A Business and Co-operative Future For Weaver Street Market By Geoffrey Gilson docx

The John Carver Policy Governance model www.carvergovernance.com/model.htm provides opportunity for what may seem to some like an endless intellectual discussion about the balance betwee

“Informal Intimacy”:

A Business and Co-operative Future

For Weaver Street Market

Geoffrey Gilson

August 2007

Introduction – Policy Governance

I have been with Weaver Street Market (WSM) for something over two years now About

a year ago, I began formulating some thoughts about the future structure of WSM, both as

a business and as a co-operative This document represents the sum of those ideas I don’t pretend that the document is a detailed blueprint I merely offer it as a trigger, to help start

a conversation among the stakeholders in WSM

Let me say straight away that my style is informal So, I apologize upfront if this

document does not read like other policy development strategies or organizational

evaluations you may have read Indeed, it may seem a little rough around the edges in parts – I was more concerned with getting something out, than making it all polished and streamlined

If this document is being read by someone who is not grounded in WSM or policy

governance, then it’s probably a good idea first to read through the WSM website

(www.weaverstreetmarket.coop), and in particular, the sections entitled “About Us” (www.weaverstreetmarket.coop/about/index.php) and “Become an Owner”

(www.weaverstreetmarket.coop/owner/index.php)

The John Carver Policy Governance model (www.carvergovernance.com/model.htm) provides opportunity for what may seem to some like an endless intellectual discussion about the balance between ENDS (www.weaverstreetmarket.coop/about/wsm.php and

www.weaverstreetmarket.coop/about/coops.php) and MEANS; whether a Board should

be prescriptive, or merely exclusive (about results that are undesirable); the full extent of the monitoring function; and so on

As interesting as that discussion may be for Retreats, Board meetings, or just chats over coffee (!), what it means to me immediately is that I’m not entirely sure how to go about raising thoughts (my own) which have been brewing for some time, and which some may see as a full-blooded, up-and-down revamp of the corporate and co-operative structure of WSM and its Board

Do I submit all of those thoughts in one go, or in parts? Under this item, or that? During policy review, or monitoring? Well, rather than give myself an excruciating (and

undoubtedly self-sustaining!) migraine, I have decided that the easiest thing is simply to lay out my thoughts all at once, and let time and natural process (organically) do the remainder

This way, you know what is in my mind, and you can decide for yourselves what you want to discuss, and what not; and when; and how

I would apologize for the length of the document, but I have a lot I wish to address If I didn’t think it important, I wouldn’t be saying it You may not agree with it, but that does

not mean I’m not passionate about it The way I was raised was simple: if you believe something, believe it vigorously But believe it without disrespecting the views of others

And what is it exactly that I believe so passionately? Well, in a nutshell, in the two years that I’ve worked at WSM, I’ve become particularly interested in what can be done

structurally with WSM to retain the ‘small co-op’ feel after all the expansion that is underway

Specifically, I’ve wondered whether the MEANS/ENDS John Carver Policy Governance model, as originally adapted by WSM for use when it was just one unit in Carrboro, is still rigidly applicable to a co-op that is now aggressively becoming both multi-unit and multi-million

Everything evolves The organic movement, the sustainable movement, even the operative movement – all have evolved in the past twenty years As has the size of WSM Wouldn’t it be a little crass immediately to assume that everything else evolves, but we shouldn’t look to see if our policy governance structure also should be evolving?

co-Now, the answer, after a deal of worthy discussion, may well be ‘leave it all alone.’ But, surely we should at least have a wide-ranging conversation to see if there are ways that

we can modify our policy governance structure, within the model set by John Carver, such that it becomes more responsive and more accountable?

And before the purists run screaming for the hills, let’s not confuse ‘structure’ with

‘model.’ I’m not suggesting that we move away from the John Carver Policy Governance

‘model.’ I’m suggesting that we review our policy governance ‘structure,’ to ensure that it

is still commensurate with the John Carver Policy Governance ‘model,’ in a way that maximizes responsiveness, accountability and internal communication, within the new circumstances that WSM finds itself

Responsiveness and Accountability

I think we can all agree that Weaver Street is so much more than just a grocery store It is more than a corporation; it is a co-operative It is more than just a shopping stop; it is a community events center It is more than just a bottom line; it is a social statement and a pressure group for those statements

I would not presume to produce a document that reviews every aspect of what makes Weaver Street so…Weaver Street! Perhaps a little boringly (!), I limit myself pretty much

to discussing corporate and co-operative structures and policies

However, it could be argued that they represent the most important aspect, since they provide the vehicle within which all the rest is able to travel safely

Leaving all the grand philosophizing to one side, and in my humble opinion, the

structures and policies that make a co-operative corporation truly effective are those that allow for maximum responsiveness and for meaningful accountability

I believe, for example, that every single person associated with a co-operative corporation should be accountable to someone And that includes customers They should be

accountable also Which may sound a tad radical I’ll come back to that specific point later in this document But, let me expand a little upon the responsive/accountable theme

We are fond in Weaver Street of graphics to make a point So, imagine if you will a chart that is circular, when talking about lines of responsiveness and accountability Not just vertical

Worker obviously is accountable to management Think of workers being on the outside

of the circle Now, management should also be responsive to workers Both should be responsive to customers and consumers, who are beyond the edge of the circle

As one moves inside the circle, one moves up the management food chain, until we reach the Board Each level of management is accountable to the level above, and should be responsive to the level below Finally, senior management should be directly accountable

to the Board (which, again, may be a departure from where we are at the moment – and again, I come back to that later)

The Board should, of course, be responsive to the needs of the co-op but it’s more than that And here we not only move back out again, but also into a third dimension (blimey, sounds like “Hitchhiker’s Guide to the Galaxy, doesn’t it?)

The Board is accountable not only to the owners (both consumer and worker), but it should also be responsive to all workers and to all customers So should every level of management – and worker

I’ve read and re-read this section, and ended up asking myself, ‘what am I trying to convey?’ I think the answer is this: when contemplating this document, don’t allow yourself to compartmentalize the workings of WSM too much

The Board is not separate from management, and management separate from worker, and worker separate from owner, and owner separate from customer – and then back again!

We are all organically linked, in relationships that work in many different directions

Now, if I haven’t completely lost you, hold those thoughts, and let’s examine the context

in which I believe all this responsiveness and accountability works best – namely,

“Informal Intimacy.”

