Making the Grade
Will co-ops succeed or fail in the new century? The answer lies with co-op education efforts
By Brett Fairbairn
Director, Center for the Study of Cooperatives
University of Saskatchewan, Canada
Editor's note: This article is based on an
address the author gave at the National
Institute on Cooperative Education
(NICE) in Atlanta, Ga., last summer.
hat kind of cooperative education is needed in an information age? Experts in globalization see the changes in our society as shifts in:
- extensity-the degree to which cultural, political and economic activities are "stretching" across new frontiers;
- intensity-the magnitude and regularity of interconnectedness;
- velocity-of global interactions and processes; and
- enmeshment-or interdependence, of the global and the local. (William S. Coleman, after David Held et al.)
No business and no organization will escape the impacts of these kinds of changes. Currently, we are seeing the reorganization and restructuring of many perhaps most sectors of human activity: new ideas, new influences, new attitudes, new competitors, new products and new methods. The resulting challenges for enterprises are not solved by simply throwing more capital or more labor at them: information is the key.
Cooperatives need to perceive and recognize change. They need to be
flexible to innovate and adapt appropriately and quickly in order to deal with complex, interrelated problems. Education has a role in every one of these processes and is essential to the success of cooperatives.
One of the most remarked-upon features of the new age is an excess of information. Facts abound. No one can keep up with all the stories, reports, articles, events and opinions. Skills and skill-training are everywhere, constantly changing and updated with the latest technology or the latest approaches. What people desperately need is not more information to add to all this noise, but rather mental tools to deal with information, to sort out what is meaningful, what is significant and what is needed.
We must distinguish training from education. Training imparts specific, predetermined facts, procedures and skills. Education develops in people the capacity to know what is important, how to do something and to find the information and skills they need. Cooperatives have gotten by for decades by doing a great deal of training particularly of staff and elected leaders. But in the new information age, they have to go back to doing more education, especially member education. This must be a new and innovative kind of education.
Education for change
Education must respond to four key needs on the part of members and leaders of cooperatives: a need to innovate; a need to respond flexibly to fundamental changes; a need to deal with complex problems; and a need to overcome compartmentalization within organizations. Cooperators need the ability to deal with rapid change. They must be able to generate and adopt innovations, assess new ideas and implement them appropriately. This doesn't mean buying new machines or software off the shelf. The most important innovations in today's business world are innovations in how firms are organized, how work is done, and how different units are linked together. Such innovations require a pervasive kind of education and minds that are not only open to new ideas, but that are also critical and constructive in applying them.
Cooperatives will need the ability to handle surprises, because the economy and world events will remain volatile and unpredictable for a long time to come. Flexibility will be a key attribute and will have to be encouraged and supported by education. Members and leaders who are trained only for specific roles and functions will find this training inadequate when the world changes around them. In addition to job and role specific training, cooperators will need a broader foundation of understanding of the economy and of their place, and their cooperative's place, in that economy.
Co-op members and leaders also have to be able to grasp complex phenomena, bundles of problems and changes that are interconnected and go beyond simple solutions. Changes in many spheres of society are occurring in parallel. What is happening in agriculture, for example, is related to retailing, manufacturing and science. What is happening within cooperatives is connected to what is going on outside them. Cooperatives mirror the society they are part of Changes in social priorities and attitudes are reflected in changes in cooperative members' and employees' values and behaviors. It is increasingly the case that cooperators need to understand society in order to understand their co-op.
All of these needs, requirements and trends are bound up with a fourth factor: non-compartmentalization of knowledge has become a central challenge for all organizations. Previously, organizations dealt with tasks and information by "bee-hiving" them off into specialized units. Today, in all walks of life-business, communities, governments and universities the challenges that matter require people to cross these boundaries and to connect knowledge of different kinds, from different people, about different things. There is no formula or specific structure to do this. It is, rather, a question of adopting a network model for how organizations work.
Education and strategy in a networked world
Networks are an increasingly prominent form of relationship in the post-modern economy. Instead of being entrenched in ponderous and long-lasting organizational structures, networks go across and between existing organizations with a minimum of structure. They are coordinated through information and sustained by communication.
This network environment encourages diffusion of ideas, adaptation and innovation exactly the qualities cooperatives urgently need in their new business environment. Within a network environment, particular kinds of education are important. Cooperatives will need education that releases and puts into operation contextual knowledge (knowledge of local people, members, employees, stakeholder groups and partners in specific ventures).
