Owners and shoppers of Ozark Natural Foods,
As many of you know, the Co-op was closed on Monday. The staff decided to put down their vests and stand outside to speak with owners about what they felt were very serious issues. The staff did this with the best intentions – they felt that the ownerships voices were being ignored by the Board of Directors, and they wanted to take a stand that was strong enough to get the attention of the Board, owners, and community at large. That feat was accomplished, but at great risk.
While many owners and shoppers have expressed support and stood behind the decision the staff made, we are aware that we also upset many owners and shoppers. For that, we truly apologize. It was not our intention to upset or inconvenience anyone. The staff honestly felt that we were doing a service to the owners by standing up for them. We apologize to anyone who was upset or angry.
If you were displeased with this situation, we hope that you will give the Co-op another chance and find it in your heart to forgive us. We had the best of intentions. Now, our hope is for us to have the ability to move forward, as staff, management and Board, to work together for the betterment of this Co-op. Please join us in that effort and give us a chance to work together.
Thank you,
Staff of Ozark Natural Foods
It’s easier to go with the flow, to just put your head down and do your job than it is to take a stand. As an adult, I understand that sometimes a little inconvenience is necessary to bring about change, and that I am not the only one in the room so to speak.
While I was saddened to hear the gravity of the situation facing our Co-op, I understand that everyone did and is doing what they feel is best. I’ll continue to support the co-op and hope that issues can be resolved openly and with consideration to all.
Gee I guess since I’ve talked to lots of members who don’t agree with Alysen in Wonderland being rehired, that means I can come down, block the store entrance with my car and say that in all honesty I believe that I’M doing the best things for the members. No? You wouldn’t like that? What? You’d call the police on an Owner?
Oh, and also can I get paid for the day like you all did? And get the 30% discount on all my purchases like you all have?
Dear Staff,
Here’s my take, which I intend as part of the conversation and moral discernment. The apology you have posted here doesn’t sound like an actual apology. It sounds more like you saying you were right, but you were sorry that in being right and taking a stand, you offended some people, so you aren’t sorry for the position you took, or the actions, only the effect of your actions, which is that some people were offended.
I know negotiations like this are difficult. I’m proud of anyone who takes a stand for things they care about. I would just encourage you that, if indeed there are issues you believe need to be raised, and if striking is the best way to address those issues, then do what you need to do, and only apologize if you have realized that you were wrong.
Whenever you take a stand, it will offend or bother some people. That is the nature of communal decision-making and truth-telling.
I support our staff. We have a great store & ONF employees play a very important role. ONF staff should be consulted and listened to as their day to day awareness of issues is vital to ONF. Most owners and board members have no true point of reference. ONF leadership must consider the insight of our fine staff. As for the few who were inconvenienced – when it is snowy, icy, pouring rain, or hot as hell ONF staff is there working at your convenience.
I’m glad the staff stood up for what they believed in. There are few willing to do that in our day and age so bravo to you all. I’d much rather deal with a brief inconvenience in the interest of the long term good of the co-op. The staff is great and one of the big reasons I’m a co-op shopper and owner.
I am an owner who supports your decision and your work stoppage action. You felt the need to get the attention of management, and you accomplished that in dramatic fashion.
This was a situation that needed a strong message from the workers. No apology needed for this owner….in fact, I congratulate you for your passion. You know better than most owners about what needs to be fixed with the co-op – you’re there every day, working hard to make it a success.
I support the co-op and will continue to be an owner-shopper though all of its growing pains and difficulties. It’s a human organization, so mistakes will be made. What matters is how we deal with the problems, and move forward.
The name of the store is Ozark co-operative foods. With a strong emphasis on CO-operation.This whole episode which I really know little about,seems to me to be a childish exhibition of total lack of co-operation.Must be a lot of strong willed ego’s involved.It’s an embarrassment.
FT, Get a job @ the coop and you’ll get your discount. It was a collective decision, not one made by one person. That would be the difference. Did you read? They apologized, and I am sorry if you were inconvenienced, but thank you staff.
Since no one felt the need to reply to my email here it is on a public forum:
When my children lay down on the floor and throw a kicking, screaming fit, I do not give in to their demands. The reason being that I don’t wish to encourage their immature behavior. Apparently, the co-op doesn’t share this view. Last night you gave in to your employees’ kicking, screaming fit. The customer coming first must not be a philosophy of your organization. By continuing to pad your “slush fund” you are making your store more and more inaccessible to the average consumer. Ninety percent of families cannot afford to shop there because your general manager wants to pay off the mortgage early. You have lost the essence of what the co-op is. The essence of what it was when my mom took me shopping there all those years ago when it was a little house off of the square. The next time I come into your store it will be to revoke my ownership. I hope Whole Foods comes to the area soon, maybe they will put their customers’ needs first.