“Informal Intimacy”: The Essence of Co-operation

Look, I could jabber on for pages about charts, and lines of responsiveness and

accountability, and definitions of co-operation But the fact is this What makes

responsiveness and accountability work in a co-operative – what makes a co-operative such a great corporate structure in principle – is immediacy

When Weaver Street was just one unit in Carrboro, people came in every morning and immediately saw their bosses Management immediately saw the Board If a customer had a complaint, they could make it to the person responsible immediately There were no lines of authority Everything was as ‘local’ as you could get Owners, customers,

management and workers all in the same small box

There was little need for formal structure and endless planning and reams of documents Everything could be achieved over cups of coffee This is the essence of “Informal

Intimacy.” I know I oversimplify, but the point is still good A co-operative works best (and this is what makes co-operatives such a potentially dynamic form of corporation) when matters can be addressed informally, casually, by a couple of people talking

intimately

Naturally, as one grows from one unit to three, and now to five, that immediacy – the informality, the intimacy – is lost One has to rely more upon documentation and reaction

to provide response and accountability all around the circular graphic

The primary thrust of this document is to examine what we can do to recover as much of that informal intimacy as possible And if we can’t, what we can or should be doing instead

Now, let me say right here, you may vigorously disagree even at this stage Great! This is

a discussion document If it provokes someone into coming up with something radically different, so much the better

Let’s start at the bottom of the ladder Oops Misspoke I mean the outer edge of the three dimensional circular graphic With our loyal workers – of whom, of course, I am one

Department Intra-action

It is sometimes a little too easy to sit in the sanctity of a Board meeting, put forward a policy item, and assume that ‘operations’ (the MEANS side of things) is some Borg-like apparatus (sorry about the constant sci-fi references), which instantly knows, as one hive, exactly how to implement the policy, all the way around the chain of command

In the same measure, it is all too easy to assume that one man, the General Manager, when reporting during monitoring, is able to speak with one voice, with total and

complete knowledge and understanding of all that happens under his command and why

I have enormous respect for our General Manager, but I think he would be the first to leave omnipotence to the Almighty! Every link in any human chain (or circle!)

is…well…human And it is subject to all the subjective foibles of humanity As we used

to say about computers, the information out is only as good as the information in

So, is there something we can suggest that would help our General Manager (and the rest

of the operations management) in their job of gathering information? And which would also help our workers and Worker-Owners better to understand what the Board is saying – at the sharp end!

I think that there is And I believe it to be particularly apposite, bearing in mind the expansion Back to the concept of Informal Intimacy…

When we were one unit, managers and our General Manager could get a sense of what was going right, and what wrong, what people felt, whether policy was properly being implemented, and the like, by a hands-on walk-through the one co-op unit every morning

Or whenever

More and more, as we expand, and senior management and the Board become more

‘remote’ from the sharp end in every unit – as time presses – so it is that we have to rely more and more on ‘remote’ and ‘reactive’ management tools Such as the Mystery

Shopper Report – a brilliantly conceived, but still impersonal, decision-input mechanism

Or co-worker performance reviews And so on

I wonder whether a more immediate and more effective means of two-way

communication might not be more department meetings?

From my own perspective, I think that every department would benefit from having at least one department meeting every two months That they need be no longer than one hour in length And that at least half of each meeting could be set aside for workers to raise their own points So that they are not merely management-presentation sessions

Management could get across figures Workers could be ‘educated’ in matters flowing from the Board They would also have an immediate and informally intimate forum in which they would increasingly feel more relaxed about sharing their true feelings about what was going on This, in turn, would provide the General Manager with invaluable raw ‘intel’ so as to be able more informatively to report back in the monitoring process

It could be argued that the management chain provides all the ‘intel’ that the General Manager should need And that management manages by managing, not by collective discussion and action

I would say that management has its own imperatives that are not the same as workers’ And that while we are not a collective, a co-operative is not just an ownership model; it is

a business and an economic model too Employed properly, co-operative principles and practices, including an element of democracy in the workplace, can assist in departments being more effective, and maximizing their contribution

It is workers who are the primary point of retail inter-action with the customer They are the ones who truly represent the values of the co-op to consumers The Board should want to ensure that their input is received, that their views are valued and respected, and that they, in turn, are fully prepared, in every way, to act as ambassadors of WSM the grocery experience, and WSM the co-op

Annual Co-op Meeting

Every fall, there is a meeting of all of the workers in WSM It lasts a couple of hours, and

to be honest, and perhaps naturally, bearing in mind the increasing size, spread and complexity of WSM, it has become more of a management-presentation session, than a further opportunity for workers to give feedback (ultimately to the benefit of the Board’s monitoring function), and to feel that they are participating democratically in the affairs

of their co-op

I would suggest that half of this meeting be given over to matters raised by workers And that those issues be decided by a suggestions and voting process before the Annual Meeting

I think it very important that those involved with our co-op be given a real opportunity to make decisions from time to time It is not enough that they are consulted A suggestions box is not participatory democracy And in that same vein, I think it important that those present at the Annual Meeting be allowed to vote on something, and feel that the vote is

in some way binding on someone

Open Forums and Consultation Exercise

The previous section was written before the Annual Co-op Meeting of August 27, 2007

A short while prior to that meeting, I sent an e-mail to Human Resources, a copy of which

is included in the Appendices to this document

I was delighted that the questions in that e-mail were the first to be read out at the

meeting; that our General Manager answered both questions in the affirmative; and that

he kindly suggested that the agenda of the meeting was in response to those questions

Whatever else may happen, I am proud that, even in this small way, and while still only a candidate for Worker-Owner Director, my suggestions may have made some small

contribution to improving the communication structures within WSM

For the first time, the Annual Co-op Meeting incorporated a full half-hour of open and direct questions and answers between co-op workers and senior management

That suggestion was expanded upon with the proposal for monthly open forums It is my hope that these might complement department meetings and a revival of the Worker-Owner Program, which I discuss some more in the next section

I agree that it would be useful to have these open forums address specific issues, so that attendees may know beforehand what it is they will be discussing At the same time, I hope it will still be open to employees simply to raise points once they are there

At the Annual Co-op Meeting, I made the point that it would be helpful to have the appropriate senior management present at each open forum, so that matters raised could immediately be addressed by those responsible for resolving them

