Saturday, May 30, 2009

Ownership Culture

This is the second part of my commentary on a thread of discussion on OrangePolitics about the decision by the Board of WSM to replace consumer-owner point-of-sale discounts with an end-of-year dividend (in years of profit):

First, welcome back WeaverGuy! Now that I know who you are...

David [Beck], thank you for your comments. Of course, you can shop where you like [makes mental note: come the revolution, David's on dishwashing detail...]

Mind you, David, "If WSM had not listened to members..." Ouch! Where's the primacy of owner authority in that statement...?

But your point about the size of the Board underlines what this whole maneuver should really be about - namely, changing the nature of the relationship between the co-op and its owners, so as to encourage loyalty (on both sides).

This is a concept that's been doing the rounds of the national co-op movement for a few years now. It's known either as "Economic Linkage" or "Ownership Culture."

The idea is that, since the rest of the world is beginning to catch up with what used to be a co-op preserve (locally-grown, organic food), co-ops need to find a way to develop owner loyalty.

The premise is simple. Take all those co-ops that introduced discounts in the Seventies and the Eighties (so that they could compete with the likes of Costco and Sam's Club), and replace the discounts with a dividend system, that makes reward dependent on the co-op's performance.

But there is a second important element to this concept - which, bless our eternal hearts, was notably missing from all our pronouncements this week.

Namely that, in return for telling our owners their return will now be dependent on our performance, owners will be given more say in judging and monitoring our performance.

But how? Well, the funny thing is that we don't have to look too far for the answers. Just a year ago, another Task Force met. It was called the Elections Task Force, and it was charged with finding ways to improve turn-out in WSM Board Elections.

I was one of its members. And we quickly took the view that the best way of getting more owners to vote was to give them good reason to believe that voting would make a difference.

So, we widened our remit to include looking at ways of making the governance of WSM more accessible to and more meaningful for its owners.

I have a personal interest in WSM governance, being a worker-owner. My pet governance change, arising out of the Task Force, would be to allow all workers (not just worker-owners) to vote for their two representatives on the Board.

Workers have sacrificed much this past year to keep WSM afloat. We have taken cuts in our wages. We have worked harder for less. We are the folks on the cutting edge of keeping you folks (the customers) happy.

For all these reasons, I think that all workers should have meaningful input into the big decisions that are changing the face of our co-op.

Frankly, I think that some of those decisions would have been quite different (and better) if our in-house experts had been fully involved in their making.

I also believe that no worker should have to pay ($500 for a worker-owner share) to vote for their representatives in a worker-consumer co-operative.

We came up with a number of other ideas to introduce more democracy into decision-making in WSM.

From term limits for Board members, and more of them, to the not-so-radical notion that the Board would be more representative of the views of its owners if all of its voting members were elected - at present, three out of seven are appointed.

In addition, some of us felt that accessibility would be enhanced if there were active consumer-owner and worker-owner discussion groups, and an online forum, not dissimilar to OrangePolitics.

In fact, one of your consumer-owners has already created the forum. It exists, just waiting for the Board to adopt it, and attach it to the WSM web-site.

The bottom line is this: what's done is done. The discounts are gone. Now, let's focus on letting the other shoe drop, and agitate as best we can to encourage our co-op's Board to introduce the other half of the concept of "Ownership Culture": mechanisms, systems and procedures that allow for more meaningful owner involvement.

I have already asked the Board (more than once) to set up a new Task Force, to make recommendations for changes to WSM Governance.

Fill in those little slips of paper in the stores asking for the same thing, why not? Or write to the Board. Or turn up at the next Annual Meeting.

Better still, make it a condition of voting for a candidate in this year's Board Elections. Don't leave it to the person standing next to you in line. Why don't you be the one to take the initiative on this?

Oh, a P.S. To Mark [Chilton]. I agree with you about the Hillsborough store. And forecasting the economy.

The thing is, the world has now changed. That is why, at the last Annual Meeting, I proposed a motion that an Owners' Committee be established to review the entire financial picture at WSM, and to make recommendations on the sustainability of our now some $11m in debt.

The motion was passed. The Board then, in its infinite wisdom, took the view that it knew best, and decided not to create the Committee.

Funny thing. Do you know how many votes were cast for the winning consumer-owner candidate in the 2008 Board Elections? About 70.

