What the Co-op Measures Gets Done
In FSW, our take on the setting of performance goals is quite particular; if you are to generate more value for your clients than your competitors, goals and targets must be carefully crafted to encourage behaviour in your people that genuinely adds value for clients. But, for publicly quoted companies, the obligation to deliver value for shareholders often dominates, and some critics would say this skews the focus of what managers notice, measure and reward.
So, it’s encouraging to hear the recent Performance results from the Co-operative Group, the UK’s largest mutual retailer; gross sales are up 15% over last year, with improved profits of 11%. They also report progress on their many social goals, including including a 10% increase in their contributions to community projects.
An employer of over 110,000 people, with around 4900 retail outlets in a range of retail sectors, the group is owned by over 3 million members, who share the group’s ambitions.
“At a time when the economy is struggling and many business models are coming under intense pressure we truly believe that The Co-operative Group is coming into its own….Our focus on financial success combined with social responsibility is more attractive than ever before ” Peter Marks, Chief Executive, 6th May 2009
The group has come a long way since it was first established in Rochdale in 1844, but the co-operative and social aims have remained constant.
Are there any principles from this business model that can be applied more widely in tomorrow’s companies?