My theme throughout this document, and with my actions over the past year within WSM, has been to encourage meaningful two-way communication, response and

accountability The open forums will achieve little if they are merely opportunities for worker ‘grunts’ to talk to each other

By the same token, I agree that it might be useful to have independent moderators at the open forums WSM already uses the services of a meeting facilitator for its Board

meetings

More than that, I believe it might be helpful if notes are taken, and then distributed to senior management and Board members, so that as many people as possible, up and down the ‘ladder,’ are informed of feelings within the co-op Indeed, it wouldn’t hurt if Board members were to attend, and even address the odd open forum

The final part of the communication jigsaw that the General Manager mentioned at the Annual Co-op Meeting (and which was first raised in my own election address, written and published before the meeting) was the desire to have a ‘conversation’ before June of

2008 (the 20th anniversary of WSM’s foundation) about where we all want WSM to go in the next 20 years

I take the view that it is important that this ‘conversation’ involve as many stakeholders in WSM as possible Bearing in mind that WSM is so much more than just a grocery store –

it is a community icon, that anchors life in Carrboro – it is not unreasonable to want a

‘conversation’ that pretty much includes the whole community

I would invite the Board to take this ‘conversation’ under its wing, and to set up a task force, first to expand on the ‘conversation’ and design around it a full-blown consultation exercise, and then to implement that consultation exercise in the months leading up to June 2008

I see no reason why that task force could not include leading members of the local

community, who might not otherwise have a direct and current involvement in the

operations or governance of WSM

The consultation exercise could work hand-in-hand with the Owner Programs, the open forums, the Marketing Messenger, the WSM Newsletter, the local media (both formal and informal – forums and blogs) and special meetings of residents and customers

I would suggest that the marketing department set up a simple blog, on a server such as

Blogger.com, to allow ongoing discussion by all stakeholders on all manner of topics

I would hope that the Board and WSM might find some of the matters raised in this document to be worthy of consideration in that consultation exercise, as potential

component parts of WSM in its evolution over the next 20 years

I apologize if it seems a little disjointed to have this section tucked in here But I wrote it after the rest of the document And I really couldn’t work out where else to put it…

I think it important that we make the forums as inviting as we can in every way possible –

in terms of their being easy to attend, and in encouraging participation We will have made no progress at all if these forums merely end up being one-way feedback sessions for Human Resources If they are to serve the purpose intended, they need to foster

genuine two-way communication between workers and the management members

responsible

On that latter note, I found the first open forum, as advertised, a tad formal and

intimidating, when I would have been looking for more informal and intimate Personally,

I would prefer store-wide forums There is a hint of divide-and-conquer about separate unit forums Workers, who might otherwise not speak up, will probably find safety in numbers in larger meetings In any event, it facilitates open communication and

transparency if we are all in one place, able to hear what everyone else is saying

I think we night have gone a little too far with the specific topic angle I believe the sense was that workers wanted to be able to give advance notice of matters they would be raising so that the appropriate management could be present I don’t think the idea was that management alone would set the agenda, or that they alone would get to pick a topic from a selection submitted At the very least, I think it should be made clear that workers may also send in other topics, and/or raise them at the forums under an Any Other

Business item

I certainly hope that we are going to pick up on the point that senior management should

be present to make it genuine two-way communication I would suggest that both the General Manager and the Operations Manager make it a point to attend every open forum

Worker-Owner Program

Now, it is not the case that workers have no input at the moment They can become Worker-Owners, and express opinion through the Worker-Owner Program and their Worker-Owner Directors (www.weaverstreetmarket.coop/working/benefits.php)

Again, I’m going to be blunt, without being disrespectful I don’t think there is one

individual associated with the workings of WSM who is not multi-task It is

understandable that we cannot all have our eyes on every ball at the same time

The fact is that the Worker-Owner Program has not been as active as it could have been

As part of its monitoring function, the Board might want to examine this aspect Is more support staff required?

For myself, if I end up submitting this document as a Worker-Owner Director, I will be making my e-mail and a blog available to all Worker-Owners, and I will be holding regular meetings, so that Worker-Owners can express their frustrations, their ideas, their input to their two Worker-Owner Directors directly – immediately, intimately and

of excellent quality, on a regular basis, if you are essentially asking them to do the work

of a Board Director for free

We have an expression in England: you pay peanuts, you get monkeys The Board has been fabulously lucky to have the quality of service it has received from all of its

Directors, including its Worker-Owner Directors We take the continuation of that

excellent service for granted at our and the co-op’s peril

I leave this section with this thought: We look to our Worker-Owner Directors to be an immediate, informal and intimate link with our workers, the sharp end of our co-

operation That takes time and dedication, and that is money out of pocket for people receiving less than a living wage

We spend more money on our Mystery Shopper Program, which impersonally monitors the performance of our workers, than we do on paying our Worker-Owner Directors to inter-act on a personal level with those same workers, find out what they are thinking and actually help to inspire them to work better

Is this really the best use of our resources in meeting the ENDS set by the Board? Is this truly the best way of encouraging our work-floor ambassadors to represent Board policy the best way that they can?

Consumer-Owner Program

I know little of the way the Consumer-Owner Program works

(www.weaverstreetmarket.coop/owner/benefits.php), or whether it is working well I do know that I have heard anecdotal evidence that some Consumer-Owners feel a little out

of touch these days

There is an Annual General Meeting of WSM Although all Owners are entitled to attend, essentially it is the annual platform that allows Consumer-Owners to have their input Maybe, there should be an effort (perhaps by the elected Consumer-Owner Directors) to hold more regular, informal and intimate meetings with Consumer-Owners during the course of the year?

In conjunction with suggestions I make later about the accountability of senior

management and the structure and functions of the Board, I think it would be appropriate for both the General Manager and the Operations Manager to make reports to the Annual Meeting There should be votes on those reports and a vote upon the presentation of accounts

In any company with a turnover of $20m (and rising) with which I have been associated,

it has never been enough that Owners, shareholders, whatever, get to listen to what has been happening They are always given the opportunity to engage in regular votes of confidence It ain’t a democracy if you don’t get to say “nay” once in a while – and the

“nay” is allowed to have some direct effect

And while we’re on the subject of ‘democracy,’ as some point I think it would be

worthwhile to debate and consider whether WSM is employing a sufficiently inclusive definition of ‘stakeholder,’ when considering voting matters within WSM

If all we are about is money, then should WSM be a co-operative at all? For sure, there are both workers and consumers who feel disenfranchised at the moment, simply because they can not afford the current price of entry to the ‘voting club.’

