Why social capital can help predict a co-op’s strength and success

Trust in their cooperative was among the most important reasons for cooperative members to adopt a new agricultural technology. [photo courtesy Land O’ Lakes] Trust in their cooperative was among the most important reasons for cooperative members to adopt a new agricultural technology. [photo courtesy Land O’ Lakes] Trust in their cooperative was among the most important reasons for cooperative members to adopt a new agricultural technology. [photo courtesy Land O’ Lakes] What signifies your cooperative’s wealth and success? When we asked this question of our cooperative partners at a Cooperative Leadership Event (CLE) in Rwanda, the answers largely included physical assets, such as buildings, land, and equipment. A few believed it was the talent of their manager or accountant that makes them successful.

No one mentioned relationships. No one mentioned the importance of a cooperative’s social network, relationships within the cooperative or with key external stakeholders.

In my earlier life, I studied to be a social worker. Through a series of fortunate life events, I now work on enterprise development to support the success of cooperatives globally. In my role with Land O’Lakes International Development, I manage our USAID-funded Cooperative Development Program (CDP), and I’ve facilitated two social capital studies with maize and dairy cooperatives in Rwanda. While I’m usually focused on cooperative management support, these studies have given me the opportunity to tap back into my former sociology and human behavior education.

The studies looked at the bonding ties that link cooperative members in trusting relationships with each other and the bridging ties to apex organizations and other key external stakeholders. Healthy relationships and strong communication skills can build trust within a cooperative and among its community members. In addition to improving governance and management skills, we are also investing in activities that build trust in cooperatives because we believe trust should be considered a valuable asset among cooperative leadership.

Relationships matter
In 2016, we completed our first study on the relationship between communication and trust levels with the adoption of new technologies in maize cooperatives. The study included 250 members from five cooperatives. The second study, which is still underway, looks at the levels of trust between the different levels of maize and dairy cooperative bodies—six primary and three unions. There are some interesting baseline findings. The most relevant findings from both studies were shared with participants during the CLE social capital presentation. They include: 

  1. Diffusion of communication is important Communication in cooperatives is typically centered on the president but due to availability and training of this person, she/he should not be the only source of information. Cooperative leaders, accountants, agronomists and lead farmers can be all utilized as important points of communication to better diffuse knowledge and information within a cooperative’s network.

  2. Trust brings easier change Trust in their cooperative was among the most important reasons for cooperative members to adopt a new agricultural technology. This has profound implications for a cooperative that is seeking to grow and transform. Members will be more responsive to change if the cooperative is transparent in communication, opening channels among various actors in the community where strong social bonds exist.

  3. Training should go beyond management and governance Cooperative leaders do not always understand their full roles and responsibilities. Training often focuses on governance and management, but great leaders must also know how to advocate for their cooperative and communicate with members and stakeholders, so these trainings must be conducted in parallel.
     
  4. Aligning union services with co-op needs Union leaders who promote services that do not align with member needs may be hindering their relationships instead of building them. For example, access to markets is a highly-valued service by members, but is least likely to be provided by unions. Union leaders should focus on member needs through more frequent feedback loops to build trust and ensure healthy, sustainable engagement and member patronage.

What cooperatives can do

  • Satisfaction surveys Cooperatives should incorporate a simple member satisfaction survey. Who in the U.S. has not been asked to participate in a satisfaction survey in the last week? In Rwanda, surveys are not commonly used with farmer cooperatives, and under our CDP program we will test a survey tool and encourage cooperative partners to utilize responses to provide more appropriate services to members.

  • Maintain strong business practices Cooperative leaders should be reminded through training and other network events that they are businesses, not just cooperatives. They have formal roles and obligations to fulfill in order to grow and keep their cooperative strong. Cooperatives should ensure that their leaders operate with this mindset.

  • Improve communication Cooperatives can also improve member communication by ensuring the dissemination of a communication plan. This could be as simple as a list of key people, titles and phone numbers. This helps reinforce that there are many positions within the cooperative that members can and should access for information, not just the president. Additionally, cooperatives should ensure they have enough regional leaders in place to flow information to the farthest member in a timely manner.

Mindset change
Social capital is an essential component of wealthy cooperatives. As part of the community, cooperatives are well-positioned to understand and grow social networks. Through increased linkages, increasing tangible services/benefits to members, leaders knowledgeable of their responsibilities, and sustainable information flow, social capital can strengthen cooperatives.

The CLE co-hosted 98 cooperative leaders from various sectors across Rwanda for a four-day learning event. The objective was to train and equip cooperative leaders with skill sets to enhance their enterprises and also gather rural cooperative development data.

When leaders heard initial findings from our current study, it clicked—they understood the need to focus on their relationships to keep their cooperative healthy.

“I only thought our wealth was about the fixed assets, land and buildings. I am happy to learn that how leaders and co-op members work together is another type of wealth, which is key to my cooperative’s success,” one participant said.

—LuAnn Werner leads the USAID-funded Cooperative Development Program (CDP) at Land O’Lakes International Development. This is the seventh post in the Cooperative Development Learning Series, which highlights lessons from USAID’s Cooperative Development Project. Click here for links to other posts in the series. 

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