remember that, and to draw strength from it.

[I have never met Lyle Estill. I have no clue how to get a hold of him. I hope he will not mind my printing this excerpt - bearing in mind I link to a place where you can buy his book!]

Yes Weave Can @ Online Forum

The overriding theme at the 2008 Annual Meeting of Owners of Weaver Street Market, held last Sunday (October 19), was the creation of more ‘vehicles’ to allow Owners and Workers to be heard by their Board and by senior management.

Funny you should all mention that…!

One of our more active Consumer-Owners, Jamie Bort, and his wife, Sarah Kahn, have spent the past couple of months putting together the basis for an Online Forum for Weaver Street. I’ve been helping.

You can see the bare bones right here.

What is needed now is for the WSM Board formally to adopt this Online Forum as an official communications vehicle for the Owners and Workers of WSM.

Once again, look what can be achieved by a couple of committed ‘outsiders,’ who understand the desire of other Owners to be more involved, and better informed about their co-op.

Imagine what could be achieved if one of them was on the Board, helping to make these desires a reality…

Yes Weave Can @ Annual Meeting

The 2008 Annual Meeting of the Owners of Weaver Street Market supported my call last Sunday (October 19) for the Board to establish an Owner’s Committee to review the finances of WSM, in the light of our Worker-Owner Dividend not being paid this year, and in view of the level of WSM’s debt and its debt repayments.

This is what one voice, speaking out for you, can achieve as an outsider. Imagine what that same voice, speaking up for you, could achieve if it was on the Board itself…

*******

[Update - November 5, 2008]

It is the day after the Board Election Count. Senior management have just announced a co-op wide reduction in worker hours, along with a freeze on hiring.

This will mean that we workers will be working harder for less take-home pay.

I can't help but wonder what effect this announcement might have had on the Election if it had been released the day before voting ended?

We are told that the reason for these savings is that there is a lack of sales growth.

Er...last time I looked, the Southern Village store had never recorded less than a constant 5% sales growth.

I'm not sure we're being told the whole truth.

Sure, there's competition. Sure, we're now in a severe recession. But another major contributor is the fact that we consciously eviscerated our foundation store in Carrboro in order to accommodate the new Food House and the new store in Hillsborough - and our customers are now voting with their feet.

Don't believe me? Check the sales figures for all of the stores. While Southern Village is registering a 5% increase, it is Carrboro that is suffering a double digit drop in sales.

This isn't because the competition is tougher in Carrboro, or the recession any more severe. Nor is it due to any lack of diligence on the part of our work colleagues in Carrboro. It's because we took away the tools workers needed to maintain the level of customer service they were used to giving to consumers.

Plus - and let's be honest here - the food from the Food House is still not pleasing our consumers. And their vote on that is being registered with their checkbooks!

This is especially true with Carrboro, where our customers were used to prepared food of the highest quality, because it was prepared on site, by artisans, who got to meet their clients, face-to-face, every day.

More to the point, the real reason that our books are out of balance is the huge ongoing cost of the Food House-to-Nowhere and its attendant $10 million debt.

Instead of nickel-and-diming we workers, we should be doing all that we can to reduce these enormous costs, while striving to rescue what we can from what is now being seen as nothing more than a vainglorious adventure in empire-building.

If we are to survive the difficult circumstances in which we find ourselves, we will need to do all that we can to maintain the loyalty of our workers and our consumers. Instead, senior management seems to be hell bent on doing all it can to upset us.

I'm a total sucker for 'hey, we're all in this together.' But, we're not.

There is an established process for including all employees in major decisions that impact our workplace environment. Where was the employment of this process before these recent decisions were made by senior management?

I'm guessing much the same place as all of the other vehicles by which we workers are supposed to have a voice in the affairs of our self-styled worker-consumer co-operative (can we truly go on calling it that?).

In these past couple of years, every single avenue by which we workers are entitled to input into co-op decision-making has been closed down, curtailed or rendered impotent.

I'm talking about the employee decision-making process, the open forums, the Worker-Owner Program, the Annual Co-op Employees' Meeting, and last but not least, the Elections for Worker-Owner Directors.

How on earth can we claim to have a free and fair elective system, that is supposed to put a genuine worker representative onto the Board, when that system allows managers to operate a veto over the result?

Who on earth ever heard of an elective system that includes both workers and managers anyway? Isn't it time for workers and managers to have separate representation?

The fact is that, while we are all supposed to be equal in our co-op, there are some who consider themselves to be 'more-than-equal.' Don't blame me for saying this. I'm not the one who created this 'them-and-us' situation.

And if you think I'm dancing with the facts, let me ask this: are senior managers going voluntarily to reduce their salaries, in line with the reduction we workers are having to suffer?

And when I say 'senior,' I wish to differentiate from junior managers, who are getting hit as hard as we workers.

They have all been put on fixed salaries this past year. And now, they are the ones having to make up the lost hours.

The fact is that we workers have been and will continue to be kept as far away as possible from the important financial decisions being made in our co-op. Decisions that impact our daily lives. Those decisions will continue to be made by senior management - on their own.

Which is why now, more than ever, it is of paramount importance that the Board heed the call of the Annual Meeting to set up an Owners' Committee to get a handle on the overall financial picture.

That Committee needs to be given access to all of the documentation that provided the rationale for the Food House and the Expansion - if any exists. And all of the documentation giving an accurate picture of the current financial situation.

We need to be able to determine if, in the changed economic circumstances, we still need all that we have built. And to decide what can be saved, and how we can make the financial equation work.

And we need to find a way forward that does not continue to penalize workers and consumers.

We need to be able to determine what caused the near $500,000 (or more?) over-run on the Food House and Expansion, which was the real reason the Worker-Owner Dividend was wiped out.

Let me just back up there. You will remember we were all told that the near $400,000 loss in 2008 was due to 'once-off' costs associated with Expansion and the Food House (the Monitoring Report presented to the Board talked about 'personnel') - as if this was planned.

Um...hmm. For reasons that are still not clear (and the Committee needs to find out), Expansion and the Food House ran over its budget. A lot.

The money that had been borrowed for Expansion and the Food House ran out. And without telling us what was happening, senior management then just dipped into the Operating Budget, and took out our Dividend Money to pay the difference.

And remember this, the loss of that Worker-Owner Dividend is now being used as the excuse to get rid of the Consumer-Owner Discount.

If Expansion and the building of the Food House had been undertaken by independent contractors, we would have been able to enforce some sort of penalty. As it is, the only people being penalized are we workers. And, if plans go forward, our consumers as well.

Back to the Financial Overview Committee. Once the Committee is in possession of all of the facts, it will then need to consider options as to how best to return us to financial sustainability.

I've said before, when we're talking about a $400,000 loss and a debt of $10 million, with debt repayments that balloon to $1.5 million in 2013, it's not nickel-and-diming nonsense that is going to do the trick. We will need tough decisions about major re-structuring of the co-op.

I think, among other possibilities, we may have to prepare ourselves for the Committee considering one or two of the following:

1) Selling the property on the West side of Greensboro Street. This could raise about $800,000.

2) Asking the good people of Hillsborough to take over the store there, along with the attendant debt - remember, we borrowed a large sum of money to buy the freehold.

They can still call it whatever they like. But if they want it, they need to pay for it - not we workers, with our lost hours and lost Dividend; and not our consumers, with their lost Discount.

Otherwise, we should sell the store. Or at the very least, sell the building, and get a Lease back.

That way, Hillsborough gets to keep its downtown grocery store; jobs are not put at risk; and Hillsborough gets to choose the manner in which their grocery store is saved - it's entirely up to them if they wish to keep it as a co-op.

3) Set the Food House free to be a separate Producer/Worker/Consumer co-operative. That way, it can go out into the market place and sell its wares wherever it can get the best price.

