WCOM and WSM: Save Our Station

There is now a hole at the heart of the finances of Weaver Street Market Co-operative. This much will become clear when its Audited Annual Report is published at the beginning of October.

It has been caused by the Food House and Expansion. The long-term debt of WSM has risen dramatically over the past year to just under $10 million (on an annual turnover of $21 million). The scheduled annual repayments balloon from some $170,000 this year to $700,000 in 2011 and $1.5 million in 2012.

The Accounts will show a loss of some $400,000 this year. As a consequence, the Worker-Owner Dividend was not paid.

At the September Board Meeting, WSM's Auditor 'suggested' to the Board that they formulate a comprehensive plan to deal with the debt. It would be much easier to put together such a plan if the Board had an Audit Committee.

My concern is that, in the absence of a plan and an Audit Committee, the Board may overreact to the situation, and end up doing more more harm than good, as it thrashes around trying to find anything and everything it can to lessen the debt burden, rather than adopting a measured approach.

I mean no disrespect with that last comment. Suddenly to be faced with a report of $10 million in debt can make even the strongest of people quake just a little - if it's something for which they are not used to taking responsibility.

Before I left the corporate world to pursue my creative interests, I was what in England used to be called a 'company doctor.' I made my living as a lawyer helping companies to get out of tight spots. That's one of the primary reasons I'm standing for the Board this year as a Worker-Owner candidate. I want to help. Anyways, my first advice to my clients was always: don't panic.

Weaver Street is inherently strong. We have $14 million in real assets. We have a product with which people love to associate - even if there have been a few glitches with some of the food this past year. We have 12,000 Consumer-Owners and 200 Workers who are committed to The Weave, not just as a grocery store, but as a living social statement which they love.

We will pull through. If I didn't believe that, I wouldn't be standing for the Board. But it will require an honest appraisal of where we are. A comprehensive plan about where we want to go. The full support of our Ownership. And a freedom from knee-jerk, fear-driven, short-sighted stop-gaps - which simply amount to trying to fix a broken leg with band-aids.

To be honest, one of the latter has been WSM's immediate reaction to shut off support to WCOM 103.5 LPFM, Carrboro and Chapel Hill's Community Radio Station.

WCOM was formed by WSM in 2004. Since then, WSM has been the lifeline for WCOM (either directly, or through its associated 501 (c) (3) non-profit, Public Gallery of Carrboro (PGC)), providing it with free station space in the Community Realty building on Greensboro Street, and underpinning its finances.

In a recent letter from the General Manager of WSM to WCOM (a copy of which is set out at the end of this post), notice was given that the support was to be discontinued.

My concern is not that WSM is attempting to regularize its finances. It is the abruptness and insensitivity involved. We in WSM face tough decisions in the next year. The measure of our standing as a leading community support organization will be the manner in which we affect our community with those tough decisions.

Before I turn to anything else, and putting on my hat as a member of WCOM's Development Committee, let me say that WCOM needs an immediate injection of cash and general fund-raising assistance to finance the move to a new location, and to fill the new hole in its own finances.

You don't need to be rich or to be an expert in fund-raising (but if any of you are, so much the better). All you need is a bit of spare cash or (if you want to help the fund-raising effort) two hands, a brain, a voice and a desire to see genuine locally-based public radio continue in our community.

Go to http://www.communityradio.coop/ and follow the links to Donations and/or Volunteering, and let the folks know you're ready to jump in and help. Or you can contact me directly at: geoffgilson@hotmail.com.

In the meantime, I've started to do what I can by writing a letter to the Board of WSM, which letter I set out below (Jacob [Myers] is a Worker-Owner Director, who has been WSM's Board Chair these past three years):

"Dear Jacob,

I attach a letter that apparently was sent by Ruffin in his dual capacity as General Manager of WSM and President of Public Gallery of Carrboro.

You will know that, quite separately, I have asked for WSM's Auditors (among other matters I believe to be crucial to understanding and then acting upon the critical state of the co-op's financial security) to provide all owners of WSM with an organizational chart showing all owners what is the relationship between WSM and what appear to be all of its attendant companies.

In the meantime, what I am led to believe is that the majority, if not all, of the funding for PGC has come from WSM. Indeed, the web-site of WSM openly proclaims that it was WSM (not PGC) that was responsible for the creation and early upkeep of WCOM 103.5 - our local Community Radio Station.

You and the Board will know of my concern at the level of debt in WSM. I am not surprised if the response, whether it is to me, the Auditors, or whoever, is to take steps to start reducing that debt. Including, if necessary, the sale of the property on Greensboro St., and the desire to see WCOM eventually become self-funding.

However, I think it important that WSM reduce its debt and its costs in a way that is commensurate with its Mission Statement, Board Policies, and its standing as a community co-operative. In other words, in a way that is creative, and not destructive.

