Decision making

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.

Dealing with Difficult People?

When I’m web surfing – looking for interesting insights and new approaches to dealing with conflict, I often come across articles or workshops claiming to tell you ‘How to deal with Difficult People’ – and I’ve always had a bit of a worry in my mind about how useful such approaches are – I’m not convinced that to pin the blame for conflict in the workplace on one ‘Difficult Person’ will solve the problem.

A few years ago, I worked with a now large and successful co-op, who asked me to come in and facilitate what they expected to be a ‘difficult meeting’. Two founder members who had conflicting views about the way the co-op was being run were expected to come head to head. The issue was being identified as a personality conflict – i.e. one member was being ‘difficult’. In fact it didn’t come to that – the members were too thoughtful to permit a head to head situation developing. What it threw up was that the difference between the two members was a typical challenge for any co-op growing up from three or four members to ten or twelve – one member wanted things to continue in a laid back ‘everyone decides everything’ style, whilst the other member saw the need for structure and a division of labour.

After much discussion the co-op agreed to adopt a more structured approach, recognising that especially regards HR (in co-op speak Human Relations) the personnel team needed the authority to implement policies agreed by all the members, and that the General Meeting was not the place to deal with issues such as members consistently arriving late. The co-op subsequently asked me to facilitate a strategy meeting called to look at the whole structure of the business, developing an organisational structure based on teams and team representatives, which as far as I know has served them well since.

We have also worked with co-ops in situations where a co-operative board member – again characterised as ‘difficult’ – had exploded with frustration in public, much to the board’s embarrassment and dismay. On investigation however, this ‘difficult’ behaviour seemed to be the result of a whole cat’s cradle of behavioural and governance issues.

In similar situations, we would recommend improving practice in areas such as:

 1. Communicationsears have walls

2. Meetings skills

  • An important role of the chair is to summarise debate as it goes along and especially to summarise any decisions taken in clear language so the minute taker can write it down
  • Minutes should be a record of decisions taken, not a blow by blow account of the meeting
  • There should be an agreed approach for taking decisions, consensus is best for important long term strategic decisions which will impact on lots of people or involve large sums of money, for less critical decisions it’s ok to vote (unless your co-op has 6 or fewer members, when voting is not recommended)

3. Dealing with conflict

You need a tried and tested recipe for dealing with the inevitable tensions as they arise. There’s also a comprehensive and helpful leaflet published by ACAS

If your co-op is facing such difficultiesyou need to make sure you have a clear vision of what the co-op is for – what does it deliver to its members, agreed by members – without that good communication can be just an efficient way to disagree. The lack of such an agreed ‘vision’ could be the root cause of the problemsTwo people might be pulling in different directions, but they might be in a minority, with the majority wanting a third option and disengaging, which could lead to the co-op crumbling away. 

All of which leads me to think that there’s no such thing as a ‘Difficult Person’ – although of course we can all exhibit Difficult Behaviour! Instead, developing a co-op ‘vision’, thinking about how we communicate, how we take decisions in meetings, and how we deal with the inevitable tensions when they arise – in other words, brushing up our co-operative skills – will make it less likely that such behaviour will occur and will help minimise its impact when it does. It will make us better co-operators and make our co-operatives better places to work.

Co-operative skills

What we mean by co-operative skills is the skill-set you need to be able to co-operate effectively – i.e. work with others in a collective, non-hierarchical, democratically managed organisational structure.

Co-operative skills include:

  1. Communication skills (understanding the essential elements of communication, i.e. sending and receiving messages, and minimising ‘noise’)
  2. Meetings and decision-making skills
  3. Conflict management
  4. Understanding how to avoid potential conflict caused by poor governance or poorly planned growth.

It has been suggested that Emotional Intelligence is a necessary basis for the development of co-operative skills, and if we assume that what we mean by that is self-knowledge and self-awareness, reflection, empathy and social awareness, then common sense would suggest such attributes are indeed essential. Here’s a brief summary of current understanding of emotional intelligence, a look at some of the skills and how we can improve our own emotional intelligence.

Whether or not it’s possible to identify and measure emotional intelligence, some of the basic requirements for co-operative working – such as good communication skills and the ability to behave assertively (instead of being passive, aggressive or manipulative) require self-knowledge, social awareness and empathy.

It’s my belief that such skills are not innate, and can be learned – indeed if children were taught co-operative skills in the classroom they would be better equipped to help build the better world we all want to see.

The elements above are all described and explained in the various topic areas of the website – with games, exercises, and links to other websites and sources of information.