Get Down, Get Ahead

Driving Operational Improvements Using CoCoFiSt

The Common Cooperative Financial Statements (CoCoFiSt) data sharing program has evolved over several years into widely used, multi-functional benchmarking, budgeting, and operational improvement tools for managers. The use of CoCoFiSt data is becoming widespread throughout our industry. Over 90 co-ops now regularly submit password-protected financial data that enables them to examine and compare in detail numerous aspects of their operations. (See

General managers in these stores and some Cooperative Grocers Associations (CGAs) are recognizing that CoCoFiSt is an extremely valuable tool for assisting them in prioritizing areas of performance to focus on for operational improvements. While this is a very satisfying direction for those of us who have been working with the stores and CGAs to improve their operations, we recognize that this is nowhere near the end of the process.

Our goal is to make the CoCoFiSt tools readily available to support departmental managers in their never-ending quest to institute improvements in their departments, both operational and financial. In fact, one of the values I have seen departmental managers receive from their use of CoCoFiSt tools is the quick translation of how operational improvements can be financially quantified.

There are a number of ways CoCoFiSt is being used by managers:
• To improve department operational and financial performance.
• To budget for sales, margin, labor, and inventory needs.
• To set benchmarks for margin, labor, and inventory turns.
• To build teamwork on the management and departmental teams.
• To educate team members on how they impact department financial performance.

An essential aspect of driving the use of CoCoFiSt from the general manager and finance manager to department managers is to set up a simple system allowing easy access to all available CoCoFiSt data and to institute regular reviews of this data.

Access to data must be free of barriers

Department managers should be able to access their Historical File (HiFi) and graphs whenever they choose. To ensure that this is possible, your co-op needs to set up on your system, or on the hard drive of department manager computers, a folder into which information is downloaded once per quarter and which is consistently available whenever managers desire access.

Information to be stored in the folder should contain Historical File graphs (store size, deli size, grocery size, general merchandise, and CGA) and your CoCoGap (if you use this tool). Include in the folder the CoCoFiSt manual (on line on the CoCoFiSt website) and definitions page (handed out at CoCoFiSt trainings—or obtained by e-mailing a request to me). Each quarter, update the folder by deleting previous data (HiFi, graphs and gap) and loading in the new data.

Once the data is readily available to department managers, a program to educate concerning what the data may be telling them and how to use the information is essential to helping department managers grasp CoCoFiSt’s potential as a management tool.

Regular review of CoCoFiSt data
(Historical File, graphs, and gap)

The general manager, operations manager, and/or merchandising manager must become fluent with CoCoFiSt—with both the data and how to navigate through the tools; determine who will lead this process.
Management team should set aside at least one meeting per quarter to review and discuss data.
Over the course of the first year the CoCoFiSt lead should work with the management team, regularly reviewing and discussing quarterly CoCoFiSt results and assist managers (one-on-one) who are having difficulty understanding the data.

Ask team members to explain reasons for department operational performance, both strong and weak.
Ask the team for ideas on how to change performance in any area where improvement is needed.
Note that the process of regularly reviewing the data can be a significant team-building tool. Gathering the management team together to review the data and to brainstorm potential approaches for areas of poor performance can create an atmosphere where all managers are working towards enhancing the performance of each individual department.

Improve department operational and
financial performance

For areas of concern, discovered during the previous process, have the managers from those departments take the information back to their teams, review data and stated concerns, and produce a tactical plan for improving performance in the selected areas. Set a specific date for the tactical plan to be completed and brought back to the management team.

Have the managers who have been directed to focus on operational issues report progress to the management team on a regular basis (monthly).

The management team should offer feedback, both positive and improvement oriented, to the reporting managers. The culture (if it exists) of not offering feedback for fear of alienating a co-manager needs to be discussed and broken through by the management team.

When progress is shown for the operational issues being focused upon, celebrate the success.
The above process can also be used when there isn’t a perceived operational problem but it is determined that there is room for enhanced performance.

Setting store benchmarks

The goal is to set challenging but realistic benchmarks in areas where department managers have control: labor, margin, and inventory turns.

The two main CoCoFiSt tools used in this process are the gap and graphs. The gap has a column titled “Upper Quartile…” This column offers a potential benchmark, since it typically shows the best performance (out of 20–40 similar size stores) for the each measured area. Graphs are very helpful because you can view both similar size store results and also regional performance.

Using CoCoFiSt data for departmental budgeting

It is critical that department managers take the lead in budgeting for their departments. If the department managers are merely handed a budget, there is the possibility they will not feel ownership of department goals. Also, if they have not produced the budget for the controllable factors in their departments, they may be at a loss when determining the necessary strategies and tactics to achieve the desired results.
CoCoFiSt tools typically used for department budgeting are HiFi, graphs, and gap.

Department managers review the HiFi and appropriate graphs. They gain an understanding of where their departments are underperforming and where the department strengths are.

The supervisor opens up the gap and educates department managers on the use of the gap:
• your rolling annual performance;
• upper quartile performance;
• dollar difference.

Build a scenario for each department manager to manipulate

Department managers fill in the gap and create a scenario for the coming year that is a reasonable performance improvement and meets the co-op’s financial goals (as agreed upon by the department manager and supervisor).

Once there is agreement as to the goals, it is the department managers’ job to create a plan (written) to achieve those goals; they should include their team in the planning process to create a dynamic approach. Specific tactics, resources needed, and timelines are recommended to be included in the plan.

Monitor performance through internal reports but review the gap every quarter. Review progress with the department manager and the management team.

Does it work?

Co-ops in the Midwest CGA have been using CoCoFiSt to improve their stores operational and financial performances for over three years and have documented hundreds of thousands of dollars in improvements. Co-ops in CGA–Northeast began this approach in 2003, and some Northwest CGA members have recently brought use of these tools into their stores.

Keys to success
• Commitment: The general manager must be invested in the use of CoCoFiSt and communicate this to department managers that it is: (a) part of their job and (b) a tool for enhanced team work (both management team and department team).
• Access: Easy access to the data for department heads.
• Education and training: Department managers must understand what information is being conveyed; they need to know how to use the tools; and they must understand the limitations.
• Repetition: Managers hold quarterly meetings with discussion between meetings.
• Accountability: Managers’ understanding and use of CoCoFiSt data will be part of their annual review.

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