We can all continue to get our food from them. Jobs will not be lost. And it is more likely that the Food House can more quickly become financially viable - and look after its own debt and operating costs.

Nothing would be lost. It would merely be re-structured. With the debt and costs broken up into more manageable chunks. Rather than it all falling onto the shoulders of a few.

All of the various component parts could still choose to be co-operatives. That would be their choice. And we could all continue to co-operate with each other. By way of strict commercial relationship. Rather than the vague, unwieldy and rather unhappy inter-relationships we have at the moment.

With careful thought and sensitive consultation (and nothing should happen without the agreement of workers and owners), we can come up with ways to re-structure what has been created, so as to make the separate parts more sustainable, while allowing them to work together, and allowing us to save as much as we can of the original benefits - not least, peoples' jobs and their pay.

As drastic as this may seem, I would prefer that we be the ones to formulate whatever plans we need to make to save what we can. Rather than burying our heads in the sand, and waiting for someone else to come in and do it to us - in ways that we may all dislike...

*******

[Update - November 21, 2008]

A couple of further wrinkles.

First, the property on Greensboro Street is up for sale. But it's not going to realize any cash any time soon. And this is one of the major factors behind what some of us might regard as the short-sighted moves to save money by cutting operational costs.

Now, you might well ask: why on earth would something which is designed merely to reduce our outstanding debt cause so much fluster over our daily operational costs?

The answer appears to be that our plight is now so dire that the proceeds from the sale are likely to be used for shoring up operational costs, rather than paying down the debt.

You see, in a normal situation, if there's a temporary gap between income and expenditure, rather than turning the whole operation upside down (as we seem to be doing at the moment), it is much more prudent either to use some reserves or use a credit line.

The problem is (here we go again...) we don't have any reserves. We were supposed to have started them some years ago, but I'm guessing Expansion and the Food House used them up.

We don't have any more credit worth talking about, either. Why? You guessed it. We used it all up on Expansion and the Food House. And the Auditor has told us to stop borrowing money.

So. We are left paying our bills out of ready cash. And it ain't so ready at the moment. In fact, we're having problems keeping up with some of our bills.

Hence, the shift in how we're intending to use the proceeds of the Greensboro sale.

Once again, I'm saying "we," when I should be saying "senior management" - who, once again, are doing all of this without consulting the owners of the assets we're selling (namely, us).

The problem with this shift is that it will likely leave us, at the end of the year, with more liabilities than assets. This is not good. It will make our Auditor very unhappy.

Besides, I'm worried about just how close we're getting to the technical definition of insolvent, which I recall as being a situation where a company's liabilities are greater than its assets, and it is unable to meet in full all bills that are due and payable.

Once more, I am driven to say that there is a way forward, but it requires creativity and the need for some to put ego to one side.

I say the latter because we will not make any sensible progress until those in charge are prepared to ask for help. And that first of all requires that they admit they need help.

What would I suggest to improve out immediate liquidity?

1) Continue with the sale. On whatever terms. Get the cash. Ask the Auditor to sign off on some arrangement whereby we can use some part for immediate operational costs. Internal loan, whatever. Call a Pre-Board Meeting. Advertise it in the local papers. Get the support of owners and workers for this and the other moves mentioned below. Speedy action is possible, but not if we keep all of this a big secret. We have to tell people the state we're in. If we're too proud to do that, then we will go under.

2) Create a special, one-off call-for-capital. That's the proper way to get cash if you need it in a hurry. Offer every existing owner the opportunity to take out a second share, on the same terms as their first share, provided we have their money by this Christmas (or, in the case of Worker-Owners, have begun to pay their installments by Christmas). We want to be encouraging more owners to give us more money. Not finding ways to make them keep it, or take it elsewhere - by, for instance, taking away their Discount.

3) In the same vein, we want to be doing all we can to inspire our workers to work that little bit harder. We won't do it by taking away their Dividend, making them work harder for less, and offering them no opportunity to share in the decisions being taken. I would suggest that we announce that there will be no Dividend for two years. That instead, there will be a gainshare offered to every worker, with slightly more being given to Worker-Owners. The gainshare to be based on an increase in sales - from where we are now. If it is not possible to pay it from operational funds, then we should borrow it from asset sales or from the Worker-Owner Central Account. And again, we should get the consent of workers before going ahead with this idea.

Anything and everything is possible. But not if we put pride before common sense. We need to be open with the world about the trouble we are in. And we need then bluntly and loudly to ask for help.

If those in charge are too proud to admit that mistakes were made, and instead, seek to cover their tracks by making consumers, owners, and workers pay the price, while keeping them in the dark as to why, then those in charge will end up being the death of this co-op.

*******

[Update - November 23, 2008]

In the middle of the recent Board Election, a member of senior management vociferously took issue with me over my claim at the Annual Meeting that, during the Board's conversation with the Auditor, I had heard the Auditor suggest to the Board that they draw up a comprehensive plan to deal with our $10 million in debt.

The substance of that discussion with the senior manager has continued to bother me. I know that Auditors are sometimes not direct. They speak in circumspect terms. It could well be that I misunderstood what the Auditor had said.

But even if I did, are we seriously suggesting that we don't need a comprehensive plan to pay down the debt - soon? Are we seriously suggesting - as has been stated to me - that this is no business of owners, and certainly not a committee of owners?

Well, in any event, I wrote an e-mail to Jacob - as Board Chairman (with a copy to the senior manager concerned) - making what I thought was a very reasonable suggestion to attempt sensibly to clear up the whole matter.

Now, I'm beginning to wonder if I wasn't right in the first place. You see, I've still to get a response from Jacob...anyway, here's my e-mail:

"Hey Jacob,

Well, that was probably one of the most lively Worker-Owner mornings we've all seen in a while [The discussion involving the senior manager had occurred as Jacob and I were on our way to one of the Candidate Forums].

There is only one thing that troubles me, though. I am genuinely concerned at the level of debt. And more specifically, the level of debt repayments. I don't want all the gains to be endangered by a debt we can not sustain.

For that reason, in any event, I would want someone, some body immediately and comprehensively to examine the level of debt, and confirm that it is ok.

For myself, I can see no reason why it should not be the same sort of task force that we had for the Elections. But that's my input.

I also, very genuinely, believe I heard the Auditor say (and Auditors speak round-a-bout) that the debt level should be addressed, that this did not need to await the next Audit, and that there should be a comprehensive plan (of some sort).

Again, even if the Auditor had not said anything remotely like those things, I would be concerned, and as someone with experience of management consulting, I would ask the Board to get specific input from the Auditor about those very points.

Indeed, Jacob, you know that I did write in almost exactly those terms as the Audit was underway. And, to be fair to me, those questions were not answered. And, to be fair to me, [name of senior manager deleted], this is why I wrote to both Jacob and Ruffin before the Annual Meeting requesting that they address these issues at the Meeting. They did not. So, I raised them - as an Owner.

All of this is fine and dandy. We can disagree to and fro about my concerns, my expression of them, my candidacy, the vehicles I create to talk about my candidacy.

The one thing with which I have a problem is when my honesty is called into question.

So. I would like to suggest to you, Jacob, that you and the Board please find out precisely what the Auditor recommends WSM do about its debt in this next year.

I will accept what he says. And if there is no mention of 'comprehensive plan,' then I apologize. I mis-heard. But the mis-hearing was genuine.

Best,
Geoff"

*******

[Update - December 11, 2008]

All workers at The Weave today received a 4-page Blue Document from Ruffin Slater, General Manager, asking us all to work more for less, to help balance the books. What follows is based on the response I sent to my department manager, with a copy to Ruffin, other senior managers, and the Board:

I regard the Blue Document in my mailslot as an invitation. A request. Asking me to work yet harder, for even less.

