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“How should boards of mutuals measure member engagement?”
This post will explore the potential measures and the role of a board in governance of member engagement as a key part of a mutuals strategy
There’s No One Number That Rules All
Best to save time by supplying the answer in a heading for those looking for an easy answer. There isn’t one, but the discussion of what matters to track is more important.
Just as there’s no single number that best explains employee engagement or collaboration for every organisation, there is no single number that can describe member engagement universally. If you spend a moment considering the idea, it would be unusual if it was the case. Every member organisation is different, comprised of different groups of members with different inclinations and each organisation has a uniquely different strategy (at least ideally).
Start and End with Strategy
The mutual’s strategy should be the source of the measures that the board tracks and where membership engagement measures should be found. Membership engagement is not something that sits outside of strategy. It needs to be fundamental and connected. The issues that organisations seek to address and the connection that organisations seek to make with members are found in the purpose and strategy of the organisation.
Boards of mutuals, should be governing this aspect of strategy and assessing performance the same way and with the same frequency that they do on customer, people, financial, risk, compliance and other non-financial dimensions such as sustainability and resilience. Questions that can help define the right measures of engagement include:
If members are customers or employees, does the measure start and end with employee engagement or customer engagement measures? What else is needed to define the unique characteristics of a mutual strategy over a commercial one?
What role do members play in our strategic success? How will we know we are winning with and for members?
What role do members play in governance of the organisation in our constitution and strategy?
What issues that we exist to address matter most to members and how are we seen by members in addressing these issues?
Do members feel like the belong to a cause that matters to them? this is more than a NPS score. It is a willingness to see the organisation benefit others in line with purpose and strategy and to feel ownership of that work.
That’s a lot of questions. As always when there are lots of possiblities, Boards of mutuals can be at risk of slipping into dashboard mode and considering too many minor measures to the detriment of effective strategy governance. The purpose of these questions is not to guide a lot of measures but to ask the kind of questions that prompt consideration of what matters most to success of the strategy. Let governance start and finish there.
Some Minimums to Consider
Whatever the strategy of the organisation it is worth considering that a mutual is an organisation that operates according to cooperative principles. This gives rise to a few issues to consider from the perspective of organisation structure:
Do the customers of the mutual understand that they are members if it is a consumer mutual? Members with a purely transactional relationship with the organisation can hardly be engaged in the strategy. This is particularly important where a mutual may engage members through intermediaries or online digital experiences.
Are members using the benefits available to them as members of the mutual? If their purchasing or other activities are spread around or there are benefits unclaimed, is the strategy effective enough? Does the organisation need a deeper connection with its members to succeed?
Do members participate in the organisation: open rates, clicks, conversion and depth of engagement? Does the organisation have contact details that are up to date? it’s hard to engage the uncontactable and unresponsive.
Are members exercising their rights to vote or otherwise contribute to governance?
Governance of a mutual is never simple, easy, or sleepy. Performance accountabilities are sharp when the performance of the organisation for members is the sole point of existence and when capital must be earned. A well-set strategy will consider a wide range of performance measures and the right cycles of review and iteration based on performance. These measures will adapt and evolve as the strategy moves through its cycles of delivery. Setting and managing that is a role for the board and management together. Done well, it can be the defining conversation at the heart of strategic success.
Mutuals and cooperatives (‘mutuals’) can play a key role in addressing declining social connection and civic engagement in Australia. To do so they must return to their connection to their members, foster belonging in those members and strengthen the fundamental principles of mutuality that define that connection. Mutuals can also use their economic power to do more to contribute to social challenges beyond their everyday economic activities, further reinforcing community engagement and wellbeing.
The Business Council on Cooperatives and Mutuals produces a report each year that documents the the scale of cooperatives and mutuals in the Australian economy. That report highlights that almost 8 in 10 Australians are members of mutuals. Many of those engagements are through motoring agencies, superannuation, financial services and other commercial service offerings provided by mutuals and cooperatives. The challenge we face in our digital age is that few consumers understand that mutuality. Members may not feel any tangible sense of belonging or loyalty and may not understand that membership that comes with a say in the future of their organisation. Only when we work to engage members in these organisations and ensure that they are connected to, run for and shaped by their membership do we see the wider social benefits of mutuality.
Going it Alone: Declining civic engagement and belonging
I recently read Hyperpolitics by Anton Jäger, a book about the rapid and tumultuous politics of the last few years where issues rise rapidly and dissipate just as rapidly without necessarily driving any real change. One of the theses of the book is that the current era involves a rise in politicisation at the same time that individuals are increasingly atomised in their experiences of politics. The institutions like political parties, unions, and other associations are increasingly less relevant and have lower membership. This individualisation of politics and the shifting issue-led campaigns that result becomes an extension of the themes of Putnam’s Bowling Alone from 2000, which examined social capital in the US and among other trends highlighted the decline of bowling leagues as representative of a wider social disengagement. Both books describe these changes as being driven by social trends in work, life, family and technology and encouraged policy makers to look for new ways to encourage civic engagement. Civic engagement and social cohesion have been themes of this blog, especially as we faced the challenges of the Covid crisis.
