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Arva, Ontario | Solly,
This is part vent, part experience, part observation of the human condition.
Definition of a Farmer's Co-op: "Where members expect to do daily business at cost, and then goes to the annual meeting to see how much money the co-op made."
Peeve # 1
The Board of Directors have one job; hire a good General Manager and give him/her the basic direction. The GM is then responsible to hire/fire the team, create a budget and stick to it, make the day-to-day decisions, and occassionally go to the board with recommendations for business direction or capital expenditure.
Too often, the directors get meddling in the day-to-day business (creating obstacles to hiring/firing), over-riding the GM's direction to take the business (keeping poor R.O.I. divisions because it will affect their personal bottom line), and not respecting the chain of command (the employee's only boss is the GM - not the 12 directors). I've seen co-op directors enter a site and start barking orders like they owned the place, que jumping, and generally expecting all other members to step aside while the employees all came at a dead run to kiss his....ring. This not only blurs the chain of command, but turns off other members.
Peeve # 2
As noted above, the primary function is to hire a General Manager. Too often, the GM is either a second generation GM (his dad did it for 25 years, hired junior to work in the business, and groomed them for the job). The other source of GM material (apparently) is the former farmer that wasn't a successful business person in their own right, got a job in sales, didn't screw up bad enough to get axed, and was the next longest serving employee when the past GM retired/died. While this person may be a fine person ("He's a good guy, I know his dad...."), they are not equipped to manage the multi-million dollar/narrow margin businesses that ag co-ops have become today.
In some respects, the best hire for the GM job might be a former banker (or like-minded individual). While they don't know how to run the spreader truck or start the pit at the elevator, they will likely understand hedging risk, setting employee performance benchmarks and following them up to see if they get a raise or terminated, how to evaluate enterprise profitability, and how to set a budget and stick to it. I've also seen some successful co-ops recruit bright young farm kids where there wasn't an opportunity at home, help them get away and get a good business education, with the expectation/provision that they return to the community to help operate the business. I've seen these types of induividuals get cursed into the ground when they return because there are no "special deals", but the bottom line at year end is much healthier.
Peeve # 3
If you care about your co-op, the most important meeting you can attend is the annual meeting, and the most important job is to have new directors recruited and nominated well before that day. Too often, members wait until that fateful part of the meeting to elect the director's slate, then look around for a "sucker" to fill it. Year after year, the results will likely reflect the amount of time that was invested in finding bright, willing people to do this work. (The definition of "Insanity": 'Doing the same thing over and over and expecting a different result'). If the standard motion is to re-elect the existing slate of directors, members should hardly expect the results to change much.
I personally think that most (not all) farm co-ops are doomed to failure(or purchase by a private firm) because of poor management at the board table. They start out for all the right reasons, but ultimately their members will let them down.
End Rant,
I hope it inspires some good discussion,
Luke aka Ken SWOnt
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Farm Coops