The letter to WCOM has caused some consternation among supporters of our Community Radio Station. It is akin to foreclosure and cutting off a banking credit line - all at the same time.

In the circumstances, as and when the Board reviews the decisions being made by Operations to reduce the debt and cut costs within WSM - which ought to be when it considers the Annual Accounts for 2008 - I would be grateful if the Board could have before them this letter, and if it would then address its contents.

First, I am not sure that Ruffin should be making decisions unilaterally about reducing WSM's debt. And certainly not decisions which have such impact on WSM's standing in the community.

I would have thought that any decisions to reduce the debt should be taken by the Board. As were the original decisions to incur that debt.

If the Board has changed its Policy, such that the General Manager is allowed to incur debt and reduce it unilaterally, then I would, with the greatest of respect to all parties, strongly suggest that the events of the past year (not least the non-payment of our Dividend) would persuade the Board to re-visit that Policy.

The Board is responsible to all owners for the financial health of the co-operative. It is the Board which must answer to the owners for the risk to their investment. Not the General Manager. The Board should have primary decision-making responsibility for the major risk to investment, being debt.

Secondly, I would appreciate the Board considering ways to process the sale of the property in Greensboro St., and the attempts to encourage WCOM to be self-funding, that are more sensitive.

What about some sort of Lend-Lease arrangement with a potential buyer of the property? For a limited time? Say, a year?

What about WSM using its many contacts actively to help WSM find a new home? I was at the Steering Committee of WCOM when Ruffin's letter was discussed. No-one from WSM or PGC was present, to offer assistance to WCOM in facing the new reality which had just been imposed upon them.

What about WSM offering WCOM an immediate interest-free loan, to be repaid in no less than five years? WCOM is struggling to raise funds. not least because it has not had its own formal Board these past four years. PGC was their active Board - until this past week.

WCOM will need immediate funds to secure at least a temporary new home, and finance the move of equipment.

The measure of progress in a progressive institution is not necessarily the end destination. It is almost always the nature of the journey itself. And the friends we manage to retain when we have to make otherwise difficult decisions.

Let's not lose our co-operative sensibilities, as we pay the price for our own Expansion. Let's not let down our community, as we struggle to make the necessary tough decisions this next year. Please."

*******

[The letter from Ruffin to WCOM:]

"Hi Audrey [Chair of WCOM's Steering Committee of Volunteers],

Thanks for being in touch. Here is what I know about the status of the studio at its current location and my ideas for the future.

Regarding Weaver Street Market providing studio space for WCOM:

Weaver Street Market purchased the corner building five years ago to prevent it from being developed into a CVS Pharmacy and to meet its need for office and meeting space. The part of the building that WSM wasn’t using was rented to Community Realty and provided free to WCOM. (WSM has also provided free electrical to WCOM.) The arrangement with Community Realty and WCOM was made with the understanding that 1) their use of the building was temporary and at some point WSM would do something else with the property; and 2) WSM was not interested in putting a lot of money into a building that didn’t have a future by doing things like replacing the roof.

WSM no longer needs the space in the building because it now has office space elsewhere. As WSM considers next steps for the property, the future of WCOM remains an important consideration. Regardless of whether WSM rents or sells the building, WSM is committed to arranging for WCOM to stay for a period of time in order to facilitate a move to a new location. In summary, while there are no specific plans for the corner property, WSM is starting to consider next steps now that it no longer needs space in the building, and I will let you know once WSM’s plans become more concrete.

Regarding the Public Gallery of Carrboro’s support for WCOM:

The Public Gallery of Carrboro’s Board raised the money to launch WCOM and most of the money to finance its first two years of operation (about $70,000). That was a one-time effort to get the station going, and the Board has said that it doesn’t have the time or the energy to continue to play an ongoing fundraising role, although board members continue to pay the costs associated with taking website contributions (about $600/year). The Board had hoped that the idea of locating the studio in the Arts Center might come to fruition, but the Arts Center’s expansion into a larger space still seems to be several years off. In summary, at this point the Board has turned the running of WCOM over to the Steering Committee. While the Board will help however it can to find a new studio location, at this point it does not know of any obvious candidates for a more permanent home for the WCOM studio.

Achieving financial self-sufficiency will ensure a secure home for WCOM’s studio:

While WCOM appears to be nearer to a point where it is financially self-sufficient it did not meet its budgeted fundraising goal last year and may not raise enough money again this year to meet all of the expenses in the budget. To ensure that it has a secure future, WCOM needs to be able to pay studio rent and studio electrical along with the rest of its expenses. I think everyone realizes that raising money and making the station financially self-sufficient is important. Chris Frank uses the leaking roof to draw attention to the uncertain financial future and to build a sense of urgency for achieving financial self-sufficiency. Chris is right that the only sure way to have a more permanent home for the studio is to be in a position to be able to pay for it.

