Building Loyalty, Thinking Mutually?

1. Building Loyalty, Thinking Mutually? Richard Simmons University of Stirling

2. Is Organisational Form Important? • No: Businesses/enterprises with generic measures of success • Yes: A different way of doing business based on ‘the idea of membership’ • “A Conceptual Framework for Research into Co-operative Enterprise” with Tim Mazzarol and Elena Mamouni-Limnios (UWA)

3. FOCUS HERE!

4. Building Loyalty Closely linked to value and identity • Know what value you provide: (financial, functional, social, emotional) - evaluation • Let people know what value you provide – information, e.g. • Newsletters, annual reports, etc • Personalised member feedback reports • Support the development of member identity • Pride in membership • Participation

5. How are Democratic MBOs Different? • Basis in membership • Four dimensions: • Ownership • Belonging • Control • Benefits (Simmons & Birchall, 2009)

6. Member Interests • Meeting needs • Economic benefits • Influence over decision making

7. Member Identities • Belonging? • Ownership? . ‘I belong here, this belongs to me’

8. Making Membership Meaningful Reinforce all four dimensions Importance of democracy: (i) symbolises inclusion in the collectivity and reinforces ownership (ii) provides tangible control mechanism and ability to have influence e.g. in the distribution of benefits Member democracy is a key component of the ‘co-operative advantage’: manage tensions, build member commitment and loyalty

9. Member Commitment • Normal distribution of member commitment Resistant/disinterested Highly committed Sceptical Supportive in principle positive negative = co-operative advantage?

10. Advantages? • Commitment > > > • Productivity? (management gains marginal? membership gains exponential?) • Trading commitment? (v. opportunism) • Agreement? (e.g. production standards) • Investment? (inward e.g. £; outward e.g. training) • Trust? (e.g. for collective action and investment) • Sustainability? (lock-in) • Resilience? (e.g. solidarity in face of adversity) • Wider benefits (e.g. community dividends, social capital)

11. Basis for Co-operation Resources Mobilisation Motivations ‘Participation Chain’

12. Mutual Incentives Theory Motivations: Individualistic - ‘Me’ mentality - Free riding? v. Collectivistic

13. Collectivistic Motivations • Shared goals • Unifying purpose • Sense of community - ‘we’ mentality, win and lose together • Shared values • e.g. John Lewis - ‘Be Honest’, ‘Give Respect’, ‘Recognise Others’, ‘Show Enterprise’, ‘Work Together’, ‘Achieve More’ - Behaviours expected in all relationships at all times • Collective motivations reinforce member identities

14. Values and Value • ‘Value and values are closely linked. Inappropriate values may lead to the destruction of value’ • Organizational systems are strategic resources - innovative organisations have begun to see organizational design and management processes proactively as necessary facilitators of success

15. Linking Values and Value • ‘Co-operative value’ requires balancing of some competing values • Political • Governance, participation and value creation • Organizational design • Reinforce ‘co-operative citizenship’

16. Organisational Democracy as a Comparative Advantage • Flexible - can deal with uncertainty, ambiguity and unexpected change • Enables people to co-operate and make choices on the basis of something beyond the individualism of the market • Can move beyond the distribution of benefits to bring interests together to achieve common purposes • Imbues co-operative action with the imprimatur of the membership (as a signal about the desired response)

17. Stakeholder Relationships “Mutuality may do a better job of aligning stakeholder incentives than some alternative forms of corporate governance” Andrew Haldane (2009)

18. Debating Mutual Models • Mutual ‘ideal’ may not be how it works in practice • Dangers in either losing ‘sharp’ business focus or of providing too-thin support? • Practical strategies: • Building stakeholder commitment • Communication and mutual reassurance • Evaluation/Research

19. Research and Evaluation • Good evaluation is a continuous (not just one-off) process informing planning and delivery • Track down and translate the preferences of members > what is ‘valuable’ requires ‘validation’ • Good evaluation: • involves all those with an interest in the organisation in defining the questions they want answered • highlights and celebrates successes and achievements • encourages an honest appraisal of progress, so that we can learn from what has not worked as well as what has

20. Research Project • UWA research project • Next phase – survey research • Co-operation with SAOS and University of Stirling • We welcome your participation!

21. Finally… • Focus on USPs • Core values • Systems and practices • Be aware of challenges at all levels • Manage stakeholder relationships • Communication and constituency building • Role of evaluation and research to provide evidence of added value