This gave birth to Cest Qui Le Patron?! (Who is the boss?!), a consumer cooperative that has exceeded all expectations. Despite a radical marketing strategy of very little advertising (none of the cooperatives products are advertised on TV, promoted in-store or pushed by a sales team for example), the overall sales exceeded target 10 times over three years after the launch.
It differs from conventional consumer co-ops in three ways:
- Whereas a typical consumer co-operative operates stores, Cest Qui Patron?! is a private label product line.
- Whereas a typical consumer co-operative seeks to provide the best price for the customer by distributing the profits to members in a form of dividend proportionate to the amount they have purchased from the co-op, Cest Qui Patron?! charges a slightly higher price and minimises the profits to pay the producers more.
- Unlike in a typical consumer, Cest Qui Patron?! membership provides no economic benefits, only rights to democratically decide the details of the products.
The over 10,000 members form a committed online community that democratically decides on the details of the products. They set the price, remuneration for the farmers, where and how the produce is grown and stored and even smaller details like whether the packaging is made of plastic or paper. This process of democratic design has spun off many success stories - including the most popular egg and organic butter brand in the country.
Cest Qui Le Patron?! shows that even in a market that is characterised by cut-throat competition, new co-operatives can emerge and quickly gain a strong market position.
In consumer cooperatives especially, the role of member democracy has been often understood as electing representatives to the board which sets broad long term strategic goals. The reasoning is that members do not have the expertise required for operational decisions. While members do not have the expertise to make all operational decisions, the operational decisions members are equipped to make should be made by members. We should not underestimate the extent of such decisions - Cest Qui Le Patron shows that direct democratic member control in operational decisions such as product design and even pricing can be a source of competitive advantage.
On the other hand, we should not overestimate the importance of domain expertise. A study
of thousands of US banks spanning over more than a decade found that boards with a high proportion of experts are generally neither better nor worse than boards with few experts during periods of economic stability. But when facing periods of economic uncertainty or crisis, expert-heavy boards perform worse
. This rather counterintuitive finding is explained by factors such as overconfidence and the suppression of alternative views that are more prevalent in expert-heavy boards.
Cest Qui Le Patron shows that new cooperatives based on new business models can be successfully established even in highly competitive markets - and that they can tap into structures that distinguish cooperatives from other firms, turning those differences into competitive advantages. It also shows that some cooperative structural characteristics often deemed as weaknesses (such as democratic participation by non-expert mass membership) can in fact be a source of strength.