The trends of civic engagement in Australia continue to be concerning, particularly in an era when demands on that engagement are likely to be increasing. We have ongoing cost of living pressures, international shocks continuing at pace, and structural challenges such as intergenerational equality, ageing population and climate change to address. Addressing these issues with a focus on individual outcomes only will present impossible political challenges and likely continue the volatility described in Hyperpolitics.
Examples of the declining social engagement are around us. The membership of Australia’s political parties has fallen and trade union membership continues its downward trend. Even volunteering has fallen since the first decade of this century as measured independently by the ABS and the HILDA longitudinal survey. The Scanlon Index of Social Cohesion has been level for the last three surveys at 78 but that is measured against an index of 100 in 2007. Elements of that survey such as the sense of belonging Australians feel experience even greater drops and particularly in younger members of our community. The Scanlon report indicates that community engagement activities, such as community support groups, social and religious and civic groups, are playing a role in engaging people and delivering a sense of belonging.
Growth is Not Enough. Belonging Matters
Mutuals step in where society needs them and the market won’t. In the current environment, it is clear that market forces won’t deliver the uplift in social belonging needed and some trends such as artificial intelligence may actively work against improvement in connection. Mutuals and cooperatives are examples of communities community together to address issues because of the connection and belonging between people in the community. That is something we need to foster. If mutuals work to contribute to these core elements of the principles of mutuality, they will be another force for connection in our communities. That connection to members and community can be the foundation of new social connection, wellbeing, and prosperity, particularly for younger members.
Many mutuals are generous donors using their profits for social good. However, giving away profits to charitable and community causes is not a substitute for living the spirit of the Rochdale principles of democratic control, education and cooperation. Mutuals and Cooperatives can and should be a part of the process of fostering social connection and belonging in the communities that they exist to support.
The distinctive feature of a successful community organisation is not that we belong to it, but that it belongs to us
Two-way belonging sets a high standard for mutuals. The communities from which mutuals arise should have a deep connection to them. That means should be clear and closely connected to their mutual or cooperative, at least they should understand the organisation is a mutual and the benefits that they accrue from that model of business. In many agricultural and other purchasing cooperatives, these connections are strong and clear. In many commercial and financial cooperatives this focus on connection to members has been lost to the detriment of the organisation and the wider community. If greater member participation gives rise to new risks that the organisation must become responsive to new demands from its members, then it will be fostering that engagement and alignment that members are seeking. The organisations will be better for working with and for their members.
Many mutual and cooperative organisations are very proud of their track record of growth. Growth is very important for organisations seeking to influence better outcomes for Australian consumers through their capabilities and financial resources. However, the scale of commercial activity alone is not enough to justify a mutual’s use of members’ capital. Scale cannot become an end in itself. Without connection to and between members and a commitment to a fuller expression of mutuality, any such organisation risks becoming just another commercial player and losing the wider social benefits that these organisations can deliver. Scale can be an active detriment to member connection and influence over the organisation. In this case, we lose the opportunity for mutuals and cooperatives to play a role restoring civic engagement.
Mutuals were born in a period in the late 19th Century when people came together to address the challenges of a rapidly transforming society and when the political response to that transition was weak. From the Rochdale Pioneers to the friendly societies, mutual insurers, building societies and commercial cooperatives, we experienced a flowering of social innovation to support communities through that change. It’s time for the mutual organisations of today to play their role in supporting communities and society through another era of challenging transition. To achieve this, mutuals will need to focus on the connections with and between their members and generate new strength of two-way bellowing.
More than Enough Problems
Some sceptics might view that the world has changed irreversibly and that connection is impossible in a digital age. However, the second trend highlighted in the book Hyperpolitics suggests that people will engage with a cause that matters enough to them. What they have been missing is a way for that engagement to result in a contribution to the problem or opportunity that they want addresses. Mutuals can and should be that vehicle.
In a wider sense, mutuals must adapt to contribute to the social needs of the communities that they exist to support beyond making money and giving away money made from members’ consumer purchasing decisions. To restore and deepen member engagement, cooperatives and mutuals need to challenge themselves to consider how they can help members with new solutions to other challenges that are widespread in our communities. There Is a long list of issues where Australia needs new solutions and mutuals are ideally placed to work with their communities to deliver them. Examples include: sustainability, affordable housing, affordability generally, food security, social and community care, access to services for regional communities and the ongoing workforce transitions and reselling required. Ignoring these issues or papering over them with charity will not deliver the benefits Australia needs from mutuals and cooperatives.
Mutuals have played a defining role in Australia before. The federation of the Australian colonies in 1901 was the work of civic organisations like the Australian Natives Association friendly society (now Australian Unity). These organisations kept the idea of and the campaign for Federation alive when politicians repeatedly failed to deliver the agreement required at conventions. That pressure ultimately led to successful political change. Mutuals and cooperatives don’t have to become political organisations. but they can lead change, connect their members and shape the society around them for the better.
In a world in which social disconnection is on the rise, especially for younger adults, mutuals need to take up the challenge of fostering new social connections and delivering solutions to wider social issues. In so doing, they will lay the foundations for their next phase of relevance and the well-being of society more generally.
And while governments, local and national, can create conditions for a stronger civic society, the most effective way to build one is the simple act of one person inviting another person to join in
The challenge to all mutuals in Australia is simple: How can they invite their members to join together in solving the challenge that we as Australians all share?
