Marty Frost, Founder of Canadian Co-op Development Company, Devco, Talks Cooperatives

January 8, 2010

Activating a dream business idea can be a bit intimidating. It takes a lot of belief in self, perseverance and tenacity.

This is no different with a cooperative, except that there are more personalities involved (which can be a great asset).

Well, for those living in British Columbia, Canada, there is another helping hand. Enter Devco. A workers co-op developed to assist those thinking about creating a cooperative idea, groups that have already moved forward, and established co-ops, Devco is a one-stop shop. Everything from offering assistance with the business plan to providing organizational training to build group capacity for co-op implementation and management is under the Devco roof.

One of the founders, Marty Frost, sat down with me (virtually that is) and let me pick his brain about collaboration.

Marty at the helm

Growing up in a small farming community, Marty was introduced to the collaborative mindset at an early age. This unknowingly gave him the backbone of what later become a lifetime career. His inspiring intelligence about the art of working together for the community-good and load of experience, ideas, and interesting information makes him, in my opinion, a powerful asset to global collaboration.

Not to mention, his enthusiasm is contagious. It confirms to me that working together truly is the wave of the future.

Here’s what he had to say…

EoC: What is your background with cooperatives?

MF: Although I served as a director on the credit union in Kentville, Nova Scotia before moving to the west coast, most of my co-op activity took place after my family moved to British Columbia in 1978.

At that time in Vancouver there was a thriving and active “new” co-op community, and joining that community felt like coming home – no small claim for a boy from the Maritimes!

By the end of the first week, I was a member of the food co-op and the local credit union. In March 1979 I went to work for a workers’ co-op, where I stayed as a member-worker for 17 years. In 1983 I was a founding member of my housing co-op, where I stayed for 13 years, and in 1996 with some colleagues founded Devco, a workers’ cooperative of co-op development and training consultants. Along the way I got involved in the greater co-op movement both provincially and nationally, and was even privileged to do some international work in Indonesia, China and Mongolia.

EoC: Were you cooperative as a child growing up?

MF: Of course, I was a model of cooperation!! No, seriously, I was the only boy in a fairly traditional farming family in Prince Edward Island. With four sisters, I was pretty much spoiled by the attention. It was also a pretty basic farm, and there were real imperatives driving the work and so on.

So, if I didn’t want to do the barn chores, it wasn’t just a case of my dad getting upset, it was a case of the cows and horses not getting milked, fed and watered. If the wood didn’t get cut and split, we didn’t have enough wood to heat the house in the winter.

Not a lot of room for rebellion or lack of cooperation there!

In our community, too, the local farmers did a lot of stuff together. Usually when it was time to cut the hay, all the farmers would just sort of start at one end of the road, and take in the hay from all the farms. Lots of farmers didn’t have all the equipment they needed, but that wasn’t a problem, since another of the farmers would just bring his along. My family owned (along with another family a couple of miles away) the first hay baler on our road, and the first mechanical hay rake. That was a bit of a boon to the whole group of farmers. Same thing when it was time to cut the firewood. Our tractor usually drove the sawmill for everyone.

I doubt any of us saw it as “cooperation”, it was just the way things got done.

EoC: What role do you feel collaboration plays in cooperatives?

MF: Collaboration, in our terms cooperation, is at the heart of the co-op system.

A co-op does not come into being unless a number of people agree to collaborate under a set of common principles and agreements to meet a defined common need. Co-ops themselves collaborate in federations and through business arrangements with one another, again to address common needs. All co-ops in the world are organized on the same set of 7 co-op principles, or values. Among these are a commitment to equal democratic control by all members, and a commitment to collaboration with other co-operatives.

EoC: In what ways are you seeing Canadian cooperatives incorporating collaborative aspects to their business models?

MF: The Canadian cooperative system is a tiered system. At the top (or the bottom, depending on your point of view) of the system are the individual co-ops. Each of these is a collaboration of members, as I described above, committed to the co-op values, and agreeing to work together to meet a common need, based on equality and democratic process.

From time to time a number of these co-ops will get together to form a federation of co-ops with similar structures, and again with a common need, which the federation is designed to meet. These federations of co-ops have banded together to form the Canadian Cooperative Association (CCA), again, democratically controlled, and directed by its members, to meet needs beyond the scope of the individual federations. The francophone co-ops in Canada have a similar apex organization, called the Conseil Canadien des Cooperatives et de Mutualite (CCCM). Historically the two worked somewhat separately, but for the past 10 years or so have worked more and more closely, collaborating on their government relations and sector strategies and so on, to the strengthening of both!

