University of Wisconsin Center for Wisconsin
Rural Cooperatives, July/August 1999, p. 22-23.
Published by the Rural Business and Cooperative Development Service 

Co-op Member Education Needed in 21st Century

By William J. Nelson

Executive Administrator
Association of Cooperative Educators

Is anyone surprised that we are seeing significant change occurring in the economic and social systems in which cooperatives are involved as the 20th century ends? And should we be surprised that cooperatives themselves are undergoing significant change? We have known for some time that change at the close of the 20th century would accelerate. We should not be surprised that the accelerating rate of change is altering the very structure of the cooperative system, and will continue to do so.

In an article in Rural Cooperatives (September/October 1998) Randall Torgerson described several "drivers" behind the rapidly changing cooperative system, including: the implications of the global economy; the combined pressures of specialization and economies of scale; reduction of the "safety net" provided by the federal government; the desire for more control over quality and defined product characteristics leading to vertical coordination of production and distribution; and the need and opportunity for cooperatives to play a critical role in this new marketplace on behalf of their members. This leads to the critical question of who will control our destiny, and—in a producer or consumer-owned cooperative —will the members, directors and staff be prepared to meet the challenge?

He closed the article by calling attention to a key issue: among the many challenges these changes create, a very important one is "keeping the member-owners informed, involved and empowered so that benefits are clearly oriented and delivered to them."

While today's changes may seem great, even overwhelming, this is not the first time this has happened in the cooperative system to either producers or consumers. We might be able to learn a little about how to proceed by looking back.

The modern cooperative business structure, and the system it became, grew out of tumultuous and difficult social and economic stress created by the revolutionary new technologies being created by the industrial revolution. Of course not everyone agreed on the value of the new technologies and, in retrospect, the "revolution" never really ended. We emerged into a new era of civilization in which industrialized technology became a driving force, rather than simply an extension of previous small, incremental adaptations of tools and techniques to meet specific human needs.

The changes in technology and the structure of industry created significant social, economic and political turmoil, which—like the change in the structure of commerce and industry — never ended, either. As we progressed into the 19th and 20th centuries, the pace of change began to accelerate. Social, political, and economic change is a little more difficult to see, describe or measure, but the impact is nonetheless significant.

As one very important solution to the problems created by this change, ordinary people created a new type of business structure to meet their needs: the cooperative. From the perspective of consumers, and later as producers, they took calculated risks in a difficult environment, knowing very little about what was ahead of them. They started co-op businesses designed to reduce expenses, increase income or provide a needed service, using a new strategy of combining entrepreneurship with collective action, in a formal business structure. When they got it to work at the local level, they expanded the idea into regional, national, and even global structures and systems.

The cooperative system has been able to function in a range of economic, political and social systems for over 150 years. It promotes desirable competition, creates value, adds value, meets needs and responds to the needs and objectives of member-owners. Is there something unique about the system that has made it so sustainable through so many changes? If so, what will it take to continue?

A closer look at the formation of the Rochdale cooperatives, the prototype of our modern system, reveals that along with all of the obvious business challenges they faced, they realized they needed to know a lot more than they did, and they devised their own elaborate learning system, including a library, adult education programs and a commitment from the business to support this education effort.

They devised a way to have the business pay for it, as an investment in the future of their business and likelihood. When they created their mission statement with a set of business principles to guide them, they included education about their business as a key guiding principle for future success.

As the system grew, and as basic general education became the responsibility of the public school system, the tasks and responsibility for education on the unique features of a co-op business gradually shifted to what cooperative historian Brett Fairbairn of the University of Saskatchewan has called "the agencies."

These are organizations such as state and national trade associations, universities, and government agencies, and professional associations. This worked reasonably well for a long time, even though the commitment and capabilities of "the agencies" fluctuates over time, depending on resources and a host of other factors.

The leadership and commitment of "the agencies" today are on an upswing. For example, we have a rejuvenated federal research and information service through the Rural Business Cooperative Service of USDA Rural Development and rejuvenated and expanded university centers for cooperatives and endowed chairs, with excellent leadership and staff. We have very strong professional associations of cooperative educators and communicators, including the Agricultural Communicators in Education (ACE) and the Cooperative Communicators Association (CCA), and we have new models of collaboration on cooperative education emerging between state cooperative councils.

