September 22, 2014 - 2:00 am
In today’s business climate of acquisition-hungry Fortune 500 companies, performance bonuses and high-profile boards of directors, the co-op business model can come across as outdated, or even inefficient.
But, defying that belief, the co-op business model is thriving locally, providing Southern Nevada with innovation, transparency and pricing value in several sectors. By avoiding the constrictions of shareholders and the need for aggressive pricing, industries are providing a different value proposition to the market.
There are seven principles of co-ops:
■ Voluntary and open membership;
■ Democratic member control;
■ Member economic participation;
■ Autonomy and independence;
■ Education, training, and information;
■ Cooperation; and
■ Concern for the community.
“I would like to see more industries adopt the cooperative business model,” says Chris Brooks, executive vice president of energy services for Valley Electric Association. “If other industries viewed their consumers as owners and didn’t appeal to them solely as shareholders or investors, you would see different strategies and a higher level of commitment.”
For Valley Electric Association, Southern Nevada is home to a long-running successful co-op that transcends state boundaries. From its headquarters in Pahrump, the VEA serves substantial irrigation power loads to the Amargosa and Fish Lake valley portions of its service area, and is the only out-of-state utility company in the California independent system operator, which controls energy transmission throughout the state.
“We haven’t raised rates a penny in four years,” Brooks said. “We are held accountable through monthly meetings with our board of directors, and on a daily basis we remind ourselves we are here to serve the owner-members of this company.”
Next year, the VEA will celebrate its 50th year. Although many variables have changed, its dedication to the co-op business model’s seven principles has not.
Here’s a look at four other distinct industries experiencing the success of a co-op collaboration:
A creative co-op
One of valley’s newest co-ops is the Vegas Video Co-op, established in 2013. In a city that depends on communications for business, this co-op lets members access top-quality professional video services for as little as $209 per month.
“Because of the high numbers of entrepreneurs in the area, it leads to more opportunity for us as they recognize the importance video plays in their online sales and marketing efforts,” Vegas Video Co-op founder Scott Whitney says.
Along with entrepreneurs, the co-op has landed major clients, including: KSHP-AM (1400), local television personality Dave Courvoisier, LASIK of Nevada and Las Vegas Heals.
The co-op provides clients with important strategic coaching on content that can be worth more than the cost of membership. The strategy often involves directing clients to create content so the viewer takes an action, or implementing a video communication strategy that boosts clients’ bottom lines.
“Whether you are trying to sell something or establish yourself as an expert, if you use the same Web-based techniques as everyone else, you will look like everybody else,” Whitney says. “It is a tough place to start a sales process, so we spend a great deal of time teaching our clients how to differentiate themselves from the competitive herd.”
Co-op for the table
Far from the bright lights of the Strip’s world-famous restaurants, the Vegas Food Co-op is quietly reinventing how locals buy their food.
The co-op lets people buy free-range chickens, a small portion of grass-fed beef and pasteurized pork raised with no antibiotics or growth hormones. The co-op sells 170 dozen eggs every two weeks and works closely with farmers in Southern Nevada and Utah.
“People ask us to track down certain natural animal products, and we try to find it,” Vegas Food Co-op co-director Carolyn Rockwell says.
The Vegas food co-op’s most intriguing selling point is that anyone can purchase the meat without being a member.
However, those who do sign up as members enjoy direct email communication on what food is available for no additional charge. The food is delivered directly to the consumer from the farmer in a public meeting area. The co-op is the top customer for its pork farmer.
The co-op has expand to 1,200 members because of taste, not word-of-mouth.
“We don’t advertise, and the process and the food speak for itself,” Rockwell says. “It is a resource that is hard to keep quiet because after someone tastes the difference, they want to tell their family and friends.”
A co-op for care
After all the fuss and fury surrounding the Affordable Care Act, Nevadans came out of it with the first member-operated health care insurance plan in the state’s history, Nevada Health CO-OP.
The group received a $65 million loan to establish the co-op, which it calls “uncomplicated care.”
The co-op includes 552 doctors and has 40,000 members. To increase memberships, the co-op is attending public events, connecting with diverse audience through groups like the Latino Chamber of Commerce and leveraging social gatherings such as local farmers markets.
“We want to educate our members about our plan before they have to use it,” Nevada Health CO-OP CEO Tom Zumtobel says. “That is a large departure from our current health care system.”
Another departure from the standard health care system is the level of customer service provided to members; the health plan acts as client advocate.
“We are really happy that our members tell us that they can tell we truly care about them,” Zumtobel says. “We have made mistakes, but we have learned from them and are looking forward to new offerings like telehealth and wellness.”
A co-op for kids
Kids cooperative preschool and kindergarten has been established for 30 years, but its curriculum requirements, parent involvement and interaction strategies are as innovative as ever.
“Our foundation is having an appropriate curriculum for child development,” co-op director Bonnie Toft says. “The parents have to commit to being in the classroom twice a month because we believe they are an integral part of the child’s education because they know them best.”
The board of directors operating the school is elected annually, eliminating long-term monopolies or hidden agendas. The board also directs community service projects such as litter pickups to build bonds among directors, teachers, students and parents.
“Our teachers keep our vision on track so that our students can learn both emotionally and mentally in this environment,” Toft says. “They are taught communications, life skills and negotiation tactics to a power themselves to have useful conversations.”
To continue to improve the co-op, Toft and her colleagues visit three different educational co-ops annually. Toft says that because of the nontraditional work schedule many parents have in Las Vegas, the co-op benefits parent participation.
“With the school choice movement being more popular than ever, we often wonder why there are not more co-ops across the country,” Toft says. “People feel they belong here, and in a transient city like Las Vegas, that stands out.”