Co-operative myths: decision-making is done by all, or how many co-operators does it take to change a lightbulb?
The last instalment of our series looks at the myth that in co-operatives, decisions are taken by everyone.
In this series Co-operantics aims to debunk some of the commoner myths about co-operatives – the stereotypical beliefs that people hold about what a cooperative is, which can lead to misunderstanding and can prevent people from recognising the very real value of the co-operative business model.
In co-ops everyone takes the decisions – right? Wrong! If they did, it would be difficult to get any work done!
Depending on the type of co-operative, everyone can be involved to some extent in decision-making, but the kind of decisions people can influence will vary according to co-operative structure. In a more hierarchical co-operative, with representative democracy, operational decisions will be taken by managers employed to run the co-operative, whilst member representatives may be able to influence strategic or policy decision making at Board level. The Co-operative Group is the largest consumer-owned cooperative in Europe, with a turnover in 2012 of over £13 billion. It is run like a conventional company, by employed staff and managers, but members sit on local and regional committees and also at national Board level, and are provided with induction and training to provide them with the skills and knowledge necessary to participate in running such an enormous business.
Employee-owned co-operatives tend to have less hierarchical structures, but nevertheless have a range of approaches to decision-making. Some, like Unicorn Grocery are committed to a highly participative approach to strategic management. They hold an annual away day where all members can contribute ideas and debate potential projects and initiatives, which can then be taken up and implemented by a strategic team or by relevant departmental teams. In other co-operatives, strategic decisions will be taken by a Board of Directors or a Management Committee, whose members are elected annually, often with a proportion standing down each year to ensure continuity whilst bringing in new blood.
In all co-operatives, people taking decisions must have delegated authority to do so, they must have the autonomy to get on with it without anyone peering over their shoulder telling them what to do, and perhaps most importantly, they must be accountable to the members in general meetings or at the Annual General Meeting (AGM).
There are a variety of levels at which decisions can be taken. In all co-operatives, employees should have job descriptions, which will include the kind of decisions to be taken on a day to day basis, as part of the job. Employees should also have easy access to the co-operative’s written policies and procedures, which will provide guidance for individuals on decision-making. Departments and teams should have an agreed remit, including the kinds of decisions they can take, perhaps with a budget limit. The co-operative’s Constitution will state what decisions can be taken at General Meetings and the Annual General Meeting, the latter usually concerned with election of Directors or Management Committee Members, approval of the Annual Accounts and acceptance of the Board or Management Committee Report, describing how Directors have implemented the co-operative’s business plan during the year.
Of course in smaller co-operatives, operational and strategic decisions will be taken by the same people, but wearing different hats, so it’s useful to find a way of differentiating operational decisions from tactical or strategic ones, by holding different types of meeting – or remembering which ‘hat’ you’ve got on!
Finally there are a range of approaches to decision-making, from Command (authority lies in the job description) through Delegated (authority lies in our remit) to Voting (authority lies in agreement by over 50% of the members) to Consensus (authority lies in arriving at an agreement that everyone can commit to).
It’s clear that each of these approaches has its advantages and disadvantages which are discussed in more depth here, however it is important that co-operatives understand the difference between voting and consensus decision making. It’s a mistake to resort to voting if your attempt to arrive at a consensus decision fails. It’s better to decide beforehand whether or not a decision requires consensus, and we believe there are clear circumstances under which consensus decision making is to be recommended. If the decision is going to affect large numbers of members, if it implies significant expenditure, or if it will impact on the co-operative in the long term, then it is worth using the techniques of consensus decision-making to arrive at a decision that everyone will commit to and no-one will ignore or subvert. However consensus decision making requires a good understanding of the techniques involved and can be time consuming. Seeds for Change have recently published their excellent Consensus Handbook with clear guidance and some thoughtful reflection on power and conflict.
And lastly, beware the dangers of Groupthink! Just because all your mates think it’s a good idea is not a good reason for agreeing something – co-operatives need assertive members who think for themselves and share their opinions including fears and reservations.