f\ ?9.K! 33- Information 32 February 1963 Making Member Relations Succeed by Irwin W. Rust Farmer Cooperative Service U.S. Department of Agriculture UNIV. OF FL LIB. D OCUMENTS D E PT U.S. DEPOSITORY FARMER COOPERATIVE SERVICE U. S. DEPARTMENT OF AGRICULTURE WASHINGTON 25, D. C. Joseph G. Knapp, Administrator The Farmer Cooperative Service conducts research studies and service activities of assistance to farmers in connection with cooperatives engaged in marketing farm products, purchasing farm supplies, and supplying business services. The work of the Service relates to problems of management, organization, policies, financing, merchandising, product qual- ity, costs, efficiency, and membership. The Service publishes the results of such studies; confers and advises with officials of farmer cooperatives; and works with educational agencies, coop- eratives, and others in the dissemina- tion of information relating to coop- erative principles and practices. CONTENTS Page Changes in today's co-op 1 Methods used 3 Methods measured 5 Points to remember 7 Key steps to sound programs 7 Coming events cast shadows 11 Co-ops vs. autocratic efficiency- 14 Making Member Relations Succeed by Irwin W. Rust Membership Relat ions Branch Management Services Division In the early days of farmer cooper- atives, a member learned about his association by actually taking part in its affairs and functions. But as cooperatives became more specialized and grew in size and variety of services, they began to delegate more and more of the actual operations to employees they hired. Changes in Today's Co-op Thus today the detailed knowledge of cooperative affairs is likely to be confined only to those members acting in some official capacity such as on the board of directors. And conse- quently the rank and file member feels less involved in his cooperative. In addition, today's member no longer thinks of his cooperative as a major social outlet. He no longer has as much time to spend on it. There is increasing competition for his time and interest from other activities. And he is often quite a ways removed from the cooperative -- both because of the larger areas most cooperatives serve and the increasing technical knowledge required to run many aspects of the business. All these changes make it increas- ingly difficult to maintain a feeling of warm, close personal relationships between cooperatives and their mem- bers. But at the same time the need for this close relationship has become more and more imperative. For ex- perience has taught us that the informed -- and involved — member is the loyal member. And the loyal member in turn provides the foundation for a strong, vigorous cooperative. Progressive and far-sighted coop- erative leaders have recognized the difficulty and the necessity of keeping Meetings to educate and inform members about their organization are helpful to any member relat ions program. members well-informed, and over the years have developed various methods of membership education. Methods Used Today, these educational activities are usually grouped into what is called a member relations program. Usually these programs include at least the following three methods -- meetings, personal contacts, and printed materials and audio-visual aids. Meetings Meetings include such events as the annual membership meeting, local or district member meetings, and board meetings. At the annual meeting, members learn about their cooperative by listen- ing to officers and key employees review policies and give an accounting of their stewardship for the preceding year in the form of an annual report. Here also they have an opportunity to ask questions on any points bothering them. Local or district meetings are often held by the larger cooperatives. Here members meet cooperative staff per- sonnel who brief them on cooperative affairs. Board meetings, by necessity largely restricted to directors, give board members an opportunity to learn the more technical details of the organization and operation of their cooperative. Personal Contacts The second method for educating members, personal contacts, is par- ticularly effective if well planned. Such contacts may be between member and employee, member and director, or even member and another member. Contacts may be made in the cooper- ative^ office, on the member's farm, on the street, or at any gathering where cooperative members and staff meet. Worthwhile contacts may be made also during special events, such as an edu- cational tour or speaking contest spon- sored by the cooperative. An advantage of the personal con- tact method is this: If you T re looking a man in the eye, he probably will listen to what you have to say. Personal contacts may be made at special events, on members' farms, or at any gather' ing where cooper at ive members and staff meet. Publications and Audio-Visuals A third method for educating mem- bers is printed materials and audio- visual aids. Among the most widely used are printed annual reports; regu- larly issued magazines, newspapers or newsletters; outside newspaper stories; radio andtelevisionprograms; institutional advertising; and posters and charts. An advantage printed materials have is that they can be studied at leisure. A disadvantage is that they can easily be discarded, for a man reading his mail in the privacy of his home can T t be forced to read if he doesn't want to. With several choices of methods, a cooperative planning a member education program must devote most of its attention and funds for this activity to methods that have proved their worth in the past. Methods Measured To measure the relative effective- ness of these various methods, in 1950 the Membership Relations Branch of Farmer Cooperative Service made a survey of 2,750 members of a large, federated cooperative noted for its member relations program. These 2,750 were asked to rank, in order of effectiveness, seven educational de- vices most commonly used by their cooperative. These seven most ef- fective methods turned