An Open Letter to New VFC Board Members
Rory Bowman
Dana Greyson - Da...@VancouverFood.coop
Philip Thompson - Phi...@VancouverFood.coop
Marjorie Casswell - Ma...@VancouverFood.coop
Dear New Board Member:
Congratulations on your selection to the Vancouver Food Cooperative
board of directors under president Sunrise O'Mahoney. I have some hope
that you can salvage this organization, but not a lot. Some very
talented and competent people have been on this board and, for reasons
I shall explain, almost every one of them has left. The public reasons
for those departures do not necessarily match the real reasons, and
naively trusting in Sunrise's stories will not serve the cooperative
in any substantive way. For most of its existence, the Vancouver Food
Cooperative has been a hobby project for an unemployed O'Mahoney, and
to succeed it must become something else. You have very little time to
make this happen, as saving VFC will require both clear vision and
moral courage.
I don't know what you understand of cooperatives, or start-ups, or
business, or governance. Many of those who have volunteered understood
quite a bit, but most O'Mahoney has recruited do not. The THEORY of
cooperative governance (in keeping with the second principle) is that
the board of directors governs on behalf of and for the benefit of
owners transparently, absolutely accountable to the ownership under
the principle of "democratic control." VFC's practice has always been
otherwise. VFC was founded by O'Mahoney and Heather Lehman when both
were students, and carried through as a hobby project after they
graduated to become stay-at-home mothers. In 2006 the corporation was
formed, and the board essentially self-selected until elections were
forced in early 2008. In combination with what happened immediately
after those elections, VFC is effectively a "board-only" organization,
with governance by a self-selected group not accountable in any
substantive way to its owners.
Despite the spirit of RCW 24.06 and the explicit wording of all share
subscription agreements, the board has taken to itself all substantive
power. Rather than use a reputable, cooperative lawyer, they selected
one who changed bylaws to grant them dramatically more power than
members than was standard under Washington's mutual and miscellaneous
corporation act. These bylaws were unilaterally adopted just before a
special, owner-called meeting, and will not withstand legal challenge,
as I clearly demonstrated in small claims court this past November.
The corporation took money for shares it was not authorized to issue
and has not issued shares, in violation of state law. I am happy to
explain to each of you personally why I believe this is the case, and
I assert that a reasonable person would investigate this claim. The
second-hand opinion of a non-cooperative lawyer working pro bono for a
woman without substantive legal or business experience is no
substitute for due diligence on your part as a director, and any
director and officer insurance that VFC has purchased will not apply
retroactively. To the extent that you are supporting past misdeeds by
the corporation (or working to cover them up) I assert that you may be
personally liable. Certainly you are morally obliged to investigate
these concerns.
The Vancouver Food Cooperative has claimed for several years that it
planned to open a modest retail grocery in west Vancouver, and has
repeatedly promised timely progress toward that goal. As has been
clearly established (and as can be confirmed by discussion with
previous directors who served in 2008), Sunrise O'Mahoney unilaterally
took it upon herself to change this goal and to deceive other board
members about this in late 2007. As location consultant Pete Davis
will confirm if directly asked, he was contacted by O'Mahoney
privately and asked to delay his contracted market study on a
delusional promise of free space at an unapproved west Camas
development called Moxie Village. This delay of the market study was
directly responsible for all progress coming to a screeching halt,
disrupting plans for timely progress which had been linked to the
first owner meeting in February, 2008, and a clean transition to VFC's
newly-elected board. The direct result of this deception were (1) my
own resignation from the board in February, (2) Lori Loranger's
decision not to continue as a board member, (3) dramatic conflict and
distrust within the board and (4) the subsequent resignations of the
majority of those elected. Of the current VFC board, only four were
ever elected, and these are the four who chose to side with and be
personally loyal to O'Mahoney rather than transparent and accountable
to the ownership. Your selection to the board was made so that this
faction could remain control going forward. Whatever you may have
thought when you agreed to serve, your appointment is for O'Mahoney's
convenience, not the health of the organization nor the fulfillment of
its original mission: a modest cooperative grocery store near downtown
Vancouver, west of Interstate 5 and south of 39th street.