Thanks for all of your efforts on behalf of WCOM,

Ruffin"

The Economics of Spam

Not everyone was born an accountant. Not everyone necessarily understands the complexities of a $21 million turnover co-operative – which is what The Weave now is.

So maybe our Board should ask for help from people who do understand?

When, in the past, I have advised companies with a turnover similar in size to Weaver Street, it has been the normal practice of those companies to have a special committee of the Board called an Audit Committee.

This Committee is usually made up of Directors (those who are not directly employed by the company in question), and by an equal number of experts, with specific knowledge of the company’s specialty and/or corporate finance.

The primary job of the Audit Committee is to oversee the Annual Audit. As opposed to WSM, where the Audit is overseen by the General Manager.

Audit Committees can also meet all through the year, and advise the Board on complicated financial issues that are presented to the Board by management.

A case in point.

Earlier this year, management suggested to the Board that they do away with the Board Policy requiring that there be a 1% profit each year.

How was the Board to know that removing this Policy would ‘move’ our Dividend – which is paid out of profit? An Audit Committee of financial experts could have warned the Board of this.

******

I set out below a copy of the e-mail I sent to Jacob Myers, the Worker-Owner Director who has been Board Chair these past three years, asking questions of WSM's new Auditing firm.

These are the sort of questions your Board should have been asking over the last few years, and which an Audit Committee of experts probably would know to ask.

If they had been asked as we went along, we might not now find ourselves over-extended and over-indebted going into what promises to be a severe recession.

Look. I know this is not as much fun as Monty Python quips, or as interesting as the Wine Shows, but this is exactly the sort of dry, complicated, tedious crap you expect your Directors to be able to take care of competently, when we are a $21 million turnover co-op.

So that you can focus on the fun stuff, while tentatively hoping that your Board knows what it's doing, and is taking care of your business. Ok?:

"Dear Jacob,

The WSM Audit is underway. As I understand it, the Auditors will be presenting their report to the September Board meeting. As an owner, I would be grateful if the Auditors could address in writing the following. I think it follows that I would wish that copies of their report, and their response to my concerns, be available to owners attending the September Board meeting:

1) Is the Audit of just Weaver Street Market, Inc.? Or is it of the whole entity we know as 'Weaver Street Market' ('WSM'), including all of the associated companies, corporations, organizations, non-profits, et al ('associations')?

2) Could the Auditors please prepare and present a full organizational chart of all of the 'associations,' showing the full picture of assets and liabilities, and flow of monies between the 'associations' (if any), with specific and separate mention of all real estate holdings?

I understand there are certain LLC's which bear names such as 'Carrboro' and 'Hillsborough.' There is also Public Gallery of Carrboro, which I understand receives monies directly or indirectly from WSM.

3) Concerns may well be raised at the Annual Owners' Meeting as to whether or not the monies spent by WSM and its associations on Expansion and the Food House could have been better spent. Clearly, that is a matter on which the auditors should be able to give owners comfort.

Would the Auditors please make available any and all written comparative studies that were produced before Expansion began, which helped WSM managers and the WSM Board decide that the Expansion course chosen (including the Food House) was the most beneficial to owners, with respect to the risk to their financial investment?

Will the Auditors state that, in their opinion, WSM managers and the WSM Board undertook a sufficiently comprehensive comparative analysis of the alternatives before deciding up on the course chosen? That is, was Expansion and the Food House the best way of spending our money?

Will the Auditors state categorically whether or not, in their opinion, WSM and its associations are on target with their financial forecasts for the cost of Expansion and the Food House. If we are over budget, by how much?

4) Will the Auditors please state definitively what they regard as being the total current debt of WSM and its associations, and what they regard as being the debt to equity ratio of WSM and its associations?

Are the Auditors legally required to offer assurances in any Audit statement that the appropriate processes were followed by WSM and its associations in creating such a level of debt, against collateral (equity) which is the property of the owners, in respect particularly of obtaining the owners' permission beforehand to collateralize their property?

5) Will the Auditors please define what they understand by the expression 'equity,' and specifically explain how each category of 'equity' presented by WSM and its associations is 'equity' within the Auditors' definition?

Can something be 'equity' if we have to return interest upon it, or if it is recallable? Specifically, are loans arising from the Community Investment Initiative, and the like, equity or loans?

6) Will the Auditors please explain clearly what is their recommendation for the debt of WSM and its associations in 2009? Should it be reduced, be allowed to stay the same, or can more be borrowed - and with what qualifications?

Jacob, I would be grateful if the Auditors responses to these concerns could also be made available in writing at the Annual Owners' Meeting."

Something Completely Different

So. My line is that we need a different Board which will do things differently. And that if we did things differently, we could be a better co-op and a stronger business.

