Melanie Reid of CDS consulting co-op contributed her expertise to this column.
Electric cooperatives are facing challenges right now. Our memberships are changing; our workforce is aging; many of the key components of our amazingly stable business model over the last eight decades are in flux.
As is typical, co-ops are meeting these challenges head-on and finding unique ways to adapt, overcome, and thrive.
Over the years working with co-ops, I’ve found that the ones with the most engaged staffs are nearly always in the best position to weather rough seas and come out strong on the other side of the storm.
There are countless ways to go about building an engaged staff. One that I’ve been giving a lot of thought to lately is the concept of open-book management.
This approach operates on a somewhat radical philosophy that says all employees should be given access to the details of a company’s finances. I’m not talking about the numbers that go into the annual report, but rather the decisions and the calculations that are behind those annual report numbers. It’s a striking departure from the typical “need to know” financial regimen that most companies operate under.
There are several techniques, but like most things, it all begins with some simple education. Why are you switching to open-book management? What is the philosophy? What are the expectations?
Next, from among the rank-and-file employees, assign “line owners” to each primary section of the budget. It will be their job to understand this segment and hold meetings to explain how the decisions each employee makes affect this expense item and, ultimately, the co-op’s bottom line. Once staff are on board and really understand the concept, these open-book meetings or huddles can be done in 10 minutes, standing up. All employees should be encouraged to offer what they can do to improve the “line.”
Supervisors and the CEO should offer encouragement and feedback to the line owners to help make sure they have the tools they need to involve and educate their peers.
Think about engaging ways to explain budget lines. A walk through the warehouse can be very instructive. Tell folks the prices of all those items on the shelves.
Another good issue to tackle first is the facilities charge. As efficiency efforts and distributed generation sources affect power sales, this important charge that keeps electricity reliable and costs equitable will end up front and center in your rate structure. Every employee at your co-op should be well-versed on exactly what goes into the facilities charge and why it’s needed.
Visible scorecards around the building or intranet dashboards with financial information, goals, and milestones are also effective in keeping people involved.
The advantages of having a financially savvy workforce may not seem obvious at first. But you’ll be amazed how much more productive and substantial internal conversations about the direction of the co-op become. And you’ll be confident that your staff can ably explain the co-op’s decisions and policies when speaking with members.
The reality is that in a more challenging environment, it’s an advantage for your staff to have as much information about the co-op as possible. And if, for any reason, you feel an employee can’t be trusted with this information, you need to ask yourself why—then either work to change the feeling or the employee.
As one general manager told me, “When staff members understand the financials, they are better able to make significant contributions. And when everyone is able to contribute, the business has a better chance of continued success. Plus we can have fun with it.”
Adam Schwartz (@AdamCooperative) is the founder of The Cooperative Way, a consulting firm that helps co-ops succeed. He is an author, consultant, educator, speaker, and member-owner of the CDS Consulting Co-op. You can e-mail him at email@example.com.