Co-ops work together on a market level as well. A good example would be the co-op stores of Co-op Atlantic carrying JustUs coffee products. JustUs is a workers’ co-op in Nova Scotia. Cooperators Insurance Group, the largest mutual insurance company in Canada is 100% owned by cooperatives. They maintain two funds of $500 thousand each, one is given out as grants for the formation of new cooperatives, the other for grants to community development projects.

EoC: Do you feel with 20-somethings entering the job world, with their extensive knowledge of technology, texting, instant information exchange and a broader mindset of collaboration, that this will have an impact on cooperatives?

MF: I hope so.

Back in the 70’s, that I describe above, it was the 20-somethings who created all that stir in Vancouver. And when I look around now, I feel safe in saying that it was us, the 20-somethings using the co-op model, that started the natural foods industry in Canada, now a multi-billion dollar industry. The credit union we started back then is still alive and thriving, with almost $50 million in assets! The manager is one of the 20-somethings that started it.

The technology revolution is a system of tools, and yes, I think that they give us power that we’ve never had before to communicate and mobilize people. At the core, though, there has to be a set of values that drives and steers that power.

Does that exist among 20-somethings today? And if so, is it a positive set of values?

I do some reading (and writing) about the concept of social capital – the sort of underlying set of activities that people do together that gives a community cohesion, and with that a certain strength. The thing is that it has a bright side, as seen in countless positive community based initiatives (including the people who started all those co-ops back in the ‘70s) and a dark side (like Hell’s Angels, for example, or the gangs that all but own some of our communities).

All of these have strong social capital at their core, but different values driving them.

So, what we have now is huge technological capital. How will it manifest itself? That will depend on the values of the people who choose to use it. Right now the dominant social forces in North America are not too positive – accumulation of personal wealth, degradation of the planets ecology, a fortress mentality with respect to social change.

20-somethings first have to decide if this is what they buy into. If they do, I am pessimistic about the future my grandchildren will inherit. If they choose to become agents of change, they can change the world.

Back in the ‘60s we stopped a war, against the will of the government of the US!! What can we do today?

I think anything we set our minds to.

Within that, cooperatives continue to provide a viable constructive economic model, which is one of the needed components to global change.

EoC: Are Canadian cooperatives collaborating at all with other global cooperatives?

MF: Yes, we are.

CCA is one of the primary delivery agents for CIDA projects, the Canadian government’s external economic development agency.

Why?

Because in the parts of the world that they serve the co-op model has been found to be the most effective model for sustainable socio-economic development. CCA is also a member of the International Cooperative Alliance (ICA), the world-wide federation of co-ops. My own federation, the Canadian Worker Co-op Federation (CWCF), is a member of CICOPA, the world federation of worker co-ops, as well as a member of CCA and CCCM (we’re a bilingual organization).

EoC: How has technology assisted the cooperative business model, if at all?

MF: I think mostly through communication options.

My federation (CWCF) began a couple of years ago using voice-over-internet for board meetings and committee meetings. This enabled us to have 4 meetings a year, which did a lot for the board’s ability to support management in moving our programs forward.

At our AGM recently held in New Brunswick, we had video-voice links first with Elizabeth May, the leader of the Canadian Green Party, speaking from British Columbia, and with Bruno Roelants, president of CICOPA, mentioned above, speaking from Germany. In each case the medium was sufficient to enable our members, in a general meeting, to ask questions of the speakers and have them respond.

Last year, the youth program of the British Columbia Co-operative Association was able to convene a meeting of young cooperators from Argentina, Japan, the US, and parts of Canada into a first-ever common “table” to share their experiences and challenges.

EoC: What do you feel is the most fundamental move for a group of people trying to collaborate and create a cooperative?

MF: Have the people sit down and establish what their common goal is. Then look at the statement of co-op principles and see to what extent people respect the values at the core of these, and are ready to subscribe to them.

The co-op values contain some pretty revolutionary stuff, and anyone who has the conventional North American vision of starting a business, operating it for a few years, then selling it for millions and retiring on the profits is in for a shock.

Co-ops are a business model designed to provide a common service to people who need it.

While it will contribute to a member’s wealth by providing them with employment, or expanding their opportunities to market a product, or do value addition on their products, or reducing the cost of part of their lives, a person’s share does not necessarily increase in value as the years go on and the business grows.

Co-ops are made to serve people, not capital. That runs kind of counter to the capitalist ideal, and some people are a bit shocked when they find this out.

EoC: What is the current state of cooperatives in Canada?

MF: I think we’re in good shape.

