1996 - Co-operatives
Imagine a company without bosses,
where you can change your job if you don't like
it and where you are guaranteed a job for life.
Could such a business exist today and compete
as a profit-making enterprise?
It can and it does in Halifax,
West Yorkshire, where SUMA Wholefoods runs a successful
co-operative employing about 60 people. Its origins
were among lentil-eating hippies in the 1970s,
who became attracted to wholefood and vegetarian
The business has proved determedly
idealistic in its principles and, in so doing,
has developed employment policies independent
of the human resource management theories of the
late 1980s and the 1990s which have become fashionable
in the largest of companies. Empowerment, flat
structures, job flexibility and multi-skilling
are not only present in SUMA today, but were there
20 years ago, says Graham Findley, who, as operations
co-ordinator, is the nearest thing the business
has to a managing director.
While the merest mention of hippies,
lentils and co-operatives may be enough to turn
the average capitalist stomach, SUMA believes
that, at the very time Tony Blair, the Labour
leader, is talking of a stakeholder society, there
may be lessons to be learned from the democratic
structure of co-operatives and other employee-owned
businesses. This is particularly true of those
which have shown, in a track record established
over many years, that they can make the enterprise
SUMA is not only knocking on
capitalism's door, it has many of the credentials
to be considered a fully paid up member of the
club. In many respects it is not much different
from any other business. It is profitable and
turned over Pounds 8.5m in its last financial
year as a wholesale health food warehouse and
Perhaps the biggest difference
between SUMA and a conventional business is a
pay policy that insists upon equality of wages
for all jobs. Findley, who joined the business
shortly after its inception, receives an annual
pay and benefits package worth about Pounds 16,000.
The same deal is available to every employee,
no matter how new, whether they look after the
accounts or sweep the floors.
The only people who are paid
a differential are those with children who qualify
for an additional 'child allowance'. The business
has found that not all employees can embrace the
values necessary to accept a job without a pay
ladder. Many recruits also find the lack of hierarchy
difficult to get used to initially.
This is why SUMA has developed
a sophisticated recruitment and screening process.
All job applicants are posted a comprehensive
information pack, and all new recruits come on
a three-month temporary contract followed by a
six-month 'trial member contract'.
All employees officially adopted
into the co-operative are classed as members.
Working hours are 9am to 5.30pm, Monday to Friday,
with one evening working late, until about 8.30pm.
Staff turnover is lower than the industry average
and employee commitment high. Work output is fostered
largely by peer pressure.
Findley says that people would
have to demonstrate some gross incompetence or
dishonesty to get themselves dismissed. Generally
the membership is sympathetic to those who are
struggling or burnt out in a particular job. In
those circumstances, they either receive additional
training or can change jobs. Job rotation is common
among all the members.
Findley himself has been doing
his current job for three years and would expect
to continue for another year or two before moving
to another job, possibly lorry driving, which
he says he enjoys. 'As it is, I get to take out
a lorry on Mondays. I'm little more, ultimately,
than an over-promoted truck driver,' he says.
Driving of one kind or another and warehouse picking
are elements of almost every job in the business.
SUMA is unusual among larger
co-operatives for preserving equal pay and maintaining
a collectively run structure based on one member,
one vote. In the early days, employees did whatever
jobs they wished from day to day. Decisions tended
to be taken by the whole workforce meeting on
Wednesday afternoons. The meetings became unwieldy,
however, and customer demands could not tolerate
a day on which the business effectively stopped
Other processes were equally
eccentric or, in the case of stock taking and
cash security, virtually non-existent. The business
was servicing a rapidly growing market. When the
market began to attract bigger commercial interests,
many of the fledgling co-operatives that emerged
in the health food boom went to the wall.
SUMA survived, but not without
change. A layer was added to the decision-making
structure so that a delegate committee, called
a Hub, received views of different working groups,
called Sectors, but the system was not without
tensions. Decisions were slow and some members
were loath to invest management with power.
Today, the business has an elected
management committee executing strategies and
policies decided at quarterly general meetings.
The committee enacts strategy through various
company officers: personnel, finance, information
and operations. Team working has been adopted
and departments now work to agreed goals.
Findley says the business is
now stabilised with a strong balance sheet, a
broader customer base, overheads under control
and increasing profits available for investment
in business projects currently under consideration.
Not everything in the co-operative
is rosy. Its information sheet for job applicants
is frank in its comparisons between the ideal
and reality. It says: 'SUMA jobs can be a wonderful
mixture of manual and mental work, with plenty
of personal initiative and creativity. Unfortunately
in reality, members get stuck in boring routines,
operating beyond their personal competence with
plenty of stress and lack of support to complete
the cocktail - a normal small business situation.'
Recognising this problem, it has earmarked training
and development as a personnel priority. It believes
it is 90 per cent towards the standard of training
necessary for Investors in People accreditation,
the accepted UK training standard.
The pay structures are accepted,
but again this can be a source of tension. The
introduction of differentials are discussed from
time to time but the membership continues to resist
their introduction. As the information pack concedes:
'It is a good wage for most manual warehouse workers
in this area but poor for managerial staff.'
The SUMA members would be the
first to accept that co-operative structures are
not for everybody, which is why they have developed
a complex recruitment procedure to find committed
individuals. But the business has demonstrated
that true worker democracy cannot be dismissed
as a pipe dream. As the co-operative develops,
there is every possibility that the business-wide
salaries may improve commensurately.
The business is also protected
from takeover, in that the employees do not formally
own the assets. In the event of its failure, its
remaining assets would be passed on to another
co-operative. A conventional business structure
might be looking for better returns and swifter
development, but SUMA measures its success by
different standards. 'Most importantly,' it says
in assessing its current fortunes, 'sixty well
paid jobs with exceptional benefits are now, for
the time being, safeguarded in the midst of the
low-wage economic desert which characterises much
of northern England.'
The point seems well made. Given
the rampant job shedding among many big employers,
it might be time for some more traditional managements
to question their own values.
©1996 The Financial Times
Ltd. All rights reserved
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