Loyalty Management in the New Economy The COTRAD Co-operative Model

 By Christian L’Écuyer, President
Les Traductions COTRAD Translations (Quebec, Canada)

(Editor’s note: This article is a condensation of a much larger piece originally published in “The Voice,” the Newsletter of the Translators and Interpreters Guild (Canada), in 2002. With generous permission from its author, the article has been significantly abridged and edited for publication in Translorial.)

What is a co-operative, and how does it work? Does it have realistic and potentially profitable applications—both in monetary and social terms—for translators in today’s commercial environment?

Unlike a purely commercial venture at one end of the spectrum and a non-profit association on the other, a co-operative lies somewhere in between. It actually combines a “cooperative,” people-oriented strategy with sound business principles designed to generate self-sustaining (and beyond) income. Sometimes known as “employee-owned companies,” co-ops may be less well-known than other types of businesses, but they are far from uncommon. As of 2001, according to a study by the government of Quebec, there were 47,000 co-ops in the United States, with over 100 million members.

In the Canadian model, where self-employed professionals cannot create or become a member of a trade union, co-ops have tended to emerge in a particular market or field in response to needs that have often remained unmet in the economic environment, participating in the mainstream economy largely by default. Viewed this way, cooperatives are often seen by their proponents as correctives to the prevailing profit-driven economic structure in a specific market.

In this structure, co-operatives may in fact have a greater success rate that that of commercial ventures. The reasons for this may be traced to investors’ frequent lack of interest in serving a particular community, or too keen an interest in the bottom line. Co-op members are concerned with profits, too, of course, but their criteria for success encompasses more than just merely financial rewards. A co-op’s strengths and successes, in fact, stem from sustained grassroots links with a community of members, in the localities in which they live, or even through the Internet.

This egalitarian perspective is showcased by the democratic structure of a co-op, in which share-holding is not a factor: the association operates on the principle of “one person/one vote” for all business decisions, as distinct from a system in which seniority, job title, or even relative economic value determines influence. Participating in the co-op as both workers/artisans and as managers/directors, all regular co-op members share in the joys and pains of co-ownership and co-management. This means that regular co-op members can bring issues to the attention of fellow “cooperators” and to the elected board, and participate in finding a solution from within. They are the ultimate decision-makers. In this sense, some cooperators consider their statutes and by-laws as a type of collective agreement.

The COTRAD example

In an organization like COTRAD—as with any other generalized co-operative—the “company” model comprises two parts: an association of members, and the actual business run by it. As distinct from consumers’ co-ops, where membership is open to all who care to shop there, membership in professional organizations such as COTRAD is limited to skilled workers—here, translators and language specialists.

Within this context, COTRAD has evolved its own “co-operative difference.” Among its unique characteristics is the equal distribution of work allotted to each member, in order to eliminate a sometimes cannibalistic mentality regarding job assignment, and to give all members a chance to earn a reasonable living.

This equity is achieved through a work allotment formula based on specific criteria as derived from the association’s experience over the past five years. In short, the member who has received the least work in the preceding ten weeks gets first choice in accepting incoming work. A sub-formula allows integration of a member’s fields of expertise in the process. The allotment formula, or “work roll,” is updated as new work comes in.

COTRAD requires regular members to manage a particular aspect of the overall business side: supervising the insurance file, maintaining the database for professional development, picking up the mail, actively promoting the co-op’s services, making sure the amounts paid or received are consistent with figures in appropriate databases, etc. These administrative responsibilities are done more or less on a bartering basis, in the sense that they are the members’ claims to ownership of the co-op.

The association is administered through a project management approach. Although an administrative assistant is employed on a part-time basis, the group nonetheless believes that involving the regular members in the administrative aspect of their own business is the best way for them to keep control of it. This process insures that the co-op remains the property of its artisans and reflects their inputs.

COTRAD hires, or “recruits,” new members only if the translation volume in a given field has increased in a steady and consistent manner, or to comply with the required minimum number of members. Candidates must of course provide an up-to-date résumé, an example of their translation skills with source text, and—in the case where a candidate does not have a recommendation from a current member—a 200-250 word composition in the second language, on cooperation or a related subject.

