Transcript Co-operative Leadership and Governance. A Values – Based
Moncton 2012 : Managing the Co-operative Difference.
Does the Co-operative Difference imply Different Managers as well as Different Governance?
By Dr Peter Davis, Chartered FCIPD, AHEA
The Conference Themes which I want to prioritise today are: 1. The Global Context Today and Yesterday the lessons of history and the threats the contemporary context poses.
2. What is the Co-operative Difference and how to apply it operationally and strategically?
3. The Problem of Governance, Leadership, Engagement and Management 4. Performance measurement for co-operatives.
5. Brand Equity Youth Identity, the Co-operative Identity and the culture question
1. The global crisis and the threats it poses
1.1 Globalisation & the Financial Crisis - The end of laissez a faire
The state no longer regulates Capitalism it is collaborating with it
In the global village of 1000
400 live without civil rights 50% of the working class earn less that $2US per day
1. The global crisis and the threats it poses. 1.2 Rising inequality and poverty In the Global village of 1000 60 own 50% of all the wealth in the village 600 live in shanty town level accommodation 500 are Hungry 300 are under or unemployed In the poorest part of the village life expectancy is 36 In the richest parts of the village the gap between rich and poor is the highest for 30 years Ratio of top earner to bottom 1960 in average corporation 2007 40 : 1 344 : 1
1. The global crisis and the threats it poses 1.3 The environmental and ecological crisis Species Depletion Pollution of air, sea and fresh water tables Deforestation and lack of habitat Ocean Dead Zones and acidity levels growing Ozone depletion - increase in skin cancers The built ugly dehumanised built environment Climate Change and the food chain – signs wine growing in southern Italy and Spain are starting to move north because the climate too hot Resources Depletion - mineral hoarding and oil
The Trash Vortex The trash vortex is an area the size of Texas in the North Pacific in which an estimated six kilos of plastic for every kilo of natural plankton, along with other slow degrading garbage, swirls slowly around like a clock, choked with dead fish, marine mammals, and birds who get snared.
Gore Point Alaska
1. The global crisis and the threats it poses The Industrial Revolution in the 1820s in England – the first globalisation 1821 Political repression: no democracy: No Vote Trade unions illegal The six acts made public meetings and protest virtually impossible Newspapers heavily taxed Liberalisation of wage regulation Technological change creating mass unemployment Starvation Urbanisation /land clearances Child labour Life expectancy 27 in the cities and 32 in the countryside The Ricardo Malthus Debate and technology
1. Robert Owen The Model Village 2. Association based on the Labour Theory of Value and incremental accumulation of capital owned by the community 3. They reformed and democratised our society without a revolution or a civil war in a century 4. By 1921 One person one vote A mass Trade Union Movement A massive Co-operative Sector The beginnings of the welfare state HOW?
The development of civil society Today we must as a key strategy develop the global civil society
1. The global crisis and the threats it poses 1.4 The Demographic explosion 9 billion by 2050 1.5 The Technological Threat Bio genetic crop modification Human genetics Cloning AI Artificial Intelligence Robotics What is it to be a human being?
2. What is the Co-operative Difference and how to apply it operationally and strategically?
1. It is a different ownership model based on common community based ownership 2. Its purpose is to provide a) access to resources and leverage in markets to empower individuals and communities.
b) educate / develop the human capital in the community c) provide control of wealth to deliver a just distribution d) to create solidarity and fraternity amongst the members and their stakeholders 3. It achieves these purposes by providing a range of high quality services desired by the members at prices that they can afford and permit just exchanges with suppliers and workers.
2. How to apply it operationally and strategically?
Owens answer to “ What is the purpose of economics?” Character formation Cuba. Human capital development a priority This should be the priority for co-operative economic development Why?
Because we must have a value change, a life style change, to meet the challenge of globalisation
But what is Human Capital Development ?
1. In the Catholic / Christian Tradition a human being is a composite of body and soul 2. In social sciences we are seen as complex social beings and psychological beings 3. There is a spiritual dimension to human development whether you believe in an immortal soul or not 4. Justice and the common good require an authentic fraternity or unity 5. Human development includes skill and knowledge 6. But without character development it will always be incomplete and potentially dangerous to the person concerned.
7. No authentic economic development without moral or ethical development
3. The Problem of Governance, Leadership, Engagement and Management
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Traditional Approaches to Governance
– Legalism – Division of Power – The Democratic Principle – Standard Setting Monitoring – Reporting and Accounting •
The role of Culture and Values
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The role of Modern Management Methodologies
Why co-operative leadership and governance is problematic?
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The problem of the leadership followership gap (From Iron Law of Oligarchy- Roberto Michel's to Enron)
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Scale, technology, speed and globalisation
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Models of co-operative management
Models of Co-operative Management and Governance
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Charismatic Great Leader Model
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Collective Model
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Civil Service Model (CUs and most other Co-ops)
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Co-operative Value Based Model is a Servant Leader Model?