You, my friend, have lost the essence of what it means….so go shop at a national chain who would never allow a democratic process or strike to halt for a day their money making….and as a child psychologist, I fail to see the connection in the tantrum child and a tough, thought out, multi person decision…but I suppose it is all about perspective…
I support the staff members, who are at the heart of our coop experience. The board must listen to the staff. I’ve never had a board member contact me or ask me what I thought about the situation. Why are we not hearing from the board? The board gives the impression it wants to act privately and exclusively. I want a statement from the board. And I want the board to work tirelessly to meet staff and owner concerns. Otherwise, the perception remains rigidity and exclusivity.
Ozark Natural Foods
April Board Meeting
Board Meeting Minutes
April 24th
6:00pm
Board Members Present: Tuesday Eastlack, Colleen Pancake, Sue Graham, Josh Youngblood, Linda Ralston, Kathryn Scherer, Hank Kaminsky
Owner Comments: Owners present had 30 minutes allotted to speak. Each owner was allowed 2 minutes.
Minutes: Josh moved to table March minutes pending further discussion. Motion carried unanimously.
President’s Report: Josh stated his hope for future meetings going forward and noted that it is turbulent times like these that the co-op needs a board. Josh would like to continue working with Thane Joyal. He also stated, that the board needs to take time to make big decisions.
GM Report: Interim GM Mike Anzalone reported that the co-op is doing great! The open book financing has been very successfully and goals are being exceeded. The new Point of Sale system is being installed June 4th. He also noted two upcoming projects, one for the deli re-set and the other, for expanding office space.
Bylaw Suggestions: John Eldridge previously sent recommendations to board members. He advised that there are two problems where the Bylaws are not in compliance with the statute that the ONF articles of incorporation were written under. The first non-compliance within the Bylaws was the removal of directors without cause which requires cause under the state statute. The second non-compliance
within the Bylaws was that they only allow for one proxy per owner and the law says that an unlimited number of proxies should be allowed. He suggested either following the bylaws or rewriting them. The board will discuss the changes.
Discussion: There were four items of discussion:
Working Rules of Agreement:
1. Embrace honesty and transparency
2. Use process and mutual respect to achieve shared understanding.
3. Listen to the owners and act as a Board through consensus and a unified voice.
4. Review information and deliberated before making decisions, then own the decisions we as a Board make.
Reporting of closed session decisions from March 27th meeting:
1. Removal of Tuesday as President and appointing of Jim Roughton as President.
2. Removal of Colleen as Vice-President and appointment of Kathryn as Vice-President.
3. Increase of Board budget by $20,000.00 and Hiring of Ray Wymore as equity accounts coordinator. Replacing Stephanie Conway.
4. Dismissal of Alysen Land as GM.
5. Appointment of Mike Anzalone as Interim GM Position
6. Board approval required of all capital and extraordinary expenditures.
7. Free Thinker Productions would no longer be hired by ONF in any capacity.
GM position and transition- Closed session board meeting to review and clarify rationale and plans was set for May 15th at 6:30PM.
Upcoming Owner Forums- the dates for the owner forums were set for May 5, from 1-3PM, May 10 from 6-8PM, June 2 from 1-3PM.
The open session of the meeting adjourned at 7:47pm
Board member Colleen Pancake is a partner at the media group listed above. She should not have been a vendor and on the board at the same time.
This was Sues response to the attempt at removal.
