Presentations and Outreach: Extension Focus Areas

Summary of Extension Programming to Address Cooperatives’ Needs

I develop and deliver extension programming to address the emerging and persistent needs of cooperatives in Iowa and beyond. This happens through three channels:

1. delivery of programs directly to co-ops, their associations, and stakeholders,
2. annual educational offering through the Iowa Institute for Cooperatives, and
3. through provision of co-op relevant content and materials accessible online.

My extension program is characterized by three broad areas identified through targeted and on-going needs assessment: capacity in human capital, co-op financial education and analysis, and structural changes in the agriculture industry. The offerings are described below.

Collaborating Directly with Co-op and Other Stakeholders for Targeted Needs

* For more information about these offerings, please contact me via email: kljacobs@iastate.edu.

Cooperative Basics for Employees

The objective of this workshop is to inform employees about the cooperative business model to ultimately enhance their performance and job satisfaction. When employees understand more about the firm’s structure, governance, and objectives, management can lead more effectively and potentially have greater buy-in when changes are needed. This workshop highlights the implications of customers who are members and own the assets and revenue streams. Common cooperative terminology is presented along with an overview of the relationship between local and regional cooperatives.

The workshops covers ag cooperative history, legal requirements and structures, cooperative membership (what membership is and why it matters), basics of patronage and equity, the regional cooperative system, and the role of the cooperative board.

Cooperative Boards and Management: Responsibilities, Limitations, and Challenges in Navigating Both

Cooperative boards and the manager work in concert to ensure the cooperative is sustainable and meets the needs of its members, but at the same time must remain cognizant of the boundaries of their roles. A primary challenge that boards and management face and that can derail the cooperative’s success is understanding and respecting the extent of and limits to the roles and responsibilities each has. This session presents the responsibilities that board and management each have in directing the cooperative and also discusses common pitfalls that arise as these activities are navigated in practice. A discussion is led with participant feedback on the list of duties and responsibilities that must be performed and whose responsibility it is to ensure it gets done.

Updates on Cooperative Financial Performance and Outlook

I utilize peer cooperative financial information to analyze local grain and farm supply cooperatives’ financial performance. Drawing from this, I collaborate with boards and GMs of local co-ops to provide perspective on their own cooperative’s financial conditions, often providing this analysis at annual board planning sessions. The presentation:

• Identifies and discusses the key leading and lagging indicators of financial and operational performance that boards and management commonly use.
• Discusses trends useful in the planning and budgeting process.
• Provides insight on merger drivers and the circumstances in which growing via merger or acquisition can improve the co-ops economic situation.

Cooperative Equity Systems

Cooperative income and equity and how each is managed is commonly misunderstood by cooperative board members, middle management, employees and members. This workshop is designed to give all participants a foundation to understand co-op income and equity management systems. Cooperative employees benefit from being able to explain the patronage and equity decisions made by the board and management to members. The following are discussed:

• Allocation of cooperative income – regional income versus local savings, effects of tax management strategies on income allocation.
• Equity redemption options – discussion of age of patron, revolving, and base capital approaches
• Qualified and Nonqualified allocations – how they work and trade-offs to consider
• Understanding the role Sec 199 (DPAD) has on equity management
• Utilization of member and permanent equity

Member Workshops

Members learn about the basics of the cooperative model, with an emphasis on the role of the board, their role in governance, the roles and responsibilities of managers and boards, patronage and equity. Producers who are members of cooperatives have concerns about their local cooperative that are discussed in the context of cooperative principles in theory and practice: cooperatives as growing businesses through consolidation, monopolies, contracting with co-ops as unsecured creditors, governance in the age of consolidation, equity, Sec 199 and patronage. These and other topics that are important to cooperatives and their membership can be addressed in workshops tailored to meet specific needs.

Annual Workshops through the Iowa Institute for Cooperatives

In addition to the workshops I provide directly to co-ops and other stakeholders, I collaborate with IIC in their annual offerings of education and industry updates for cooperative board members and managers. Boards and managers utilize these programs to develop the business acumen to make informed decisions and effectively lead their organizations.

* For more information about these offerings, please contact the Iowa Institute for Cooperatives.

Director Certification Program (DCP)
DCP is a 4-phase educational program for new board members and those desiring a refresher of the role and responsibilities. DCP has a 35+ year history as a collaborative educational effort between ISU, IIC, and CoBank. Cooperative general managers and board presidents encourage their board members to complete all four phases over one or two years as board members, recognizing that the program helps them to engage sooner and more effectively with the board and understand their roles and responsibilities.

• Phase 1, Co-op 101 and Director Roles & Responsibilities – participants learn about the historical foundation of cooperatives, federal and State of Iowa legal authorizations and cooperative statutes, basics of the cooperative business organization, and the roles and responsibilities associated with their unique role in governance.
• Phase 2, Establishing Direction and Planning – participants are introduced to the key elements to effective strategic planning, and learn their role in establishing a direction for the cooperative business. Board members engage in a situational analysis (video with discussion and exercises) to solidify their understanding of critical components in the planning process.
• Phase 3, Cooperative Financial Basics - board members learn the basics of the balance sheet, income statement, and sources and uses of funds statement as well as key financial ratios. Specific attention is paid to understanding working capital and equity and how boards’ decisions and unforeseen operational and economic conditions can impact both. Exercises are used to highlight the common challenges and critical components to managing for financial health of the cooperative, and participants hear from a lender about their views on financial conditions and ratios.
• Phase 4, Evaluation, Compensation and Communication with the GM – participants learn about the boards’ role in developing the general manager, fostering communication with the GM to meet the needs of the cooperative, characteristics of effective and fair evaluations, and the various mechanisms for GM compensation.

Board Presidents Workshop (Spring)
This annual workshop hosts cooperative leaders – managers, board presidents, and board member – who hear from a panel of cooperative experts on emerging issues and best practices on topics germane to their own cooperatives and challenges as cooperative leaders. This is followed by an open discussion with the panelist and participants. Participants provide high evaluations for this program and note, “The open session is the best information transfer there is.” and “This is the most important meeting for Board Presidents.”

Board Officers Workshop (Summer)
This annual workshop hosts current and aspiring board officers of cooperatives. Participants learn the unique responsibilities of board presidents, vice presidents and secretaries, and engage in situational exercises to learn appropriate ways to handle challenges they may encounter in their leadership roles.

Iowa Cooperative Intern Day (Summer)
In 2016 we held the first annual Cooperative Intern Day in Iowa. The goal of this one-day offering is to educate interns and new employees at Iowa’s cooperatives about the cooperative business model and network with industry leaders to gain an appreciation of the application of the co-op model in Iowa. Co-ops value that their interns understand the co-op model and hear from a variety of cooperatives to gain an understanding of how working for a cooperative impacts their interactions with customers.

Mid-Managers Workshop (Fall and Spring)
An annual workshop that provides mid-level managers and those in key roles at cooperatives education on the basics of cooperative profitability and financial statements; additional sessions allow participants to hear from industry leaders about new developments in ag relevant to their jobs.