My first meeting with the current Co-op Group was not promising.

The scene was a wet summer afternoon in 2013, in a service station on the M62. Just weeks before, the rating agency, Moody’s had given the Co-operative Bank a 6 notch downgrade; the only precedent for so sharp a downgrade previously was Enron. It quickly became clear that I was being asked to join a new Executive team that was being built, with some haste, to steer the Co-operative Group, and its family of businesses, through the Bank’s capital crisis. 

I accepted the challenge and those initial few months really were shaped by daily battles to ensure the survival of the Co-operative Group. It is a salutary lesson for us all that co-ops have no inherent right to survive, let alone to thrive. But I also soon realised that if this Co-op was once again to prosper, we needed to be conscious of the lessons of the Co-op’s past, and to build on the best of our early 19th century heritage to define our future in the emerging economy of the 21st century. 

Britain in the 19th century was the workshop and trading powerhouse of the world. Those who drove the revolution – Britain’s workers – were also the victims of the downsides of rapid urbanisation. Poor sanitation, malnutrition and gruelling work in unregulated conditions led to death rates which saw 1 in 5 children die before they reached their 5th birthday, and those who did survive their early years were unlikely to live beyond the age of 40. A few found enlightened employers who cared about the conditions of their workers. The legacy of the Lever Brothers, the Frys, the Terrys, the Rowntrees lives on. But in each case, their founding inspiration is now a historical footnote in a subsequent series of multi-national acquisitions and takeovers. 

And then there was the Co-op. Founded in 1844, its principles were incredibly enlightened for the time. It started by providing good, wholesome food, effectively through a buying club. And the Co-op was open to all, for a contribution of a week’s wages, regardless of gender, faith, or political belief. It was a pioneer of social mobility and social justice long before the phrases were first coined and it was the original disruptor; the forerunner of modern organised retail. At the turn of the 20th century, when William Morrison had a stall in Bradford market, John Sainsbury a few dozen shops and Jesse Boot just over 100 chemists, the Co-op was a global organisation, with its own shipping fleet, huge warehouses, factories and a network of thousands of shops. They were brilliant traders, who operated with strong ethics but overcame all obstacles by allowing no excuses. 

And the Co-op carried on disrupting. The development of the wireless in the 1920s enabled news to be carried live around the world. But the manufacturers’ cartel put the price of wirelesses beyond the reach of most people. So the Co-op developed its own wireless, called the Defiant, and opened up the market to everyone by undercutting the cartel. 

By 1956 the Co-op was by far the largest retailer in the world, but the rot had set in. The findings of an Independent Commission, chaired by Labour luminary Hugh Gaitskell and with a young Tony Crosland as Secretary, calling for reform of its arcane governance, was ignored. Decades of relative decline followed, as more nimble competitors took share. As is so often the case, when big institutions fail, the warning signs are ignored and early, albeit painful, interventions are avoided. 

Until the crisis hit. 

While the financial crisis that eventually hit the Group was not inevitable, the governance failings that had been highlighted some 50 years before made it more likely. The crisis not only undermined the financial health of the Group, it also tarnished our reputation and prompted a wider crisis of confidence in the mission and purpose of a large co-operative like the Group. But from those dark days of Rescue, we have set about Rebuilding the Co-op. 

Core to our Rebuild is a new Purpose: championing a better way of doing business for you and your communities. No other business of national scale would have this as their purpose, and we are determined to live up to it. 

But not for one minute should we slip into thinking that ‘being Co-op ‘ is easy. It isn’t. Like any other large organisation, we can benefit from economies of scale. But we also could have run the risk, seen in other large customer-facing businesses, of becoming too remote and impersonal, hoarding rather than sharing wealth and power, failing to listen and engage with the communities in which we trade.

So how are we doing?

Putting membership back into the heart of our Co-op is our foundation stone of Rebuild. 

