Lessons from the Planning Front Lines

Does the idea of planning sessions with your co-op board of directors fill you with dread? Do you spend more time talking about planning than actually doing any planning? Are your planning discussions dull and overly hypothetical? None of these scenarios needs to be the case, but in truth they are all too common.

Planning doesn't come easily or naturally for any of us. It's hard enough to figure out the overall purpose or direction of your life all by yourself or with family members. For the co-op, we have to figure out the overall purpose and direction of a multifaceted organization with a whole group of people.

The end result is that many groups put off planning or do a mediocre job of it. Co-ops and their boards talk a lot about planning. But figuring out how to do it isn't easy, and there's no simple, single formula that works in all situations. Here are some lessons I've learned over the years.

1. Plans are worthless, planning is priceless.

This is a bit of a cliche, but true nonetheless. The true value of planning is not in the documents produced. The true value of planning is in going through the process. By using a careful, well prepared process of planning, all of the co-op's key leadership reach agreements about what is most important: the general direction the co-op is going. Then, when unexpected things happen (as they always will), leadership has some common agreements to work from in making decisions.

An additional benefit is that planning discussions stimulate thinking about the future and the co-op's role in it. Finally, planning discussions help leadership anticipate upcoming issues and better prepare. This allows time to present issues or potential changes to members for their consideration and input before immediate action is needed. It also provides management with guidance on issues that need to be researched. As Alice said to the White Rabbit, "If you don't know where you're going, you probably won't get there."

At the same time, the quality of the results does make a difference. Spending time generating a mission statement is a waste if that statement doesn't accurately depict the co-op and present a clear sense of direction. In order to be of value, the discussions about a mission statement need to help the group better clarify the co-op's identity and direction.

2. Start with the core issue: is your co-op primarily about food or about being a co-op?

Each successful organization has one primary driving force which shapes the direction of the co-op or how it conducts its business. Groups that waffle on driving force issues tend to be less decisive and, as a result, less successful.

Natural food co-ops inherently have a strong duality of focus -- product line (food) and being consumer-owned (co-op). This is very much a part of our history and origins. Without a doubt, natural foods co-ops were primarily product-driven in their early days. But the market has changed dramatically in the past 20 years. Maintaining this duality leads to indecisiveness. The driving force that helped build co-op success in the past may not be the driving force that will lead to success in the future.

My opinion is that, in order to survive and thrive, we need to build on that which makes us most distinct in the marketplace. This means making consumer ownership the cornerstone of our success. As the market become more competitive, being product-driven means that the co-op is essentially going head-to-head with competitor stores in their own game. Those stores are solely about product; co-ops have much more to offer as stores owned by consumers. Co-ops are the consumers' buying agents and have a better chance of success by building upon this key strength than by trying to play someone else's game.

A Sampler of Mission Statements

Planning experts advise against sharing sample mission statements with groups working on writing their own. It's too easy to just copy someone else, which makes the new mission statement less meaningful. With that caveat, here are some retail co-op mission statements:* (Co-op) offers consumer ownership of a community resource for food, products, services, and information which promote healthful living* Our purpose is to operate a cooperatively owned retail business providing high quality natural products which offer the best value to our customers.* (Co-op) is a consumer-owned grocery store serving our community with quality products and honest information.

3. Create missions with meaning.

Believe it or not, mission statements are both under- and overrated! A clear, succinct, focused mission statement will go a long way toward answering the question, "What business is the co-op in?" At the same time, a mission statement does not answer all of the questions that planning raises. Don't try to put everything into it. While a mission statement is important for the co-op, trying to say everything about the co-op will only render the statement less clear and meaningful.

Many groups groan when the question of mission statement comes up. They've burned out on mission statements, endured hours of endless discussion parsing the nuances of phrases that really don't make that much difference to the overall statement. Unfortunately, there are no simple methods for writing a good mission statement. It is much more meaningful when done in a group so that all group members fully embrace the final result. Keep in mind that the mission statement, like the driving force, is part of a whole set of statements (including vision and values statements, described below) that define the co-op and how it will operate.

4. Dare to dream and think big.

Planning affords us the opportunity to think about the "big questions" -- e.g. why do we do business the way we do, what is most important to us about how we do business? It's valuable to develop clear statements for these ideas, often called vision and values statements. A vision statement describes our vision of the world we are trying to be part of with the co-op. It is, obviously, visionary and far-reaching -- probably even beyond the co-op's sphere of influence. For a vision statement, try completing this sentence: "We envision a world in which..."

Values statements (also called beliefs statements) are individual statements about core beliefs that shape the way the co-op does business. It's easy to get carried away with these statements. Remember, there are some who will hold you literally to your values statements; you want to avoid creating unrealistic expectations about what the co-op is and how it works. For values statements, try completing this sentence: "We believe..."

5. Don't wait until you can plan perfectly.

You'll never do it perfectly, certainly not the first times you try. Besides, the perfect planning model doesn't exist. For co-ops, planning needs to be a relatively simple system, workable for groups (not just the Vice President for Planning). Complex planning models don't necessarily produce better business success -- except maybe for the planning consultants who sell you their planning "model." Keep it simple and stay focused on the desired end result: clarity of direction.