Response to Garrett Brown’s Petition to Remove Susan Graham There has been much discussion about the Ozark Natural Foods’ Board of Directors and its duties. In many ways, this discussion parallels discussions in the media about corporate boards. A recent article in the NY Times by H. Hurt blames the financial crisis on the failure of many, if not most, corporate boards to simply do their jobs. ‘The boards were supposed to monitor risks, provide judgment and supervise managers on behalf of shareholders.” Ironically, “Four days before Lehman filed for bankruptcy, the CEO announced that the board had been wonderfully supportive.” In February 2012 Ozark Natural Foods (ONF) Board Director, Garrett Brown filed a petition to remove me from the board with the complaint that I was an obstruction to the functionality of the board. In his original petition, he stated that I tried to stall voting on the proposal to pay off the loan on the ONF building. The remaining loan amount is 1.9 million dollars, which includes a $300,000.00 pre-payment penalty. I had, indeed, requested the Board wait on the vote for several reasons. The newly elected Board had just received the proposal in June, 2011, with instructions from the General Manager (GM) to not tell or discuss it with anyone. The GM did not tell the Board to seek the opinion of experts as she stated at the 2012 Annual Owners’ Meeting. Instead, she told the Board if they had any questions, to come to her. The GM wanted the board to vote to pay off the building loan at the July meeting. I thought we should seek the advice of an expert regarding how much we needed to leave in reserve if we pay off the building and become debt-free. The GM said she would retain $400,000.00, which would take care of any unforeseen events. The Business Plan the GM handed in the month before she gave the debt-free proposal said $600,000.00 would be needed to cover such events. I also questioned whether it might be necessary to leave a certain percentage of owner equity in our account. And, of utmost importance, Linda Ralston and I both wanted to wait so the owners could give their opinion since ONF is a COOPERATIVE. Paying off the building loan meant many projects, like expanding into the basement, would have to be put on hold. We felt the entire membership should have been consulted, not for their vote, but for their opinion. Our request to delay the vote was ignored and the President called for the vote, stating she was doing so because that is what the General Manager wanted. The General Manager had stated that if the co-op did not have to pay the $15,000 monthly mortgage payment, she would be able to lower prices. However, when I later asked that the decision be tied to a commitment to lower prices, I was told the building pay-off was for no other reason than to simply be a debt-free company. After hearing that, I felt like we had been given a bait-and-switch; that while we were told it would then be possible to lower prices after the payoff, then were told there was to be no guarantee regarding lower prices. After looking over some specifically requested financials, I saw the huge profit margin. The quarterly reports we had been given had not shown that information. It is this huge profit that created the reserves, which made the 1.9 million dollar building pay off possible. I was surprised that I never heard an owner ask how we were able to pay off almost two million dollars when only 12 years ago ONF was nearly bankrupt. The answer to this unasked question is that the General Manager has been saving $60,000.00 a month. She even reported to the last board that we were ‘swimming in money’. At that meeting, the finance manager, Gary Cook, said if Whole Foods comes in, we could lose a third of our business and still have $300,000.00 excess annual cash flow. I investigated other cooperatives and looked up suggested benchmark figures for the profit margins. I found that other cooperatives worked with only one and a half to two percentage points as their profit margin. The 2012 General Manager’s Business Plan lists an expected profit margin of 6.8% for 2013, 6.77% for 2014, and 6.55% for 2015. Those figures do not represent lower prices at all. If ONF was a traditional, profit-seeking corporation and I were a shareholder, I would be thrilled with the picture these figures painted. Someone from ONF regularly visits the Whole Foods store in Little Rock or Tulsa and has announced that our prices are in line with those stores. I am not comforted with this fact. Whole Foods is a corporation with shareholders who expect a profit. Yet the profit margin listed on their site when I looked up these figures was only 2.9%. I brought this issue up at a lot of the meetings, which may have given one cause to say I was ‘obstructing’ other business, but I felt that this was an important concern that many owners are likely to share. Another issue raised in Garrett’s original petition discussed my feelings about the treatment of the staff. I did have a problem with the most recent employee satisfaction survey. Surveys for the past six or seven years have all indicated there were issues of favoritism by the General Manager. The most recent survey taken had only one question concerning favoritism and it was combined with nepotism, which caused confusion. Linda, Jim, Kathryn, and I wanted to use a provision in the bylaws that allows for employees who work more than 20 hours, and who have been there longer than six months, to evaluate the GM. We felt it would be helpful if the employees were allowed to do a free-write narrative to help us with an evaluation. This evaluation, or any other, was never done. I did have other concerns about the employees that take me back to the topic of the amount of our cash reserves. The 2011 General Manager’s Business Plan (page 25 – 27) discusses changes that she would make if competition comes to the area. She lists these changes under the heading of ‘Contraction’, which means benefits are ‘taken away’. Discounts would be systematically removed, starting with the deli, then the wellness discounts, and finally reducing the overall discount. IRA contributions would be lowered and possibly eliminated. Insurance benefits would be changed with a complex system for figuring out which non-management employees would retain coverage. And, finally, there