Download Cooperatives Can’t Communicate the R Word

Cooperatives Can’t Communicate the R Word
Phil Kenkel
Bill Fitzwater Cooperative Chair
Our national project highlighted member communication as a critical issue. Managers and board
members responding to our multi-state survey of cooperative communication indicated that their
cooperative was reasonably effective in communication. The resolution to this apparent
discrepancy may relate to the messages being communicated. Cooperatives (like other firms) are
good at communicating the availability and advantages of their products and services.
Cooperatives do a reasonably good job at communicating the benefits of the cooperative to the
member. Those communications relate to “what your cooperative can do for you”. The tougher
communication message, and the one that most cooperatives are weak on communicating, is
“what you must do for your cooperative”. Cooperative principles tell us that members have a
collective responsibility of providing equity for the cooperative, participating in governance and
supporting the firm’s economies of scale and scope by doing business with the cooperative.
Cooperatives do a poor job of communicating these responsibilities to members.
From a big picture view it is obvious that member’s must help finance the cooperative since they
are the only class of owners. While the need for member investment seems obvious I have never
heard of a member asking whether the cooperative is retaining sufficient funds. Members want
favorable prices and the highest possible cash patronage. They leave the responsibility of
financing the cooperative to the board and manager. That explains why we remind a new board
member to take off their farmer hat and put on their board member hat. As a producer, they
likely never considered the responsibility to provide funds for the cooperative’s stability and
infrastructure. In a similar fashion, the big picture view makes it obvious that members must
combine their business volume in order to obtain an economic benefit. However, few members
feel that they have a responsibility to do business with the cooperative.
Communicating member’s responsibility to fund, patronize and control the cooperative is a
tough communication challenge. One problem is that it is not a popular message. Another
problem is that it is a collective responsibility. Most agricultural cooperatives are open
membership organizations that are organized without usage commitments. Producers have no
contractual responsibility to patronize the cooperative and they, and their cooperative, like it that
way. Maybe responsibility is the wrong message. Perhaps we should tell producers how their
cooperative is helping them, and how they can help their cooperative. If you have a strategy for
communicating member responsibility, I would love to hear about it!
11-16-2012