Start with the big questions -- at least a mission and values statements. Inevitably, the question of whether you are primarily a food business or a co-op business will come up in these discussions. Write a vision statement if it helps. This is the foundation of planning. After having these core statements prepared, you can begin to discuss specific goals.

But you do need to prepare well!

• Plan for the session thoroughly. Prepare an agenda and hold the session in a place that will comfortably accommodate all participants. Take time for some fun. One of the desired outcomes is an enhanced sense of teamwork.
• Get all participants to start thinking in advance about the issues to be discussed. This can be accomplished by sending out a simple questionnaire asking participants for comments on where the co-op stands, where it is headed, current strengths and weaknesses, etc. Compile the responses so everyone can read others' ideas before hand.
• Prepare a packet of materials for all participants to review in advance. Include the following: background on terminology or techniques to be used; information about trends in the co-op and natural foods industry (the annual Cooperative Grocer and Natural Foods Merchandiser surveys are good for this); and information about where the co-op stands today. In this last section, include current financial statements and ratios, membership statistics, the results of member or customer surveys, and current planning statements. This packet will be helpful both in getting all participants up to speed by the start of your session as well as for reference.
• Get the right people in the room. All directors (board members) and all of the co-op's top management should participate in a planning session. Limiting management participation to just the general manager will limit the benefits of your planning sessions.

6. Ground discussions in the co-op's business reality.

Look at the key performance areas (KPAs) that shape the totality of the co-op's operations -- all of the things that the co-op needs to do to succeed. I use the following KPA list (with some specific indicators noted):

• finances: sales, profitability, liquidity, "bankability," cost control, capital base, asset use
• marketing: product mix, advertising, growth rate, customer service, image, pricing
• management and personnel: experience, turnover, training, compensation, culture, depth
• operations: location, facility/layout, productivity, systems, use of technology, flow
• ownership and member relations: sales to members, systems, benefits, records, recruitment, capital structure, significance to the co-op's success
• corporate leadership (board and management): quality of leadership, ability to effect change, problem/conflict resolution, focus, communications, follow up

These KPAs will give you a good framework upon which to build goals, to rate the co-op's current performance, and to ground your discussions in the real world. Start with one- or two-year goals. Later, you can expand to three-year goals, if you feel it would be valuable.

Vision and Values Statements

Once again: you lose the value of planning by copying statements from other co-ops. But for the purposes of illustration, consider these samples:

VISION STATEMENTS

* We envision a world united by cooperative economics and driven by a shared concern for the health and well-being of the planet and its inhabitants.* We envision a just and liveable world with cooperatively owned enterprise as a cornerstone of a sustainable economy. We build consumer ownership to provide healthful food to our community.

VALUES STATEMENTS

* We believe that the cooperative business structure is the most effective way of meeting consumers' needs.* We believe all individuals should be treated with respect. (Co-op) exercises honesty and integrity in all relationships with employees, customers, suppliers and the community.* We believe that a healthy environment is vital to sustaining the quality of our lives and community.* (We value) member involvement as it develops inner community and builds value to whole community.* (We) support the local economy. This allows us to influence and control/participate, creates a sustainable economy, and supports environmentally sound practices.

7. Ground planning discussions in the future.

The future is what planning is all about. Eventually, as you build your skill with planning and find what works for you, you will be able to expand your horizons and start looking at the co-op's future in a longer-term way. One very interesting technique for doing this is something called "scenario planning." This involves imagining what the world looks like in the future, and then trying to figure out where the co-op stands in that picture. This method requires a fair bit of advance preparation but can be very stimulating for participants.

Another technique is just to imagine what the co-op is like in the future -- considering how the co-op looks, where it is, what is happening around it, what's on the shelves, who's in the store, what you see, smell, and hear, etc.

8. Take the time it needs, and be patient.

Unfortunately, one day is rarely enough. There is real benefit to working hard for a day and then coming back to the discussion after taking some time off. There is also benefit in holding planning sessions in a place different from where the board and/or management regularly meets.

It will also take more than one session or one year to get up to speed with planning. At the early sessions, you can build a strong foundation (with the core identity statements -- mission, vision, values, driving force). At later sessions, you can start thinking about the direction and future of the co-op more tangibly. Later, you can get more specific with goals and/or key issues that keep causing the co-op problems. However, I would strongly urge against holding such sessions any less than six months apart. Doing so runs a serious risk of planning fatigue, which will likely lead to no planning at all. Most typically, co-ops hold one planning session each year with key leadership.

After several such sessions, you will be able to evaluate performance against the goals and directions set at earlier sessions, and to begin focusing further discussion on addressing recurring problems. After three years or so, you might also want to reevaluate your core statements: are they still relevant, do they still resonate and provide direction? As your experience and sophistication with planning grow, you can begin introducing new, more complex activities. One technique that some groups find useful is a "stakeholder conference," where representatives from the co-op's various stakeholders (members, staff, directors, vendors, neighboring businesses, and the local community) are invited to a structured session to discuss the co-op and its future.

Don't just talk about planning or limit the discussion to a committee. Planning is something in which all key leadership need to be involved. Prepare carefully and you'll see payoffs now and in the future. Have fun with it. And remember, the process is more important than the product.