Structuring to Meet Diverse Member Needs

Phil Kenkel

Bill Fitzwater Cooperative Chair

Oklahoma State University

In my last article I discussed consensus based decision making in the context of a cooperative with a diverse membership.  Under consensus decision making, the cooperative leaders consider the wide range of needs of a diverse membership and then chart strategies focusing on the common needs.  The downside is that the cooperative may concentrate on “business as usual” and fail to act on opportunities to meet the needs of some member groups.  Over time this can prevent the cooperative from changing with its membership base.

An alternative strategy is to develop structures that allow the cooperative to focus on multiple member segments.  A simple example is organizing into functional departments such as fertilizer, petroleum and grain.  That organizational structure creates division managers who are focused on meeting and anticipating the needs of particular customer group.  In a larger cooperative that concept can be expanded to include staff positions with greater specialization.  For example, the fertilizer department might have an individual with specific responsibilities for specialty crops or precision application.

The challenge for cooperatives is in expanding that concept of multiple specializations to the governance level.  The board’s role is always a balancing act, allocating the cooperative’s scarce resources to competing opportunities and member needs.  As the cooperative becomes diverse, boards struggle to identify and fully understand opportunities that relate to one segment of members.  Implementing structures such as advisory boards, focus groups, or key customer groups can help the board think through areas where there is a critical mass of member needs but perhaps not a consensus of member needs.  A focus group representing no-till producers can help the board to better understand where the cooperative is and is not matching up with their service and product needs.  The board must still of course consider whether the cooperative can profitably configure itself to meet those needs.  The focus group allowed them to investigate an opportunity that might not have been on their radar screen.

The cooperative cannot be all things to all members.  However, as membership becomes diverse it also can’t be one thing for all members.  In a cooperative with diverse membership the management and governance system must allow the leaders to not only be on the ball but to keep their eye on multiple balls.