Is it reasonable to separate capital raising from the ability, as a more broadly defined stakeholder, to take part in decision-making within a co-operative we promote as the community’s grocery store? Should the financial be set apart from the social aspect?

Collective Executive Management

The clarity of lines of communication and authority laid down by the John Carver Policy Governance model require that there be one focal point of contact between ENDS and MEANS; policy and operations (implementation)

We currently have an annual turnover of $20m The concept of the General Manager as focal point was conceived when we were one, much smaller unit We will soon be five units, spread over three towns It is not inconceivable that, in a very few years, we may have an annual turnover of some $30m

We have already concluded that this is all too much for one focal point when it comes to managing the implementation of policy around three units That’s why an Operations Manager was appointed I am concerned that this new focal point, with immense personal authority for implementing ENDS, is not as accountable as perhaps he should be

Is it really fair that we ask one other man (the General Manager), on top of all of his other burgeoning responsibilities, to be solely responsible for second-hand (not immediate and not intimate) reporting to the Board on operations compliance?

And what of expansion? What of geographic spread? Will there be further delegation of operations responsibility around the co-op and Orange County? With more focal points of authority and responsibility, becoming ever more remote from the source of policy?

Is it appropriate for the Board to review the axis of senior management? To re-cast the role of General Manager? Perhaps around a collective executive? Which would function within the John Carver Policy Governance model as a ‘collective’ focal point?

Give each member of the new collective executive clearly defined job responsibilities within the collective executive? Perhaps, with a rotating schedule of reporting to the Board? So that the collective executive, not just the General Manager, is immediately and intimately accountable to the Board for implementation of policy?

Might this bring the sharp end of implementation closer to policy-making? Might it make operations more accountable? Might it make the Board more intimately aware of the matters over which it presumes to speak with knowledge?

Might it re-introduce to the ‘focal point’ an intimacy and an immediacy that we had when the Board met in a room right next to the work-floor, and Directors could chat with senior operations management on their way to and from Board meetings?

Hang on, you might say, aren’t we just re-inventing the wheel here? Not really The John Carver Policy Governance model would have failed a long time ago if it wasn’t possible

to adapt it to different circumstances We at WSM find ourselves in different

circumstances to those when we were just one unit What I am proposing is different to what existed when we were just that one unit, but it is all within the philosophy of the original John Carver Policy Governance model

The strict rules of separation were appropriate for everyone occupying one small space Perhaps even necessary Much like the Japanese having rigid codes of conduct, so that they do not interfere with each other’s very confined space

However, when one expands to fill five units, many miles from each other, the rules of separation…well, they do just that…they separate We all have to make a conscious effort

to reach over the separation to stay in touch And I’m not sure we’re doing that at the moment

So, I think we need to mix it up To think about changing the rules and creating new structures that still adhere to the original John Policy Governance model and which help

us to recover the easy communication, responsiveness and accountability that we had with the original one unit

It may seem a little messy at first Even frightening But, with respect, I think that’s as much a part of a ‘teenage’ co-op growing as it is with a teenage kid growing up

Executive Board Function

My premise here is that the job of overseeing implementation of policy and then reporting back on progress to the Board is too immense for one man We have already accepted that much of my premise by the appointment of an Operations Manager

I further believe that the job may become even more complex and burdensome with the growth to five units, and their spread over three different towns

I think it unavoidable that a collective executive of some description will evolve I just want to be sure that there is some design to that evolution (and somewhere there was a joke about ‘intelligent design’ and ‘evolution,’ but I missed it!)

I would offer this much as part of that evolution I do not think the Board need necessarily involve itself with the specific design of operations responsibility within this new

collective executive, but I do think that it could consider pulling back into itself the executive function of monitoring

That would free the new collective executive to focus on implementation, while allowing the Board to become more intimate with an operation that is expanding away from it And

I think this can be done in a way that operates fully within the precepts of the John Carver Policy Governance model

I would see all of the collective executive being directly responsible to the Board, for each of their clearly-defined job responsibilities I see no muddying of clarity here,

because I would see each of the collective executive also sitting on the Board In addition, they could have their own collective meetings, where they would prepare for Board meetings, and then meet afterwards to plan co-coordinated implementation

In addition to reports from the collective executive, I think it only appropriate for the Board also to receive overall co-op financial reports at each Board meeting Not every-day sales figures, no But compliance with budget and cash flow estimates, yes The latter goes hand-in-hand with a more intimate and effective monitoring of overall co-op

compliance with Board policy

And I stress ‘overall.’ I do not see this new Board monitoring effort interfering with the freedom of the General Manager and his expanded collective executive to operate as they see fit – provided it is within ‘stated Policy Guidelines’ (love that expression) I do not want to see the Board becoming intricately involved in the minutiae of every day

operations Either we trust senior management, or they get fired

I think the John Carver Policy Governance model visualizes the Board as not so much being on top of the co-op food chain, as to one side Set apart Protected Where it can

consider co-op policies (and their most idealistic possibilities) unsullied by material and operational exigencies

Within that visual concept, the need for just one focal point of contact with the rest of the co-op is not only desirable, it is crucial

The role of that focal point (our General Manager) is not so much to act as liaison

between ENDS and MEANS as it is to be the protector of the integrity of the Board

To determine what the Board needs to be able to remain ‘pure;’ and to filter out whatever

it is that the Board decides and which the General Manager feels may be irrelevant or even harmful to the every day reality of the food retail experience in the remainder of the co-op

This worked fine in WSM when it was a one unit, informal and intimate co-op When the Board was an adjunct to the workings of the retail co-op When it was set to one side, rather than on top

With expansion, however, there is a need for the Board to be ‘on top’ – in so many different interpretations of that expression

You cannot reasonably have a publicly owned, multi-million dollar, grocery chain where senior management is not directly accountable for its operations to a Board of its Owners

That Board needs to be ‘on top’ of what is happening in the co-op, so that it is able to make relevant and informed decisions

It is way too much to ask of one man that he be the sole point of contact between

operations and policy, between ENDS and MEANS

It is probably not the best governance model, in a multi-million dollar and multi-unit

co-op, for responsibility for both implementation and monitoring of that implementation to

be in the same collective hands

That is why I visualize a collective management executive, with responsibility for

implementation, and accountable for that executive function to the Board

That is why I visualize a revamped Board, with new executive authority for overseeing compliance of policy

