Jon Thiele
International Development

Getting results

Gender and economic development

Enterprise development and agribusiness

Small holder farmers

In Ukraine

Islamic economics

Promoting cooperatives

Community-based development

Credit in economic development

Economic institutions







Working together is often a very good option for entrepreneurs of necessity, and during 2011-2012 the program I led helped several thousand women in six countries form business groups.

All groups self-select and the level of support each group receives is the same, but some groups do much better than others. Here is a brief summary of an inquiry into why that is.

Particularly with large projects, there is a standard offer of support to each participant. There is some flexibility, of course, but for the most part everybody receives virtually identical support in virtually identical circumstances. So it was in the program reviewed here: all participants attended the same course of classes to learn about cooperatives and each group had a Cooperative Support Officer to provide some guidance and consulting in the early months of their operation. Support was channeled equally to every group and intended to teach basic operational principles and promote a level of self-reliance.

This is practical, and in this program, as with many, the demographics of the participants are very similar so one might expect fairly consistent results, but it rarely turns out that way. Despite the similarities, group results vary widely. After over a year, our groups showed different levels of success as measured by maturity, self-reliance, and, most importantly, profitability of the business.

In February, 2013, we interviewed 154 co-op members in two countries to learn what worked well and what did not in the evolution of their groups.

A group business is a complex system, and several factors influence the course of development. We explored a range of factors from project design through the women's own actions, and the analysis indicates that three factors are critical:

    the participants are informed, voluntary members & leaders
    proper messaging & support from the staff
    a program design that facilitates group action but does not presuppose the formation of cooperatives

About the participants as informed, self-selecting members and leaders

It is well known that self-selection is critical to voluntary organizations like cooperatives, but this inquiry shows that an open and inclusive process for selecting leaders is equally important. In fact, it is critical to the independence and self-sufficiency of a cooperative.

Many groups of all types begin and coalesce around a single dynamic leader. The groups draw their direction and initiative from a person with vision and energy whom others are willing to follow. So it was with some of our business groups, but that is just not sustainable.

To build institutional capacity, members must be trained to elect leaders, make their management bodies functional, plan activities, make & apply decisions, and keep good records. Among our participants there are some who can become leaders-- not all of them, certainly, or even many-- so selecting and training leaders is critical to successful groups.

The project staff, though, had some trouble distinguishing between identifying leaders and actively putting them into the leadership positions. To succeed, the group must choose its own leaders, but at one site the staff simply identified leaders based solely on their ability to read and write. These people were later introduced to the members as the leaders.

About the role of project staff

Clearly the role of staff is to facilitate and guide not to manage and decide. Train, coach, mentor.

Staff education and capacity are important and greatly effect the outcomes of a project. The staff must be confident and knowledgeable about the activities and their purpose: the project trains and coaches while the members take action, decide, and own the results of their actions and decisions.

Moreover, in our country offices, staff sometimes feared losing their jobs if the groups progressed too quickly; this misunderstanding of the goal became an incentive to prolong the project and keep the women dependent on their support as long as possible instead of leading them to self-sufficiency. The groups that succeeded actually pulled themselves away from their advisor in some cases.

At a deeper level, the staff passed this "dependency mindset" to the members. We cannot help participants change if our own view of their abilities and potential is not positive and encouraging. It is by these standards that field staff must be evaluated and held accountable.

And another situation seemed to unsettle the staff. While decreasing membership is not an unusual part of the strengthening of a young cooperative (some groups lost 80% of their original "membership"), some staff thought declining membership meant they were failing in their jobs. The staff "did (their) best to encourage the disgruntled women to stay on" when they should have reminded them that the advantages of group action can only be realized through hard work, self-sacrifice, and a clear focus on realistic group objectives.

In some successful groups, leaders did this.

About project design

No development program should have "establishing XX cooperatives with YYY members" as objectives. We can control activities & outputs and influence outcomes, but we can only appreciate results. With the co-ops, we focused on process and on indicators of autonomy.

The performance of any given group is greatly shaped by individual personalities, behaviors, and cohesiveness. Group dynamics such as interactions & interdependencies, group cooperation & team spirit, leadership, transparency, and accountability strongly influence a group's quality. A functioning cooperative scores high on these factors so the plan called for support aimed at management processes, customized to the groups, to foster self-reliance and self-management.

This did not always get translated well enough at the field level. As a result, there was a tendency among both participants and staff to move very quickly toward forming cooperatives without proper preparation of the participants to manage the new and complex formations. While in theory it was up to the participants to decide to join cooperatives, in reality many were not making informed decisions to join but rather simply followed an often confused and misinformed staff member.

Many participants expected too much too soon. They thought that by joining one of the "project's cooperatives", their problems would be quickly solved. Many women were disappointed when these unrealistic expectations were not met.

Also, good project design understands that community-level values, beliefs, and norms influence participation in project activities. Regarding cooperative support, the fact is our participants work together and help each other very much already-- a common response to life's difficulties. Forming a cooperative is a commercial manifestation of this natural behavior, but bridging the two is not easy for everyone, and a complete project design must teach local staff that a "cooperative" is not a foreign idea and convince them that the participants can make it work if they believe it will help them.

The bottom line

Every group has its own specific context, circumstances, and needs. Looking into the future, at actions and support needed to facilitate the development of successful group enterprises, there is no universal "one size fits all" set of interventions. The key lessons are learned over time in unscripted conversations by field staff who are in direct contact with the groups. They must be made very familiar with the concepts, principles, norms, and advantages of group formation and operation as well as the limits of the project's support.

The role of project staff is to facilitate and guide, not to manage, for the cooperative members. To be effective we need to identify potential leaders to fill this management role. The project should support the leaders and the members in ways that put them in a position to succeed.

Specifically, "support" means that group members must be trained to elect leaders, to make their management bodies functional, to plan activities, and to make & apply decisions. Our beneficiaries can do all that is needed to make their cooperative succeed with support and training that is practical and adapted to the level of beneficiaries. We need to craft programs that build this capacity effectively and efficiently.