Principle 6: Trading together, do we?

When I first learnt about co-operatives, I thought Principle 6: Co-operating with other Co-operatives was the most powerful of all the principles and gave co-operatives a serious competitive advantage against other forms of business and other social enterprises for that matter.

I imagined this to be like being in the Freemasons, or going to the right University. The right handshake, name dropping Horace, George, or the Fenwick Weavers and you would be instantly given all the advice, business contacts and co-operation you required from fellow members of the movement.

Now that I have been "in the movement" for 18 months and talked to a lot of co-operatives, I find that this is not always the case, particularly the trading together aspect of Principle 6. There is interest though: for some a genuine commitment to a stronger movement and helping fellow co-ops, for others its just good business sense.

People do try and are successful, but this is mainly the larger co-operatives or in an informal way. There are some who try to inter-trade, market to fellow co-operatives and don't meet with much success. There has even been a proposal put forward to develop a business referral network called "principle six". So does it work? Can co-operatives trade together?

Some examples of success:

• Fair trade & supporting producers in developing countries - A good example is Palestinian Olive Producers supported by Zaytoun & Olive Co-op are selling under the Equal Exchange label in Co-operative retailers like the Co-operative Group and the many smaller retailers. The wider fair trade work done by the co-operative movement has helped 1000s of farmer co-operatives round the world.
  
• Initial growth in Co-operative Sector - Historically the consumer societies had a strong tradition of co-operating with each other, the formation of the Co-operative Wholesale Society and CRTG.
• The Co-operative - The Renaissance in the Co-operative Brand and the sector as a whole is in part down to the continuing co-operation between the consumer societies.
• The Phone Coop - has been particularly successful at using other co-operatives to promote its services, Co-operatives UK members for example get a 6% discount and we promote this as part of our membership offer.
  

Through formal co-operating (CRTG) , to the less formal (worker co-op wholesaler selling each other products), co-operatives can and do co-operate. What I am interested in, is why small and medium sized co-operatives and in particular worker co-operatives find it difficult to trade together. This is not just about inter-trading but doing joint projects, making business referrals to each other.

Here's one idea for doing using Principle 6 to trade together, (send me more):
Joint marketing is the process of promoting your co-op to the customers of other co-ops. For example, suppose you wholesale ethical products to small ethical retailers, your customers, probably have a website, bank account, phone line, and you would hope accounts.

You could ask co-op providers of these services to offer a benefit to your customers (of course with an extra discount if these customers are co-ops themselves). If your products are relevant to their customers you could mirror the deal and promote to their customers. This could result in a win-win situation for both of you.

Step 1 - Understand your numbers. You'll need these to demonstrate how much money your fellow co-op could make. For instance, work out what your response rate is for a typical direct-mail campaign and the value of each new customer.

Step 2 - List products and services that are complementary or related to your own, and that you would like to offer your customers. Don't leave out products or services that aren't necessarily related but in which your customers might still be interested.

Step 3 - Search for co-ops that sell those products and services. Then contact those people and propose a meeting to explain your strategy further or get in touch with me to make the link.

Step 4 - Get an agreement. When negotiating your deal, always try to get an agreement to extend your relationship and be clear what you both expect from each other.

Step 5 - Contact Co-operatives UK so we can promote what you have achieved, share the learning or even better get us involved in the idea from the start.

Before you go and start looking for opportunities:

How much trade do we already do with each other?
What stops us from doing more?
What things could we do to improve it?

If you are as interested in the answers to these questions as I am please fill in this quick survey and I will publish the results at the end of October. Together we can look at improving our Principle 6 behaviour. Please leave any comments on this blog or start a discussion here.

Principle 5: Learning together to be a better co-op

A post from Adrian Ashton sharing his thoughts on training - Training...an idea that either fills you with enthusiasm, or fills you with dread (depending on your experience of previous trainers). Or, maybe something that your co-op regularly budgets for (in cash and time), or views as a luxury – to be undertaken only if someone else is paying and no-one's off sick or on holiday...