And that is why I visualize this as an appropriate evolution of WSM’s interpretation of the John Carver Policy Governance model

Isn’t this all so complicated, you might say? Yes, it is We ain’t a neighborhood co-op no more We’re about to be a multi-million dollar chain store We just managed to make it all the more complicated, all by ourselves

‘Ends’ Responsibility

One of the great features of the John Carver Policy Governance model is that it allows a group of people concerned about the co-op, who bring special skills and outlooks, to review the workings of the co-op, ‘uncorrupted’ by too much attachment to the everyday,

‘material’ distractions of the grocery business

Now, of course, we don’t want the Board to be so set apart that it is living in an ivory tower And I’ve been addressing that But we want to find some way of retaining that pristine policy input, and in a way which, if possible, returns some immediacy and

intimacy to it

In more corporate-style, multi-million dollar businesses, at least in my experience as a management consultant, this function is mixed in with the executive function of the remainder of the Board

There are executive Directors, who run and monitor, and there are non-executive

Directors who also monitor and then produce policy

The non-executive Directors are generally chosen for skills which complement the

business, and may not otherwise be found among the executive Directors Sometimes, the non-executive Directors meet separately, and report back to the main Board And John Carver specifically allows for and encourages this concept

I have a few suggestions

The Chair should continue to be one of the elected Consumer or Worker-Owner

thousands of dollars very quickly

I suggested for my Vice Chair that we appoint the principal of the local private school, who had just completed an effort to raise some $22m for new school buildings He and I then approached his single largest donor – a founding Director of Home Depot – to be our new Fund-raising Chair And our fund-raising took off from there

With all this expansion, we are having to concentrate a lot of our efforts on raising capital and loans Perhaps, we could have a Vice Chair who could act as a similar beacon to potential capital and loans, say, in Hillsborough?

I am very impressed with the strength of our appointed Directors Perhaps, in due course, and with our becoming a much larger co-op, we might think about adding to their

numbers with people who are specifically expert in co-op finance and/or natural food retail co-op management and policy?

We may want to think about increasing the number of Consumer and Worker-Owner Directors, and introducing some element of geographic election?

With the specific retail operating functions of the General Manager and his collective executive on the increase, it may be that other co-op related activity, such as the Co-operative Community Fund, which at the moment is the responsibility of the General Manager, in future, should report directly to the Board?

With all of this new responsibility of the Board, it may be that the only way to find time for and to protect the nature of policy discussion and policy monitoring (as opposed to operations monitoring) is to remove them to a separate Policy Governance Committee, made up of the non-executive Directors, and reporting back to the main Board

This would retain the essential philosophy of the John Carver Policy Governance model, where policy discussion and monitoring are kept separate from the operational side of the corporation, and are allowed to take place ‘uncorrupted’ by the everyday, ‘material’ distractions of the grocery business

I mentioned earlier about reviewing the specific compensation of Worker-Owner

Directors I think we need to review the compensation of all Directors Whether we design it or not, their workload is going to expand as WSM expands – even without implementation of the suggestions in this document

In my opinion, if we want the best, we need to pay for it Volunteering only goes so far in

an ever more expensive world We don’t ask Consumer-Owners to volunteer away their discount…

I believe that this evolving interpretation of “Ends” Responsibility retains the

philosophical strength of the John Carver Policy Governance model, while adapting WSM’s unique policy governance structure to the realities of being an expanded co-op, with more units, spread over a wider geographic area It helps to re-introduce immediacy, intimacy and a measure of informality in all of our decision-making, responsiveness and accountability

Five Co-ops

There is, of course, a radical alternative, which would allow us to retain WSM’s original interpretation of the John Carver Policy Governance model – in its entirety – and to restore to it the informal intimacy that I believe to be the essence of good co-operative practice

We could divide WSM into five, stand-alone co-ops, each with its own separate

membership and Board, and all working together co-operatively

If Carrboro was able to stand on its own two feet, and to function as a successful business and co-op, then why not these five new co-ops?

I think it might be useful to invite representatives from, say, Co-operative Development Services to help (at the very least) with consideration of this and the preceding two sections, if the Board thinks it appropriate

Whatever else might be the case, we would be considering radical co-operative

developments, and help from any knowledgeable quarter should be welcomed

I am concerned that none of my Hispanic colleagues put forward their name in

nomination for Worker-Owner Director

I am concerned that we spend a lot of time railing against cheap-goods, big-box stores, but then we do little to encourage the working poor, who need such stores to survive, to shop with us

Frankly, I’m concerned that, even with a 20% employee discount, so many of our own workers buy their staples from other stores – and I include myself

The original co-ops in England were founded to allow employees and consumers to escape the company store My fear is that we may have become the company store

If we have, and that is what our Consumer-Owner want, then we should respond to them democratically, and provide them with what they want

And along the way, we should probably abandon all pretence of being a co-operative, and set ourselves up formally as a full corporate-style company, with shareholder meetings, reports and votes

Personally, I think we want to remain a co-op And I would like to see the Board address minority issues by carefully examining the ENDS, and working out whether it is specific enough on minorities, price and hardship

There are many individuals and organizations in this town, with whom I believe we should strike up a more meaningful dialogue, to ensure that we are meeting their

expectations of us as a leading commercial, community entity

Donations are not enough Do they feel a part of their local, community-owned grocery store?

Are we doing enough to integrate our Hispanic staff into our family? Are we reaching out

to our new friends, through the many community organizations that exist to welcome

them to our town, and to help them transition? There are many, but El Futuro

immediately springs to mind

We have mentioned, from time to time, that as a commercial concern, appealing to a particular demographic, we realize that we have contributed to a change in the character

of Carrboro But are we doing enough to help ease that transition for our hone town?

Frankly, I become worried when I hear that ‘affordable housing’ means a $100,000 house

‘Affordable housing,’ for those who service the Carrboro Creative Economy and now perhaps LOIS, means being able to afford to house a family of three kids, on $9 an hour,

in rented accommodation – when rent is ever increasing, due to the pressure from UNC college students, who have parents with deeper pockets

We need constantly to keep pay and benefits for our staff under review We should be ahead of other grocery stores, and should always be keeping an eye on what is genuinely a living wage That way, to be perfectly mercenary, more of our staff might then be able to shop in our stores

Should we be considering more assistance, or at least the provision of information, with regards to helping employees who have specific hardship cases? Help with health

insurance? Help with Worker-Ownership?