In other words, education will not just spread knowledge, but will also create knowledge. Among the knowledge that will be most relevant is knowledge about strategic ideas the visions and concepts that bring people together, that provide a focal point for cooperatives and for networks. Education will be intimately connected to cooperative business strategy. Education will shape strategy, and strategy will shape education.
One of the purposes of cooperative education is to help make the organization transparent. Due to their size, horizontal and vertical integration, and multiple roles and pressures, many cooperatives have become rather complicated organizations. An important corollary of this is a weakening sense of member commitment. Members feel less attached to organizations that seem more remote or harder to understand. There is less trust or loyalty when the cooperative's overall direction eludes easy grasp, when it serves many interests, or is active in many product lines or regions. The cooperative is like a black box: members put something in (patronage, loyalty, participation) and get something out (benefits and services), but the obscure. These characteristics contribute to problems of collective action: members may fail to support the co-op as much as they should, even when it is in their interest to do so.
The difference in a "transparent" co-op is that the members can more easily see and understand the inner workings of the co-op, what it does, where surplus is generated and for whom, which members or regions participate and benefit in which ways. Making a co-op transparent in this way is partly a question of organizational design and business strategy. New-generation co-ops, for example, use concentration on a single commodity and an explicit linkage of equity and delivery rights to make clear how the co-op works and how it benefits members.
The result is member commitment, expressed in a willingness to invest that is exceptional compared to other kinds of cooperatives. The general principle of transparency is one that other co-ops can learn from, even if they do not adopt the new-generation structure. Equally, transparency is an issue not only of how a cooperative is structured, but also of how it is explained: of education, in other words.
To appreciate the role of education in a post-modern enterprise, it is necessary to think about how organizations work. The most important decisions are rarely based on "facts," at least not directly. Participants base their decisions on mental representations of what they think their organization is, their environment and their competition. These mental images amount to models of the organizational self and of the others with whom it deals. While such mental concepts were always important to organizational success, they are now critical to strategy and innovation.
Rapid and bewildering change puts more stress on the need for models and strategies to be accurate; decomposition of old relationships and lines of authority puts more stress on them being shared, rather than imposed. Increasingly, organizations cannot function unless they develop sophisticated analysis and strategy that goes beyond the senior leadership group so that there is buy-in from all stakeholders into a shared strategy.
Conscious organization
In a specific sense, it is appropriate to say that the challenge for organizations is to develop a higher level of consciousness. It is consciousness that allows flexible, creative and adaptive responses and initiatives for organizations and people. Consciousness has been described by neurologist Antonio Damasio as involving three interrelated sets of mental constructs: a model of one's self; a model of the external environment; and a model of how one affects the other.
We can transfer this terminology to organizations. Effective organizations require a clear sense of who they are: an organizational identity shared among members, leaders and stake-holders. This is not a static thing, such as a plaque on a wall; it is a real, living image of what members are buying into when they join, including a sense of common purpose and values.
Organizations also require an understanding of their industry, its trends, where the competition is going and how all this fits into the broader society. Most importantly, they need a mental model of how these two things interact and fit together: the role and position of their organization in the evolution of their industry and society.
The overriding goal of cooperative education is to help create this conscious organization, the conscious cooperative. This is an integrative and connective function that has to be linked closely with business strategy and planning and with many other areas. Research is a critical related function. To have accurate and updated understandings of the industry, of communities and of stakeholder groups requires a permanent and creative research function. Cooperatives will generally need to expand their research capacity and to link research more closely to both education and planning.
Education as linkage
Cooperatives need to remember that education is not only a means of distributing knowledge, but also of creating it. This creative function arises from education's role in making linkages-linkages between ideas and information, and linkages between people and groups. Members have knowledge that cooperatives need and should value: knowledge about their local community and conditions, about their needs, about their spending, purchasing, or marketing plans and intentions.
Engaging these members in an educational process is a way of unlocking their knowledge, for the benefit of the cooperative as well as of themselves. Education reveals how to see their own operations in relation to the co-op and the industry it shows what information is valuable and what linkages and relations are useful. At the same time, the cooperative has knowledge that members need knowledge about the industry, research about trends and innovations. Education also has a function in making the cooperative's knowledge accessible to the members.
