Community co-operatives – realising the potential

11 06 2013

Community co-operatives are organisations set up to provide services to a particular community which use co-operative principles to guide their activities.

When a community is a local community, this is usually easy to recognise as there are physical boundaries, maybe a village, or a block of flats but in an increasingly complex world most of us inhabit many different communities and play different roles in each community. For example, we may be a member of a faith group and a volunteer for a charity and a member of a local sports team.

Almost every activity which involves people coming together for common purpose has the potential to create a co-operative community enterprise. The co-operative enterprise I am most closely involved with, the 3rdimagazine, (www.the3rdimagazine.co.uk) is just such a community with women and men from across the UK coming together to create an on-line magazine which looks at business issues from an ethical perspective. We do not serve a local community but rather serve a community with a shared interest in ethical business practices and in furthering equality and diversity in the workplace.

Community is an active condition reinforced by active membership with people choosing to identify with and support community values and purpose.

Community Investment involves members of that community buying shares in an enterprise that serves that community. It gives people a stake in the success of that enterprise. Common ownership puts the assets of the community co-operative in a similar relationship to its members as the village green is to the inhabitants of a village. Everyone has use of the asset but no-one person has title or claim and no-one person can dig it up and take it away.

Throughout the last century, the model of community action has been one of volunteering and heavily reliant on grant-funding from public sector bodies and individual philanthropy. This is not sustainable. I am a fan of enterprise and I’ve run successful businesses for the last 20 years. I see community enterprise as a real alternative to the market failures in the private sector and the continual withdrawal of funding from the public sector.

Community enterprises provide goods and services to meet the needs of their communities. Community shareholders, unlike traditional shareholders, only expect a fair return not a maximal or rapid return on their investment. This long-term alignment of shareholders needs, to the needs of the community enterprise, promotes long-term sustainability over short-term profit-taking.

At a time when many communities are faced with the loss of local amenities this change in focus is, I think, crucial. And community shareholders are also far more likely to get involved, to become active supporters of the enterprise, and not just remain as consumers of products and services. This engagement also strengthens the business model. This flexibility of role: as customer and supplier and employee and owner is a true stakeholder model, and is more robust and sustainable than the traditional supplier- to business- to customer model. It is this combination of engagement, flexibility and sustainability that leads me to conclude that we need more community enterprise and ownership.

So, what sort of services can community co-operatives provide? Examples are wide ranging and reflect the needs of the communities they serve; from a creche in a tower block containing many single-parent families which enabled parents to seek work through to a launderette in a housing estate. Most successful community share issues focus on an asset, which is why community shops, pubs and community buildings have featured amongst the big success stories for co-operative community enterprise. However, just because a community lacks a service that it wants, does not automatically mean that there is a viable business model that can meet that need. As with any business an opportunity only exists if there is sufficient demand from customers willing to pay a reasonable price for the goods or services provided.

With our long term energy future, particularly our reliance on fossil fuels, looking increasingly insecure, more and more attention is being drawn to renewables, with local communities seeking to benefit from renewable energy projects based in their vicinity. By coming together to form a co-operative the local community can receive a direct financial benefit from the development and can use any profits generated to re-invest in other community projects. The profit generated stays within the community rather than rewarding shareholders outside the area.

From my perspective the key is enterprise and long-term viability and I think that the model of ownership and engagement in community co-operatives means that they can be more robust and sustainable than either their private sector or charitable counterparts.

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Diversity – leading by example

3 06 2013

The3rdimagazine is a magazine that, historically, has looked at business issues from a woman’s perspective. While the focus has widened to include co-operative, social and collaborative enterprises and to examine alternative business and economic models it is entirely appropriate that the main issue when we consider diversity here to look at issues such as the representation of women on boards.

However an issue that needs addressing, and quickly, is the lack of diversity at the very top of government in the UK.

A government report published by former Labour Minister Alan Milburn found that while fee paying schools educate just 7% of pupils in the UK they account for;

  • 59% of cabinet ministers
  • 35% of MP’s
  • 45% of senior civil servants
  • 80% of Supreme Court Judges
  • 43% of barristers
  • 54% of leading journalists.

While children of wealthy families have far greater access to opportunity than children from poor families, in everything from gap year internships to ski-ing holidays, education is supposed to be a great leveller. It is supposed to work in allowing children from disadvantaged backgrounds to succeed and to compete with their more advantaged peers. It is supposed to create a level playing field. Yet what we now see is the ability to reach the top dictated by what Warren Buffet has called, ‘The Lucky Sperm Club’. Put less prosaically, a society where who your parents are, and then the school they can afford to send you to, is the critical factor in determining your future success.

The lack of diversity amongst our decision makers, with the Prime Minister, Mayor of London, Chief Whip and even the Archbishop of Canterbury, to name but a few, being former pupils of Eton College not only impairs social mobility and perpetuates inequality, it mitigates against diversity due, not least, to confirmation bias.

Confirmation bias is is a tendency of people to favor information that confirms their beliefs. We all do it. I read newspaper articles and facebook posts and watch documentaries that are in line with my existing beliefs and opinions. Even when we do expose ourselves to alternative points of view, that too may be a form of confirmation bias; in that we seek to confirm that the opposition is, indeed, wrong.

Confirmation bias leads us when interviewing to chose candidates that are most like we are. Men are more likely to favour male candidates in the boardroom. This, not poor quality candidates or insufficient number of applicants, is the most likely factor that mitigates against getting more women into these senior positions. It is not necessary for confirmation bias to be conscious for it to work!

In her book, Willful Blindness, Margaret Heffernan argues that the biggest threats and dangers we face are the ones we don’t see – not because they’re secret or invisible, but because we’re willfully blind. We turn a blind eye in order to feel safe, to avoid conflict, to reduce anxiety and to protect prestige.

Both these phenomenon mitigate against increases in diversity. We chose to operate in ways which confirm our existing prejudices and we fail to see that which we choose not to see.

We know that confirmation bias exists so we must do what we can to work against our unconscious or subconscious prejudices. We know that we have a tendency to ignore issues that have the potential to cause conflict or unrest so we must do more to challenge existing structures and systems.

We must all lead by example when it comes to increasing diversity. In our businesses we need diversity. Board diversity helps provide balance to the maverick, testosterone fuelled decision-making processes that brought down the big four banks and other financial institutions. Employee engagement at all levels of the company, and yes at board level, would also be a major positive influence. What we need to create is an environment of rich cultural, gender and social diversity.

And what is true in businesses is just as true in our government. We need a more representative legislature; more women, more individuals who have experience in areas other than just politics and a very good place to start would be by employing fewer public schoolboys.