Fine so far. But what do I say to anyone who asks: can the Board actually make a difference; and how exactly would I suggest they do things differently?

Actually, even before we go there, I’ve been asked more than once, just what makes me think I understand the complexities of all of this (and it is complex), and why do I believe that I'm qualified to offer any solutions?

Good question. The blunt answer - and forgive me for blowing my own horn - is that I know how to make Boards work. I used to make my living at it.

Ten years ago, I left the corporate world to pursue my creative interests. But before that, I was a successful lawyer and marketing and management consultant. I served on the Board of several companies with turnovers ranging from $3 million to $30 million.

I made my living troubleshooting for companies that were having problems. This meant mediating disputes, opening channels of communication and creating value-based strategies that encouraged the Boards of those companies to understand that people are the core value of profit.

What I am offering you is the opportunity to have on your Board someone who really knows how to make your Board work for you – properly, as it should in a co-op.

Right. So, back to those first two questions – can the Board make any difference, and what can it do differently to make that difference?

Hopefully Jacob and The Weave will agree to some Candidate Forums, and I can explain in detail. Something I will also be doing on this blog, over the next two months.

In the meantime, here’s a brief, two-step summary:

1) Yes, The Board can make a difference. It’s a question of truly understanding the Policy Governance model we use. And I’m not sure that everyone on our Board does.

It goes like this: the Board is supposed regularly to ask owners and workers, on an ongoing basis, what they want for their co-op. The Board should then fashion what they are told into a Mission Statement (what) and Policies (how).

The Mission Statement and the Policies set the direction for ‘Operations’ (us, and our managers). The Board is supposed then to check to make sure ‘Ops’ is doing what workers and owners have said they want, by monitoring ‘Ops’ every month at its Board meetings.

It’s supposed to be that simple.

Now, I’ve been present at almost every Board meeting in the past year. The fact is that our Board, with Jacob as its Chair, has been getting it the other way round.

They ask ‘Ops’ (and I mean just the senior managers) what they want, and then tell owners and workers what’s good for them.

I want to turn it back around. Jacob, on the other hand, wants to keep it the way it is.

Now, I want to be clear. I say kudos to Jacob for sticking to his guns, and not backing down.

I may disagree with him on this point. But he is taking an honorable stand by defending what has happened during the period he has been Chair these past three years.

I think he's wrong. But I admire his integrity.

2) What would I ask the Board to do differently – and specifically?

a) Regularize the finances. Cut the debt – in a manner that does not hurt workers or consumers. And that does not hurt our efforts in the community. To give us back our dividend, and un-mortgage our future.

I talk about not hurting our community. Here's an example:

We will almost certainly have to sell the property on Greenboro Street - where orientations were held.

But let's do it in a way that does not put the future of WCOM 103.5 (our community radio station) in jeopardy - since WCOM also uses that building.

Many of us actively support WCOM. WSM helped to create it. I serve on its Development Committee. With a little thought, we can be creative about the tough decisions that have now to be made. Not destructive.

In the meantime, I’m going to suggest there be a one-off incentive bonus for all workers at the end of 2009, based on improved production during the year.

All we workers are already being asked to do a lot more to pay for the decisions that others have made.

Is it too much to ask that, in return, we receive a temporary incentive for all that extra work, and one that will entirely pay for itself?

b) Monitor ‘Ops’ (i.e. management) better. Make ‘Ops’ more accountable to the Board. So that we can avoid some of the more-avoidable big, bad decisions.

Suggest ways for ‘Ops’ to be more inclusive of worker-input (our ‘in-house experts’). Do more real listening. Be more responsive. So that we can avoid some of the more avoidable small, bad decisions.

[I explain in more detail in a strategy document I presented to the WSM Board in 2007 - "Informal Intimacy".]

c) Do a better job of asking workers and owners what we want. Not least about the last remaining piece of the Expansion jigsaw puzzle – the refurbishment of the Carrboro store.

Let us feel that, in future, we have real control over our future – a future which, at the moment, is being created by a small handful of people, often in secret.

Someone recently used the expression ‘dark-of-night decisions, made without any public input.’ I think that’s a description that’s appropriate –and it’s not only wrong; it’s unproductive.

Workers and owners are far more likely to support and implement smoothly big decisions which they already own.

So, create vehicles to allow the Board to know exactly what owners and workers really want. And then, make sure the Board pays attention.

‘Yeah, very nice, we’ll let you know’ is not co-operative democracy. Not according to the Policy Governance model to which our Board claims it subscribes.

It’s just ‘feedback.’ The Wal-Mart way. Also known as ‘filing under ‘D’ for Dustbin.’

Revive the Worker-Owner Discussion Program. Re-jig the Open Forums. Have The Weave adopt the Online Forum that Jamie Bort (a Consumer-Owner) will be completing shortly – with a little help from me.