out to be: 1. Cooperative periodicals, 2. personal contacts, 3. circular letters, 4. annual reports, 5. annual meetings, 6. educa- tional exhibits, 7. radio programs. A similar survey was made in 1960 which bore out the results of the 1950 survey — with cooperative periodicals and personal contacts again listed as the most effective methods and annual meetings as effective as they were thought to be in 1950. These were the 1960 results: Cooperative periodicals --98 per- cent of the members surveyed reported reading all or part of their cooper- ative's periodicals. Personal contacts -- 83 percent had personal contact with the manager at least once a month, and 55 percent contacted their directors at least once a year. Printed materials telling the cooperative' s story have an advantage, for they can be studied at the member's leisure. Annual meetings -- only 15 percent of the members attended the annual meeting, 55 percent had never attended an annual meeting. Points to Remember Effective membership education must be a continuing process. Many cooperatives today understand this and have set up member education pro- grams as a departmental activity. But many others cannot afford a separate member relations department. How- ever, it is still possible for a cooper- ative without such a department to have an effective member education program if management — both directors and manager -- make the best use of the best available methods. And above all, the program should reflect a thorough understanding of the basic principles of communication. Key Steps to Sound Programs So let's dig a little deeper and analyze just what goes on in a sound member education program. Let's speak in abstract terms for a moment. Using these terms, we see three major phases in any membership relations program: Projection, or sending some form of communication. If successful, this results in Motivation -- that is, the creation in the member (receiver) of a desire for -- Action, or partici- pation in the cooperative's program. ^ \ * * ■" ') 1 s ^ .TllLza If 1 ! jp. Project ion -- One basic method of communica- tion is through the appearance of facilities. Impressions formed here may affect the mem- ber's overall appraisal of the organizat ion. Ideally this includes both patronage and participation in cooperative activities. Note that projection (communi- cation) is the first and key step and that some form of action is the desired end product. But three questions still arise: What shall we project, or communicate? How shall we communi- cate it J> and Why should we communi- cate? What to Communicate? Let's consider first what we shall communicate. Cooperative members 8 will want to know mainly about these things: The cooperative itself — its back- ground, objectives, organization, and general operation; products it handles, where they come from, and where they go. Cooperative policies -- especially the reason for adopting new policies, or changing old ones, and how policies affect themselves and their fellow members. Cooperative plans -- involving such things as changes in methods, equip- ment, services offered. The outlook -- for business and agriculture in general, and for their product in particular. Cooperative finances -- about sav- ings or losses; about plans for the future, such as development of new methods of procurement or marketing; about development of new products. To summarize, cooperative mem- bers want full information about their cooperative, including the good and the bad news. How to Communicate? Now for the second question -- How shall we communicate ? We know that the act of communi- cating is an exchange of ideas, opinions or impressions. This exchange takes place through several communication channels. For example, we can ex- change ideas through: Words — spoken or written. Sight -- pictures or other visual impressions. Activities -- such as the day-to-day operations of your cooperative. Attitudes -- expressed by the man- ner in which your cooperative performs services. Perhaps the most important thing to remember when thinking about how to communicate is this: WE CAN r T STOP COMMUNICATING . We communicate all the time, whether we intend to or not. You have all gone into a store, for example, and stood waiting while a clerk finished some bit of idle gossip before waiting on you. Your reaction was probably something like this, "If they don't need my business any more than this, Til go somewhere else"! The clerk's indifferent attitude communicated itself to you. And your reaction, from the point of view of the store, was highly undesirable. You stopped patronizing it. Or, take visual communication. If you have a choice between two business firms, one of them shoddy and run down in appearance and the other immaculate, you are apt to patronize 10 the one with the better appearance. Both communicated to you visually, and you reacted accordingly. How can a cooperative make the best use of such involuntary communi- cation? Simply by being everlastingly aware that it is going on, and by guid- ing itself accordingly. Why Communicate? And now for the third question — Why should we communicate ? This is a little more difficult to answer. Because the better informed the cooperative member is, the better the cooperative will be and the better it can compete with the increasing compe- tition of today T s modern economy of bigness and concentration of power. Coming Events Cast Shadows Someone has aptly remarked that "Coming events cast their shadows before." We are now in those shadows. For today's cooperative member lives in the shadows of this bigness and concentration of power everyday, whether it's Big Business, Big Labor, or Big Government. He meets it when he sells his farm products and when he buys his production supplies. The Federal Trade Commission reported this about total food sales in 1958: Food chains with 11 or more stores accounted for 28 percent, the 11 ORDERS - >^ - v - Mot iv at ion -- Making members aware of co-op operations is one method of creating a desire to participate . largest food chains accounted for over 29 percent, and the four largest food chains accounted for 20 percent. The member also confronts this increased size and decreased number of firms when he buys farm supplies. Thus today's cooperative member is engulfed in the wave of bigness that is not only sweeping him along in its wake, but his cooperative as well. Farmer cooperatives are decreas- ing in number. But farmer cooperatives continue to hold their share of the agricultural market. This means that cooperatives, like other businesses, are growing in size. Farms have decreased in number. But the farm of today's cooperative member has grown 29 percent in size since 1940 and is still growing. 