Martin Lowery is NRECA’s executive vice president of member and association relations. He serves on the boards of the National Cooperative Business Association, the National Cooperative Bank, and the International Cooperative Alliance. An inductee of the Cooperative Hall of Fame, Lowery is recognized internationally for his work promoting co-ops.
He will be a presenter at the 2016 International Summit of Cooperatives, which runs October 11–13 in Quebec City, Canada. RE Magazine spoke with Lowery about the goals of the event and the challenges facing those working to expand the influence of the cooperative business model around the globe.
RE Magazine: What topics do you plan to focus your remarks on at the Summit?
Lowery: I will be talking about the cooperative organizations that have been built over the years to support electric cooperatives in finance, in information technology and supply chain management, in insurance and employee benefits, and many other areas. These cooperatives have made the overall network stronger and have benefited members at every level.
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RE Magazine: So the idea that a network of support allows relatively small enterprises to not only survive but thrive?
Lowery: Yes. The network creates the economies of scale you need as a small business, but at the same time allows you to maintain the local connection. If you were to lose that local connection, how could you possibly relate to the needs of the community that you’re serving? It all works best when the people who own the system have direct face-to-face contact with those who are managing the service.
RE Magazine: It seems like one of the real challenges might be in keeping members of a community or co-op committed once basic services are being provided. How do you maintain engagement and inspire members to take on the next big challenge if the initial reasons for coming together are routinely being addressed?
Lowery: The buy-in often comes from solid local community leadership. We found that at the Rural Summit hosted by NRECA last summer, the key takeaway was that if you don’t have a local leader, things will not happen. And buying into something that’s offered remotely is much more difficult than being able to talk with someone face to face who you know you can trust, who has integrity, and who’s really speaking for the community. That’s one of the strongest benefits of the annual meetings electric cooperatives have as well as the district meetings that bring co-op staff and leaders together with members throughout the year. Personal relationships will always strengthen community engagement.
RE Magazine: When a problem is addressed at the local level, it often reaches a point where all that can be done locally has been accomplished, and in order to grow, you’ve got to begin to build alliances. Let’s talk about that from the perspective of a cooperative model in the developing world. It’s one thing to trust the people in the village who you see every day, but extending that trust to a neighboring village can be challenging, true?
Lowery: That can be a tough one, particularly in sub- Saharan Africa where you still have tribal relationships that are integral to local communities. But putting that aside, success matters. So if I’m able to get a small health clinic in that village because of the fact that we brought in electrification, the folks in the next village over are going to be watching that pretty closely and may very well want to replicate it.
The NRECA approach to rural electrification offers a blueprint for growth that can ultimately be used to overcome a lack of commitment at the local level. As the quality of life improves, as new technology is deployed, you want to ensure that the community is thinking about the sustainability of whatever it is that they would be looking toward in the future. So in electrification, we believe sustainability is going to come best if the assets are actually owned by the villagers.
RE Magazine: Many of the people who created rural electric cooperatives were already familiar with the cooperative business model, having had experience with things like agricultural co-ops. How can you make the co-op model relevant today in parts of the world where it may be a foreign concept?
Lowery: The first thing you have to look at is the enabling legislation at the national level because oftentimes—and particularly in sub- Saharan Africa—the model legislation that was introduced over the years allows a government agency to literally control the cooperative. And that’s why, in some countries, cooperatives have a bad name. While this is changing for the better, there are still ministries that have the authority to shut down a cooperative, to hire or fire a manager, to appoint or fire the board. That’s a problem.
Cooperatives need to be formed independently and autonomously from the government. The government could have a role, as it did in the United States, in public-private partnership, perhaps financing, providing standards and that type of thing, but not controlling the cooperative.
The second thing to look at is whether the community is actually ready for that type of a model. We’re installing systems today with community support but not necessarily starting them as cooperatives. Let the system prove itself, and then talk about the institutional model that will work best. That seems to have had some success. And where we can’t do a co-op, we will definitely do an equivalent community-based-ownership system.
RE Magazine: Electric cooperatives in the United States have been successful because they have had champions within the government. FDR, LBJ, Senator George Norris, and House Speaker Sam Rayburn were all champions. How do you promote the model in nations and communities where such champions are not as easy to find?
Lowery: That’s where the International Cooperative Alliance comes in. I think you have to find the right mix of leaders and educators who can be respected but who also will not dictate an outcome. And I think we have plenty of global leaders within the cooperative movement who can play that role—which is more of an educational role than anything else— without trampling over the rights of individuals to their own destiny. And I think that’s really key.
We can’t simply go into a country and say, “You need a cooperative economy.” We’ve got to do that by way of example. And I think part of what we’re going to be doing at the Summit in Quebec City is exactly that, showing best practices in terms of how one puts a cooperative together and makes it run as a small business successfully.
RE Magazine: When you have various cooperative entities growing at different rates, there can be a natural tendency for those who are the largest or have the most profit to want a bigger voice. How do you maintain the commitment to democratic principles?
Lowery: We still stick by the principle of one member, one vote. We rarely have had a problem with that in terms of a large industry, for example, claiming that it should have a proportional vote based on its higher kilowatt-hour consumption. I would argue that the pure form of the model is better, to stick with one member, one vote, to the best of your ability because it’s simply not appropriate for any one individual or institution to have a greater say in the direction of the organization.
And when you open the door of the co-op, the commitment to one member, one vote also has to be met with an obligation in the other direction, which says, “We’re going to be transparent. We’re going to be accountable. And we’re going to have an open nomination process for election to the board.” We need to be transparent about how one determines what the qualifications are to serve on a co-op board, how one would get into the nomination process, and how one would win an election to the board.
RE Magazine: The 19th century cooperative model served electric cooperatives in the 20th century quite well. Does it follow that the 19th century model will be as effective in the 21st century?
Lowery: I spend a lot of time in the international community talking about this issue, and people who I have a lot of respect for, who are well-traveled globally and particularly in the developing world, will argue that, in fact, the cooperative model is best suited for the 21st century. It actually is the right way to think about the delivery of goods and services.
There is a global concern that companies have gotten too large, that the consumer does not really matter, and that the whole approach to the marketing of services has gone beyond an understanding of what people’s real needs are. Since the fall of the Soviet Union, there’s been a lot of geopolitical thinking around what democratization means and how it relates to both governmental entities and private entities. It all converges on this idea that the cooperative model, as ownership by those who are receiving a service, is something that people want and would support on a much larger scale than has been done in the past.
RE Magazine: How do you keep new co-ops from emphasizing profit over their broader mission?
Lowery: There’s a cooperative triple bottom line that’s talked about often. First and foremost you’ve got to have positive margins, or you don’t survive as a business. Second, you’ve got to address the environmental impacts of what you’re doing as a business. And then beyond that, the third part of that bottom line is that you’re improving the communities that you are serving by maintaining wealth in those communities—you’re recycling that wealth—and by recognizing that community needs are not always going to be met in a profit-maximization model.
Here in the U.S., some NRECA members are taking kind of a “back to the future” approach with electric cooperatives, that as community leaders they have an important role to play in the future of health services in those communities; dealing with aging populations in those communities; dealing with the fact that 40 to 50 percent of veterans are going back into rural areas and need the services of the Department of Veterans Affairs; and myriad other issues.
So cooperatives have that triple-bottom-line responsibility if they’re to be operating within the framework of the cooperative principles and values. It all fits perfectly for the growth of cooperatives. Building a better world is the key.