In light of the fact that:

* No incentive is being offered to me in return.

* I have not been consulted on this alleged Turnaround Plan, either as a worker-owner, nor under the existing process for inviting feedback from employees on decisions that affect the workplace.

* Indeed, every single avenue that used to exist to allow workers and worker-owners meaningful input has been either disbanded or put in abeyance.

* It is now clear that the recent Board Election was an undemocratic process, beset with manipulation and intimidation - including of me personally.

* The Blue Document itself is riddled with inaccuracies and distortions. For example, the drop in sales in Carrboro makes no mention on the effect of customers of having their store eviscerated, the continuing poor quality of food from the Food House, nor the movement of sales to outside stores like Southern Season to the Food House figures.

* The alleged Turnaround Plan provides us with no hard and fast figures, about which we can make meaningful judgments.

* We continue to finance a capital project out of operating cash, when we ought to be considering the possibility that we are in over our heads.

* We are continuing to borrow, when the Annual Report said there was no more room to borrow.

* The Blue Document singularly fails to take responsibility for mistakes of the past - such as the enormous overrun on the Food House.

* The Blue Document doesn't mention the fact that the big hole in our finances is occasioned by the cost of the Food House and its attendant debt. Forget talk about recession and competition. We became over-extended the minute we (secretly) borrowed $10 million, on the back of a profit margin of 1% - $300,000. And we are in a hole because we are over-extended.

* The Blue Document offers no action with respect to lowering that cost and debt (where the repayments rise each year, to $1.5 million in 2013).

* There are no suggestions for making other sensible savings, such as suspending the Mystery Shopper Program, or suspending charitable donations. Indeed, it is hard not to draw the conclusion that this Document is less about saving our co-op or our payroll, and more about saving someone's face. And we are not all in this together. I see no mention in the Blue Document of senior managers or administration taking a 10% cut in their wages over 2008 - as I and my work colleagues have done in this past month.

In light of all of this, I respectfully decline the invitation.

When this co-op is prepared to hold a full employees' co-op meeting, where full and accurate figures are presented, senior managers may be quizzed, some sort of incentive is offered for us working harder for less, and some sort of process is allowed where the body of workers approve or disapprove of this alleged Turnaround Plan, then I will reconsider.

In the meantime, I will continue to work today and tomorrow just exactly as I did yesterday, no more, no less - provided I get paid the same.

This is a legitimate protest, which should be respectfully observed in this co-op. It pains me to do this. But I am not the one being destructive. I am merely protecting myself from the destructive behavior of others. I am forced to take this action because, frankly, we are no longer behaving as any kind of workers' co-operative.

In the event that any action is taken against me for this legitimate protest, I will consider that retaliation. After all, I can hardly be disciplined for saying I won't do more for less, without something in return.

Respectfully,
Geoff

-------------------------------------------------------------------------

"All financial innovation involves … the creation of debt secured in greater or lesser adequacy by real assets,” wrote the economist John Kenneth Galbraith in 1993. And “all crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.”

Yes We Can @ The Weave

Calling all workers @ The Weave!

Yes, we can make things different in our co-op. We can make The Weave a better co-op and a stronger business.

And yes, we can make a difference with this year’s Election for a Worker-Owner Director. The numbers are there.

A number of workers, who’ve spoken to me as I’ve traveled around the WSM locations, have said to me, what’s the point? We can’t make things different. No-one listens to us.

Wrong. We can make things different. We can make them better in our co-op.

It just needs the right Worker-Owner Director, who represents your views, and knows how to get the Board to pay attention.

Others of you have said, what’s the point? There aren’t enough of us to make any difference with this Election.

Wrong again. We have the numbers to make a difference.

We have a total of 92 workers registered to vote as Worker-Owners. Of those, some 40 Worker-Owners did not vote in the Election last year. If they vote this year, we can make a difference.

We have some 200 workers overall in WSM. That means 108 of you have not registered to become Worker-Owners, so that you can vote.

You can still register before October 25 (this coming Saturday), and you’ll be eligible to vote in this Election.

Speak to your Manager, or to Jason or Linda in Marketing, about registering as a Worker-Owner, and getting your secret ballot.

And here’s the thing. A whole bunch of you joined the co-op in April and May of this year, in the two new Hillsborough locations.

That means you just became eligible to become Worker-Owners. Once you have worked with WSM for 6 months, you are eligible.

So, check with your Manager. And register as a Worker-Owner before October 25.

If there were 108 more workers voting in this Election, we could all make a difference.

So, do what you have to do to vote in the Presidential Election. And then, pay the same amount of attention to helping to shape the immediate environment in which you work.

You have the power to make our co-op whatever it is you want it to be. Don’t give that power to someone else.

*******

If you’re still in doubt, come along to one of the Candidate Forums Jacob and I will be attending around Weaver Street this week:

A separate Forum will be held in each of the Weaver units. Managers have agreed to make it possible for Workers (not just Worker-Owners) to attend. The dates and times are as follows:

The Food House Break Room (also for everyone in the Administration Offices)
Tuesday, October 21, 10:30am-11:30am

Hillsborough Store Break Room
Tuesday, October 21, 12:00pm (noon)-1:00pm

Carrboro Store Break Room (also for our fellow work-mates at Panzanella)
Thursday, October 23, 11:00am-12:00pm (noon)

Southern Village Store Break Room
Thursday, October 23, 12:30pm-1:30pm

Don't fret if you're not free to attend the Forum in your unit. You can attend any Forum you choose. And maybe you'd like to hold off voting until you've had a chance to chat with your Candidates?

Finding The Time @ The Weave

[I wrote the first draft of this next post for myself back in July, before the Weaver Street kitchen staff moved to the new Food House. But it seems appropriate now, too...

Um. As to the photo. That would be Will Aumiller, brother of Lee Aumiller, who seems to be taking too literally my desire to want to give something back to The Weave...best that no more be said about that... ]

I just had me a moment. It's ones like this that take me away from my usual self as the fun-loving jokester, whom everyone knows in Southern Village; the guy with the silly grin, and a wit that makes the gang from Monty Python look like intellectuals.

And transforms me into the passionate advocate, that the rest of WSM recognize as being the 'overwhelming' dude, who just will not shut up! Ok, maybe I over-state...maybe...I mean, I am passionate...!

I couldn't find the light switches for the cafe in Carrboro. I stuck my head in the kitchen and a nice Mexican and a really happy Asian guy tried to show me where they were.

Well. I say tried. None of us understood each other. But we got there. And all the while, we were in fits of laughter.

And, in that moment, I got it. I got The Weave. At least, as it is for we workers. As we should be - as a co-op.

We are a microcosm of America's welcoming melting pot. Except we don't melt any more. We're too 'busy.' And we don't welcome any more. We issue guidelines.

Forget 70 page strategy documents. And Task Forces. And John Carver. And philosophy. And Rochdale. Forget me. My Blog. And my Facebook page. Forget the Board. My Candidacy. And any Elections at all.

What being a co-op about is finding the time.

Finding the time to know our fellow workers. Finding the time to get to know our customers. Finding the time to buy the produce that is truly authentic. Finding the time to determine a way to transport food from the Food House other than in plastic bags which do not biodegrade.

And finding the time to work out properly what the Mexican and the Asian's names were: believe me I tried; but the machinery was too loud - and I'm pretty sure they will always know me as Geeerrrougghhh!!

Somewhere along the line, those in charge at The Weave have allowed themselves to become too 'busy' to find the time.

They ought to have found the time properly to ask workers and consumers if they really wanted change, and if so, in exactly what form.

They can still find the time to ask us how best we can implement and communicate the changes already underway.

And they should make sure they find the time to ask us how we would like them now to refurbish our Carrboro store - the foundation store of The Weave.