Last year when the economic crisis hit, while billions of dollars were lost from stock market investment, government investment and so on, the credit unions and co-ops just sailed along pretty much as always. That’s primarily because the bulk of their capital is invested locally and regionally, not in speculative markets.

I think that the main challenge co-ops face in Canada is attracting the 20-somethings you mentioned above. All organizations need renewal, need to bring in younger people, and co-ops face that challenge just like every other organization. That means that we have to remain relevant to younger people’s lives, or we calcify. Dare I say that this may have been one of the factors leading to the demise about 20 years ago, of some of the largest co-operatives in Canada. Boards and management had spent far too much time doing business as usual and emulating their competitors in the market, rather than building on their strengths, which was in their members.

It’s great to see that the co-ops that sprung up to fill the niches are responding to that challenge, and are seeing good success, both at democratic and business levels.

EoC: What is your advice for working with different personalities and staying true to the mission statement of the co-op?

MF: I think that people in general if they want to be involved in the co-op have to subscribe in one way or another to the mission of the co-op. Why else would they be a member, other than that they want to promote its purpose and move it forward?

The piece of that which is very important is that they have had input into the development of that mission.

I believe that this is one of the main cohesive elements in any co-op, the members have had the opportunity to provide input into the overall mission and vision to which the co-op holds itself accountable. Often members will not respond to requests for such input, but I believe they must be given the opportunity. Even really large co-ops like Mountain Equipment Equipment here in Canada (about 3 million members) provides an opportunity for any member to provide input into its strategic planning, and to run for the board of directors.

So, my advice is to keep your members informed and involved. Even if the co-op falls prey to disruptive dissent, a well-informed and involved membership will not be swayed from a mission and direction in whose creation they feel they were involved. Your members must be given access to input into the creation of the mission statement, the vision, and the strategic plans. This is the only way to build a strong membership, hence a strong co-op. Leadership will come from the board of directors, of course, but the membership must have the opportunity to be part of the discussion (as well as part of the board that provides the leadership).

EoC: Where do you see the future of cooperatives going in the future?

MF: That remains to be seen.

I see huge challenges ahead in transforming economies as our political leadership is forced, kicking and screaming, into a very challenging world of repeated ecological disasters and crises, and further economic “crises” as they refuse to recognize the need for fundamental change.

Can co-ops become agents of positive change?

I think the capacity is there. There is real strength in local/regional ownership and the stability that brings to capital. Co-ops show historically that they respond to change and handle very successfully economic and technological shifts.

First the motivation has to be there. I see in my own view-screen a number of examples where co-ops are leading us into the new economy, a much greener economy.

Will we ever constitute the dominant economic model in the world? Probably not.

Will we be relevant to larger numbers of people? I think so. And that may, in fact, lead us to the kind of sea-change that’s needed.

EoC: What is your favorite Co-op story?

MF: I have a hundred favourite personal co-op stories, from sitting on the Mongolian steppe in July sipping Airag (fermented mares’ milk) with local co-op members, to spending winter solstice in the Yukon with a salmon fishers’ co-op, where the sun got up after 11:00 AM and went down about 2:00 PM, to waking to a cock crowing in the Mondragon region of Spain at the co-op training institute and looking out the window to see about 20 hot air balloons taking off from a facing hillside.

My favourite co-op story might be the Peace Energy Co-op, where a group of community activists have set up their first wind turbine (7.5 megawatts, I believe) on what will ultimately be a 50 megawatt wind farm in Dawson Creek, BC. Over 1,500 residents of the Peace River Region are members of the co-op, and they are producing truly locally-owned electricity.

Their next project will be a common heating system that will serve about 200 homes in Dawson Creek, utilizing an unused community swimming pool as their heat reservoir.

EoC: What makes a really successful Co-op?

MF: The commitment of the members.

Members have to be committed to buying shares in the co-op, and participating in the democratic aspects of the co-op — the general meetings, serving on the board of directors and committees and so on — but most importantly they have to be committed to using the services of the co-op.

Canada’s most positive success story may be Mountain Equipment Co-op, which started in the 1970s and is now huge, with stores in virtually every province and about 3 million members. The reason they have been so successful is that they serve the needs of their members. They listen to what the members say, and respond to that. So, the members come back in droves, and keep on buying from the co-op.

EoC: What is your favorite aspect about working together?

MF: Aside from the mutual support, the excitement of collectively generating ideas and implementing them and so on, and just the straight out fun of it all, I’ve found, through my years working in co-ops, that decisions made collectively are always (a word I don’t often use) better decisions that those made by an individual.

