Saturday, August 23, 2014

Divide and Conquer?

Major bloody sigh. It’s Weaver Street Market Co-operative Annual Report, Annual Meeting of Owners, Annual Employee Store Meetings time again. And, once again, I’m driving myself nuts trying to work out what the heck is the actual financial situation with our co-op. So. Letter to General Manager. Major bloody sigh:

Dear Ruffin,

I wrote to you at the beginning of August giving you notice that I wanted on the agenda of the Southern Village annual employee store meeting an item where you would present your proposals for a process this coming year to allow employees to design the mechanism by which we are included in major decision-making within Weaver Street Market, in compliance with co-op policy. This item also to include a meaningful opportunity to discuss your presentation.

I now read on my breakroom noticeboard that you have decided this year, for the very first time, to divide the store meeting into several smaller meetings, all on the same day.

I would be grateful if I could attend each of the smaller Southern Village employee store meetings, in order to be present for the presentation I have requested. And to be present on the clock. For your information, the day on which these meetings are taking place is one of my days off. To be honest, I am not happy to be using my or the co-op’s time in this fashion. But this is an important matter. You are still not in compliance with co-op policy. I asked for an item to be on the agenda of a meeting. And you, not I, turned that one meeting into several.

I’m not going to re-run all the points about the co-op policy in question. It exists. It was fully discussed by the workforce in the co-op in 2007. We determined which sorts of decisions should be included. The policy demands that we employees also be included in determining the manner in which we are included. And in all respects, you are in breach of this policy. Not least with respect to the setting of the size of this year’s worker-owner dividend. Which is why I asked for the item on the agenda.

I also give you notice that I will be asking some fairly searching questions about our finances in the past year, and their current state. I think you have been and are being less than forthcoming. And again, this is why I think it more important than ever that you begin to comply with the co-op policy on worker inclusion in decision-making.

If that policy were being properly implemented, then I wouldn’t have to spend so much time trying to read the runes when its comes to our finances. Because we employees would have been involved in all the important financial decisions. As co-op policy demands.

I look forward to engaging with you at the Southern Village employee store meeting. All of them.

All the best,

Ok. So. Why, Geoff? Why, bloody why? What is so important about this infernal co-op policy that demands that employees be included in major decision-making?

You know. If everything was going swimmingly. Dividend big. Pay raises nice. Occasional meeting or two, where we got to blow off steam. No silly demands in the workplace. Well, I wouldn’t mind. But let’s take a quick glance at the last year.

A year ago, we were told our co-op was in the best of financial health. Barely two weeks after the Annual Meeting of Owners, it was announced that our long-time restaurant was being closed.

Then margins were dramatically increased. In my department alone, the margin went up by 50%. This is not a paper exercise. I am harried regularly to improve, improve, improve. Why, I shoot back? We’re making a handsome profit. What’s it all about? We are not told.

We clearly and quite heavily overran the budget on renovating the Carrboro store. I was told we didn’t. A month later, the figures come out, proving that we did, by several hundred thousand dollars. With a whole bunch more being dumped into the 2015 Financial Year.

I attend a Board Meeting, where there is this strange Paperhand Puppet conversation among Directors about how we need sales increases, year on year, of 10%, if we are to pay for all the Vision 2020 goals. But we’re only making an average of 5%. Huh? No mention of this among we mere minions on the shopfloor. Just managers increasingly poking us in the back saying work harder.

We were never properly included in the setting of the 2020 goals. And we are now not being included in the decisions being made to fund those Goals. In breach of co-op policy.

At the end of the Third Quarter, our rolling profit was down about $400,000 on last year, at about $100,000.

During this Third Quarter, we began this weird marketing exercise, called WOW, where we literally gave away stuff at the weekend. I’m not making this up. We were actually told that prices had been reduced so much that, even though weekly sales were up by $100,000, from $500,000 to $600,000, we were making next-to-no profit on the extra sales.

I’m not an idiot. Companies that engage in fire sales to raise cash are not companies in the glow of financial good health.

WOW continued into and through the Fourth Quarter. At the end of which we were told that, miraculously, our profit had increased to $500,000.

What I love about those in charge is that they really think we’re dumb enough not to know that this is a make-believe profit, likely created by dumping the cost of goods for WOW for the last month of the financial year into the 2015 Financial Year.

In the past few weeks, prices around the stores have gone up dramatically. About 40 cents on a cup of coffee.

In the meantime, I’m not convinced that this new wheeze to divide our annual employee store meetings is a gesture towards more intimate democracy. I think it has much more to do with not losing sales by having to close stores.

And so on. And so on.

You don’t have to be Einstein (and I used to a be a six figure management and marketing consultant) to know that something is not quite right in the state of Denmark.

I write letters. I get no answer. I attend Board Meetings. I can’t make head nor tail of what is going on. And the last time a Worker-Owner Board Director turned up in one of our stores to chat with workers about the state of the nation was the last time he wanted my vote.

Hence my preoccupation with the co-op policy demanding that workers be involved in the major decision-making within the co-op, and also in the design of the mechanism that facilitates such inclusion.

If we are involved, then we don’t each have to have a degree in astrology to work out what is going on. Plus, we can, as we are permitted to do, we can turn around and say, hang on, why, followed by no.

Look at it another way. I’m pretty sure some manager or another will come tapping on my shoulder saying, Geoff, you’ve got it all wrong. Guess what? I wouldn’t be getting it all wrong if senior management complied with co-op policy, and included us in all of these important decisions. Because we would then all be privy to the same information, wouldn’t we?

Weaver Street Market is not the personal fiefdom of the few who attend the senior managers’ meetings each week. It is a co-operative. Which has policy. Which applies to everyone.

I get we’ve got bigger. I get that it is difficult to implement this policy. Which is why it is time to have a full consultation about designing mechanisms which will allow for rolling and regular inclusion of employees in major decision-making. Which is why I asked for the item on my store meeting agenda.

And I’m getting antsy about it because – and I’m sure there is no connection – as soon as I asked for the agenda item, the store meeting got sub-divided. Let’s see if the response to my letter is inclusion or exclusion.

[Oh. And one more thing. In my last letter to Ruffin, I asked what had happened to $1.5 million in profit, beyond the $500,000 announced, which was clearly evident in the figures he had released for the end of the Fourth Quarter?

Along comes the Annual Report. Another miracle. Cost of Goods has gone up by – wait for it – $2 million. And the gross profit down by – you guessed it – $1.5 million. I mean, major bloody sigh …

In the meantime, my usual caveat about these being my thoughts, and not reflecting anything official from WSM.]