And most important of all – let us vote on things from time to time. Like whether we want to pawn our co-op for $6 million…

[Again, I expand on these thoughts in a proposals document I submitted as a member of the WSM Elections Task Force, earlier in 2008.]

That’s a start. And now I wish I could think of a really cute Monty Python quote.

Nope. Sorry. Guess some things are more serious than that. Oh well. Next time, maybe.

In the meantime, this Board Election is about you – not me, and not Jacob. It’s about what you want your co-op to be. How you want it to reflect the values and aspirations you have for it.

I'm standing because I love The Weave, I'm troubled about where we are, I think I can help us get safely to the other side, and I want to help. But that's not the point. It's still all about you.

I’ve spent as much time as I can trying to contact as many of you as possible, so that you can tell me about the hopes you have for our co-op.

I haven’t got to all of you. I’ll keep trying. But, you see me around. Feel free to chat to me, anytime. Or write to me on Facebook, MySpace or at: geoffgilson@hotmail.com.

And when you talk with me, I promise I’ll truly listen. We should all strive to be a genuinely ‘Listening Co-op,’ and that should start with our Board, and your Worker-Owner Board Directors.

Now please remember, you have to be a Worker-Owner to vote. You really can shape the future of your co-op. But you can only do it by being an owner and voting. To find out how, ask Linda in Marketing, Deborah in HR or write to: board@weaverstreetmarket.coop.

You can become an owner anytime up to October 25, and still vote in this year's Board Election. Whoever you vote for, please use the opportunity you have to create your own future. Good luck to us all!

More of the Spam?

Nominations for the Board of Directors of The Weave are now closed, and the Worker-Owner Director contest is a two-person race - between ‘more of the same’ and ‘something completely different.’

Jacob Myers is Kitchen Specialist in Carrboro, has been the Board Chair for the past three years, and is the newly-announced, second Worker-Owner Candidate.

I served with Jacob earlier this year on the WSM Elections Task Force. I’ll be honest. I like Jacob.

But I’ve got to admit, I kind of feel like we’re in a Monty Python skit – bless us all. I mean why on earth would we want ‘more of the same’?

This would be the same ‘same’ that just took away our dividend; mortgaged our future with a $6 million debt; and left us wondering if our money was spent the best way, and why we were never asked, in the first place, if we wanted it to be spent at all, or how. Right?

Then I’m thinking, why am I asking these questions of thin air – that really would be a Monty Python sketch, wouldn’t it? Why not ask Jacob himself?

So, I’m writing to Jacob to ask him to take part in Candidate Forums around the units, to give all of you the opportunity to ask him why he defends where we are. And to be fair, to ask me how I believe things could be different.

Or we could just compare silly walks…

Make sense?

*******

Now, we all know that Spam is a form of processed meat. Which is kind of appropriate to us, at the moment, if you think about it. And, of course, it’s also the subject of a fabled song from Monty Python.

In addition, the dictionary defines ‘spam’ as being something received which was unsolicited and for which permission was not given. Hmm. Sounds about right, doesn’t it?

So, yes, I’m probably going to be cute over the next few months, and do the Monty Python theme to death, and go on talking about ‘more of the spam,’ and ‘something completely different.’

I mean, if you can’t ‘always look on the bright side of life,’ then what’s it all for…?

So. Good luck to us all. And with that thought…now for something completely different…!!

Letter from Carrboro Store

[What follows is the letter presented to the September Board Meeting, by Lori Washington, a Worker-Owner Director, on behalf of a group of her fellow workers in the Carrboro WSM store:]

This is in no way meant to be an attack, but those of us who care about this company wanted to be sure you were aware of how we feel and how things really are. Most of this letter reflects, but is not limited to, the perspective of the Customer Service Department.

The Carrboro store should have had more support for the changes we have had to deal with. The Customer Service Department alone lost three leaders and one strong cashier to the HB store and were holding down the fort with no fewer than five new people. So far we have only been allowed to fill one of the leader positions.

Customer Service had to switch from cashier accountability to lane accountability and all we had in the way of support were some very unclear written instructions.

Many feel that the Carrboro store is being put on the back burner. Equipment is not working and no satisfactory solution is being given. Many of the machines that the front end uses on a regular basis do not work or do not work consistently. We have told the appropriate people about the situation but not much has been done.

We shouldn’t have to wait for new machines until the store is remodeled, especially since we’ve heard no concrete date for when that is going to happen.

It feels like the focus is more on how pretty the store looks and less on how it actually works. It’s nice to have things look good, but it shouldn’t come at the expense of the ability to do our jobs.

Employee morale is down. Customers complain to us (sometimes abusively, at great length and while other customers are waiting) about changes that we had no hand in making and don’t always agree with ourselves. We do our best to listen and be sympathetic, but we are starting to become numb.