That’s not to say I’m an advocate of having a group of people sitting around the co-op bakery deciding how much to charge for the apple turnovers, but an effective decision making process that allows for and integrates the opinions of a wide range of involved people.

This will always, I think, lead to a better decision.

I believe that’s why co-ops have been shown to respond to change more easily, be more innovative, more creative, retain workers longer and develop their skills further than other forms of business organization that don’t have that built into their structures.

Thank you Marty for taking the time to discuss collaboration. – EoC

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Can a Cooperative Business Model Save a Ski Area?

December 28, 2009

Crisis brings opportunity.

The saying is a popular one and a belief that has been proven over time. It is also a mantra for those looking for a silver lining during these dark times of global financial crisis. For some that glimmer of hope shines in the form of a forgotten business model that dates back to the early 1800s…the cooperative.

A practice that was born in Great Britain, fathered by a Welsh cotton merchant, Robert Owen, and expanded upon by Dr. William King and Friedrich Raiffeisen, the cooperative ideal was built on the belief that a community works together in the common interest of each other and the creation of a needed product.

The National Cooperative Business Association defines the ideology as a style of business, “…formed by their members when the marketplace fails to provide needed goods or services at affordable prices and acceptable quality. Cooperatives empower people to improve their quality of life and enhance their economic opportunities through self-help.”

Co-ops have assisted people throughout the centuries. Everything from agriculture to electrical issues, from banking to grocery shopping, cooperatives have stepped in to assist citizens around the world. In fact, there are 750,000 co-ops worldwide helping 730 million members, as reported by the NCBA.

And more importantly, these cooperatives have been found in a study issued by the International Labour Organization to be a resilient business model in times of financial uncertainty, both historically as well as in today’s fiscal climate.

As described by the ILO, “The recent massive public bail-out of private, investor-owned banks has underlined the virtues of a customer-owned cooperative…savings and credit cooperatives, also known as credit unions or SACCOS, building societies and cooperative banks, all over the world are reporting they are still financially sound and that customers are flocking to bank with them because they are highly trusted.”

For those that enjoy skiing and snowboarding, the cooperative business model has helped to open their global consciousness to a marketplace that needs assistance.

Enter Shames Mountain.

An isolated ski area in the upper reaches of northern British Columbia, the tiny resort is accessorized with impressive terrain, huge amounts of snow and, for now, easy-access to a winter playground.

But in reality Shames Mountain is a little-known powder paradise that is on the brink of death.

Accessorized by a chairlift, rope tow, ski school, rental shop, lodge and grooming department, the ski area boundaries outline 3,532 hectares (8,730 acres, which is more than the tenure of Whistler/Blackcomb for reference), of which 144 hectares (252 acres) have been developed into inbound riding.

A landscape of 1,500 to 3,000 foot vertical drops, sustained fall lines and great storm skiing, this section of Coast Mountain Range was researched, chosen and developed in the early 1990s by the Ski Northwest Society because of its impressive terrain and annual snowfall (1,200 centimeters or 480 inches per year).

Shames Mountain is located in northwestern British Columbia: 30 minutes from the logging-gone-bust city of Terrace (population 20,000) and a little under two hours from the harbor town of Prince Rupert (population 15,000). Terrace, known as the commercial hub of the region, has a user-friendly airport with multiple, daily, two-hour flights from Vancouver with Air Canada and Hawkair.

But due to a lack of advertising and world-wide marketing, as well as a small population base, Shames has yet to hit the radar screen for the global skiing and snowboarding tribe.

This lack of publicity (i.e. ticket sales) is causing an uncertain future for the mountain. In fact, there are rumors that this might be the last season if things don’t change.

Currently on the market for $1.5 million Canadian, this hidden gem is for sale to the right buyers (the current owners are very conscience of the community and the important role that the mountain plays in the outdoor recreation of Terrace and will not just sell to anyone).

The idea of a global cooperative was originally brought to the table by a soul skier far, far away from Terrace, BC. Jamie Schectman, a self-proclaimed citizen-of-the-world, United States-born, 100-day-plus skier who lives year-round in Patagonia, Argentina, had always dreamed of owning and running a ski area with other snow enthusiasts,

“I, along with a lot of other skiers I have skied with through the years, are becoming increasingly frustrated with the profit-only approach that many ski resorts are adopting. Seeing our ski areas caring less and less about the guest, not to mention the environment, just made me think there had to be another way.”

One day he received an email from a good ski buddy detailing a ski area in northern BC that was on the market for what seemed an amazing price. He did some research on the terrain and liked what he saw.