would be a hiring and pay-freeze as was done when ONF first moved to Evelyn Hills. If we had more money in reserve, we might be able to handle competition without hurting our employees. This is another reason I wanted to be able to get the owners input before the ‘debt-free’ vote was taken. The GM’s contract was one more issue that was brought up. I was not trying to prevent the development of the GM’s new contract. For the record, the General Manager was never without a contract. All four of us in the majority felt it was important to follow the eight-step guideline for making a contract. This guideline was provided by the organization of consultants that are used by both the board and management. ONF pays a lot of money for both management and the Board to have consultants from this organization and it seemed irresponsible to ignore their advice. The GM’s contract automatically rolled over to a new one, so we felt we had the time to do things properly. The eight steps included evaluating the General Manager. Past President Tuesday Eastlack repeatedly has said the primary purpose of the Board is to support the General Manager. Jim, Kathryn, Linda and I believe our main job as directors is to ensure accountability to the owners. Several economists talking about the world financial situation have criticized many corporate directors for acting like cheerleaders for the CEO and being weak people who did not ask questions. This whole issue brings Ozark Natural Foods to a real crossroads. Owners must decide if they want a ‘rubber stamp’ board, or a board that will ask questions, monitor risks, provide judgment and supervise the general manager. Do member/owners want directors that represent management, or directors that represent owners? Owners cannot lose sight of the ideology that made Ozark Natural Foods so great, a store that provides foods of the highest quality at the lowest prices. More than ever, our co-operative needs the strength of oversight that will make it even stronger in a competitive world! Susan Graham
about 2 months ago · Like ·
Board meeting notes 2011 that reference the payoff
July 2011 minutes:
The board had been presented with a proposal to pay off the building in the June meeting. Alysen asked that the board review the proposal and be prepared to move on it at this meeting. Alysen had brought up the fact that the recent owner survey showed that owners‟ number one concern was prices. Alysen had said earlier that if she lowered prices with the money on hand, it would only be a short-term solution. She posited that if ONF were debt-free, she would be able to sustain lower prices. She assured the board that she would make sure there was at least $400,000.00 in reserve. The proposal also assured the three main projects under discussion would be completed before the loan was paid off. Those projects are the generator, the parking lot lights and the point of sale equipment the store needs. The pay off would include a pre-payment penalty, but that would be far less than the interest that would be paid if the loan were carried the full twenty years. Alysen had asked the board not to discuss the proposal with anyone but to call her and meet with her with any questions. Sue asked for a discussion and Alysen said she wanted the board to discuss it. Colleen said that this just was not a difficult decision. She reminded the board of our first meeting at The Taste of Thai and when she walked in, Alysen was in the middle of answering a question from Sue on what it would take to lower prices and ultimately her answer was that as soon as we pay off the building, we can lower prices. Sue said she thought paying off the building was a good idea, but was worried about having such a low reserve. Tuesday reminded her of the „never touch account‟ that was to always have $400,000.00. Sue wanted to postpone the action until there would be more money. Kathryn noted that with decreasing property values, now would be the time to buy. Linda wanted to discuss the possibility of a third approach, a Plan C, as she called it. She said she felt she could not vote for this with a clear conscience that night without researching other possibilities and without the advice of a financial expert. Linda also said there were other considerations when one talks about competition and expressed concern about the projects that could not be done if all of our money were in the building. She asked if we could please hold off on the vote at least a month. She also wanted to be able to talk with some owners about the plan. Garrett and Colleen both told her we are not allowed to talk to owners about it. Colleen said it was a timing issue and it needed to be brought to the owners before the birthday celebration in October. Tuesday reminded everyone that Alysen had told us we needed to vote in the July meeting. Sue said she thought the timing of a vote should be a board decision. Alysen said she needed the board to vote that night. Garrett brought up patronage refunds and asked where they fit in with all of this. Alysen said these are in an interest bearing account with other savings. These funds could be used to help pay off the building. Kathryn said she hears folks complaining about prices all the time and we have to get the prices down. She said this would do that. Colleen said we can do this and then we can lower prices. Sue said she loved the lower prices but was still worried about having a small reserve. She asked why the vote had to be taken that night and Alysen told her she needed to get it in the Nutshell and work on the capital budget. At 9:32 Colleen moved to accept the proposal to buy the building with a second from Kathryn. The motion carried 3 in favor, two opposed. Meeting adjourned at 9:40 p.m. Executive Session: During an executive session, the board discussed potential candidates to fill the board vacancy. The board returned to open session. Colleen made a motion to nominate Jim Roughton and was seconded by Garrett. The motion passed unanimously
about 2 months ago · Like ·
I’m cool as long as the stunt didn’t further push back patronage refunds…
I’m with Clint, I feel like this apology was written more for public relations than a sincere letter. I’m still going to move part of my shopping to Cooks Natural Foods in Rogers, rather than spending all of my dollars with ONF.