I’m sure that every department is fielding complaints, but the Customer Service department is getting the brunt of it. One customer said she stopped shopping here for two solid weeks because every time she came in she heard a customer yelling at a cashier.

Customers are telling us that they are buying less and less here because there is no one to talk to about their meat, and that the meat that is here doesn’t look fresh, isn’t what they’re looking for or is packaged in an environmentally unfriendly way. They feel that they may as well shop at a regular grocery store if this is all we have to offer.

Many feel that the store is becoming more and more impersonal, losing its uniqueness and its community feel – essentially, it’s Weaver Street Market-ness.

Baked goods and prepared foods are not getting here on time from the Food House and foods that people are coming for are still not being prepared. The still-abundant flies and the unfortunate timing of the price increases are not helping the situation any.

Customers don’t feel listened to. The ‘We Respond to You’ customer comments and questions often go unanswered – leaving customers feeling that no one really cares.

Some say they are thinking about refunding their owner share.

No Dividend @ The Weave

IT IS NOW OFFICIAL. Weaver Street Market made a loss in 2008, and it will not pay a dividend this year.

In any ‘conventional’ corporation, the Board would immediately accept responsibility, with all of the natural consequences that would normally entail.

It is a sad reflection on our current Board, which is supposed to be the rock-solid guardian of owner interests, that it will probably not even notice or comment – without monumental prodding.

Question: Why are we here?

Answer: We are massively over-extended going into what looks like a severe recession.

The project that was supposed to safeguard profits for years to come (Expansion and the Food House) is behind-schedule and over-budget.

And the problems the Food House has had with its food production have severely exacerbated the fall in sales already caused by the recession and competition from the likes of Trader Joe’s and Fresh Market.

Let me be clear. The fault does not lie with senior management. The fault lies with our Board.

Senior management came up with a plan (Expansion and the Food House) to meet what they believed to be the challenges facing WSM going into the second decade of the 21st Century.

That’s their job. And I give Ruffin full credit. He stood up at the Southern Village Employees’ Meeting last night, and accepted his share of the blame – without trying to pass the buck for one second.

I had asked him what he felt he had learned in the past year. It was clear the answer was painful for him. Weaver Street is his life’s work. But, he did not flinch. He said that he wished he could have anticipated better, and communicated more.

But Ruffin should not be standing up there, taking all this responsibility on his own. This is the Board’s fault. They are the ones who have a duty to owners. They are the ones who should have held management accountable to the owners. And they are the ones who have failed in those duties.

The Board should have ensured that, when presented with management’s plan for Expansion and the Food House, the proper comparative studies, economic analyses and budget forecasts were produced, against which to test management projections. I have now asked WSM’s Auditors to check whether in fact this was done. I suspect it was not.

The Board should not have blindly accepted the plans of management. The Board is accountable to owners, not to management. The Board should have asked owners if they wanted Expansion and the Food House. They did not.

The Board should have sought the permission of owners to allow management to borrow $6 million to fund their plans – a debt which will hang an annual interest payment of some $300,000 around the necks of Worker-Owners for years to come.

That interest payment is the same size as last year’s profit. It is the reason this year’s operating profit has been wiped out. It is the reason no dividend is being paid to Worker-Owners this year.

The Board did not seek permission for the $6 million debt. It simply signed the bank notes. Without raising so much as an eyebrow. Even though I asked the Board to question the debt.

When it became apparent the Food House was running into trouble, the Board only responded when I and other owners turned up at their August meeting, and begged them to intervene.

There is a way forward. There always is. It won’t be easy. There will be tough decisions to make this coming year.

But it needs a different Board to make those decisions. It needs a Board that truly understands its responsibilities to its owners. That understands that it is answerable to those owners, and not to management.

And it needs a Board that understands corporate finance in a $20 million turnover co-operative. It needs a Board that either knows how to read a financial statement, or that has the self-awareness to admit that it needs experts to help it.

We are where we are. But we do not have to stay here.

I remain optimistic. The Weave is not just a grocery store. It is a family. We will rally round. We have 200 workers and 12,000 Consumer-Owners, just waiting to pitch in and pull us through – and that includes me.

But we need the right Board if we are to return The Weave to financial security and stability. If we are to become a better co-op and a stronger business.

We owe that much to our workers, our consumers and our owners. And we owe that much to ourselves.

Sesame Street Market?

Elmo likes the new plastic dishes at Sesame Street Market. Elmo likes the way they match the bright, sparkly trays with the big pictures on them. See Elmo put his meatloaf on the pretty plates.

Elmo really happy Mr. Weaver makes all of these big decisions for him. Because Elmo only a small puppet.

