Robb on Cooperation

Benchmarking your performance

Posted by Alan Robb on 29 September 2009 | 0 Comments

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Showing the world how well cooperatives are doing is one of the most important things that can be done. To do this, the cooperative movement needs data.

The website of the International Cooperative Alliance (ICA) contains some significant data.

For example, in 1994 the United Nations estimated that the livelihood of nearly half the world’s population was made secure by cooperative enterprise.

Benchmarking performance against similar businesses is equally important. Only then can you know how well you are doing in the market place. Again, the cooperative movement needs data.

Some data is available internationally on cooperative performance: the ICA recently produced an updated version of its Global 300 listing of co-ops, and six of the larger New Zealand co-ops feature on that list.

But what about the smaller co-ops, and those which want more relevant data?

That data is just not available. And how valid is it to benchmark financial performance against co-ops in other countries?

They may use quite different accounting practices and the data may be several years old by the time it is published internationally.

What is needed is timely local information.

BETTER COMMUNICATORS
I am delighted that the Association has agreed to the suggestion from the ICA that we, like other cooperative apex bodies, should gather information on the country’s co-ops.

It can only benefit the Association. It will give factual information that can be used to enlighten members of our parliament on the size and significance of cooperative business in our economy.

It will benefit individual co-ops by providing a source of information not available from official sources, such as Statistics NZ.

Based on annual reports currently prepared for members, this will not involve additional cost for co-ops. Similarly, it will not involve the disclosure of confidential information.

Cooperatives have a long history of being better communicators than investor-owned companies. The Rochdale pioneers issued audited quarterly reports to their members at a time when investor-owned companies refused to supply their owners with even an annual report!

I hope that we will extend the range of information to more than just turnover and assets so that managers and directors can benchmark their co-ops for efficiency.

For example, turnover per dollar of assets is a useful measure of the efficiency with which assets generate sales.

What is it for your co-op? For your type of co-op? For co-ops as a whole in New Zealand?

ASK THE RIGHT QUESTIONS
What’s the ratio of debt to equity for your co-op? For your type of co-op? For co-ops as a whole in New Zealand?

Is your membership growing as fast as the population? Is the membership of your type of co-op growing? Is the overall membership of New Zealand co-ops growing?

Is there a satisfactory operating cash flow in your co-op? In your type of co-op?

In co-ops as a whole in New Zealand?

It would be good to see the Association help you answer questions like these. It would also be good to hear what information you would like to access from such a source.

We look forward to working with you to develop this information.●

– from the December 2008/January 2009 Cooperatives News