“There was genuinely a moment where we thought The Co-op might not exist any more,” says Julian Sykes. It’s a statement he doesn’t follow with a dramatic pause, but then it doesn’t really need one: there are few people who don’t know that, from 2013 to 2014, just as the historic business was moving into the Manchester building where he now sits, a crisis precipitated by losses in its banking arm and deepened by tabloid revelations about its chairman pushed it right to the brink.
Back then, The Co-op’s woes were front page news. “There were fundamental issues with both governance and leadership right across the business,” says Sykes (main picture, left), who was appointed director of organisational effectiveness as the crisis was finally beginning to abate in 2014.
Three years on, his vantage point is very different, as is the group itself: it owns just 20 per cent of the troubled bank, which is up for sale, and has offloaded businesses including its pharmacy and farms to retrench and stabilise financially.
But the past three years have by necessity involved more than simply divesting and firefighting: the HR department has played a critical role in restoring employee pride, reconnecting staff to the original mission of an ethical business that returns profits to individual members, and fixing a broken leadership model – all exemplified by the mission to ‘rescue, rebuild and renew’.
HR’s role accelerated significantly in 2016, as rebuilding was in full swing. By the time of the firm’s pivotal AGM in May – when it unveiled a return to the Co-op name for its retail arm and a new, community-led membership proposition – it had already brought 5,600 leaders together for an engagement and development day where they were given first sight of the crucial changes.
This seeded the idea that the future would be more focused on consensual leadership and collective responsibility. For the first time, the whole business also came together in a series of workshops; over the six months that followed the AGM, 54,000 people attended more than 4,500 ‘Back to Being Co-op’ events across the UK where the Co-op story was brought to life.
Hosted by a senior leader and managed at a local level, the group used actors to delve into the company’s rich history (it traces its origins to the Rochdale Pioneers, who founded the principles of the modern co-operative movement in the 1840s) and to demonstrate the behaviours and values that would help it thrive in the future, through role play and interactive sessions.
For a while, HR effectively became a logistics hub dedicated to making the events happen. Sixty business leaders were seconded to become event hosts. “It took many of them outside their comfort zones and they were worried about doing it at first,” says Craig Whaites, head of leadership and learning (pictured, right). “But they did an amazing job. They have all grown enormously and are very different leaders.”
Arguably, adds Sykes, the critical element of the programme was bringing them back together under the banner of ‘Being a Co-op Leader’ to spend a day at one of 60 events held in 2016. “The biggest influence a colleague will have in their career is their line manager,” he says. “So the reason for the events was to get those leaders clear on what they are leading for, to trust them with what the organisation is asking them to do and to inform and equip them to lead.”
But the message was only part of the magic, says Whaites – simply bringing people together from across the company to share common goals was a revelation. “Being in a room with 100 people from different parts of The Co-op might not sound remarkable, but often big businesses work in silos – the real value of what we do is working collaboratively. Having a day’s worth of development with people was fantastic, but realising that our chief executive – as well as other members of the executive team – would be taking a day out too to spend it with us was even more inspiring.”
Through it all, the emphasis has been on simple messages. “One of our core values is always being yourself, and that’s at the heart of what we’ve done,” says Whaites. “Our communities and our people don’t talk a corporate language, so we’ve worked hard at getting a simple tone of voice.”
Sykes adds: “We’re gifted with having great clarity about our purpose. When you start bringing in more complexity, you dilute that message. We don’t want to develop tomes that end up holding up table legs.”
So far, that message has clearly resonated. Engagement scores are up 4 per cent year on year to 80 per cent, and those of staff who attended the events programme are, on average, 4 per cent higher still. Whaites says this has been a big factor in a rise in underlying profits of 32 per cent this year and 14 months of consecutive growth in the food business.
“We’ve started something really special,” says Sykes. “We have stimulated colleagues to feel proud again, but we’re just at the beginning. We need to sustain it.” Plans for the next phase include a potential MBA in co-operative businesses to help develop a new generation of ethical leaders. But the company is also keen to see employees continue advocating for The Co-op among their friends and families, which Whaites says demonstrates that the distinctive values of the business are being understood: “They knew in their hearts why it works, and some knew rationally in their heads. But until now, not everyone really felt it.”