And I don't just mean the physical changes. They can and should find the time to make sure that our customers and our workers are happy with the changes that are made to process, systems and personnel.

In particular, they should find the time to choose managers who honor co-operative values and customer service above impersonal, 'conventional' management styles.

I think I've made a little progress with my advocacy inside WSM. And my happiest moments, in that regard, have been where I have been able to create time for fellow workers and consumers to ask the powers-that-be to pay a little more attention to them.

I helped to open up the 2007 Annual Co-op Employees' Meeting last year to a half-hour question-and-answer session.

I badgered the Board to set up the Elections Task Force at the beginning of 2008, so that a wonderful group of dedicated workers and consumers could then help to reform our Board Election System.

As a consequence of that Task Force, we have an Election this year that is totally anonymous. And one that is in Spanish, too!

Management wanted to leave it on the basis that those of our fellow workers who have Spanish as their first or only language could ask for a Spanish version of all of the Election literature.

Bless their hearts. I know they're busy. We're all busy. But, if they had chosen to be less busy for a moment, if they had found the time, they would have realized (because we are all well-meaning people) that, in the countries from which many of these workers emigrated, it is sometimes dangerous to put your hand up and ask questions in an Election. We should be making it easy for them.

Well. Fate has a way of coming back and stinging well-wishers in the ass! As part of my effort to persuade management that it really wouldn't take that much time to translate all of the Election literature into Spanish, I sent them a preliminary copy of my Candidate Profile - in Google Spanish!

And yes, there was a hiccup. No-one's fault. These thing happen. The Google Spanish translation (which was, of course, jibberish) ended up in the first version of my Profile, splattered all over Weaver Street - rather than the 'proper' translation!

Ruffin and Linda kindly spent the best part of a day getting all of the Election literature and displays completely reprinted, repasted and redelivered to all of your mailboxes. And you'll be seeing an explanatory Erratum in this week's Market Messenger. You gotta laugh...!

So, 'finding the time' can have its own pitfalls. But that does not mean that the concept is not right. Like when I persuaded our Board of Directors to find the time to have a 10 minute question-and-answer session at the beginning of each Board Meeting.

One of my mates said: well, 10 minutes isn't long enough to take them to task for...and I stopped that person.

The point wasn't to allow someone (er...like me!) to make a 20 minute strategic statement. The point was to encourage one part of the power structure just to find the time. To pause. To take a deep breath. And to look back at the workers and consumers and say, hey, we acknowledge you.

Even if my new Mexican and Asian friends want to say no more than, 'thank you, it's really great to be here.' The Board, we, The Weave, found the time to say 'thank you' in return. That's it. It's no more complicated than that.

And I don’t mention all of this to bang my own drum. I do it to make a point – that should benefit all of us.

Namely, when all the steam, the fire, the complaints, the laughter, the joy, the sadness, the 'overwhelming' that is our co-op is said and done. When all that is put to one side, what we are as a co-op - or what we should be - is about finding the time.

Who Moved My Spanish...?

Yikes. Ouch. And blimey, even. Who moved the Spanish translation of my Election Candidate Information?

The one appearing in all of the official Weaver blurb is not the one I submitted. Which you can find two posts along, in this blog.

The irony is that I was the person who requested that a Spanish version of all Election Information be provided for all of our work colleagues, for whom Spanish is their first or only language.

Is this the reward for my suggestion? Maybe I should have kept my mouth shut? Hang on. Isn’t that becoming kind of the norm around here? Oops. Hush my mouth…

I mean, Jacob’s Candidate Information reads just fine. In Spanish. Maybe a little bland – bless his heart. I mean, he doesn’t say anything about how and why, as Board Chair, he allowed us to get where we are at the moment. Like, $10 million in debt. Oops. Hush my mouth, again…

And the English version of mine is ok. But the official Weaver Spanish translation?

Look, once you manage to wipe away the tears of mirth, it sounds like I scramble language like I scramble eggs. Less like I come from Southern Village. And more like I’ve become the village idiot.

It makes it look like I can’t be trusted to chew gum and walk at the same time, let alone represent you on the Board of a $21 million turnover co-op. Maybe, that was…? No. Never. Hush my mouth, all over again…

Well. My sincere apologies to all of you. You shouldn’t have to read something like this. Unless it comes from the mouth of Tina Fey or Stephen Colbert. Boom, boom. Maybe it escaped from a Monty Python skit?

I’ve asked the powers that be to do…something?

In the meantime, this was not the post I wanted you to see first when you came onto this blog. That’s the next one: “Something Completely Different?” Can I prevail on you to take a moment to read that one also? I think it’s important.

If you only read Spanish, there’s a translation icon at the top of this blog. It might not be perfect. But heck. Can it do a worse job than Weaver? Oops. There I go again. Grab the soap. Open mouth…

All of which said, this is still an important Board Election. It goes to the very heart of what we want our co-op to be. So, please cast a vote. Remember though, you have to register as a Worker-Owner first. And you have to do that before October 25.

Other than that. Hmm. Yes. Gosh. Well. What a strange year it’s been at The Weave. Yes. Hmm. Hello. Maybe, it really is time for something completely different…?

Something Completely Different?

[Even by my standards, this is a long post! Perhaps, a tad repetitive. I don't apologize.

The challenges facing Weaver Street are intense and complex. There are important nuances to the 2008 Election for a Worker-Owner Director. And there are significant, if respectful, differences between the two Candidates.

I want to do proper justice to all of this. So, please bear with me. Take a coffee break in the middle, if you like! I'll even come around and do a half-time show, complete with 'wardrobe malfunction'!

In the meantime, I've made it easier by breaking it down into three sections. The first covers the general points. The second goes into more detail about the Board's responsibility to we Worker-Owners. And the third deals with actually making The Decision, including information about the Candidate Forums.]

Don't think of the 2008 Election for a Worker-Owner Board Director as a popularity contest; nor as a contest between stores and locations - [Espanol].

It's not. In reality, it's a Referendum. Nothing to do with personalities, or which location we come from. Quite simply a Referendum on the following question:

'Do you think that the current Board of Directors, with Jacob as its Chair, is protecting our interests as Worker-Owners - whichever location we come from?'

Now, is it fair for me to say that? Well, the fact is that Jacob has been Chair of the Board these past three years. And the primary responsibility of the Board is to protect the interests of its Owners - including we Worker-Owners.

That said, this Board Election is not about personalities. It's not about locations. It's about issues. And who you think can best represent you - and your store, or location - on those issues.

I've worked with Jacob. I like him. We're both nice guys. We both care. We both want to do the best we can for The Weave. That much is clear from the Candidate Information you received in your mailbox, and which is up on the Weaver web-site.

What is not clear from that Information is that Jacob and I disagree fundamentally (but respectfully) on the important issues facing each and every unit within Weaver Street Market at the moment - and Weaver Street as a whole.

And those issues - the truly overwhelming ones - are the same for every unit and location in WSM.

Jacob and I disagree fundamentally on the state of our co-op as it is. We disagree about where we should be going. And we disagree about how we should be getting there.

Simply put, Jacob thinks we're on the right path, that everything's pretty much ok, and that he and the Board are doing a good job of looking after the interests of Workers and Worker-Owners - in all of the different units and locations.

Now, I believe we're a fabulous co-op, with 200 Workers and 100 Worker-Owners ready to pitch in at a moment's notice to ensure we do not fail. But I also think that The Weave has lost its way a bit. And that is the responsibility of our current Board of Directors. They took their eye off the ball. And that affects every unit and location in WSM, exactly the same.

Our Board has allowed Weaver Street to become over-extended and over-indebted heading into what promises to be a severe recession. No-one blames the Board for not forecasting the recession - heck, no-one else did. But the Board now needs to undertake some creative financial alterations so that WSM can return to financial security and stability, and so that we can once again feel comfortable calling The Weave a fully 'authentic' and a fully 'sustainable' co-op.