Definition of Co-operative Management Co-operative Management is conducted by men and women responsible for the stewardship of the co-operative community, values and assets.
Co-operative managers provide leadership, policy development options and operational control for the co-operative associations business based upon professional training and co-operative vocation and service.
Co-operative management is that part of the co-operative community professionally engaged to support the whole co operative membership in the achievement of the co-operative purpose.
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Operational Principles for Co-operative Leadership, Governance and Management?
Davis & Donaldson propose seven?
1. Pluralism 2. Mutuality 3. Individual Autonomy 4. Distributive Justice 5. Natural Justice 6. People Centeredness 7. The multiple roles of work and labour
The evolution of management in four broad phases
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Scientific Management - Engineering led Human Relations Theories – Organisation led Contingency Theories – Environment led Value Based Management – Values and Culture led integration
Co-operative Value Synergies with Modern Management
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Mission and Culture Management HRM TQM / WCM / Customer Care Brand Recognition and Lifestyle Relationship Management/JIT/ Supply Market Research and Promotion Ethical Consumers
Value Based Management –culture is more critical than rules and systems
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Values help us to understand our environment
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Values help to shape management and organisational culture
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Values gives a shared sense of solidarity and belonging Values determine our sense of purpose and objectives
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Values help us to relate to all our stakeholders
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Values help us adopt appropriate strategies, policies and procedures
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Our values help to differentiate our brand in the marketplace as long as we live up to them
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Values underpin standards and behaviour and provide an additional criteria by which to evaluate management
Co-operative Values as Competitive Advantage
• Holistic approach to customer means we can reinforce the offer with social value – added.
• Differentiation in terms of values and ownership appealing in the modern context • Social values integration with the business values gives added meaning and satisfaction for employees and possibly suppliers.
Co-operative Value Based Management as an additional tool for governance
• • • • •
Management methodologies can empower membership and employees.
Co-operative values and purposes can cement stakeholder relationships.
Influence management culture.
Encourage transparency.
Creates a listening and responding management.
Managers Lead – Boards Govern
We will attract the right people when we have a strong unified brand We can select the best people when we develop modern selection tools to help us
The cycle of democratic member and stakeholder engagement Conducted using modern market research tools
Ask Results Report Report Action
Reporting using multi media saturation methods
4. Performance Measurement for Co-operatives.
1.Performance on operational KPIs Costs Inventories Quality Assurance Employee productivity Employee behaviours Waste Management Health and Safety etc.
2. Performance on stakeholder added value
4 Stakeholder Performance Indicators
How do we engage stakeholders / members in in the project of lifestyle change i.e. lowering consumption?
Micro Finance & Domestic Labour Money Economy
Big Business Communities Capital dominated relationships in the outer circle Banking and Finance Associations SMEs Families
Domestic Economy
Labour dominated relationships in the inner circle Individuals Public Sector
5. Brand Equity, Youth Identity, Co-operative Identity and the culture question Build the Brand to match the segments your aiming to attract Target the segments with appropriate vision and message Use appropriate media Offer appropriate activities Recognise young people need to have fun and have peer based activities Facilitate and support but delegate control and reporting
Towards A New Economics Co-operative Value Based Managers A Movement of Voluntary Democratic Associations of Members In their communities
UN's Intergovernmental Panel on Climate Change Final Report 2007
"What is an extremely powerful message in this report is the need for human society as a whole to start looking at changes in lifestyle and consumption patterns," Rajendra Pachauri, the panel's chair, said at a press conference today
Teds 15 minutes silence The essential basis for activism Because to change society we must start with ourselves.
Question: “How is what I am doing fitting into the bigger picture and changing it for the better?”
Davis P and Donaldson John, Co-operative Management. A Philosophy for Business , New Harmony Press, Cheltenham.
International Journal for Co-operative Management Vol.1. Number 1 to Vol. 6. Number 1 Open Access at www.le.ac.uk/ulsm/umbo Also From ILO Coop Branch Geneva Davis , P(1999) Davis, P (2004) Managing the Co-operative Difference HRM in the Co-operative Context .
The UK Co-operative Bank plc Case Study
• It started out as another UK post war co-op failure (<3% market share, facing the big four 80%+ of retail banking market • Strengths in Local Government, reputation for integrity.
• Market Research led Holistic Marketing • Segmentation , target market and positioning strategy based on economics and ideals • Marketing led organisational development • Product innovation, cost reduction, re-branding
• Ist UK Bank to offer free cheque • Ist UK Bank to offer interest on current account • 1st UK Bank to offer a charge free gold card • Leveraged IBM to offer best ATM service • Leveraged Sky BT to offer 1 st based assess to accounts • Smile internet banking brand TV Screen • Established an ethical banking code • Established a customer led CSR programme
Results 1. The first positive national brand the co-operative movement has developed since the war 2. Record profits year on year to 2007.
3. Established or helped to develop new communities of concerned people who want to make a difference to society 4. Transformed management and staff morale 5. Engaged customers : clearly differentiated brand