One matter that I have been asked to raise is considering the provision of child-care services We have more than one parent in WSM struggling to meet their commitments to WSM because of the need to have their kids looked after Should the Food House and the revamped Carrboro store have nursery rooms and qualified attending staff, at the very least?

At this point, I want to mention one group of people specifically Without being in any way derogatory of every other single worker in WSM, everyone in our Human Resources Department is doing a magnificent job

Their combined input truly makes an enormous contribution to our collective efforts to identify ourselves as a genuine co-operative in our outlook, our practices and our concern for human dignity

Nothing that I say here is to denigrate their efforts Rather I am asking the Board to

consider if there are ways that we can help them be even more excellent in their vocation

As a community organization, it is not enough that we look after our own workers We need to give consideration to all the workers in our community, not least the working poor

I think it safe to assume that we stock what we stock because it sells It would be

foolhardy to second-guess retail operations in what should be bought It would be equally nonsensical to micro-manage the prices we charge for those goods As much as I’d like to

be able to compete with Wal-Mart on price

But I think we should consider some sort of hardship program Maybe some sort of system to help those in need become Consumer-Owners? Perhaps a Discount-Nominee program, where existing Consumer-Owners could elect to transfer their discount to add onto the discount of another existing Consumer-Owner facing hardship? Qualification could be possession of Ownership and an EBT card?

I’m not going to go through all the options here We can look around the country for examples, and perhaps the Board could spend some time on this in Retreat?

Customer Service

It is not just Consumer-Owners who are part of the shopping experience at WSM And if

we are to empower workers, we also need to educate some customers about the co-op experience and its ideal of mutual respect

I’ve waited 30 years to say the following, since I first worked as a lad in an English

‘chippy’ – fish-and-chip shop, to you Dixies And my views have not changed one jot, tittle or iota since then (just to get in some more arcane English expressions!)

As radical as it may seem, if you want your workers to be fully engaged in the co-op ideal, then they need to feel that management and the Board back them to the hilt

The principle that the customer is always right, even when he or she is treating a worker with unconscionable rudeness, is something that should be read about in Charles Dickens, not experienced in a co-op

There should be a policy of mutuality, where customers can expect to be treated in the same way that they behave And this policy should be posted and enforced

If we can not look after the human rights of our own workers, then why should we expect our customers to believe us when we say we care about the human rights of coffee

Our workers deserve no less

Now, it could be argued that this suggestion is a little self-absorbed I don’t think I would necessarily disagree with that observation

Even a tad Monty Python Hmm…did you know that some of the most successful food retail training videos in the UK were produced by the Monty Python comedy team?

Just goes to show that sometimes there’s a kernel of validity in what might otherwise appear to be the most outlandish of suggestions…

Pay, Benefits and Co-operative Democracy

Our workers deserve compensation that befits their roles as hands-on ambassadors of operation (www.weaverstreetmarket.coop/working/benefits.php)

co-When the Board makes policy (and with the greatest of respect to the unarguable talents and hard work of the General Manager), it is not he who implements that policy At the end of the day, where the implementation counts, in the immediate (and informally

intimate) inter-action with the customer, it is the grunt worker who bears the brunt of representing Board policy to the rest of the world

Out there in the non-alternative grocery world, where the profits go to Benton, where entry-level pay is whatever the system can get away with, and where ‘participatory

democracy’ means that the job of cleaning the break-room rotates around the 90-day employees, your average grunt worker goes to work, does the least he or she has to do, and tries to make it home again without waking up, or coming down off whatever

stimulant got them to work in the first place

If we at WSM want more out of our workers, the ambassadors of Board policy, if we want them truly to spread the gospel of co-operation, above and beyond being mere grunts, then we have to give them a reason Wishing it won’t wash

We have to give them sufficiently more than other grocery stores, so that they will want

to do sufficiently more in return Every sacrifice, every demand requires compensation

I’m going to be blunt I heard one Director say that it’s ok to pay less than the going grocery rate, because people make sacrifices to work in a co-op If Sam Walton had said that, we’d have accused him of exploitation – wait a minute, we did accuse him of

exploitation!

Apparently, there is a policy at the moment to increase pay by 20% over the next three years I trust that will be above performance increases, re-organizing differentials and the Hillsborough increase

After that, I think we could be more diligent about keeping pay in line with something like a National Grocery Co-operative Association norm, on a regular basis

I think we should consider some sort of bonus for Worker-Owners who weather the refurbishments That is normal elsewhere One might also consider annual worker

bonuses Then again, I would not want those to eat into the Worker-Owner Program

Certainly, if we are unable to give our workers substantial financial reason to go that extra co-op mile, then it is important that we make them feel that their input is valued, that they are genuinely part of our co-op family and that they have the fullest opportunity to

contribute in the participatory democracy that is our co-op Can we say that at the

moment?

I have a suggestion for each and every Director At some point in your current two-year term, take a week off, and make yourself available to train, work and be treated in every single way as an entry-level grunt, in one of the truly manual worker positions in WSM Find out exactly what it is you are asking your family members to do on your behalf when you make policy

Stakeholders and Elections

I am writing this section on the evening of October 14th, 2007 I make that rather pedantic point so that any reader will know that I am writing it before the outcome is announced of the election in which I am a candidate This is not about what has happened in the past, but rather what we may be able to do about making a possibly better future

[And I think I may already have made the point, but I think it’s worth making again I’ve written most of this document as if I was a Director, making a submission to the Board Not because I’m arrogantly assuming that I will be a Director – far from it – but simply because it’s a lot easier to write the document that way And also because there’s a

chance that whoever does win may themselves eventually want to present some part of this document to the Board.]

Some years ago, in England, there was a very unpopular, and eventually unsuccessful, move to change the way in which taxes were raised locally It became known as the Poll Tax, because of opponents’ claims that it was a back door method of making people pay

to vote

In the few months that I have been a candidate for Director of WSM, I have had occasion

to talk with consumers and workers, not all of whom have been owners It has caused me

to wonder if we do not also have – I’m quite sure unintentionally – a system where we have to pay to vote?