Clear planning and timelines to open a store were created and have
been consistently neglected and abandoned, such that I do not believe
that this organization is likely to open so much as a hot-dog stand
within the next year. At the first annual meeting, the goal of six
hundred owners by the end of 2008 was announced and then abandoned by
August, such that the general goal of a thousand owners to open by the
end of 2009 is now quite impossible. In the face of this failure,
O'Mahoney and her partisans have tap-danced and deceived honest owners
in a way that grossly abuses their trust. The vision was sound, but
leadership was rotten, with the natural consequence that VFC has no
substantive plan or credibility with any informed actors.
I am not certain what you were told of VFC history or of me, but I
would strongly encourage you to review original documents yourself. As
a board I encourage you to directly ask Pete Davis what happened
between his November 2007 meeting with the VFC board and his delivery
of the report in mid 2008, almost six months after the originally-
promised date. Specific details of his phone conversations with
O'Mahoney and email exchanges with Lori Loranger will be the most
damning. I also encourage you to take the time to obtain and read
through past board minutes yourself, rather than trust self-serving
versions of VFC history. Ask the corporate secretary to show you the
first hundred or so share subscription agreements, and note what one
side says about west Vancouver and what the other side says about
bylaws. Read various press reports about VFC over the years, including
the spring 2006 issue of the National Cooperative Bank's "Bank Notes"
article about VFC, the Vancouver Voice cover story of the Columbian
editorial of support from September 2007. Ask why it is that the
current board "requests" that people fill out forms to get share
payments back which explicitly reference the board-approved bylaws and
why a judge who saw the original share agreement would not require
one. Sunrise O'Mahoney is in full defensive mode, having squandered an
excellent opportunity to build a real food co-op in Vancouver, but
clinging to her own sense of self-importance as she wastes the time of
others on what is a clear failure.
The Vancouver Food Cooperative has very little chance of meeting its
original goals, is grossly behind schedule and being run with very
little respect and no accountability to its owners. It deserves to
fail unless people of goodwill find the courage to correct its many,
mortal failings. Hoping for a new board election to solve everything
is delusional. If it is to be saved, it will be saved within the next
six months, by the likes of you.
I wish you well in a difficult task.
- Rory Bowman
http://en.wikipedia.org/wiki/Board-only
http://www.VFCBizPlan.com
Rory Bowman
type I have seen arrive at VFC before, and crash upon rocks where it
is torn apart by delay and deception. People without formal
credentials have indeed done many great things, but usually not in mid-
life without past experience or other remarkable traits. I actually
have no hopes for a food co-op in Vancouver at this time, and believe
that well has been poisoned. Although I wish you well and hope that I
am wrong, my passion now is that people of goodwill not waste their
time and money on failure, which is why I think it is so very
important that new board members go back to original documents and see
what has happened before. Do not trust my accounts without proof, nor
those of Sunrise. Talk to some of the people who were actually on the
ground and left. At this point, VFC has burned out quite a few people,
and there are solid reasons why.
VFC has long abandoned its previous goals, but refuses to admit this
to its members or itself. Without competence and credibility there
will be no substantive community buy-in, which is why I spent so much
of my time on the board trying to create concrete plans, make them
transparent and convey them to the general public. The basic business
problem is (1) to create a credible plan which (2) will garner members
and (3) serious financial support, including (4) owner and commercial
loans. In everything that VFC does, it would do well to ask how
credible a commercial banker or someone with $10,000 to loan would
consider it. Failing at small things, VFC consistently doubles down
with vaguer and more grandiose plans, such that in late August they
asserted that their goal was to open a 6,000 square foot facility
somewhere southwest of 78th & Andresen, at a cost (without inflation)
of $1.5 million. This goal was chosen because they had failed to get
less than a third of their previous owner goal, for a much more modest
project.
