Characteristics of the Best Cooperatives

By Phil Kenkel, Vice Chair, Cooperatives CoP and Bill Fitzwater Cooperative Chair, Oklahoma State University,

In a recent national project, academic researchers, cooperative managers and members, USDA, agricultural foundations and other stakeholders collaborated to identify the critical issues facing agricultural cooperatives. A two-stage Delphi survey was conducted, followed by expert panel sessions in Washington, D.C. and Minneapolis, Minnesota. The material below summarizes some of the findings from the project.

During the Critical Issues Pre-Conference of the Farmers Cooperative Conference in Minneapolis on November 3, 2011, David Peters, National Account Manager for CHS discussed some of the characteristics of the best cooperatives.

The real challenges facing cooperatives are developing the characteristics of survivors. Through my work developing business plans and analyzing market scenarios with Land O’ Lakes, I have noted some of the key characteristics of the cooperative firms that survive and prosper. The cooperatives in this category tend to have:

  1. The best leaders who can communicate a vision to all stakeholders.
  2. The best human resources, not only the starters but also the deep bench, to fill the vacancy of the major managers. Identifying and attracting the right people is a challenge. There are a lot of people who do not want to go to rural areas to do the work.
  3. An alignment of purpose throughout the organization. It is difficult but essential to develop a unified sense of purpose.
  4. Recognized the importance of scale and size, which drives the ability to attract the best people.
  5. Standard high-performance goals.
  6. Bullet-proof balance sheets with higher levels of working capital. Cooperatives must have the cash to survive in volatile markets.
  7. Developed the next-generation assets, including both people and infrastructure.
  8. Continually modernized with no sacred cows.
  9. Internally aligned the cooperative’s business units such as grain, feed and processing. Work to market the cooperative value, not just feed.
  10. Perpetually sell the business through understanding and communicating the values proposition.