12 These conditions then face the mem- ber and his cooperative: fewer farms, bigger farms, and increasing concen- trations of economic power -- and from these concentrations a new, startling efficiency. In 1960 an article in BusinessWeek described how an electronic computer, then being tested, works. A computer at company headquar- ters is connected to similar computers at the company's branch plants. Infor- mation fed into branch-plant computers is flashed to the headquarters computer which processes it and arrives at a decision in a matter of seconds. The decision may then either be referred to an employee for approval -- or sent back to the branch-plant com- puters as an order. Conceivably the branch-plant computers could then carry out the order untouched by human hands or heads. The efficiency of these machines in an organization means no wrong moves, no impulsive gestures, no hanging on to unneeded plants, un- wanted products, or unneeded em- ployees, and no chances for discussion to bring in ideas from the organiza- tion's owners or employees. Listen also to Harold J. Leavitt of Carnegie Institute of Technology's Graduate School of Industrial Adminis- tration. He has said: "I argue that a third technology is already moving in — let's call it 13 information technology -- that its major idea is the idea of information theory; that its tools are a new mathematics and the computers; that its practition- ers are eggheads -- operations re- searchers; or simulators, computer program designers and such; and finally, that its target is the conversion of the middle and upper management decisions from seat-of-the -pants judg- ments to analytic problem solutions." Computers now handle many functions formerly handled by middle management, such as foremen and branch-plant managers. Through these machines, control can be concentrated at the very top of an organization, control based on information accurate and precise to a degree never dreamed of a few years ago. This is an almost autocratic controL Co-ops Vs. Autocratic Efficiency Can cooperatives, democratic in form and by nature of that form deliber- ate and slow, compete with this control, this efficiency? To do so, today's cooperative member may have to give up some prerogatives that he enjoyed in the past. These could be deciding what and where to plant, to buy, and to sell. Does today' s cooperative member have the information, the understanding of what he and his cooperative are faced with, to accept this discipline? This is his decision to make. And to provide him with the information 14 to make a sound decision lies within the responsibility of the cooperative's member relation program. But before providing him with this information must come this important realization: that today's cooperative member dif- fers from yesterday's. One cooperative leader put it this way. "...we probably are safe in assuming that increasingly the member we are dealing with has joined the association well after its founding; that he played no part in its early struggles; that he has, therefore, no emotional involvement with it; and that he belongs to the organization mainly for commer- cial reasons arrived at through rational, intellectual processes rather than because of any deep-seated eco- nomic or social philosophy. "...the challenge to the cooper- ative's member relations program in the future is to find some way of cracking this hard commercial shell and then providing the member with Ac t i on -- A good member relat ions program must find ways to persuade members to pull together for the solut ion of mutual problems . 15 a rationale for membership partici- pation that will fit his kind of business and social thinking. "Obviously, what we need now is to thread our way between these extremes of sentimentality and materialism, picking our way along the hard, if narrow, ground of truth until it brings us to a sound basis for a successful membership participation program." But participation, perhaps in pro- gram development, is not enough. The above writer concludes that "the in- tangibles -- the sense of belonging, of sharing, of having an effective voice -- these are the vitamins that keep the cooperative body strong and vigorous." The challenge to your cooperative is to find ways to operate effectively in today's efficient marketplace while maintaining the fundamental virtues which set cooperatives apart -- and to instill in members an awareness of those virtues, a sense of pride of ownership of an organization so uniquely endowed. It is up to you to help your cooperative face up to that challenge. Strong member relations is the key. 16 UNIVERSITY OF FLORIDA 3 1262 08500 2086 Other FCS Publications Available Exploring Communication Processes in a Farmer Cooperative -- A Case Study. General Report 97. James H. Copp and Irwin W. Rust. How Do Members Use a Co-op Paper? General Report 30. Job K. Savage. Making Your Membership Publication Do the Job. Information 13. Suggested Steps' for Improved Member Relations. Information 12. Oscar R. LeBeau. Popular Publications on Farmer Coop- eratives. Information 7. A copy of each of these publications may be obtained while a supply is available from -- Information Division Farmer Cooperative Service U. S. Department of Agriculture Washington 25, D. C.