Effective marketing of co-ops also has educational dimensions. There are a variety of new and important approaches to cooperative business that have been thought out by co-op innovators, and tested by early adopters. These include marketing the cooperative advantage, values-based marketing, new structures of member ownership and commitment and communication strategies that make co-ops more transparent.
All of these related approaches are on a similar track. They have at least two things in common. First, they focus on members as a source of renewal and identity, of new commitment and of increased business success. You can't renew a co-op without members. Second, it is important to note that all approaches involve or presuppose effective cooperative education. Education is not the same as marketing, but in a well-functioning cooperative the two are closely connected: each feeds into the other, provides feedback and works in a complementary fashion.
Besides research and marketing, one can also highlight training of staff and elected leaders, and communications with members and the public, as additional organizational functions that overlap with education. Education is a mission that should over-arch and inform many separate functions of cooperatives; it should be designed to integrate, to cross over different units and activities and to link them. The tendency over the last several decades for cooperative education to be isolated in separate units, marginalized or professionalized a tendency driven not only by cost-cutting managers but also, in some cases, by educators themselves needs to be reversed in favor of a more integrated model.
Rethinking co-op education
Generally speaking, cooperatives need to rethink education and reconceptualize how it can support innovation, leadership, member loyalty and business strategy. Innovation even among co-ops! normally begins with small groups and local units. Part of the job of education is to encourage and empower groups and localities, and once innovations emerge to promote their diffusion and replication.
Education has to support an atmosphere of experimentation and openness within the cooperative and among its members and partner organizations. In doing this, a critical role falls to education in mediating the tension between the diversity of ideas that makes for innovation, and the unity of vision that enables a cooperative to pursue a sound business strategy. Education has to contribute to both aspects-diversity within the cooperative and unity of purpose and has to do its part to help keep them in balance.
Co-ops have long been committed to education and have done many things well, but naturally there are barriers to new ideas in existing organizations. There are shortages of resources and appropriate concerns with efficiencies and effectiveness. In the long run, such concerns should not hinder a well conceived education strategy. However, there are also less reasonable and less logical hindrances: most importantly, a lack of legitimacy in many cooperatives for any active educational function; structural barriers to the effectiveness of educators within organizational structures; and mental barriers to realizing the importance of education.
It is important to be frank and realistic about the nature of these barriers, and creative in overcoming them. The most important step in doing so is to
articulate a vision of cooperative education that clearly relates its function to the basic goals of the cooperative and to the challenges of the new information economy.
In summary, cooperative education in the information age will focus on the following approaches and themes:
- innovation, experimentation and diffusion of new ideas;
- ideas, models and strategies not just facts, roles, and skills;
- close links to research, communications and business strategy;
- making the co-op transparent to members;
- creating and sustaining networks; developing relationships and cultivating local knowledge;
- fostering a sense of organizational identity;
- creating understanding of the organization's environment, trends in the industry, and the role of the cooperative in relation to these trends.
To some, this may sound futuristic, but in fact it is a return to co-op basics. Cooperatives were born during the industrial revolution, a time of technological and organizational change that was at least as bewildering for people then as the information age is for people now. Early nineteenth-century British cooperators-Owenites, fore-runners of the Rochdale Pioneers identified a need for "useful knowledge." What they meant by "useful" was knowledge about the new industrial economy and how it worked, about the mechanisms of economic and political power. They appear to have believed that if members understood the new economy, they would understand why they needed their cooperatives.
Cooperators would do well to translate that lesson from a far off age of economic transformation into the present age of globalization. The most important cooperative education is to educate members about their place in the economy, about their sector and its trends, about their cooperative's role. That is true now as it was then. Education is about what members and leaders need to know to make important decisions. It is much more than public relations, and it is not a social or charitable activity. It is the prerequisite for the co-op to innovate and to act as a unified organization with a common vision. It is the means by which members become economically supportive, loyal and make the cooperative a financial success. The greater the velocity and intensity of change, the more need there is for education.
Cooperative education conceived in these ways will be the single most important factor in the success or failure of co-ops in the 21st century. Inadequate education is going to contribute to inappropriate business strategies, failed innovations and weak member commitment. Effective member education, on the other hand, will be part and parcel of sound strategy and good marketing. If education ever was a luxury, it isn't any more.
