Federated Co-operatives Ltd. is reveling in its fifth straight year of record profits, says retiring chair Ed Klassen. But members can’t afford to rest on their laurels.
“We have to be vigilant. We will have to face very formidable competitors,” said Klassen in an interview Feb. 28, his last day of work at FCL.
“Success often leads to complacency. That’s a real risk.”
Klassen said co-operatives have a chance to go into the next millennium as a clear alternative to the “faceless transnationals” that are frightening many people, but success is not guaranteed unless members dedicate themselves to the principles that have brought them to where they are today.
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Klassen used his keynote speech at FCL’s annual meeting, being held this week in Saskatoon, to urge co-operative members to stick to their principles, continue and expand their vision of what co-ops can do.
He said many of the earliest prairie co-ops failed because they were only intended for short-term gain, and they didn’t co-operate among themselves.
He said the wave of co-ops that formed in the 1920s laid stronger foundations and the system of co-operatives expanded.
Wake-up call
When the 1980s hit, FCL was forced to “wake up” if it wanted to survive, he said.
That harsh experience forced FCL to recommit to its co-operative vision, which laid the foundations for today’s success, Klassen said.
FCL has no intention of becoming a transnational colossus, even though many people think a company has to “go global” if it is to survive in a competitive environment, he said.
He added the co-op system can offer people a clear alternative.
FCL’s success with large-scale petroleum processing demonstrates how co-ops can band together to efficiently produce the commodities.
And he said the move to bulk fuel plants has shown small co-ops how joint facilities can keep them viable.
He admitted getting co-ops to work together is, ironically, not always easy.
“We’re always a little independent in our thinking, but now that we’re realizing the economies and efficiencies there will be no turning back,” said Klassen.
One area that FCL will have to become more like its transnational competitors is how it treats its management.
“I’m a farmer, and we find industry salaries quite mind boggling,” said Klassen. “But if you want to run a multi-billion dollar company you have to have the management skills there and you have to be willing to pay for it.”