That journey, of course, began with the fundamental reform of our governance framework. It proved a long, and for some, a painful, process as we moved away from the hitherto complex structure of 3 tiers of governance through some 600 elected members. Instead, through the principle of One Member One Vote, we now have a governance framework that gives every member a voice. Over 5 million of our owner-members now have the opportunity to shape, through rights enshrined in our Rulebook, how the business is run for their benefit and that of their communities, rather than the 600 of old. Yet despite all the column inches devoted to the wranglings over our democratic structures, for the majority of our members, engagement through the formality of all AGMs, not just ours, tends to be a dislocated and remote process. It isn’t just the Co-op that struggles with voter apathy – the reality is that most shoppers tend to vote with their feet rather than a ballot. So membership of a co-op needs to mean so much more than just a democratic interface.

We have, therefore, sought to ensure our membership offer now speaks directly to members, combining both individual and collective benefits. The personalisation of retail loyalty offers is fast becoming the norm in the sector but we are finding that the combination of individual and community benefits resonates with today’s members. The scheme, launched last year, not only recognises the individual through the 5% reward when members trade with us, but also includes the 1% reward for local causes that our members can choose how to spend in the communities in which they live and work. Later this spring, over 4000 local community groups will benefit directly from the rewards that members have generated by trading with us, and the more members trade, the more local communities gain: mutuality in action. By 2018 our aim is that more than £100m a year will go directly to members and their communities as we, in effect, create a new circular co-operative economy.

Our confidence is returning as we think about the impact of our business operations and what a better way of doing business looks and feels like. Exceeding our target to redistribute a million meals to good causes, launching a new retail charter setting out clear principles to foster closer relationships and support for our local suppliers, and publishing a new set of principles agreed with CAMRA about our approach to retail developments, and co-launching a new digital channel to reconnect the community, including millennials, with cooking are just a few examples from the last 12 months of how we are again forging ahead with this better way.

Seeking out new ways to harness our collective strength as a family of businesses and as a community of members at a national level through supporting communities at a local level is also core to our Purpose. At the end of last year, we announced that after a year of heroic fund-raising by members and colleagues, we had surpassed our initial target and had raised £4m in support of our partnership with the British Red Cross to tackle loneliness and the causes of social isolation. Our next step is to fund new British Red Cross services in 39 locations across the UK, to help reconnect 12,500 people experiencing loneliness. 

But our commitment is also to hold a mirror up to ourselves, and from spring onwards we will show how action really can speak louder than words as we work with colleagues and members to show how community connections can overcome the loneliness experienced, but often hidden, by individuals. 

Our Funeralcare business will expand their ‘clubs for the bereaved’, which will provide thousands of people across the country with care and social support at a difficult time in their lives. Our Insurance business, in partnership with Neighbourhood Watch, will work together to refresh and expand the network, to help strengthen communities and bring neighbours together. We’ll support our colleagues who may be experiencing loneliness, by improving our employee assistance programme and pre-retirement support.

Is there a Co-op Way?

Our journey to rebuild the Co-op has only just begun. We are still living with the legacy of past recent decisions which stemmed from a fracturing of connections between a small minority in the centre and the members and their communities which we seek to serve. At times over the past year, it has felt that more profound disconnections have played out on the national and international stage as the mood of the so-called elite has been found to be at odds with that on the ground. 

But within our Co-op, we now have a clear vision of what we are trying to do, and why. Working for us, trading with us and engaging with us should feel different compared to other businesses. Actively listening to Member Voice is a key component of this difference, and even when uncomfortable, we lose touch at our peril with not just our members’ concerns and cares, but also their hopes and ambitions. So when we champion a better way of doing business, it will be firmly rooted in tangible action that we are prepared to take, and will be locally relevant, while nationally significant. That is how we rebuild our members’ trust, and prove that in small ways, each and every day, co-operation has the potential to change lives. And it’s why we are setting out our ambition to recruit during 2017 one million new members, with at least half of them brand new Co-op customers.

As we finished 2016, we could see that both our colleague engagement levels and the public’s perception of our brand were above where they had been before our crisis. We’re back, and in post financial-crisis, post-Brexit Britain, we have the opportunity to show that the spirit of the Rochdale Pioneers lives on.