Historically, food cooperatives have done fairly well in difficult
economic times, and there were many macro-economic trends that were
favorable to the original vision. First among these was the small size
and location of the store, in a population-dense area which was
gentrifying with almost no local competition at present or on the
horizon. Second was a general interest in local and organic foods, as
reflected in strong trends toward high-end niche groceries such as
Whole Foods (WFMI). Third was a dramatic increase in fuel costs, which
favored simpler and shorter supply lines for groceries, and a plan
which involved re-establishing local food sources through a modest,
increasing demand. Last was the coming inflation which would likely
make it possible to establish a small store and pay back loans with
less-valuable, inflated dollars. As the stock price of WFMI
demonstrates, much of this wave has passed. Look closely at the market
study that Pete Davis created and note that it assumes (A) no
inflation and (B) continued demand for high-end natural foods in (C) a
fairly conventional full-line supermarket. To the best of my
knowledge, there is only one food cooperative that has opened on this
model (River Valley Market in Northampton MA) and they only did it
years behind schedule with a very seasoned and expert manager, under
very different demographic circumstances. Closer to home, food
cooperatives such as Yelm, Olympia, Food Front, Alberta and People's
in Portland have all used a much less grandiose model. As a business
problem, VFC's current plan is delusional and utterly without
credibility. As the general manager of Ashland Food Cooperative said
to me, "It's easy for Pete Davis to say 'raise two million dollars,'
because he's never had to do it."
I honestly think that you are wasting your time, and that VFC is a
vanity project for Sunrise: a sort of social club where disaffected
suburbanites can play at doing something substantive and important.
Mostly I think it is self-delusion and greenwash, and that the sooner
it folds the better.
In everything you see VFC doing I would ask you to consider two
questions. First, does it increase the credibility and trust of the
general public in our ability to deliver on time and on schedule for
all of our promises? Second, will this give us enough credibility to
obtain half a million dollars in loans from a commercial banker? If
the answer to either of those questions is no, my guess is that it is
not a useful thing.
Good luck to you, but I have spent most of the past ten years focussed
on business problems for start-ups, and spent much of the past three
years studying food cooperatives, policy governance and related
issues. VFC's problems are more than simple "bumps along the way."
No plan is so perfect that it cannot fail, and no person so virtuous
as to not make fatal mistakes.
- Rory
On Dec 17, 2008, at 7:08 PM, Dana Greyson wrote:
> Hi Rory
>
> It's clear you as do a number of other folks have a lot of passion
> about making a local co-op happen. That's a spirit I believe we all
> share, though what exactly it might look like may differ.
>
> While I don't know the details of the strife (though you certainly
> list some here) I was aware there was some. I came on board anyway
> with the sense that the time is good with an increasing interest in
> sustainability and locally-grown foods.
>
> Over the years I've worked on enough projects to recognize when
> things go awry it may be the end or it may be an insightful new
> beginning. Clearly, I'm hoping the latter will be the case. As far
> as experience goes, some of the strongest organizations sometimes
> came out of garages and from college drop-outs. I've also worked on
> some teams led by brilliant folks, that tanked. And lots in between.
>
> So despite VFC's awkward past, my intent is to give it a fair
> shake. I will assume we are all learning from our mistakes (rather
> than being paralyzed by them) as well as from our successes.
>
> While I live West side, from a completely selfish point of view, I'm
> open to learning that what makes the most sense for me personally
> may or may not make the most sense for the co-op. My goal is to
> have a good evaluation of what makes sense for the success of the co-
> op. As a newbie, at this stage, I'm not going to say I know what
> that is, but am quite capable of learning, evaluating and making my
> own observations.
>
> My sense is you are sending the message you sent us because you too
> would like to see the right thing happen. I don't yet know if that
> ultimately means we'll on the same page or not. I would encourage
> you to trust that we can respect each other's opinions, whether they
> are shared or not. It would be a dull world if we all thought the
> same things!
>
> I even hope there might eventually be a time when everyone,
> including you, could look at this as a success that had some bumps
> along the way.
>
>
> Kind regards,
>
> Dana Greyson, Certified Mediator and Communication Coach
> Positive Change Mediation