That, in turn, has led me to think that maybe WSM ought carefully to reconsider whom it considers to be a ‘stakeholder’ in WSM? If we promote ourselves as the ‘community co-op,’ ought we not to encourage the widest possible involvement of our community of workers and consumers in our decision-making processes? And I mean decision-making, not suggestion-making

Certainly those who contribute to the asset stability of the co-operative should reap some benefit But should that benefit not be limited to the financial, and not be translated into

an exclusive voting club?

Perhaps at least one Directorship (on, maybe, an expanded Board) could be reserved as an

‘open’ position – ‘open’ to be voted for by anyone who works, shops or visits the co-op, provided some form of validation is included, to prevent voter fraud (I’m sure we do not have to re-invent the wheel here)?

I make this next point as gently as I can I think of WSM as a big family I would prefer that dissension, where it occurs (and dissension is merely a more adamantly expressed form of opinion; it’s not something of which we should be scared)…I would prefer that dissension be kept within the family I am doing that here Keeping it within the family

But still expressing a point about which I feel strongly – and, without belaboring the point, it is why I am writing about it before the election announcement

In my various conversations, I was troubled by the oft-repeated complaint that some people do not trust what happens with capital raised from owners It does not matter if it

is explained to the satisfaction of Directors, senior management or even outside

accountants ad nauseam My point is that I was taken aback by the number of people who

said that they were not owners because they did not trust what happened to the capital so raised

This was particularly true with workers Part of this is simply the seemingly complicated system of internal account and re-imbursement that takes place Which, of course, leads

me to wonder why it is so complicated? To be honest, it is not a system I have come across elsewhere Maybe the system could be looked at? Perhaps, the means of marketing ownership could be looked at?

And before any assumptions are made, let me make clear that this is not a fancy,

roundabout way of my saying: “I’m the one that’s suspicious.” Remember, I’m one of the ones who is a Worker-Owner

Now, it may all be very simple and straightforward Hmm I would say this We have just come out of a year (2007) when all sorts of ‘simple and straightforward’ things became misunderstood – which, I guess, means that, by that very definition, they were not so

‘simple and straightforward’ to some people – people about whom we should care

We are a co-operative All of our business should be as transparent as possible to our workers, our consumers, our members, our owners, our stakeholders – however we want

to define them

Which brings me back to the point about ‘paying to vote.’ It’s bad enough if there is that sense in the first place It’s even worse if there is something that is actually preventing people wanting to pay – whether it is real, or merely an unsubstantiated suspicion, a misplaced perception

We should want to do all that we can to encourage as many ‘stakeholders’ as possible to want to own, and to want to be a part of making decisions in their ‘community co-

operative.’

Which brings me to another very gentle point It may be the way that things have been done for 20 years, so I want to tread carefully I do believe that during the recent Director election, with its extended voting period, votes were collected from ballot boxes during the voting period

Folks Wars have been fought over less

The ballot box, in any election, should be inviolate There should, at all times, be a

verifiable audit trail of paper from vote to count That is why boxes are sealed That is why boxes are opened by independent auditors – and only at the time of a count That is why candidates are allowed to have witnesses present during a count

With respect, if votes were collected during the voting period, without a witness present, and without a proper procedure for their collection, including verification that the

collector had no relationship with the candidates, then it could be argued that the sanctity

of the paper trail, and of the election itself, has been jeopardized

I am sometimes accused of making pithy statements for effect I plead guilty I make them when I think that effect underlines a point So, I’ll make one here: we are a $20 million turnover company; we should not be conducting elections as if we were a horticultural society

If what has happened, has happened, then it’s happened, and it’s in the past But in future,

I would suggest that elections are conducted by an outside body with experience of

conducting elections I am sure the State Bar could make a recommendation

I would suggest that he/she be at the same level as the Operations Manager, whose

primary goal is to make sure that WSM is the best natural food retail business it can be

I would suggest that the Co-operative Manager be a part of the new collective executive and report directly to the Board, maybe even sit on the Board, as an executive Director

No manager has sustainable relevance unless they have administrative functions I would suggest that the Co-operative Manager have under him/her the following departments:

• Community liaison, connection and events

• The Community Co-operative Fund, and all community donations

• Hardship programs

• Recycling

• Department meetings, open forums and co-op meetings

• Oversight of the decision-making process

Budget

I also believe in a healthy dose of reality from time to time Frankly, if we want half of what is in this document to be implemented, we are probably going to have to back it up

by opening the checkbook And that means making room in the Budget

Straight away, I will say that (1) this is where we really have an interesting discussion about separation of ENDS and MEANS; and (2) some of my terminology may be from a different experience, but I think that the points are still the same

As for (1), at this point, I will contribute to the conversation only by saying that I think the Board needs to be a tad less hands-off about implementation – if you hadn’t already drawn that conclusion! I think operations can still retain wide latitude of action, even if the Board identifies some operational parameters

I don’t want the Board to micro-manage, but a discussion is in order The Board has a responsibility to see that ENDS are implemented Part of that remit has to include

ensuring that the ENDS can be financed They don’t just happen because the Board wishes them to occur

In regards to operational parameters, I would identify WSM’s Cost of Goods and Cost of Labor as two areas where improvement is both possible and desirable, if we are to ‘make room’ for the change in ENDS outlined in this document

If Cost of Goods was to be reduced by 5% and Cost of Labor by 3% over, say, five years,

$1.3m could be realized Fortunately, I think there is room to do this

As far as Cost of Goods is concerned, I might want the following discussed: Is cost of purchasing too high, and mark-up too low? Is our inventory process the best? Is receipts paperwork and shrinkage under control? Should we be a little tougher with register and refund policies?

Moving onto Cost of Labor, I might raise the following questions: Are we as productive

as we could be? Are staff procedures clear, and properly followed? Is there optimum management of personnel and scheduling? Are we maybe too lax about attendance and overtime?

I am on the sharp end of the grunt work I wonder if our practices really achieve all that

we could be achieving to ensure that we are 100% fully prepared successfully to interact with customers? I wonder if we are we doing all that we could be doing to engage in the support work necessary for such interaction?

Are our managers, at every level, fully supported in their management efforts by the very best training that we can make available to them? Are staff as educated as they could be?

