A systematic store improvement program
National Cooperative Grocers Association (NCGA) and the regional associations that formed in the 1990s have always been, at a fundamental level, about store improvement and the improvement of our sector. Early in the formation of the Cooperative Grocers Association, managers from member co-ops gathered to provide each other with peer support, and as their relationships grew and developed, began to inspire and challenge each other to stretch their operations and organizations to reach more member-owners and to serve them better.
The results have been significant for our member co-ops and our sector. One of the stated goals of the NCGA reorganization was to “support continuous improvement,” preserving the value that retail co-ops realized through tangible peer support, active participation, innovation and incubation, and development of best practices. We saw then the potential of a “truly coordinated national effort” that would “build capacity of member co-ops as well as the system that supports them.”
In late 2005 we adopted a set of multi-year strategic priorities that would provide focus for our work in the coming years. In establishing those priorities we saw that our members had some of the strongest growth in the natural products industry, that many of them were engaged in expansion or store development projects. In addition, our competitors had greater leverage over their costs and were consolidating, while new competitors were rapidly entering the natural products industry. We believed then and believe now that our ability to provide more effective operational support to existing, new, and expanding co-ops is imperative: it will lend credence to the premise that a strong national association with coordinated activities can bring value to potential business partners and suppliers. We also recognize that our members are growing in interdependence, commitment, and accountability to one another through participation in NCGA programs—programs that are increasing our visibility in the industry as well as the equity of the Co-op Advantage brand.
Support our Success
Members co-ops voted “a systematic store improvement program” one of the top three initiatives for NCGA to undertake during the General Assembly in 2005. Our 2006 business plan included strategies to bring this concept to fruition, and in 2006 we contracted with Cooperative Development Services to develop a three-year plan for a store improvement program. We’ve commonly been referring to this as “SoS” or “Support our Success.”
Late last year, CDS delivered its final program report, complete with many of the tools required to implement the program and recommendations for implementation. Because workgroups or West/Central/East corridors have historically been the center of continuous improvement efforts as well as efforts to support expanding and struggling stores, we are incubating this program in the corridors this year. This program represents the first national initiative being implemented through the corridors at NCGA.
Early in 2007, we engaged members in all three corridors in some discussion of the proposed SoS program—we were still digesting the materials ourselves and planning for implementation. Through these discussions we gathered feedback on what members believed would ensure that the program’s stated purpose, “to support the continuous improvement of NCGA member cooperatives,” was supported by the program’s primary activities. Our members were very generous with their input. A number of themes emerged from these discussions with members:
- Members are enthusiastic about developing a more systematic approach to store improvement initiatives.
- Members want to set aside resources for co-ops that both desire and willingly accept assistance.
- Members support using existing accountability mechanisms to compel a co-op to improve.
- Members don’t want homogenous stores but would like a common set of operating standards.
- Given the current state of the industry, members want us to be investing our pooled resources in the right places: not just improving struggling stores but raising the bar on operational excellence and fueling innovation in our system.
The foundation of our store improvement program will be an assessment of NCGA member co-ops in key performance areas. Initially, our assessment system will draw data from several sources:
- The CoCoFiSt database;
- A self-assessment survey completed by general managers;
- Some store audits conducted using external resources
(outside of the co-op), organized by NCGA;
- An events report to stay abreast of significant changes
in plans or staff.
These assessments are intended to examine all aspects of a co-op’s operations. We believe they will prove useful to general managers in hiring and training, potentially useful to boards as external monitoring data, and useful to co-op leaders in planning. In addition to the baseline assessment, there will be further assessments for cooperatives contemplating an expansion, extensive remodel and/or store move in the next 18 months, and for those undergoing a management change or a change in competitive environment.