“One of my big passions in life is searching out the best skiing around the world. There are a couple things that us big mountain skiers look for: steep terrain and a reliable snow pack. Well, Shames gets an A+ in both of those departments.”

The next step was to contact some locals and get their thoughts on the possibility of a cooperative.

Schectman explains, “Through the giant circle of skiers and snowboarders around the world, I was able to make contact with some of the local Terrace riders. My initial email was quickly responded to with the question, ‘Are you an angel?’ With the locals blessing, I started throwing the idea out via social networking channels like Facebook. Within a few days it was obvious that the global snow lovers were excited about becoming a united cooperative.”

The reaction to the activation of a global ski area cooperative was impressive. Within a short amount of time the Shames Mountain Co-op (SMC) Facebook fan page surpassed 1,000 members. The new SMC website was getting nearly 200 individual hits a day. And the message board surpassed 300 members quickly and easily.

In response to the surge of interest, the locals established a group called Friends of Shames. The Terrace committee determined that as a township they would like to keep it home-centered before going global. The group determined that first approaching a community-controlled, non-profit business model would be most logical.

Jamie’s reply…”What is exciting about the global cooperative movement is that it brings snow lovers together from all over the world in the understanding that we are all involved for the positive creation of a ski area. The basic premise behind the Shames Mountain for-profit Co-op idea is to offer a values-based, tangible asset to skiers and snowboarders around the world. Bringing the worldwide snow community together gives us an opportunity to create a ski area that works in the best interest of the local people and natural surroundings, as well as leaving its riders satisfied and smiling at the end of the day. A ski area run by snow enthusiasts for snow enthusiasts…”

“…the core ideal behind the global cooperative vision is the “values-led business” belief system. The global ski co-op will make it’s decisions based on what is best for the community, environment and the guests. Other businesses, such as Ben and Jerry’s ice cream, have proven that a “values-led” business model can be very successful.

If the locals of Shames would rather not have the global component involved, I respect their decision. However, I am certain, by the immense amount of support that has been shown to us from around the world, that the global ski area cooperative concept will be greatly successful somewhere else. ”

This is an important point…Shames Mountain is not the only ski area in trouble in today’s economy. Much like the bank institutions treading in dark troubled waters, the ski area model of the last decade is crashing. The profit driven mentality is proving to be a bankrupting mentality.

Schectman believes that the globally-owned co-op model could be the new way of thinking for ski areas for several reasons,

“For one, by having a co-op, we can achieve many things that an individual owner or owners cannot. By tapping into the collective global intelligence, the co-op will have unlimited resources to find solutions to challenges, as well as receive input on how to best proceed. This intellectual property, as well as sweat equity, can be bartered in exchange for shares or goods at the ski area, helping to lower overhead. In addition, by selling reasonably priced shares — we are thinking in the $500 range — that most skiers and snowboarders can afford, it will work as a free marketing campaign that will increase mountain guest visits. I believe that not only will shareholder’s visit to check on their investment, but they will tell their friends about the cooperative ski area because of the amazing experience that they enjoyed and their pride of ownership.”

Currently there are a few ski areas, such as Mad River Glen and Magic Mountain, both located in Vermont, which are showing that a cooperative business model is a viable choice, though they are working on a more localized ownership-base. Mad River Glen originally adopted the practice in the 1990s and is now a profitable enterprise. Magic Mountain has recently jumped on the co-op band wagon and has found it a helpful means to continuing business.

Whether Shames Mountain ends up succeeding through a community-controlled non-profit, or a globally-enhanced for-profit cooperative remains to be seen…but one thing is for sure…when bringing multiple people together to work for the common good it takes the pressure, whether financial or otherwise, off of one person’s shoulders.

Or as said by the ILO, “The financial and ensuing economic crisis has had negative impacts on the majority of enterprises; however, cooperative enterprises around the world are showing resilience to crisis. Financial cooperatives remain financially sound; consumer cooperatives are reporting increased turnover; worker cooperatives are seeing growth as people choose the cooperative form of enterprise to respond to new economic realities.”

For ski areas of the future…tomorrow may be changing.

Will the cooperative business model help a little-known ski area?

Will it help a sport that is slowly facing a demise because of profit-only ski resorts?

Only time will tell.


Study Showing Cooperative Resilience in Global Economy

November 24, 2009

As I mentioned before, the cooperative business model is showing itself to be resilient in these times of financial crisis.

Here is a study conducted by the International Labour Organization that discusses the various kinds of cooperatives, as well as how the idea is regaining popularity after the fizzle during the 1980s.


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