The problem is that, while I know the current Board truly means well, I simply do not think that, based on the evidence of their recent decisions and discussions, they possess the skill sets necessary both to recognize the complicated challenges facing Weaver Street, and then to come up with the necessary creative solutions - not on their own. And I honestly believe that is why we find ourselves where we are at the moment.

I also believe that, with my former experience in the profit and non-profit corporate world, I can bring a perspective to the Board which it currently lacks, and which will help us all steer a safe course through the immediate challenging times. And which will lead us back to a Board which fully protects the interests of its Workers and its Worker-Owners - in each and every one of our units, fully and equally.

And that's what this Worker-Owner Board Election is about. A clear-cut choice between two fundamentally different approaches. Summed up by your answer to the question: Do you think that the current WSM Board of Directors, with Jacob as its Chair, is protecting our interests as Worker-Owners - whichever location we come from?

*******

[Right. That wasn't too bad. Now for the detail about whether or not the Board has been looking after our interests.

Gets a bit repetitive here. Hmm. What can I say? I feel passionately about the Board looking after us, and making The Weave the very best co-op it can be. And the strongest business.

Er. Is that a negative...?]

What do I mean by 'protecting our interests'? Well, try out your answers to the following questions:

Do you think our interests and those of our fellow Worker-Owners were being protected when the Board allowed our Dividend to be wiped out this year?

And make no mistake, our Board allowed it. They took a decision, backed by Jacob, in the middle of this year to remove the Board Policy requiring a profit of 1%. It was that Policy that protected our Dividend. And by removing it, the Board allowed a loss to be incurred.

Do you think our interests and those of our fellow Worker-Owners and Workers were being protected when the Board did indeed allow that loss - at some $400,000?

And our Board did allow it. They did not do a thorough enough job of monitoring what was going on, so as to prevent it.

I have to be honest - not negative, just straight - I'm not sure if they missed what was happening, or whether they simply didn't understand what they were seeing.

It's no shame to say you don't understand every financial detail of a $21 million turnover co-op - provided you're prepared to admit you could do with some help.

I know we're told that the loss was caused by one-off set-up costs occasioned by Expansion. But in all my years as a management consultant, I have never encountered a situation where such costs were included in operational expenditure, rather than capital depreciation. And I do understand the difference.

Plus, nowhere have we been offered a detailed breakdown of these set-up costs. And our Board has still not asked for one. All we are told is that there will be no such costs next year, and in the future.

Again, my years of experience as a management consultant tell me that there will be continuing extra costs associated with Expansion, that were not there before Expansion, and which will not be off-set by an increase in earnings - not in the near future; not in this recession.

So, without wishing to be the harbinger of doom, I see no reason why the loss from this year will not be repeated in the immediate years to come - not without some financial alterations.

And I would suggest that we need a different Board to bring about those financial alterations, in a way that retains the benefits of Expansion, and in a manner that is not detrimental to we Workers and Worker-Owners.

Do you think our interests and those of our fellow Worker-Owners and Workers were being protected when the Board allowed the future of our co-op to be mortgaged for $10 million?

Our Board personally signed off on all of that debt. Can we honestly say we're building a co-op that will last when it's built on debt? How is that 'sustainable'?

How can we hope to 'sustain' huge debt repayments that will rise to $800,000 in 2011 and $1.5 million in 2012?

Again, I know that we are told that the debt is occasioned by the plans for Expansion, which plans are supposed to secure our future. But tell me, how are we securing our future with a debt we can not afford to repay? Isn't that, in fact, mortgaging our future, and making us unsustainable?

Did our Board request that those presenting them with the plans for Expansion accompany them with detailed forecasts as to cost and debt? If not, how was this protecting our interests and those of our fellow Worker-Owners and Workers?

Do you think our interests and those of our fellow Worker-Owners and Workers were being protected when those plans for Expansion were approved by the Board without the Board even seeking our permission - with all of the consequences that followed?

Do you think that is how the Board of a genuinely 'authentic' and democratic co-op should behave, if it is truly looking out for the interests of its Worker-Owners and its Workers? Shouldn't we be more of a Listening Co-op?

Now, I say this having spoken with many of you who supported Expansion and the Food House. It is not the decisions themselves I believe we should be questioning, but the manner in which they are being made.

Think about it. We don't worry about those big decisions with which we agree. We don't query how they were made. But when a big decision is about to be made with which we don't agree, we want to know how we, as Worker-Owners and Workers, can have meaningful input.

The answer at the moment is we can't. So, try the question again. Whether or not you agreed with Expansion, don't you think we Worker-Owners and Workers should have been allowed to give our approval before the plans went ahead? Bearing in mind we are now paying the cost, with a lost Dividend, and huge repayments of interest?

I have already made several proposals for improving the internal mechanisms for consulting Workers and Worker-Owners. For making us more of a Listening Co-op. Not least an Online Forum (two Consumer-Owners and I are currently putting together a test one). But it requires the right Board of Directors to implement these proposals.

I do not necessarily disagree that the concept of Expansion was an acceptable answer to several problems. For example, the cramped conditions suffered by our food production colleagues, when they struggled in Carrboro. And the lack of suitable equipment for those same work colleagues.

I have seen the Food House and the Administration Offices. I am delighted for those of my colleagues and friends who are themselves delighted with their new facilities. With their honest belief that those new facilities allow them better to support the rest of us and all of our consumers.

But the fact is that WSM's Auditor is sufficiently concerned with their cost (that $10 million), and with the huge, untenable repayments, that he has 'suggested' that WSM's Board now come up with an immediate and comprehensive plan to deal significantly with that debt. I know Auditors. You do not lightly ignore or 're-interpret' their 'suggestions.'

Do you think it is in our interest and those of our fellow Worker-Owners and Workers to depend on the Board, that allowed us to get where we are, now to come up with the way out?

Don't you think it might be more sensible to have a newly-elected Board, one which we feel comfortable has the skill sets and experience necessary to protect our future?

A different Board, one that we can trust to take a completely fresh look at the situation, and come up with a solution that our co-op can afford. That we Worker-Owners can afford. That returns our co-op to profitability. That gives us back our Dividend. While at the same time protecting the interests of all of the Workers and Worker-Owners involved.

In a co-operative, no solution is any kind of acceptable solution if it ignores our Workers and Owners. It is people, not buildings nor inventory nor balance sheets nor awards, but people who are the core value of profit. And we should never forget that in our co-operative.

My own experience tells me that Weaver Street is more than capable of pulling through the immediate challenges.

I hate to borrow a phrase that has been totally corrupted at the national level, but the fundamentals of Weaver Street are strong.

We have $14 million in assets. Our debt burden, although way too large, at a total of $12 million, is covered by our assets.

The problem is the debt repayments. We need a Board that has the skill sets and experience necessary to understand how to come up expeditiously with a comprehensive plan to restructure that debt.

If you are in any doubt whether or not the current Board has those necessary skill sets and experience, then ask them how they intend to deal with the debt. Ask them at the Annual Meeting on October 19 (details on the Weaver web-site), or ask them in the various Candidate Forums (details later on in this post).

Personally, I believe it is possible to resolve the debt situation with some creative re-structuring. And most important, if done by the right Board, it can be done in a way that retains all the benefits of Expansion and the Food House, while dramatically reducing the price all we Workers and Worker-Owners - including all those in the Food House, the Administration Offices and the Hillsborough store - are having to pay.

But, here's the bottom line: it must be done in a way that has the full support of all of the Workers and Worker-Owners involved. Never again in this co-op should major decisions be taken, that have such a dramatic affect on we Workers and Worker-Owners, without the full and express permission of we Workers and Worker-Owners. We need to be a truly Listening Co-op.