Following these comprehensive assessments, our energies in this program will be focused in three areas:
Strengthening our struggling stores through more systematic and regular monitoring and coaching to increase the sustainability of their business practices;
Establishing mechanisms to invest our pooled resources in innovative market strategies at the national level—in order to stay relevant in a mature and rapidly consolidating natural products marketplace we need to develop mechanisms that both fuel innovation at the retail level and extend innovations to more NCGA members;
Identifying and documenting the “best practices” (systems or “store operating prototypes”) of our top performers through on-site case-study visits and then integrating those practices into our other programs such as trainings and website resources. We believe that the potential to improve operational excellence system-wide in this area is significant, and that in order to do so we’ll need to increase the volume of the ways in which we’re highlighting excellent performance in our system.
These initiatives will allow us to better assist member co-ops in making improvements to achieve success. This program is being designed so as to avoid being prescriptive, and in most cases the support available to a member co-op will be fully voluntary. In some cases, consistent with our members’ desire, we will leverage the culture and systems for accountability that exist within our system to ensure that our resources are being optimized in maintaining the balance between the opportunity for improvement and the potential risks to our system from a lack of improvement.
Through this program, NCGA staff will be able to bridge tailored assistance to member co-ops needing support services and to actively monitor progress and effectiveness. NCGA staff will be steadily involved in assisting member co-ops when needed. With staff support and effective use of the resources allocated to the program, NCGA, on behalf of its members, will ensure that every co-op has the resources it needs to achieve success.
The overall purpose of this program is to support the continuous improvement of NCGA member cooperatives. Strong and improving cooperatives will enhance our ability to leverage the collective strength of our sector. We see many immediate and long-term benefits of this program to NCGA members and to our food co-op system.
- To the NCGA member co-op: The information provided to each member co-op through assessments will be useful in many ways—to provide a benchmark of co-op operational performance; to help in management recruitment, training, and retention; as a basis for planning decisions; and to help local boards round out and have some context for their understanding of their co-op’s performance. This will be especially useful to the local co-op through periods of expansion or new initiatives.
- To NCGA: This program will assist NCGA by helping to assess and manage the new financial risks associated with the national purchasing program contract, allowing us to systematically identify existing or emerging weaknesses and to address these weaknesses before they become critical. In addition, over time we expect that the information provided through this program will help us identify trends, assess the impact of programs and services, and better understand member needs so that we can most effectively plan programs and activities to meet them, effectively increasing NCGA’s ability to maximize the impact of resources.
- To the food co-op system: This approach will enable us to begin to systematically track lessons learned from ongoing cooperative operations and co-ops in special circumstances including expansion, management change, and change in the competitive environment. Incorporating these lessons will be a critical step in developing valuable tools and programs for NCGA, as well as to support the growth and development of all food co-ops and organizations that support food co-ops.
Once we’ve developed a comprehensive assessment data set, multi-year comparisons for individual cooperatives as well as in-depth analysis of results in key performance areas will allow cooperative managers to better understand the strengths, weakness and vulnerabilities of their operations. This program will not only measure how a cooperative is doing, but it will measure what systems each cooperative has in place to support performance, thus ensuring sustainable performance.
Program development status
This program is being incubated this year in the West/Central/East corridors, where each corridor has set aside a pool of resources specifically for store improvement initiatives in their region. By the time NCGA members gather in September for their annual General Assembly, we expect to have collected our initial assessment data, to be delivering steady support to a number of our struggling stores, to have conducted a first round of case-study visits to top-performers and disseminate our learnings from those visits, and to be highlighting and celebrating the excellence performers in our system.
We expect that with success and over time this program will require more capacity in order to bolster and accelerate our member’s improvement. In the first year, we believe we can be successful by beginning to develop systems that will provide the foundation for the program’s effectiveness in the long term. We are enthusiastic about the opportunity this program affords NCGA to offer its members a program that can benefit our members individually and our sector collectively. We’re grateful for our members’ continued input, participation, and hunger to realize our dream of a virtual chain of “thriving retail food co-ops.”
Ben Nauman is category management director at National Cooperative Grocers Association ([email protected]).