Still Standing: The Reputation of Co-operatives

The challenges of The Co-operative Bank and the furore around the role of the former chair, made co-operatives - businesses that are member-owned - an unhappy national news story in late 2013. Three months on and I feel that I can breathe again. But what difference did these high profile troubles make to the wider co-operative sector and the long-term reputation of our business model?

The challenges of The Co-operative Bank and the furore around the role of the former chair, made co-operatives - businesses that are member-owned - an unhappy national news story in late 2013.

Three months on and I feel that I can breathe again. But what difference did these high profile troubles make to the wider co-operative sector and the long-term reputation of our business model?

Of course, it is still early days, and much now depends on whether the troubles that flared up, with their welter of regulatory and official inquiries to follow, are put behind us - that there is, in short, no new scandal.

To gauge the initial impacts on the reputation of the co-operative business model, Co-operatives UK commissioned field research, across the country, to take the temperature of public opinion.

The first finding is that this was all seen, primarily, to be about one specific business. Of those who were aware that The Co-operative Bank had been in the news, 55% believed the issues were specific and individual to that business. Only a small percentage, 6%, thought that the troubles of the bank will be true of other co-operative businesses. There are, after all, around six thousand independent co-operatives in the UK.

Over half of people that were aware of the news coverage (53%) do say that, overall, they trust co-operative businesses less than they did before the bank coverage (40% said that it had made no change to their level of trust). But, this is not dissolution of trust.

Overall levels of trust in co-operatives amongst UK adults still remains high, with, in fact, a small rise in the number of people who associate co-operative businesses with the word 'trusted' (47% of those who expressed a view, which is up two percentage points from earlier in 2013).

It is said that it takes years for a business to build trust and it can take only hours to destroy it. The trust that the co-operative sector has built up over decades has emerged, so far, as more resilient than that. Public trust has been dented, but from a high level. Trust in co-operative businesses is still far greater than companies at large (with just 7%, in other research*, saying that they trust shareholder companies). The level of public trust that the co-operative sector enjoys is still the stuff that marketers' dreams are made of.

However, we must accept that we are now viewed in a more critical light. While only cited by a small minority, the top three 'negative' associations with co-operatives, for those who expressed a view, are: old-fashioned (30%), inefficient (7%) unprofessional and greedy (both 2%). Even so, these are all significantly lower than positive association like, ethical (54%), democratic (48%) and honest (46%).

So, how do we respond? First, public perceptions are shaped by a wide variety of channels of information. Over time there has been a significant cultural shift, sometimes dubbed as a journey from 'deference' to 'reference', where consumers trust business and marketing less. They place far more emphasis on what they learn from friends and family. In this context, the fact that co-operatives have over fifteen million member owners is a unique business asset.

Second, there is a wider inter-dependence across the sector. The risk of any one business knocking onto others like a domino is lessened if the sector stands together to champion the underlying model of a member- rather than investor-owned business.

Third, despite what looked like a very public setback, this remains a time of opportunity. Later this year, a new, consolidated Co-operatives Act comes into play, bringing together all the long-dated legislation on co-operatives. Co-operatives Fortnight, immediately before this, from 21 June to 6 July, will run on a theme of 'Choose Co-operative: local, loved and trusted'. By promoting ourselves in this way, we align what we offer with how, at our best, the public see us. We offer, confidently, a better way of doing business.

So, on balance, we are still seen in a very positive public light. We fit the concerns of our time. The challenge is to live up to this potential - to be the business that people want and to win their custom and loyalty for the quality and integrity of what we offer. We have to live up to our own promise.

Assuming we do, which is still no small jump to make, we have, as co-operative and mutual businesses, a real opportunity open to us.

The time is still right to press for a more co-operative economy.

More thoughts on this issue can be found at www.uk.coop/documents/after-storm.

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