Tried-and-tested model for business cooperation
The Netherlands has proved to be a fertile breeding ground for cooperatives, home as it is to no fewer than 4,000 of these organisations. Some of them – like Rabobank – date back centuries, while others have come on the scene only recently. What makes the difference between success and failure in the world of cooperatives? And what support does Rabobank offer to newcomers?
‘We are currently seeing a second wave of new cooperatives emerging in the Netherlands’, says Rabobank’s Henk Doorenspleet, who is in charge of facilitating new cooperatives. His job is to offer support and consultation to local Rabobanks and their customers in conceptualising and establishing cooperatives. Local Rabobanks throughout the Netherlands have been involved in dozens of local initiatives in recent years, with customers across a range of sectors and industries joining forces to set up business cooperatives, allowing them to make great strides forward. Rabobank is one of the co-founders of the Dutch Chamber of Cooperatives, an advice hub for people looking to establish cooperative enterprises.
‘United we stand’
The first wave of cooperative organisations in the Netherlands came about some 100 to 150 years ago as the result of a combination of sclerotic, dysfunctional markets and economic hardship among large swathes of the Dutch population. Whether it be building up savings, taking out business loans or insurance, or selling dairy, sugar beets or other agricultural products, people caught on to the fact that the only way they could really thrive financially was by teaming up. The cooperatives that were set up in rural communities across the Netherlands at that time have grown into giants that continue to drive the Dutch economy today. Rabobank is one of them, as are insurance companies Achmea, Univé and VGZ, and food companies FrieslandCampina and Cosun.
Getting it done – together
So what does Doorenspleet think has sparked off the current second wave of cooperatives? ‘I think the revival we are seeing is inspired by a real desire for grassroots action. People are eager to take control, to get together with others and organise activities that benefit the community as a whole as well as themselves individually. They are stepping up to take action because they realise that if they do not tackle these issues themselves, no one else will’, he says. He cites several examples, including the installation of fibre-optic networks in rural areas, the supply of sustainable energy and the provision of healthcare in villages and urban districts. Some of these initiatives are started by groups of local residents, while in other cases the members of a pre-existing village association might decide to establish a cooperative business enterprise together.
It takes just seven steps for an idea to develop into a fully fledged cooperative. After the idea has been formed, you need inspiring, driven leaders, a business case and an idea for a specific project which can be successfully replicated. Once you have got your ducks in a row and your cooperative has been formally established, it is time to – quite literally – get down to business. As Doorenspleet explains: ‘It is a good idea to kick off with a project that has a clear start and finish line. Then, once you have successfully completed that first project, you have to keep the momentum going.’
New sense of realism
So what sort of support can customers expect from their local Rabobank? Doorenspleet: ‘Rabobank’s mission is to empower its customers and strengthen their communities. When customers get together and come up with an idea that is most likely to succeed in the form of a cooperative, our local Rabobanks are all too happy to contribute ideas and can decide to make financing available from the Cooperative Fund to help these new ventures find their feet. But the cooperatives retain the responsibility for finding staff, preparing a business case and raising the venture capital required. Rabobank may provide a business loan, but cooperatives are subject to the same standard terms and conditions that apply to other types of businesses. That means they must have a business plan in place that provides detailed information on how much interest they are able to pay and how they intend to repay the loan. We also require them to provide collateral.’
Up-and-coming cooperatives will be relieved to learn that they will not be expected to reinvent the wheel themselves, and that Rabobank is behind them every step of the way. Doorenspleet: ‘Since developing projects takes considerable time and money, we are seeing new, alternative business models emerging. I am talking about initiatives such as energy companies creating wind farms and allowing local cooperatives to invest in these projects. Wind turbines are highly complex: they can take many years to develop and development costs can be sky-high.’
While Doorenspleet is a firm believer in the merits of the cooperative model, he emphasises that the success of a cooperative hinges on a solid business plan and having energetic and resourceful leaders behind the wheel. In working with fledgling cooperatives, he has noticed some changes in attitude: ‘People are becoming more realistic about the challenges involved in establishing a cooperative. They understand that members need to be fully committed, both to cooperation and in terms of the financial sacrifices involved. After all, you cannot have a cooperative without the funds contributed by the members themselves.’