In this week’s Principle 6 Newsletter, Mike Mercer explores and “overlooked, under-articulated” characteristic that defines all cooperatives, regardless of sector or size: leveraging influence for their members.
“Free-market capitalism is the ultimate expression of individual achievement. Co-ops are a part of the market that elevates the expression of common achievement,” Mercer writes.
Read the full newsletter below, and consider how “cooperation among cooperatives” could amplify our shared identity and purpose. NCBA CLUSA is on a mission to document Principle 6 collaborations across the country so we can identify trends, document best practices and share this knowledge with you—our fellow cooperators!
Principle 6 Newsletter – Leveraging Influence …the Universal Co-op Thing
May 11, 2022
Crowd workers should have a right to know what they are working on instead of contributing to mysterious projects posted by anonymous consignors. – “Ours to Hack and to Own,” Scholz and Schneider, 2017
Cooperatives “aggregate the market power of people who on their own could achieve nothing, and in so doing they provide ways out of poverty and powerlessness” (Birchnall and Ketilson 2009). – quoted in “Collective Courage,” Jessica Gordon Nembhard, 2014
The true heart of any mutualist organization lies in its social purpose and the community it serves. That social purpose can be grand—for example, to try to improve the lives of tens of thousands of garment workers on the Lower East Side—or it can be something as modest as improving access to affordable groceries for a local community. – “Mutualism,” Sara Horowitz, 2021
America is billed as a great experiment in democracy… but the hard truth is that America’s economy is not structured to give everyone a fair and equal opportunity, but to assure that a small elite always wins. – “For All the People,” John Curl, 2009
“If you’ve seen one co-op, you’ve seen one co-op.”
How many times have you heard that cliché? Kind of absurd when you think about it. Of course co-ops are different. All of the members that they serve are different. Usually, the cliché is uttered in the context of frustration with trying to categorize co-ops in some uniform way. Once the frustrated soul gets beyond the liturgy of common Rochdale co-op evolution (itself legitimately contested by prior centuries of common enterprise), the differences are many and the commonalities become generalized in the articulation of “cooperative identity.”
Today, many co-op leaders are not sure (occasionally not interested in) what co-ops have in common—in practice. It is acknowledged without much question that co-ops have a unique structure: one-member-one-vote, members elect a board, and benefits are directed to members fairly. And, in some sectors, the co-op structure comes with a number of legal benefits (tax status, director duty of care, and the like). A significant majority of co-op leaders accept the traditions (stories), dogma (values and principles), incentives (the absence of interference from third party investors) and some societal distinctions (the good guys in the market) as generally common characteristics of their tribe. Still, they struggle with the notions of common identity, interdependent fortunes and a common role in the quest to improve community.
Could there be an overlooked, under-articulated tie that binds?
A defining characteristic of all co-ops is the self-assumed role of leveraging influence on behalf of their members. To some co-op leaders, this is stating the obvious. But hold on. The business of leveraging influence for the many is the antithesis of the operative model of “free market” capitalism, wherein winners consolidate markets and concentrate wealth for the major shareholders. This, in turn, leaves workers and customers deprived of any meaningful influence in the direction of the enterprise. Left unchallenged, the winners can easily regard workers and customers as nothing more than factors of wealth production. In contrast, co-ops strive to enhance the influence of members (consumers, workers, or small businesses) as intentional beneficiaries of the enterprise.
This is not a story of good (co-ops) meets evil (for-profit firms). There is no question that free market capitalism has endowed the world with rapid advances in the standards of living. Critics can point to no more efficient way to continuously re-allocate resources to the activities of highest productivity. But free-market capitalism is the ultimate expression of individual achievement. Co-ops are a part of the market that elevates the expression of common achievement, built not on the framework of government decision-making but on the collective application of individual initiative, usually by people of limited influence. The co-op business of leveraging influence is additive to society and its economy.
Capitalism is the ultimate expression of individual achievement. Co-ops are a part of the market that elevates the expression of common achievement.
The role of leveraging influence applies in any sector and at any scale in the co-op world. It is the essence of why ten employees go through all of the trouble to organize a worker co-op for the purpose of buying the family business when the old man decides to retire. And leveraging influence for members is center stage in thinking behind the curtain at a large credit union with 250,000 members. It is the driving force behind consumer co-ops, worker co-ops, purchasing co-ops and all the rest. Co-ops that are wired up to solve for a societal need (childcare) and co-ops that view their existence to be primarily economic in nature (purchasing) can all view themselves as being in the business of leveraging influence for their members. It turns out that leveraging influence for those that would otherwise not have leverage could be the most significant universal thing that co-ops (and other types of collectively owned orgs) have in common.
Co-ops that are wired up to solve for a societal need (childcare) and co-ops that view their existence to be primarily economic in nature (purchasing) can all view themselves as being in the business of leveraging influence for their members.
Bring this concept closer to home. In the boardroom. At the skull sessions in the C-suite. On the manager’s desk. Leveraging influence for the benefit of the members should be at the center of strategic discussion. It should be among the KPIs that get reviewed during progress assessment. How does our co-op leverage influence for our members? Not just competitive price comparisons or if-we-grow-they-must-like-us KPIs. Those are important but dig deep into the idea of leveraging influence. How are we making our members into smarter consumers? How are we helping our members run more successful businesses? Not just financial outcomes, but things like access, convenience, dignity (picture the loan interview process) and helpfulness. Every co-op already has good stories to tell about leveraging influence.
From the co-op decision-leader’s desk, the role of leveraging influence requires a 360-degree perspective. “Up” to the members (we always put members at the pinnacle of purpose). “Sideways” to fellow employees and to other co-ops (perhaps even to other collectively owned/governed organizations). And “Down” to the support organizations and associations that are in the business of leveraging influence on behalf of the co-ops themselves.
Co-ops should bring this business of leveraging influence to the forefront of awareness—develop new language that will make it feel like the co-op superpower. The co-op structure enables leveraging the influence of many to be a fundamental objective (couldn’t happen at banks or big tech firms). The co-op values and principles supply the motivational construct. But the co-op system needs a differentiating “here’s what we do” unifying declaration. Something that people on the street can appreciate.
Something like, “Co-ops don’t stifle your influence as a consumer/worker/small business leader…they leverage your influence.” Or “magnify.” Or “expand.” Or… you supply the word. But, whatever kind of influence co-ops create, they create it for all.
And all co-ops do it!