I mean nothing derogatory by these comments I have the highest respect for all of my work colleagues and management Our heart is in the right place

But that does not mean that we do not all wish we could be doing better, and that, even now, we could identify areas for improvement It’s a question of the Board lending some leadership and helping to make the necessary resources available to assist in improving performance

I don’t think there is one of my work-mates (whether staff or manager) who would not agree that there is room for tightening up I wonder, once again, if we could be helped in our efforts by financial, co-operative and retail expertise on the Board, and/or input from the likes of Co-operative Development Services

As much as we all want to design and implement a retail experience that is set apart from the non-sustainable and sometimes abusive process of those stores that do not emphasize the same values that we do, the fact is that the wider food retail industry has learned useful practices over the years There is no reason why we should not be borrowing and adapting those procedures on a coherent basis Let’s not be throwing the baby out with the dirty bathwater

At the same time as we make the Operations Manager accountable to the Board, at the same time as we possibly create a relationship between him and a new Co-operative Manager, we must be prepared to give our successful Operations Manager (and all of his equally hard-working store and department managers) all the ‘investment’ he and they need to be able to realize further and increased success in his and their efforts

There needs to be a greater distribution of financial information, down to the workers, and up to the Board, so that we may all assist the Operations Manager and other managers

to achieve the best they can by way of departmental contributions

One matter in particular I have mentioned before I believe that we could improve

department performance if there was better understanding between our food production departments and their corresponding retail departments This will be even more true after the move to the Food House in Hillsborough

I have suggested that there should be a rolling program of ‘exchange visits’ between corresponding departments, to allow the workers in each department fully to appreciate the efforts being made by their counterparts at the opposite end of their collaborative process

I am concerned that we do not have an annual audit I am surprised that outside

institutions settle for less It makes me nervous I wonder if we are employing our cash reserves, equity balances and retained earnings to their maximum and co-operative extent Are they invested? Even on a short-term basis? How, and where?

Which brings me to what may be the most important question in this section, and try as I might to find the answer, I have not been successful: Who sets the operating budget? Who drafts it, when, and to what process of approval is it subject?

I was an observer at the Board Meeting in September 2007, when the outside accountant made a point that reminded me of the practice of other multi-million dollar turnover companies of which I have had experience

He said that good financial oversight required that the people who collect the money not

be the same people who reconcile it I wonder if that principle should not apply at the Board level also?

The General Manager, who also sits on the Board, is the person who is ultimately

responsible for the collection of all monies earned by the Co-op At the moment, he also has oversight function for the person responsible for the ultimate ‘reconciliation’ (the end-of-year audit), namely the outside accountant

I wonder whether, in future, we could not follow the practice of which I am aware, where, say, appointed Board members (in particular, any who may have specific financial

expertise), who are a little removed from a day-to-day vested interest in the operations of the Co-op, themselves have pre-Board meeting oversight authority for the workings of the outside accountant, by way of a Standing Audit and Budget Sub-Committee of the Board?

I call it the Audit and Budget Sub-Committee, because I think it could also have an ongoing, pre-Board meeting, oversight function as regards the Budget Thus, the General Manager would draft the Budget; the Board would be able to have a sensible oversight function by way of its Standing Audit and Budget Committee; which would then have further pre-Board meeting oversight of the outside accountant’s ‘audit’ of the end-of-year accounts, prepared once more by the General Manager

Still with me? It’s not as complicated as it sounds It truly is pretty standard practice in multi-million dollar turnover companies I’m sure our existing outside accountants could advise us of the details of the set-up

I have already touched on using our Board to help broaden and deepen our capital and loan raising activities I have not a little experience in these activities myself – non-profit, for-profit, community and political

I wonder whether, even in a co-op, it might not be useful to consider performance

incentives up the ladder in WSM I am sure that the Operations Manager has some

thoughts And I would think that Co-operative Development Services might also

I’m jumping a bit all over the place here I apologize But I will continue with the

Mexican Bean act

I think there are certain central expenses which could usefully be transferred to the

individual units The immediacy might make the units more responsive to controlling the costs

I’m thinking, for example, of the Mystery Shopper Program and internal shop marketing I’m not saying the work should be done in the units, but the cost could be billed to the unit directly Units might then have more control over what they want, and what they don’t want to do

I’m not entirely sure what is the existing financial position of Panzanella Maybe we should consider selling it, even to a co-operative of existing managers, consumers and workers?

Next point, almost entirely out of order (!) – apologies Do we have Keyman Insurance for the General Manager and the Operations Manager – at the very least?

One comment that I have heard is that there are people, both consumers and workers, who say they are happy with everything to stay the way it is, because they are happy with those who are at the helm

One of the concerns I hope I am succeeding in conveying in this document is that there is insufficient formal corporate and co-operative structure in place to handle a situation where those at the helm may no longer be there God forbid, in an accident What

happens to the immediate operational continuity, the financial health and the collected institutional knowledge at the top of WSM?

We should be considering all of this as we review the structures and policies of WSM, both as a corporation and as a co-operative But with this immediate suggestion, we can at least address the issue of immediate financial recompense in the event of a tragedy

befalling our two most important executives – as gruesome as it may be to talk of them purely in dollar terms!

I see all of these comments as part of my overall message of increasing co-operation, communication and democracy within the departments and within the co-op generally I think better business flows from this, not in spite of it

I think that a conversation of some form among the Board, and then between the Board and operations, on the matters raised in this section would be fruitful for all

Further, it would be in line with my thoughts about a relevant evolution of WSM’s policy governance structure within the John Carver model, and would not ‘corrupt’ the integrity and overall philosophical separation of ENDS and MEANS

I think we could offer more support to those community activities to which we donate by having a permanent display near the cafeteria’s, which organizations could supply or man

as they saw fit

Review and Evaluation

I would invite you not to evaluate any one suggestion in this discussion document in total isolation Rather review the combined effect as a whole

I believe I have gone to some lengths to balance demand with benefit Where there is

‘take,’ I have also attempted to offer ‘give.’

So, when I talk about expanding the executive function of the Board, I take care also to suggest ways to preserve its policy-making integrity

Where I presage an improvement in workers’ performance, I also talk about improved worker benefits, and a greater participation by them in the expanded democratic structure

of the co-op

At the same time as I wonder whether it might be a good idea for more senior

management personnel to be accountable to the Board, I also foresee the possibility of conversations between the Board and that senior management, to find ways to support the latter in their efforts to improve the retail performance of WSM

I do not bore you to death with highlighting the attempted balance wherever it occurs, but please know that it is there

Conclusion and Process

I don’t have any conclusions That would be to pre-determine discussion

Clearly, many of these suggestions would require changes to the ENDS Statement,

Policies and perhaps even the By-Laws Those can be considered alongside or after