Whatever our feelings may be, training and learning are key aspects of any co-operative enterprise: remember, in the absence of a legal definition of what constitutes a co-operative business in the UK we rely on being identified by our values and principles which include:

• Principle 5, A commitment to the education, training of members and workers.

So, we need to do be doing this, but what if we're facing some of the constraints listed above? It's not uncommon for co-ops to have had bad experiences with trainers who didn't 'get' what a co-op is, nor in this current training climate to be facing difficultly in justifying spend on training courses.

There is a solution which also neatly fits with another of our defining characteristics:

• Principle 6 Co-operation between Co-operatives - We should work together at local, regional, national and international levels to achieve our aims.
  

As a movement, we've fundamentally changed the way business is done by showing that our alternative model can not only work, but also is also a very powerful tool to address all sorts of issues in our society and world. In doing so, we've created a lot of knowledge, expertise and skill.

So how do we look outside of ourselves to source training?
We've an internationally recognised College that specialises in co-operative learning, most relevant for small and medium co-operatives at the moment is a practical work-based learning scheme.

We have numerous networks (both local, regional and on-line). Many co-operatives informally support each other from phone calls, and visits to staff swaps. We now also have tools to allow us to measure our performance against our defining values and principles (CESPIs) so can even more easily identify who we might want to approach to ask for some ideas...

Above all – remember learning doesn't have to be a stuffy formal classroom affair: it can be done as a shared activity with other co-ops, be as simple as reading and article or listening to a podcast, or even spending time down the pub with other co-op members.

What's stopping you?
What is stopping us from learning together, post your challenges here, or on our facebook group and lets see what we can all do to suggest 'work-arounds' to them.

Comments from John Atherton
From talking with members I hear of lots ways members are or have learned together.

Daily Bread and Unicorn used to do staff exchanges, as did Brixton Cycles and Bicycle Doctor does anyone still do these, or would they like me to facilitate exchanges?

Becky of Who Made Your Pants recently visited Infinity to learn about engaging members in the Co-operative Culture. Both parties even got paid for this through a NCVO fund called Only Connect.

Members are always asking for example policies and procedures, and I share what I have on a resources page for worker co-operatives (I am always looking for new resources and links to add).

We are developing an online resources repository, wiki and the ability to discuss issues with other members on a new Business Networking Website (more information on this in November).

I agree with Adrian, there are lots of opportunties for co-operatives to learn from each other. What are your barriers to doing more?

Case Study: Calverts

Calverts, one of our long standing worker co-operative members and has kindly updated their case study. If your interested in what makes a successful worker co-op, continue reading. If you want to help us promote the co-operative model, I am always looking for more case studies.

Founded in 1977, and based in central London, Calverts North Star Press Ltd (now trading simply as Calverts) is a successful graphic design and print co-operative employing 16 worker members, with a turnover of £1.4m. The co-op specialises in communications design, branding, graphics and print. Clients range from investment banks and marketing agencies to government organisations, arts groups, charities and campaigns. Services include branding, corporate identity, design, copywriting and photography; website design and development, and print media of all kinds.

Calverts is a market leader in environmentally positive design and print. It holds Forest Stewardship Council (FSC), Greenmark and ISO14001 accreditations. In 2001 it was given the Inner City 100 award, in recognition of its achievements as one of the UK’s fastest growing inner city social enterprises.

Calverts was named in honour of Giles and Elizabeth Calvert, who published and printed many of the millenarian texts of the 17th century English revolution (and were frequently imprisoned for their efforts). Their workshop was in Clerkenwell, where the co operative had its first premises.

Calverts was set up after an industrial dispute at IRAT services, the design and publishing wing of the Arts Lab. The workers had understood that they were working for a ‘co-operative’, which turned out not to be the case when they found themselves in receipt of redundancy notices. Believing that there was a market for their work, wanting to preserve jobs, having no investment capital and wanting to work in a radically egalitarian way, seven of the employees decided to set up a common ownership, ICOM (Industrial and Common Ownership Movement) collective type worker co-operative. They incorporated as an Industrial and Provident Society in November 1977, and the first formal meeting was held at the North Star pub in Finchley Road (hence the other part of the co-op’s name).

