President’s Journal: June 2016 Nordics visit

28 Jun 2016

The Nordic countries, with their vast distances and cold climates, not at all unlike my home country Canada, have seen co-operatives there grow fast and evolve into a true pillar of society.

This month of June, Sweden’s HSB (housing co-operatives), whose President, Mr Jan Anders Lago, is a member of the Alliance’s global board, kindly hosted the Alliance’s board meeting in Stockholm. 

In Sweden, the 100 largest co-operative companies generate a staggering sales figure of SEK 400 billion per year. They employ 80,000 people and have 13 million memberships, making co-operation a key part of Swedish business life. The co-operative companies provide an example of consumer power, financial transparency, favorable working conditions and sustainable production.

Our board meeting was followed by the Alliance's strategy session, where we collect updates from the regions and sectors. Our directors there decide on the course the Alliance will follow for the short and the long term. We acknowledged the excellent work done by our policy and strategy directors, with several key publications being published of which the most recent is the Doing Co-operative Business Report. The Alliance’s board has presently two positions vacant. We call on Alliance members' executives to send their candidatures. Elections will be held when our board next meets, in October, during the International Summit of Co-operatives.   

While in Stockholm, our board heard a presentation of We Effect, formerly the Swedish Co-operative Center, which has a long history in the co-operative movement of Sweden, supporting international co-operative development. Later in the visit we had the privilege of hearing from co-operative leaders in all sectors about the challenges they face.

Swedish co-ops are in good shape, even if they too face similar challenges as elsewhere in the world, such as digitisation of the market or laws that are not always adapted to the co-operative model – a hurdle the Alliance is working hard to change. Impressive real estate projects are being developed by HSB, as Sweden’s rising wages having stimulated demand. Budding co-operatives are given a platform to build capacity and grow into successful micro-enterprises and SMEs through the Swedish movement’s Coompanion program. An exceptionally high number, 70% of these “start-up co-ops” survive their first years in business! My thanks again to Mr Jan Anders Lago and staff at HSB Group who indeed did a magnificent job, ensuring a flawless board meeting and strategy session, complete with a splendid networking programme.

Our Finnish board member, Mrs Anne Santemäki took the opportunity of the board meeting in Sweden to invite a delegation to meet with the Finnish co-operative movement. I was impressed by how in Finland too, the co-operative movement plays an essential role for people and for the economy of the country. Today there are about 5000 co-operatives in Finland. The larger co-ops are flagships of the national economy, though SME’s count for 90% of co-ops. Each year up to 250 new co-operatives are established. All together, the number of memberships in Finnish co-operatives and mutuals in Finland is around 7 million – while the population is 5,5 million!  

I was pleased to learn from Mr Sami Karhu, Managing Director of Pellervo, the context of the broader Finnish co-operative movement. Pellervo played a principal role from its establishment as a national co-operative organisation in 1899. The most important sectors, at first, were credit societies, co-operative dairies and shops. We are pleased and grateful with Pellervo’s endeavour, a long-time and dedicated Alliance member, to represent the larger co-operative movement to its members.

In Helsinki, we were welcomed at OP Financial Group by Mr Reijo Karhinen, President and Group Executive Chairman. During our visit to the group’s striking headquarters, I noticed how remarkable OP’s customer centric approach is. OP Group are front runners in digital marketing, meeting the client where it matters to them, a strategy which I myself have with success made to work when I was president of Desjardins. Seeing the number of customers using Op as their main bank and insurer increasing by 135% since 2005, I can only say that this strategy clearly is yielding results.

A true co-operative, OP has a dual role; a business role and a social role. In early 2013 OP Group opened its wholly-owned Omasairaala hospital in Helsinki. The next hospital unit will be opened in Tampere this summer. OP Group is testimony to what the possibilities are for co-operatives, when governments really understand the true nature of co-operatives as member-focused enterprises!

Visiting paper manufacturer Metsä I met a co-operative that again is ahead in using technology as a business facilitator. Metsä for instance provides it members with a forestry app that tracks logging and revenue in real time. Not only online technology but perhaps first and foremost Metsä’s innovative business strategy, with a brand new bio mill opening in 2017, is driving the group’s splendid operating result of 109 million EUR in the first quarter of this year. My thanks to Metsä’s chairman and CEO Kari Jordan, who welcomed our delegation and with whom we had most interesting exchanges about leading co-ops extending and conducting more co-op-to-co-op international business. I was pleased to learn that Mr Jordan, today successfully steering a world leading paper and paper solutions producer, has strong ties into finance, once also having been a banking executive operating from London.

Finland’s S Group is expanding its impressive food retail market share of 45.9%, showing continuous growth ever since 1978. S Group’s far-reaching portfolio includes business areas such as supermarkets, department and speciality stores, hardware trade, service station and fuel sales, as well as travel industry and hospitality businesses. In addition to the Finnish market, S Group conducts international operations in Russia and the Baltic countries. There are Prisma stores in Russia, Estonia, Latvia and Lithuania and Hotels in both St. Petersburg and Tallinn. At S Group again, co-operators prove to be innovators, going so far as to launch an app that lets members fill up at a gas station without using a payments terminal – and without leaving their car - a bonus in a cold climate. S Group is a showcase of a consumer co-operative successfully and effectively integrating the co-operative identity into its business – requiring its employees to follow a dedicated training programme on co-operative essentials.

My gratitude to Consumer co-operative S-Group’s CEO Mr. Taavi Heikkilä for receiving our delegation and expanding upon S Group’s business model and achievements. S Group’s flawless organisation of our visit and their effectiveness were only met by the warmth and friendliness with which they welcomed us to Finland.

I conclude that the opportunity to co-operate and to learn from exemplary organized meetings such as this June’s mission to Finland and Sweden is invaluable to both myself and the Alliance’s global board. Even more delightful than the most cordial contacts with co-operatives in Sweden and Finland, were the enriching, stimulating and provocative conversations with co-operative leaders in both countries. This same deep reaching into strategic considerations will also mark the 2016 International Summit of Co-operatives, and I am happy to know that we will have the opportunity to meet and listen to many of the Swedish and Finnish co-operative leaders during the Summit. I have been amazed by the steadfast manner in which the co-operative movement in Sweden and Finland succeeds in creating sustainable prosperity, security and well being for owner-customers and their communities, building the co-operative tradition not only in the Nordics, but in the world.