But Elmo unhappy now. Elmo wants Mr. Weaver to buy some plates with dividers, and sippie cups and sporks as well.

Elmo says: are the new plastic plates E-N-V-I-R-O-N-M-E-N-T-A-L-L-Y friendly? Can you spell Environmental? Elmo can. Can Mr. Weaver?

Now, I'm Dazed AND Confused

We just started advertising for a Kitchen Manager for the Food House.

Hang on, wasn't I told during my Food House tour that only two people from Receiving had left the Food House since it opened? And no-one else?

Does that mean that we never had a Kitchen Manager? Is that why we've been having so many problems with the supply of food?

Wait a minute. I'm sure we had a Kitchen Manager. Didn't we have him head-hunted? Do I have that wrong? If we did have him head-hunted, can we get our money back?

In any event, we are now told that all of the problems with the supply of food will shortly be resolved...but...without a Kitchen Manager in place?...uh oh...yup...here comes that headache again...

Why, oh why, is it so difficult to get a grasp on the true big picture in our co-op? Why do I have to read the small print just to find out what is happening?

*******

[As always, this little bit of light-hearted seriousness is in no way a commentary on any of the Food House workers, all of whom are working day and night, in difficult circumstances, to do what they can to give our customers the sort of quality we all want them to have.

It is merely a commentary on the 'difficult circumstances,' all of which are beyond our work colleagues' control.

And my primary 'comment' continues to be this: why won't management just share the truth of the 'difficult circumstances' with us, so that we can offer realistic advice and help?

Our co-op does indeed have a wonderful advantage over 'conventional' grocery stores: the loyalty and concern of over 200 workers and 12,000 owners. Every single one of whom is ready and willing to step up and help out with the current problems.

But we can't help until we're asked. And those in charge can't ask while they remain in a suspended state of denial. Please let us in. We want to help.

Maybe the Employee Meetings by Unit (EMU's) will offer that opportunity...?]

The Carrboro Weave

What is going to happen next with the Carrboro store? It is due for a major refurbishment, now that all of the food production workers have moved to Hillsborough. Will owners and workers be consulted properly about what happens to their store?

I want to be fair to the senior management of The Weave. Some of us feel that they and the Board do not listen or respond to our concerns as much as they could. We say they do not consult enough. And that they do not communicate well enough.

Well, it was explained to us at the August Board meeting that the Food House (and the move of food productions workers from the Carrboro store) was itself a response to worker, consumer and owner concerns.

For ten years, we were told, senior management had heard that food production workers were fed up with their cramped conditions in Carrboro, and that customers and owners wanted better quality and more variety of locally-sourced foods.

The Food House was the response of senior management to those concerns.

Well. So far, so good. But isn't that when things went a little off the rails? At that point, senior management could have paused, taken breath, and fully consulted owners and workers on the scope of the changes, their details, their consequences, and whether or not workers and owners were prepared to pay the price for the changes.

Instead, we were not asked. Not properly. A couple of presentations and a slide-show don't really add up to democratic consultation in a co-operative, do they?

If we had been a proper part of a truly democratic decision-making process, we would now, all of us, worker and owner alike, be invested in ownership of the big changes; there would be much less complaining about the consequences; and we would all be a lot better placed to ease the process of implementing the changes.

I think it's fair to say that. Don't you?

Now we are told that senior management have learned from the mistakes that were made. Well that is certainly encouraging to hear. And they have an excellent chance to prove it. They can ensure that workers and owners are properly, fully and democratically consulted over the upcoming refurbishment of the Carrboro store.

And maybe they can make a start by telling all of the Carrboro workers how that consultation will proceed, at the Carrboro 'Employee Meeting by Unit' (EMU) this coming Monday evening?

Your Co-op Needs Your Help - Now!

The Board of Weaver Street last night offered some opportunities to all of us who are worried about our co-op at the moment. Opportunities to make things different. To make things better.

But it requires all of us to take advantage of those opportunities. Not just one or two of us. So, please rally round!

The Board kindly allowed me a chance to address them on the concerns many of us have about Expansion and the Food House.

Once the ball was rolling, several other Consumer- and Worker-Owners chipped in, including Lori Washington, who presented a letter from a work colleague on the Front End at Carrboro.

I think it is fair to say that, at first, the Board seemed stunned by the depth of antipathy among workers and owners to the manner in which implementation of Expansion has been mishandled.

Then, to be equally blunt, the Board resorted to the arcane meanderings, which have so many owners and workers in our co-op perplexed at the moment.

In the face of a phalanx of complaints by workers that they are not happy with the way they are being treated at the moment, the whole Board signed a report that said that management was doing a good job in its treatment of staff.

Just when we thought all had been lost, new Director David Rizzo and Consumer-Owner Director Robert Short came to the rescue. They refused to back down on their demand that the Board respond immediately to the worries of owners and workers.