And again, if you are in any doubt whether or not our current Board will seek your approval, when they didn't seek it last time around, then ask them. All I can say is that any Board to which I am elected will ask your permission first.

For example, I will insist that those working in the Carrboro store will have final say on any refurbishment changes that may be made to the Carrboro store. I will insist that any new developments with the Hillsborough store and the Food House will only proceed if they have the full support of all those working there. Will the current Board and its Chair make you the same pledge?

I know all this consultation takes time, and may be viewed by some as an irritating intrusion on their normal decision-making processes. But, I feel that, in a co-op, we should be able to find the time, and we should always put people first.

Now, if after all this explanation, you are still happy with where we are and where we are going. If you genuinely believe that the Board which got us where we are is the same Board that can get us out of that situation. If you truly believe that they possess all of the necessary skill sets and experience. And that they will protect the future interests of WSM as a whole - and of your location. If you believe all of that. Then stick with the Board we have. And I would respectfully suggest that you will continue to get more of what's been going wrong. More of the same.

If, however, you believe there is room for something different. If you believe there is room for new skills sets on the Board. And if you believe that something different - those new skill sets - can make all of Weaver Street a better co-op and a stronger business (with each of the individual units and locations becoming better and stronger in their own individual ways), then maybe you should think about choosing something different?

That's what this Board Election is about. Not personalities. Not individual units and locations. Isolated and inward-looking. But the co-op as a whole. Newly empowered. Acting as one. Ready to overcome all challenges.

*******

[Ok. Now's about the time you might want a back-rub and a cup of hot chocolate - or maybe something stronger. But complex situations require complex thoughts and processes.

Onto the last section - where I try to set out the factors that might help you make The Big Decision...or not...]Now it's very easy just to say that. But I know it's a lot more difficult to keep it in mind when you're sat there with your pen poised over the Ballot Paper.

You may well be thinking: geez, why does anyone have to 'lose'? Jacob has qualities. Geoff does, too. Jacob wants to go on serving. And Geoff thinks he has something to add. What to do?

All I can suggest is this: same point, from a different angle. Jacob and I are big boys now. We're grown-up. We knew when we submitted our names that one of us was going to lose. That was our choice, not yours. You have no reason to feel guilt.

Focus on the one thing that is yours: your choice about where you want Weaver Street to go. Do you think everything is ok? Or do you think we need something a tad different?

Make your choice an honest one, based on an honest appraisal of where we are. And I can promise you that neither Jacob nor I will be offended by your choice.

We have an honest difference of opinion. We welcome your verdict. It's not about us. It's about you. It's that simple. Honest!

Another point I want to clear up. One or two of you, when speaking with me, have wondered at the fact that all of our Worker-Owner Directors come from the Carrboro store, when we now have five locations, spread over three towns.

[We are entitled to a total of two Worker-Owner Directors on the Board, each serving two-year terms, elected in staggered years: Lori Washington (Carrboro: Front End) was elected last year, and will serve until the end of 2009; and Jacob (Carrboro: Kitchen) is standing this year.]

I say: absolutely and totally irrelevant. If you genuinely believe that Jacob represents you best on all of the issues, then you vote for him regardless of which unit he comes from. Same goes for me.

Jacob and I are both of us pledged to represent and act for all Worker-Owners equally. This is not some power-play between locations. It's about what's best for all Worker-Owners in The Weave. Jacob and I are agreed on that absolutely. Ok?

And on that last point, when you do finally make your choice, remember that you are choosing for all the Workers around you, too. Your colleagues. Your friends. Both at your own location, and in all the other locations. We are one co-op.

Now, if you're not sure about the answer to this 'Referendum,' then you have the opportunity to ask questions of Jacob and me at a series of Candidate Forums.

To ask Jacob why he thinks we're on the right course. And to ask me what sort of different and more successful path I think we could follow. [By the way, I'm also happy for you to write to me at: geoffgilson@hotmail.com.]

A separate Forum will be held in each of the Weaver units. Managers have agreed to make it possible for Workers (not just Worker-Owners) to attend. The dates and times are as follows:

The Food House Break Room (also for everyone in the Administration Offices)
Tuesday, October 21, 10:30am-11:30am

Hillsborough Store Break Room
Tuesday, October 21, 12:00pm (noon)-1:00pm

Carrboro Store Break Room (also for our fellow work-mates at Panzanella)
Thursday, October 23, 11:00am-12:00pm (noon)

Southern Village Store Break Room
Thursday, October 23, 12:30pm-1:30pm

Don't fret if you're not free to attend the Forum in your unit. You can attend any Forum you choose. And maybe you'd like to hold off voting until you've had a chance to chat with your Candidates?

Voting begins on October 6. The end-point for voting is Sunday, November 2, @ 9.00pm.

Every Worker who has been with Weaver Street for at least 6 months has the opportunity to vote in this Board Election. But first, you must become a Worker-Owner.

You can become a Worker-Owner up to October 25, and still take part in this year's Board Election.

If you want to vote, speak with your Manager, or speak with Linda or Jason in Marketing. They will tell you how to become a Worker-Owner, and how to vote. Or e-mail board@weaverstreetmarket.coop.

At the end of the day, this Board Election is about you. You have the power to choose whatever future you want for The Weave.

And I'm sure there's one thing that Jacob and I do agree upon. That is, please vote! Whichever way you vote, please vote!

You have an opportunity that many people in the world do not possess, so please make use of it. And thank you for bearing with me...all the way to the end!

[I want to take this opportunity sincerely to thank Eliza, Ruffin, Linda, David, Diane, Mickey-Jo and Emily (the WSM Elections Oversight Committee), everyone in WSM Marketing, and the Managers of all the WSM units, for all the endless hours they have put in, along with all the creative brainstorming, and their co-operative spirit, to make this Worker-Owner Election happen in such an open and inclusive fashion. This is my personal spiff to you all!]

A Worker/Owner Program

The most important assets with which Weaver Street Market Co-operative is blessed are its Workers and its Owners (both Consumer and Worker).

As we begin the process of coming up with a comprehensive plan or program (as suggested by our Auditor) to address our Food House-created debt of $10 million, it will be essential for us to find creative ways in which fully to enroll those 'assets' in fashioning and then implementing that program.

Such a people-driven program might well look something like this:

1) Balance the Books

Leaving aside all the jargon about debt-equity ratio and balloon, interest-only loans, the bottom line is that WSM needs to reduce its debt over the next year or two by about $4 million.

To be blunt, anyone telling you differently simply doesn't understand the implications of over-indebtedness. If you want to know where denial leads, take a good long look at Wall Street and the Stock Market.

Such a reduction in debt will not be accomplished by tinkering with minor property or asset sales. Nor by freezing hiring. Nor by messing with the Consumer-Owner discount.

It will necessitate fundamental re-structuring.

One shouldn't try to achieve that overnight. I would suggest the Board make the first task of a new Audit Committee to come up with options over the next 6 months, and report back to a Special General Meeting of Owners, say, in about April 2009.

In fact, the Annual Meeting of WSM Owners supported that very suggestion when I put it to a vote at the Meeting on October 19.

Thet Audit Committee should have an equal number of Board members, Owners and experts from our local community.

Next, the Board should use its Retreat in January 2009 to brainstorm with management ways of eliminating the $400,000 loss we suffered in 2008.

For sure, we need to find savings on expenditure. But to try to do so (as we are at the moment) by reducing staff numbers is neither people-driven, nor is it productive.

Like it or not, we are in the middle of an Expansion project. Unless you want the project to fail - and produce even more grief - you have to see the Expansion through. That means you can't be contracting staff while you're expanding the workload.

All that does is over-work staff, cause further disenchantment, and complicate the implementation of the supposed benefits of the Food House - such as the new vaccuum-packaged meat offerings. This is Business 101.

