Growth Frameworks for Expansions and Startups Predicate Success

From September-October 2014

Let’s say you wanted to bake a cake. Chances are you would make a plan, choose a recipe and buy the necessary ingredients. To make your cake even more spectacular, you might pick out the highest quality ingredients, or go to a cookbook written by a baking expert like Gale Gand. You would follow her directions to the letter. When your cake is done, if you followed your plan, it will likely garner rave reviews. After everything you’ve put into it you’ll feel a sense of accomplishment and satisfaction.

It might seem like an obtuse metaphor to equate baking with co-op growth, but to do both well takes a lot of the same skills and need for a working formula. When taking on an expansion project or a startup effort, you’ll want to have a format, or the “recipe” that will give you the best chances of success. Cooperatives are not like investor-driven, or even mom-and-pop operations, in that a co-op’s accomplishments are often defined by how well they engage with their owners and meet owner needs in the marketplace. This level of participation is one of the unique layers in the cooperative “cake.”

bill-gessner-quoteGroups that adhere to a development model are much more likely to be resilient and effective at reaching their goals. In the food co-op sector, development experts have created frameworks for expansions and startups based on deep experience and shared knowledge that accrues best practices to make growth possible in do-able stages.

Bill Gessner has spent three decades with the CDS Consulting Co-op helping hundreds of co-ops grow and develop, and as author of the Expansions and Relocations toolbox, he developed a four-stage process for existing co-ops working on growth: feasibility, preparing for leasehold improvements or construction, implementation of construction, and preparation for opening. Gessner was also instrumental, along with other sector cooperators Marilyn Scholl, Denise Chevalier and Kevin Edberg, in developing the groundbreaking Four Cornerstones in Three Stages model for startups. The model is based upon the four cornerstones of vision, talent, capital, and systems that are each within three stages of food co-op development: organizing, feasibility and planning, and implementation.

Kevin Edberg, the executive director of Cooperative Development Services, said that a strength of the 4-in-3 model for startups is that it addresses the necessary role of strong community organizing. “The necessary ingredient of a co-op’s success is the business loyalty of its members. That’s why community organizing is so important.”

The vision for both of these development models is to support faster and more efficient start-ups by providing a way to see the whole and make sense of the parts throughout the development process. The Four Cornerstones in Three Stages, as well as the four-stage expansion process for existing co-op growth, comprise a process for developing a cooperative retail food business, a process that includes recognition of necessary support systems and decision points.

“I think it’s helpful to clarify and define the stages and to look at development in terms of decision points,” Gessner said. Without a model, he said, launching a project can be like stepping into quicksand. People can get sucked in and stuck—in part because projects can easily go off track. Adhering closely to a development model provides a stable foundation and tools to focus the work of the cooperative.

It also sounds counterintuitive, but Gessner said every project resists the model. There’s always some unique or special circumstance related to a co-op expansion or startup, but it’s the task of the group involved to keep their work contained within the model. He said one best practice is to do things in sequence, and not blur the stages. This takes discipline. For example, Gessner said, you wouldn’t want to sign a lease or buy property before your financing is in place. “Once you get out of sequence, it can be hard to rein things in,” he said.

Gessner also advises that co-op leaders get a good understanding of the Sources and Uses budget, and to use that as a tool to help people through the stages. “Once you begin to envision the cost and where the money comes from you can start systematizing your project.” Another benefit of taking a systematic approach is that it helps professionalize the plan, increasing its fundability and its ultimate success.

jeanie-wells-quote2Jeanie Wells also works with cooperatives in organizational growth transitions. “Whether it’s an existing co-op or a startup, the value in having a structured way to work is that you can view all the tasks, details and decisions along the way,” she said. Wells believes that the rigors of adhering to a development model and arriving at specific decision points gives co-ops a clearer view of the big picture and the how-to for reaching their goals.

No matter what people think will happen, invariably there are surprises. “Stuff is going to happen,” Wells said. “Things change and the plan will change. Knowing where you’re headed will help you refine your plan rather than derail it.”

Wells noted that sometimes people can also get fixated on the project’s site or construction, and focus all their development energies on that while overlooking the important work of internal readiness. That’s another area where adhering to a model can keep the co-op focused on all the things that go into a successful project, like planning, staffing and promotion.

Both Wells and Gessner acknowledged that co-op development comes with organizing and financing pressures that cause people to react, and adhering to a process can be challenging. Yet doing so not only benefits individual co-ops going through an expansion or startup, but the sector as a whole. “Everyone wants to be faster and better at new store development,” Wells said. “Competition is accelerating and so is the interest in starting food co-ops. These are huge trends. The models we are working with can allow us to be more nimble if we leverage the wisdom of the co-op sector, pool our resources, and share best practices. The answer lies in our ability to collaborate.”

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By |September 22nd, 2014|Categories: EXPORT, Solutions|Tags: , , , |

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