It is important to keep in mind that COTRAD is a legal entity separate from the individual translator or language specialist. Thus, it is first in the client’s line of fire when things go wrong, which is why the association pays extremely careful attention to the monitoring of all outgoing jobs. Monitoring involves one or more of the following: spot-checking, copyediting, intermediate revision, or full revision. All target texts are spot-checked by the project manager, who then decides if it is good enough to be sent to the client as is. If not, further copyediting or revision is applied to the target text. Such close monitoring is a value-added process that clients tend to appreciate.

One of the distinguishing characteristics of the COTRAD co-op is that translators are always paid. If the client has not paid a validated job within a reasonable period of time, the co-op will pay the translator his/her full honoraria and then use whatever legal recourses are available against the delinquent client.

When developing a new section or module of the cooperative, COTRAD calls on freelancers, allowing members to monitor the linguistic skills of the prospective new cooperators and put their co-operative spirit to the test. Rates are negotiated on a per job or per period basis, as in any agency, but members of COTRAD are paid according to specific guidelines (see sidebar).

In all, a little over 90 percent of the total fee paid by the client is re-circulated among the members who participated in getting the job done, and in getting the job in the first place. All surpluses generated in the fiscal year are reinvested in the company’s growth fund.

As to management training, there are currently very few schools of co-operative management, in Quebec or in North America as a whole. Many managers in commercial enterprises are trained to think in terms of hierarchy, not of democracy. This can create problems in managing a co-op, especially the tendency for such managers to want to transform their co-operatives into share-holding ventures.

That said, it is quite interesting that some profit-based approaches nevertheless struggle to emulate a community-based business model that is over 175 years old; we should thank work-team theorists for bringing the work co-operative formula back in the spotlight of 21st century management and for arousing a new interest in the true co-operative approach.

© Tous droits réservés / All rights reserved, La coopérative de traduction COTRAD, Aylmer (QC), Canada, July 24, 2002. Copyright of the version of these articles that appeared in ‘The Voice’ in July and December of 2002 is shared with TTIG.

Getting started

Co-ops tend to generate a higher level of motivation among members than a traditional corporation does. It also nicely smoothes out the pitfalls of independent work.

Four or five members with common and/or complementary interests is all it takes to start; virtually no startup money is required, only the usual dictionaries, software and computers. All members work from home, are linked through e-mail, or fax, or phone. They meet perhaps every three weeks in a chat forum, on an intranet site, or in person to resolve management issues or organize special production projects. Members revise each other’s work without fear of reprisals and at lower cost; as to the business side, all members look for, receive a commission on, and can accept work in all specialties that all members have. Add an administrative assistant to the group if you have some start-up money, and you’re on your way. Bonne route!

COTRAD’s payment guidelines

The company keeps 15 percent of all jobs as the “co-op’s earnings,” to pay its overhead, the administrative assistant, the accountant, its Internet connections, and its phone lines; to guarantee the members’ and the general public’s preferred shares; to defend a member’s work if necessary; and to provide for the members’ common fund, called the Co-operative Advantage Fund.

The project manager and/or finder share 12 percent of the paid amount. It is important to keep in mind that the finder or project manager for a particular job is usually a fellow member. Thus, this money is effectively redistributed among members (another way to reduce cannibalism and inequity).

If a translation is sent to the client after spot-checking, the translator gets approximately 73 percent of the fee. Should a translation need full revision, the translator would be paid only 50 percent. Although 23 percent is subtracted from the honoraria in the latter case, it helps a fellow member make a living and saves professional embarrassment in the process.

Add to these honoraria the 5 percent or so from the Co-operative Advantage Fund that the language professional can use for professional development workshops, collective insurance premiums, or for other work-related advantages, and the pay system is complete.

For more information, for more on the COTRAD Translation Cooperative., the International Cooperative Alliance. You will find on this site numerous internal and external links on a variety of coop-related subjects. Reading ICA’s « Declaration of Cooperative Principles » is a must. Among other functions, the ICA has the mandate of representing the world’s co-ops at the UN., the National Cooperative Business Association in the US., the Canadian Co-operative Association., a Canadian Counselling and Research Co-operative
You may also want to search the Web for “icagroups” (International Cooperative Alliance Groups); “cooperatives US;”“workers’co-ops”US; etc.; the USDA for its section devoted to cooperative businesses; and various American universities for their Co-op Management Programs—their sites often have links to successful American cooperatives or co-op resource groups.