We are in the first stages of what is likely to be a severe recession. Sales will not pick up simply because we wish it.Our Workers will be at the cutting edge of any sales improvement. And the Board just wiped out our Worker-Owner Dividend.

As much as we Workers all love The Weave, there ain't too many of us who are going to work harder and smile more often, for less money.

I'm not sure that any sensibly cautious businessman would blindly guarantee that a Worker-Owner Dividend will be paid in 2009. Plus, we need all Workers on board with this program, not just Worker-Owners.

I would, therefore, suggest that, as a one-off incentive, we offer all Workers some form of performance-generated bonus at the end of 2009.

Weaver Street used to operate such a bonus. It was called a 'gainshare.' So, the logistics are doable. And 'doable' is what we're about at the moment.

All of this is necessary if we want to regularize our co-op's finances and have any hope of restoring the Worker-Owner Dividend in the foreseeable future.

Now, there are many Workers who were dubious about becoming Worker-Owners, even before the Dividend was wiped out.

Their concerns need to be addressed. The continuing financial health of the co-op depends in large part on encouraging we Workers to become Worker-Owners.

The co-op gains an important source of capital. And Workers gain a voice in the running of their co-op - and a few extra dollars in their pocket, from time to time.

The problem is that many Workers aren't sure what happens to the money they contribute under the Worker-Owner Scheme.

The solution to overcoming Workers' concerns is simple: have the co-op's the Auditor conduct a separate audit of Worker-Owner contributions, and attach his findings to his next Annual Report.

The co-op's own Financial Department could then produce a Statement for each Worker-Owner, to be appended to their Annual Dividend Statement, setting out exactly how much that Worker-Owner has in their own personal central Worker-Owner account - together with a much simpler explanation of how that amount has been calculated.

One final point: never again should the money that is held in each Worker-Owner's central account, along with any 'pooled' Worker-Owner money, ever be used by management or the Board, without the express permission (and that means a vote) of a majority of the Worker-Owners in the co-op.

2) Balance the Board

Management and staff are hired to run the various activities of our co-op. They are accountable, through the General Manager, to the Board. The Board is then accountable to Owners.

That is the equation which is supposed to make our grocery co-op Owner-driven. It is based upon the John Carver Policy Governance Model, to which our co-op subscribes.

By turning the equation the other way round, we see how the equation is supposed to work in practice.

The Board listens to what Owners want. The Board then fashions Policies that set the parameters for management and staff. The Board follows up by monitoring management to ensure they are abiding by the Owner-driven Policies.

Unfortunately, an imbalance has developed within our co-op. As a consequence, the Board has become management-driven, not Owner-driven. The Board listens to management, rather than listening to Owners. And that is why we are where we are at the moment.

The balance now needs to be restored if any comprehensive, people-driven 'rescue' program is going to succeed.

Balance can be restored by first restoring the influence of Owners over management on our Board, and secondly, by creating vehicles that allow more regular input from Owners to the Board (which I deal with in (3)).

The single most effective measure for restoring the influence of Owners on the Board is to institute a Policy change which says that only elected Owner-Directors may vote on Board matters.

I welocme as much expert input to the Board as possible, whether it comes from management, outside experts, wherever. But, if our co-op is truly to be Owner-driven, then only elected Owners should vote on the Board.

We have over 200 Workers in our co-op. Some 100 of them are Worker-Owners. We have only one class of Worker-Ownership. Which means that the General Manager and the dishwasher vote for the same Worker-Owner Directors on the Board.

As utopian as this arrangement may seem, reality suggests that in a mature, $21 million turnover corporation, the dishwasher and the General Manager are not going to have the same agenda. It's time for them to have separate representation.

Remember, management already have their own 'vote' in the decision-making process. They have their own management meetings. Plus, they have their General Manager sitting on the Board.

I think that, with Expansion, we will be looking at enlarging membership of the Board, in any event. What I would suggest is perhaps one elected Management-Owner Director (plus the General Manager = 2) and two elected Worker-Owner Directors.

What's more, I think that, in a co-operative, all Workers should be able to vote for their representatives. Worker-Ownership costs $500. You shouldn't have to pay to vote.

There is nothing radical in these suggestions. They are merely what is required to bring the functioning of our Board back in line with the John Carver Policy Governance model.

Indeed, there is general recognition in the national grocery co-operative movement that more needs to be done to involve Owners in co-operative affairs, in order to maintain their loyalty - and their spending dollars! - to help offset the challenges posed by increased competition and the recession.

This approach is finding expression in concepts which carry the name "Ownership Culture" and "Economic Linkage." But they are essentially just John Carver updated.

3) Balance the Input

For input to be meaningful - as it should be in a co-operative - that input needs to be two-way.

That means that The Weave should have vehicles which allow for a conversation between those making the decisons and those affected by them, whether Worker or Owner, before the important decisons are made, and demonstrably taking into account the input offered.

There used to be a regular Worker-Owner Discussion Program. That should be revived. And one should be created for Consumer-Owners.

An Online Forum is being designed by two Consumer-Owners, Jamie Bort and Sarah Kahn. That forum should be adopted by WSM, and management and the Board 'encouraged' to take part and respond.

Within the business-side of the co-op itself, it might be helpful to have more Department meetings, where Workers actually get to make decisions alongside their management.

Again, this is not all that radical. We're not talking socialism here. We're talking about encouraging Workers to have more incentive to implement decisons, by involving them more in the making of those decisions.

And we should find creative ways to restore the series of Worker Open Forums. Perhaps by allowing Workers to choose the subjects and select the managers who will attend and respond, and maybe by including Workers as facilitators of those Forums?

Weaver Street Market has had its fair share of high points and low spots in its 20 year history. Only time will tell how we come to view where we are at the moment.

I remain the eternal optimist. I believe we will pull through, and we'll end up looking back on this moment in our history as one of the most inspiring of the next 20 years.

But, for that to happen, we need to face up to where we are, we need to find bold and creative solutions to the challenges facing us, we need to encourage new faces to step forward to help, and we need to enroll all of our existing 'faces' in the next steps that will make The Weave a better co-op and a stronger business.

Economic Linkage

There is going to be much talk in Weaver Street in 2009 about "Economic Linkage" and "Ownership Culture." The ambition is to improve the loyalty of our Owners - both Consumer and Worker.

The way it works is that we make the return Owners receive from their investment in us dependent on our performance, and in return for that, we offer Owners a greater say in our performance.

I came across these concepts as I was researching for my involvement in the WSM Elections Task Force at the beginning of 2008. I had an exchange of correspondence with Brett Fairbairn, the academic theorist behind the concepts. I set out one of those e-mails below.

Our exchange formed the basis for the introduction to the strategy document I submitted to the Task Force.

Peg Nolan, whom many of you will know from Weaver Street, has written two articles for The Co-operative Grocer, commenting on Fairbairn's original treatise: Three Strategic Concepts for the Guidance of Co-operatives: Linkage, Transparency, and Cognition.

I link to those articles here and here.

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Dear Geoff,

Thanks for writing -- these are interesting issues, and ones that periodically surface in many co-ops. Unfortunately I have not had a lot of time to develop the ideas I presented at CCMA any further, because I have become quite involved in administrative leadership at my university. Two things that might be of use, both I believe available as downloads from the Centre for the Study of Co-operatives website, are my booklet on 'Linkage, Transparency, and Cognition' which is intended to put issues of this kind into a broad perspective, and my 'Self-Assessment of Democracy in Organizations,' which is a kind of analytical tool for thinking about ways in which organizations are or can be democratic.