Early barriers to success were many. The co-op had no capital other than a £500 loan from ICOF to buy equipment; initially, there was no money to pay wages. Calverts’ landlord required personal guarantees on the lease (two people volunteered, and the other members signed a legal deed in case things went wrong, to indemnify the two); suppliers had to be persuaded to continue delivering raw materials such as paper, ink and typesetting consumables on credit; membership of the NGA trade union had to be negotiated.

The biggest single weakness of the co-op was lack of capital. Calverts was a classic ‘sweat equity’ operation. It was decided to cease trading if all the members could not be on the trade union minimum within six months (they succeeded); apart from some small members’ loans at low interest rates, major equipment purchases were financed through debt (asset finance loans from Close Brothers merchant bank, United French Banks, and further ICOF loans.)

This has continued to the present day; Calverts last major investment was in a £750,000 Heidelberg printing press, financed by a loan from Close Asset Finance over 7 years. The view has always been that relatively expensive capital has been a price worth paying for autonomy and equality.

Essentially, all the early problems were overcome through a combination of militancy, hard work, solidarity and persuasion.

For the worker members, the main benefits of working at Calverts are good wages and conditions (slightly higher than average pay, and much better conditions than the industry standard), respect and equality in the workplace, education and skills development, and the opportunity to exercise democratic self-management. Average staff retention is more than twice the industry average, which means that as a business Calverts has built a body of considerable creative and technical expertise. This is reflected in high levels of quality, service and client care.

Trading through three recessions, no employee has ever lost their job by reason of forced redundancy, and continual improvements in productivity and service delivery meant that real wages have increased almost without interruption for 30 years. Apart from these obvious social dividends, Calverts has also developed an unusually strong management culture based on mutual respect, trust and consensus building. This is the true strength of the business, and it is maintained by paying close attention to good governance, which the members have interpreted as operating according to both the letter and the spirit of the co-operative principles.

Successful and innovative business initiatives in Calverts have come from all areas of the co-op, which has always invested for the long term, and attributes the success of its investment strategy to rigorous discussion and testing of its plans. As a result, the co-op has weathered the storm of the current recession, in a business market was already hugely competitive, much better than its competitors.

In Calverts early days, skills development was almost entirely ‘on the job’, and members rotated job functions. As the business grew, technical and creative skills became more specialised. All members have a personal training budget which allows them to develop knowledge relevant to their job role, but also to their personal aims. In recent years, the co-op has invested more in the area of new member induction and education in co-operative values, principles and the movement’s history, believing this to be an important aspect of skills development for any worker in a co-operative business.

Interestingly, Calverts is still a true equal pay co-op; the hourly rates of pay are the same for a founder member with 31 years’ service, who is now a trained financial accountant, as for a newly-qualified design or printing apprentice. The co-op has had to meet the needs of all its members by driving up productivity, and thereby improving pay and conditions across the board. As a result, it has no problem recruiting experienced and highly-skilled new employees.

Calverts demonstrates that radical ideas around worker co-operation can lead to innovative and successful businesses, bringing member benefits which other business models cannot equal. It believes the project to build co-operation as 'social brand' is now an urgent challenge for the wider movement. To demonstrate the kind of work it thinks is needed to raise public awareness and approval of co operative values and principles, Calverts developed the 'Co op Hands' stamp for worker co operative produced goods and services, and is working on ideas for a new ‘co-operative mark’.

The co-op champions socially and environmentally conscious design and print - but, like many other co-operatives, it didn't jump on the last green bus. It pioneered high quality printing using recycled papers and vegetable oil based inks before such things were popular or profitable. As one member explains: "our clients want the assurance and credibility which comes from eco-positive design and print - but in Calverts early days, it was as much about clean and safe working methods for our members."

Jess Baines, a former member now teaching at the London College of Communication, has set up a wiki about radical printshops, design studios and poster collectives of the 70’s and 80’s, and there are a couple of interesting reminiscences about Calverts here.

Sion Whellens one of Calverts members is a member of the Worker Co-operative Council and at present represents the WCC on the main board of Co-operativesUK

Other links:
www.twitter.com/calverts
Calverts Facebook group