Saturday, February 7, 2009

Reflections on recent Board Meeting

Andy Johnson
reflects on the recent Board or Directors' meeting

The Co-op's board met for their January meeting on Thursday the 29th at the Senior Center starting at 5pm. I can't say how many people were present but the place was packed, all seats were taken and many, many people were standing in the back. There were numerous introductions and agenda items, but the heart of the meeting was in three main parts. I'll try to describe them briefly and fairly, and save my own reflections for the end. I hope that the Board posts all relevant documents - financial statements/presentation, Board statement, minutes, other items - on the web site in a very timely manner so that those not in attendance have a chance to peruse.

Much of the early part of the meeting was devoted to Michelle Schry - outgoing interim General Manager - presenting her comprehensive financial summary. The Co-op is not in a good situation economically, and the picture of a clearly worsening balance sheet and falling working capital is sobering. Michelle placed much emphasis on labor costs, which an outside audit from last fall and her own experience show to have been (at least until recent layoffs) very high relative to sales in the context of the co-op world. According to her numbers, we are very close to not paying our bills on time, and a number of negative consequences could spiral from there.

Then Board President Steve Peterson read a statement from the Board, which attempted to address some of the questions and concerns of members and to "make the layoffs more understandable". The statement provided responses to many posed questions, including: "Why restructure and lay off Liz"; "Are we more than our bottom-line?"; "Does the Board adequately oversee the GM?"; and "Is the Board too isolated from staff?" The statement was thoughtful and placed repeated emphasis on the 1) importance of adhering to the policy governance and 2) insisting that in the current financial crisis we direct all efforts towards running our Co-op as a business.

Eventually the meeting was opened up to a member comment period, with Barb Ettleson given the unenviable task of moderating. Passionate, thankful, intellectual, forceful, deliberative, angry, calm, philosophical ... just begin to describe the range of comments and mini-presentations that no summary can do justice. Strong counter-arguments were given to the stated financial reasoning behind Liz's layoff, with details supporting the true economic value Liz has brought to the Co-op (hundreds of thousands in volunteer organization/coordination during the new store renovation alone) and the minimal savings accomplished by letting her go, along with much history of the staff-GM struggles of the past year plus. Commendation was given to Michelle for the quality of her financials presentation, and support was voiced for the Board in its commitment to developing and adhering to their policy governance. And many, many calls were made to the Board to step back and reconsider, and to open a more structured, formal dialog with all parties to address the issues that brought us to this point and find a solution acceptable to most involved.

A few of my own thoughts on some issues raised:

· The Board continues to hold to the position that Liz was laid off for strictly financial reasons, but much of what was presented at the meeting (and that I have heard directly from other staff) indicate that is at best only part of the story. The financial situation is clearly dire, but when faced with financial crisis we shouldn’t be letting go of top talent, *especially* when the direct savings will be quite small for the foreseeable future (when we most need that talent) due to ongoing contract obligations.

· It struck me that Michelle placed some emphasis on the fact that an audit just this past fall came to the same conclusions of one roughly five years ago: that our labor costs are way too high and are threatening financial survival. But we didn’t cut our most experienced staff five years ago and we survived. I suspect that a similar audit any of the past 20 years may have made similar recommendations, yet our Co-op has survived and thrived and been profitable *because* of our people, not in spite of them – apparently until 2008, a new store, a new GM, new policy governance, and a recession.

· The Board statement honestly recognized an inadequacy of communication between the Board and staff. The solutions developed this past summer, however (a staff survey, and encouraging the staff to voice their concerns as members at Board meetings), continue to discourage open and honest staff-board communication in times when it is most important, and are wholly inadequate to address situations of staff-GM conflict in which the Co-op found itself this past year. More effective formal and structural channels of communication are sorely needed, and needed quickly.

· The Board called on membership to support their focus on the bottom line, on cutting the operation to the bare bones, and stated that the two most important things members can do are shop more at the Co-op, and help attract/welcome new customers. In times of financial crisis it seems to me there are three broad approaches: cut costs (in our case labor), increase revenue, or a combination of the two. Labor costs were already greatly reduced *prior* to Liz’s layoff. If there was anyone at the Co-op capable of bringing in new members/customers, or successfully exhorting current members to spend more, it is probably Liz Rog. If there was anyone whose layoff was more likely to negatively impact sales (through seriously upsetting very large numbers of dedicated, high-spending members) it was Liz Rog. It just wasn’t the best decision, financially or ethically.

· Which brings me to my last point. The Board’s statement included this quote: “For too long we have thought we were immune from the considerations of the business world. The Board stands here tonight to say that we no longer have the luxury to imagine we are different from the rest in this regard. The Board’s role, right now, is to be the voice that insists we run our Co-op as a business so we can fulfill our Co-op’s purpose.” Besides being unfair to past management who ran the Co-op as a successful business for over 30 years, this statement seems to suggest we can somehow set aside two-thirds of our name – Oneota *Community Cooperative* - until things improve and we can come back to revisit all that those terms mean to members. An alternative perspective might be to realize that we have only succeeded financially for over 30 years precisely *because* we were able to work together and to imagine and create community, and it was that *community* - not cutting to the “bare bones” – that pulled together and did anything and everything it took to succeed in times of crisis and great change.

In closing I should say, with as much humility as I can muster through this impersonal medium, that our current Board has taken on more challenges and been faced with more troubles than perhaps any other. I honestly can’t be sure how I would have acted had I had been serving along with them, working from their perspective and enduring their struggle – I would hope as a conscientious objector of late, but none of us can be sure. I also want to place our very local struggle in a larger context. Of course, parallels to the national political and economic scene may be reaching, and even a bit cliché-ish, but are not entirely irrelevant. If you’ve made it this far, humor me and read on, if for no other reason than to be inspired to imagine a better way.

Not too many years ago, in a time of true national financial and political crisis, our President exhorted us all to shop more. It was advice sincerely given and grounded in economic fundamentals, though lacking in moral authority and unifying power. Now our little store and our big country are again in a time of financial crisis, and our current president offers very different advice upon taking the oath of office:

“.. every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forebears, and true to our founding documents."

"Now, there are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans. Their memories are short, for they have forgotten what this country has already done, what free men and women can achieve when imagination is joined to common purpose and necessity to courage. …"

"For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break; the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate."

"Our challenges may be new, the instruments with which we meet them may be new, but those values upon which our success depends, honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism -- these things are old.
These things are true. They have been the quiet force of progress throughout our history."

"What is demanded then is a return to these truths. What is required of us now is a new era of responsibility -- a recognition, on the part of every American, that we have duties to ourselves, our nation and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character than giving our all to a difficult task. This is the price and the promise of citizenship."

Andy can be reached at , or (563)382-0537

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