After some more arcane meanderings, the Board agreed that Ruffin would spend the next month addressing all of the concerns raised by workers and owners, and would then report back to the September meeting with his progress.

Depending on the extent of that progress, the Board would then decide its next steps. And that's where we get the first of our opportunities.

We should all pay close attention this next month to see if there is any change in what is happening around us.

Do we get answers to our questions at the Unit Meetings next week? Do work and store conditions get better and become less stressful? Are we given proper information to supply to customers? Do our managers begin to listen to us - seek our input? Does food supply improve?

If the answer is 'No,' then we go back to the September Board meeting (September 17 - in Carrboro). Not just one or two of us. All of us. Owners and workers alike. And we register our continuing concerns - loudly!

I will be writing to Jacob, Board Chair, to ask him to set aside time in that meeting to allow owners and workers to to respond to what Ruffin has written in his report. And I will be asking for that report to be made public.

Are there now other opportunities to make a difference? Yes.

The Board invited Worker- and Consumer-Owners to write to them with ideas for subjects to be discussed at the Annual Co-op Owners' Meeting on Sunday, October 19 (not to be confused with the Annual Co-op Employees' Meeting). Write to board@weaverstreetmarket.coop with your suggestions.

And then attend the Annual Meeting. Take a fellow owner. And make a fuss!

Is the Board doing enough? No.

To be absolutely frank, our current Board does not understand that a co-op should be owner-driven, not management-driven. The Board spends too much time listening to senior management, and not enough time listening to owners and workers.

The rest of the national grocery co-operative community is investing heavily in the concept known as 'Ownership Culture.' Meanwhile, we invest $6 million in a management-designed Expansion, and a culture of secrecy and control.

I'm sorry if that bluntness offends, but there is too much at stake for me to worry about the sugar coating.

Can we do something to make things different - and better? Yes. We can make the Board different.

Become an owner. Contact: Linda@weaverstreetmarket.coop. Once you have been a worker with The Weave for six months, you can become a Worker-Owner, and you can vote in the 2008 Board Election - to be held this October. You can become an owner right up to October 25.

Now, we did a lot of hiring in April-June of this year. So you folks should become eligible to become owners starting in September. Don't wait for someone to contact you. Get a hold of Linda at that time.

Then, vote for a Board Candidate who truly believes that it is the job of the Board to listen to workers and owners, not just to management - as our Governance Policy dictates.

I spoke with a couple of Worker- and Consumer-Owners after the meeting. I wanted to listen to their specific concerns.

They were confused as to why the Board seemed, at first, so reluctant to step in and respond to our worries. They were quite disenchanted.

I told them then, and I'll say it again now: do not give up hope. It is not too late. We can make things different. We can make things better. We can. Honest.

We just need people on the Board who understand how to make us a 'Listening Co-op.' And that, in turn, needs all of you!

Again, I'm Confused...

So, now I'm being told that the slow-down in hiring new staff relates only to food service workers in our retail stores, and is to compensate for those food production workers who moved to the new Food House.

I'm told that it has absolutely nothing to do with falling sales in our retail stores. With me so far?

Ok. So, how come some workers in the Food House tell me that they also are experiencing a similar shortage in staff?

And how come I'm told by some workers in the retail stores that the same shortages exist in their non-food service departments?

And how come...wait a minute...yup...now I've got a headache...

Now I'm Confused...

Today I went on a very professional, well-organized tour of the new Food House.

Every single supervisor who addressed my group waxed lyrical about the improvement in the food production process. Every single worker waved and smiled at us. And every single supervisor than told us that all of the workers were happy.

So why, if the food production process is so improved, why are our customers so unhappy? And why, according to Ruffin, are our sales falling?

Why, if our Food House workers are so happy, why are they telling me privately that they are unhappy? That promises that were made about work conditions have been broken? That no-one listens to them? And that they are fed up producing food that does not meet their own artisan expectations?

And why, if everything is going so swimmingly, why are we now instituting a co-op-wide program to cut staff numbers by slowing up on hiring?

You don't contract in the middle of an expansion, just because you hit problems. Contracting the number of staff - when there is still more work - will lead to over-work, over-stress, lowering of productivity and departure of staff. You only end up exacerbating the problem.

Of course, I want us to succeed. We can't go back. Although I do hope we do a much better job of asking before doing when it comes to the Carrboro store refurbishment.

But definitely, we absolutely can not turn 180 degrees, and head off in the opposite direction. That's suicidal business. However, we might need some serious adjustment. And that is not going to happen if our leaders are in a state of denial.

That is why I am raising the matter of work conditions and the expansion generally with the Board tomorrow evening. They need to sort out this confusion.

Confusion is not a good thing in a $20 million business. And surely it goes without saying that it is unacceptable in a co-operative?