People. It really doesn't take much to change the way WSM functions - if you really want it...

Anyway, back to Mark's two points. I wonder if the time has not come now to take the view that we will best save that which we have created (a Hillsborough store and a central food processing facility in Orange County) by inviting the residents of Hillsborough to take over the financing of their own store, and to set the Food House free, to become a stand alone unit, able also to attract investment from sources other than just WSM owners in Chapel Hill and Carrboro?

Thursday, May 28, 2009

Discounts to Dividends

What follows is my comment in response to a thread of discussion on OrangePolitics about the decision by the Board of WSM to replace consumer-owner point-of-sale discounts with an end-of-year dividend (in years of profit):

Hands up anyone who thinks Obama's got everything right so far? Right. Hands up those who think we should impeach him?

Same with Weaver Street. I've stood for the Board twice now, and I'll be doing so again this year. Why? Because I don't think we get everything right.

Everyone who has written on this thread so far says that, like me, they don't want WSM to go under. Good. Then the first thing to do is support the stores. Stop shopping at Fresh Market and Trader Joes and Whole Foods.

You can't have it both ways. You can't say it would ruin this area to lose the co-op, and then do the one thing that will lead to its ruin - stop its cash flow.

But we need more than your money. We need your involvement.

All of you who complain about the decisons that were taken, and the way they were taken, how many of you turn up to the Annual Meeting? Or to Board Meetings. Or to vote?

A co-op is like a love affair. It has its ups, it has its downs, but most of all it needs work. All the time.

Those of you who know me will know that I can be the strongest critic of the Board and senior management of WSM. But I turn up. I care. I get my hands dirty. And I do what I can to make things better. Do you?

I will be blunt. I do not think the Board should have made this decision without first consulting the consumer-owners. Co-operative values state: "the primary source of all authority in the co-op is its owners."

I do not think the hole in our finances is caused by the consumer-owner discount, but by the over-arching cost of the Food House and the new Hillsborough store.

But I do not throw my hands up and run away. I make my point. And I then knuckle down. I work hard to make the money we need. I work hard to make the decisions work. And I will work hard to get elected, so that I can then work hard to make better decisions.

Don't sit on the sidelines and carp. Join me in working hard to make our co-op work - for everyone's sake. Please.


On a lighter, a customer comes up to me and says, 'what does it all mean about discounts, then...?'

I grab a dollar bill in my left hand, and an owner card in my right, and I say: 'well, dis counts, and dat doesn't...'

Oh come on. I'm joking! You've gotta laugh at life...

Friday, May 1, 2009

Board Elections 2009 - My Candidacy

I will be standing for the position of Worker Director in the Weaver Street Market Co-operative Board Elections of 2009.

We are one of the very few (if not the only) worker-consumer food co-operatives in the United States. Co-operators around the nation look to us to see how the model works.

It is no secret that many wonder if we can truly reflect the full spirit of co-operation in our business if the authority for making decisions in our co-op is split between consumers and workers.

The thinking goes that, in this situation, it may well be management that ends up calling the tune. And there may be some in this co-op who feel that is exactly what has happened. And that it has not been in the best interests of the co-op.

Workers have been called on, by management, to make many sacrifices in this past year. Without being offered very much in return. Or being offered any meaningful opportunity to have a real voice in the affairs of this worker's co-operative.

I believe that, in return for our many sacrifices, that should now change.

I am standing in the Board Election 2009 too allow workers to have a real voice on their Board. To assist the Board in returning our co-operative to being the best co-operative and business it can be.

In that regard, and believing that we workers should be a more vocal element in co-op decision-making, because we are the ones at the sharp end of producing the profit, I will be making the primary plank of my candidacy the proposal that, in all Worker Director elections, every single worker (not just Worker-Owners) should be allowed to vote for their Worker Directors on the Board.

I do not believe that the right to vote for a representative should be dependent on our having $500 to pay for that right. Not in this economic climate. Not when so many of us have seen our paychecks reduced by management in this past year.

No worker in a co-operative should have to pay for the right to be heard. The reward for paying for a Worker-Owner share should be financial, not electoral.

It is important to me that the voice that is heard on the Board reflects the very real concerns of the workforce. I want to know what you are thinking. Please do not hesitate to contact me at: About anything.