Foundation support of cooperative education has increased, new electronic technologies are being used for information delivery and increased coordination in the development of new or updated curriculum materials is improving communication efficiency and effectiveness. We have some very strong co-op educational programs in place, including the Graduate Institute for Cooperative Leadership (GICL) and the Legal, Tax and Accounting (LTA) conference of the National Council of Farmer Cooperatives. Consumer cooperatives have similar educational programs.

One key area of cooperative education, leadership development, is being improved on several fronts, including programs such as GICL, and a new program for defined membership cooperatives created through a partnership between the Quentin Burdick Center and several other agencies, foundations and —most importantly—the cooperatives themselves. Other leadership development and support programs include the Future Co-op Leaders Program of the National Cooperative Business Association and the New Cooperative Leaders Scholarship program of The Cooperative Foundation, which supports professional development in cooperative education.

The Cenex Harvest States Foundation has made a commitment to co-op education, including support for professional development of co-op educators. Two new director training series are available, and young farmer programs emphasize leadership development.

But this is only a part of the story. While it is important, necessary and reassuring that "the agencies" are alive and well in actively looking after the principle of cooperative education, it can't fully substitute for a full commitment by the cooperative businesses themselves. We need to take another look back, to see what we might need to do now.

When the early cooperatives made a commitment to their own ongoing education, they ensured that they would continue to be risk-takers, innovators, successful competitors in their cooperative marketplace. This approach, which they supported as a necessary business expense and investment, is what we today call "a learning organization."

A learning organization is an organization which is continually expanding its capacity to create its future, through learning as well as earning. Cooperatives used to do this—it was how they got started and what they had to do to create a new niche market in a very difficult business environment. They started at the most basic level and grew into a system that is locally, regionally, nationally and globally competitive, ensuring a place and future for member-owned and controlled business. But we have gradually lost much of our inherent advantage.

Today, we tend to follow the rest of the business world through one management "innovation" after another: total quality management (TQM), re-engineering, reinvention, systems models, networking vs. hierarchical models of leadership and management, niche marketing, customer orientation, shared profits, incentives, give-backs, adding value and even trying new technologies to sell things. We lament that our democratic system sometimes slows us up, because it takes too long to get the buy-in of members who don't understand where we need to go on their behalf. We try to "communicate" more, we provide (what sometimes amounts to remedial) education to attract and train directors, we increase our legal and lobbying budgets and we try to find new ways of explaining our unusual capitalization and financial structures to new types of investors. Sometimes we even consider giving up the cooperative business model because we aren't sure if it is up to the challenge of today's business environment.

Isn't "adding value" what we were doing when we started? Weren't cooperatives learning organizations, innovators, risk-takers, networkers, partnershipbuilders, profit-sharers, customer service providers, niche marketers, investor-controlled business innovations? Wasn't the system able to transcend local, regional and national boundaries when it was the appropriate and necessary business thing to do (still done in service to members)? How did we do this? What was the key ingredient? Could it have been ongoing cooperative education? Was this the reason it was included as a principle?

Where, then, do we go from here? Not backwards, except to learn what we can from the past. Just as the originators of any cooperative—whether in Rochdale, England in the 1840s, the Upper Midwest states, the West and East Coasts in the early 1900s or in the Midwest again in the 1990s—we in the cooperative system need to rethink the commitment to cooperative education.

We need to capitalize on the investments made in "the agencies": the university centers, endowed chairs, state and national councils and USDA. We need to continually re-invest in them to keep them strong and future-focused, emphasizing the "learning organization" aspect of a member-formed, owned, and controlled business. But we also need to make a stronger commitment within our cooperative businesses themselves to make sure we have a membership which fully understands the power and potential of a member-owned and controlled business in today's global competitive economic environment.

We may need to set priorities: can we, or do we, need to educate the pubic about cooperatives, which some co-op education advocates believe should be the top priority? If we want to build strong, informed, dedicated members, at what age do we start? What is the best access point, the optimal curriculum, the most efficient and effective delivery system? What does the content for cooperative education in the 21st century need to be?

Some of these questions are being addressed by the agencies, but that is not enough. We need the cooperatives themselves to re-claim their roots as authentic learning organizations. A key step in this direction would be a renewed commitment to member education, as part of a business investment in cooperative education. This may be necessary to, as Torgerson suggested, "keeping the member-owners informed, involved and empowered so that benefits are clearly oriented and delivered to them."

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