The topic of relations between managers, on one hand, and boards/volunteers/members is a huge issue in governance of co-ops and nonprofits, and there are lots of resources available. Generally I would say the basic considerations are that (1) managers have to be free to manage, and be accountable for overall results rather than be scrutinized for individual day-to-day decisions; and (2) the board (at least) has to have a big, participatory role in the part of strategic planning that involves setting long-term directions and highest organizational priorities. Often (I would say) it is helpful for the board and management to engage different members and stakeholder groups in discussions about the broadest aspects of long-term directions. All of this suggests boards and managers who respect each other's roles and competencies, and who work at developing a collaborative relationship in which each party does its job, and not the other's. Generally this kind of relationship carries with it a strong understanding that the board is a collective entity, and that its individual members do not play prominent autonomous roles.

There are aspects of the general Carver governance model (boards worry about policies, managers make decisions within policies) that are not bad at getting at these issues in practical ways, though the Carver formula can be a bit over-prescriptive, I think.

Naturally elections come into all this, since they connect the members to the board. But a director election is usually about people and competencies, and may not be a great forum for discussions of strategic directions. I think looking for ways to stage discussions, participation, and input apart from director elections is a good thing for all co-ops to do. I often wonder whether what most members really want is (a) to have 'someone' do the director's job competently for them (not necessarily a burning desire to participate on this front) but (b) for the co-op to 'listen' to their ideas and concerns when they have them.

I often find that case studies of how other organizations work are good ways for people to think about the issues involved. This allows them to set aside, temporarily, their own organization's issues, think about the more general questions involved, and return to their organization's concerns with fresh understandings. Often a trainer or facilitator, if you have access to one through some network in your area, can help with this. Or maybe a partnership with other local co-ops, to look at common issues?

Those are quick thoughts off the top of my head. I hope some of them are helpful to you!

Regards,
Brett


Brett Fairbairn
Professor and Head, Department of History

Fellow in Co-operative Thought and Ideas
Centre for the Study of Co-operatives

University of Saskatchewan
9 Campus Drive
Saskatoon S7N 5A5 Canada

Tel. (306) 966-8505
Fax (306) 966-5852
www.usaskstudies.coop/ or www.usask.ca/history

Who Moved My Auditor?

[What follows is a copy of a fairly self-explanatory e-mail to Jacob Myers, Board Chair of Weaver Street Market, who is standing for re-election as a Worker-Owner Director in 2008]

Dear Jacob,

I write this e-mail with the greatest of respect to all of its recipients, not least you; but also with a heavy dose of reluctance and sadness.

I have attended almost every Board meeting this past year, along with engaging in the work of the WSM Elections Task Force at the beginning of this year.

I have closely followed every step of the implementation of the capital building projects associated with Expansion. I have listened to what we have been told, and have read what has been written. And I've done a good deal of commenting of my own!

I have two further specific questions in this e-mail. I apologize for the lateness in asking them. Bluntly, that is because I have had to work out the premises all on my own.

The information that has allowed me finally to make the necessary deductions has been withheld or presented in a less than full manner. I'm sorry to have to say that. But it is true.

I am writing this e-mail, even at this late stage, to give you and the General Manager the opportunity, in your remarks to the Annual Meeting, to address the answers to these two questions; to the various previous questions I have asked about debt, the Auditor's Report and the expenditure on the capital building projects; and to address the summary points I raise at the end of this e-mail.

[For those of you reading this e-mail, who have not seen the Auditor's Report, he puts the co-op's long-term liabilities at $9.3 million (not the $7 million our Annual Report states); and he has the debt repayments ballooning from $170,000 this year, to $700,000 in 2012, and $1.5 million in 2013 - which our Annual Report doesn't mention at all...I have asked, without success, for the Auditor's Report to be available at the Annual Meeting.]

If you do not so address these issues, then reluctantly I reserve the right to raise them myself, in the form of questions to you two at that Meeting, and at the various Candidate Forums.

Transparency and accountability are the touchstones of our co-operative integrity. Those running this co-op simply can not ignore the unsustainable debt that has been created for this co-op; the unsustainable repayment amounts; the manner in which we arrived at this situation; and the sensible steps now needed to take us forward.

My two questions:

1) Why was the roughly $400,000 which the GM has attributed to 'one-off' expenses associated with the Expansion building projects paid out of the Operating Expenditure Account rather than by the monies raised and borrowed specifically for the purpose of the Expansion building projects?

In other words, why was any part of capital expenditure covered by monies available properly for the use of operating expenditure? Was there no more capital money available?

This rather strange allocation of operational monies was the sole cause of the Worker-Owner Dividend being wiped out. It is an issue that has never been addressed by you, by the Board or by senior management. And that is why it has taken me so long to work out.

It is also the reason the Board is now finding itself distracted into talking about filling the hole by changing the Consumer-Owner Discount, rather than properly filling that hole by addressing the overly high level of debt that has been incurred by overruns on the Expansion building projects.

2) Why was the Worker-Owner Dividend not paid out of the central Worker-Owner Account, in which is retained all of the 'excess' monies vested by Worker-Owner contributions each year?

Since you have already established that you can use operating money for capital purposes, why did you not use that Worker-Owner capital to pay the Worker-Owner 'operating' Dividend?

And why was none of this explained to the Board, and to Worker-Owners?

The facts are these: the Expansion building projects were advanced as concepts to address pressing problems. Hillsborough wanted its own Weaver Street. And we all wanted better quality food; more of it; and better facilities and more space for our food production workers.

I have re-checked the original game plan for consultation on these concepts. At no point was it ever planned to ask Owners what they wanted or would allow. I think we can now all agree that was a mistake.

You have not answered my questions about what formal studies, analyses, comparisons and the like were undertaken to gauge the true need for the Expansion projects as conceptualized, their cost, and so on. I have to assume there were none.

In other words, we pretty much backed into this whole deal on the basis of our own feelings.

When implementation finally got underway, the projects fell behind schedule; there were problems with equipment, among other things; and eventually, we ran over budget.

At that point, instead of asking Worker-Owners and Consumer-Owners for their permission, we over-borrowed, and when we were no longer able to do that, we simply dipped into operational funds - again without asking Worker-Owners, whose Dividend we were about to wipe out.

And now, to make even more room for this over-extension and over-indebtedness, we are beginning a process of trying to change the Consumer-Owner Discount.

I say 'we.' I'm the one being disingenuous now. Absolutely none of this was done with my support. I either didn't know, wasn't told, wasn't asked, or vehemently objected - at Board meetings; in person; or on my blog and in e-mails.

Back to the Consumer-Owner Discount. Sure, there are co-ops around the country who are addressing the issue of increased competition by changing the Consumer-Owner Discount to a Consumer-Owner Dividend.

But, that is in response to unavoidable competition coming from outside, not from over-extension and over-indebtedness coming from within.

And it is part of a two-part approach to increase Consumer-Owner loyalty. What goes hand-in-hand with the change in return on investment is the notion that Owners be allowed much more say in the running of their co-ops.

The premise is: if your return is now to be dependent on the co-op's performance, then you, the Owners, must be allowed much more say in the performance of the co-op.

I've been pushing for the last point for the past three years. I've written two strategy documents and a blog on the subject. But that's the part you, the Board and senior management have not been addressing so far.

Will you address it at the Annual Meeting? Indeed, will you finally come clean on all of these points at the Annual Meeting. Will you, the Board and senior management finally practice the transparency and accountability we tell our Owners (not least all over our purple trays!) is an integral part of our approach to 'Co-op Ownership'?

What we need to do now, in my opinion, is:

A) Review our "Ownership Culture," so as to ensure that no further important decisions are made in our co-op without the meaningful input of Owners.

B) Re-structure our debt, so that the financial sustainability of our co-op is no longer endangered - and to do so in a way that retains the benefits of Expansion, and to do so in a manner that does not further alienate our Worker- and Consumer-Owners.

See you at the Annual Meeting and the Candidate Forums.