Perhaps the next time you guys decide to “look out for our best interests” you’ll make sure we know what’s going on at ONF.
And yes, Leigh Barnham we know that when it is snowy, icy, pouring rain or hot as hell ONF staff is there working for us. We also know that they are paid to be there and they are working in air conditioned/heated comfort. We PAY for them to be there, we PAY for our store to be open and if those things can’t happen, I can take my shopping elsewhere.
Amanda, refunds are still set to be out to everyone by the end of June!
Most feats of importance that are accomplished come at great risk…….good for you guys…..Bravo!!
Balance folks! All previously noted issues are important. Everybody has a piece of the truth here. Learn from Sam Walton on the price issues…..pay the building off comfortably….take care of the staff and the owners….for goodness sakes give the owners better prices. Many are shopping elsewhere and vowing to see your best intentions pave the streets of hell. Just do it! Let the Board do their job and all parts of the whole function as a coop!
I suppose asking for forgiveness is easier than asking for permission. The staff has cost the coop more than just thousands of dollars in present and future lost sales. This egregious stunt has also cost our coop many owners. When the 57 staff members, along with the interim GM who allowed this to happen, make monetary restitution along with a sincere effort to regain precious lost owners, then maybe your apology will be believed and accepted. Until then, it is nothing more than a pathetic attempt at bettering public relations.
Just to clarify, full time staff members recieve a 22% discount, not 30% as was posted earlier. And everyone gets paid to work at their job, not just people who work at ONF, so I feel like the fact that the staff get paid to be at work is kind of a given. So that’s not much of a point…
Upset because ONF was closed for a day? Not even close. I am upset by the immaturity of nearly everyone involved with managing and running our coop. From attacks on individuals to an irresponsible and highly improper walk-out by employees I have seen nothing professional at any level.
There’s no argument, I think, that there are serious problems at the board level and those are urgently in need of attention. But I am just appalled at the behavior of ONF’s employees and the support they’ve received from some owners.
I have been a union member – United Federation of Teachers – in New York City and a union delegate from my school. I have walked a picket line. I’m completely sympathetic to the needs and aspirations of employees. I have also been a business owner here in NW Arkansas for more than 25 years so I’m not unfamiliar with employer-employee relationships.
Of course employees have a right to strike. If, after negotiations, they feel their grievances have not been adequately addressed, their only recourse is a walk out. Employees strike to support their demands as employees, demands that reflect their working conditions and compensation. The ONF staff acted as a group of owners, not employees. They did not present their grievances to the board and, as a group, try to negotiate with them (in fact their grievances had nothing to do with their working conditions). The ONF staff acted as a group of disgruntled owners. Do we really want to countenance this display by a group of owners? Would we feel just fine if some other group of owners, acting out of sincere belief that they have only the best interests of the owners at heart, blocked entry to our store because they don’t like the way the board is acting? The staff’s “action” was nothing but strong-arming, no matter what nice words are put to it. Their behavior was un-democratic and should be condemned. Targeting individual board members – red circles around their head-shots – is positively frightening.
To put things in the simplest terms: we, the owners, elected a board to make the decisions that make ONF run. If these representatives are doing a good job, we re-elect them. If we’re dissatisfied with the job they’re doing we vote them out of office. Short of legal malfeasance or prescribed ethical transgressions by any particular board member they are ours for the duration of their office. We can, and should, tell them what we think but we cannot tell them how to vote and we certainly can’t remove them from office because we disagree with how they’ve voted or acted. They are elected to assess the business of the coop and make what they consider wise decisions. If we don’t like the way any of them do their jobs, we can elect someone else at the next election. That’s how a democracy works.
The board members were elected by the owners therefore owners should be the only ones responsible for their removal-as far as the building being paid off I feel the terms and liabilities of such an action should also be a decision of the owners,it is a decision that should be explained and voted on in a ballot.Sue Graham’s comments make sense to me.
22% or 30%, thats pretty much unheard of discount-wise, and along with all the other benefits the employees receive working there, I find it a slap in the face that they could opt out of work for fairly petty reasons (from an employee standpoint). Probably a bit of bitterness comes from myself having applied to work there a couple of months ago, when I was told hiring is rare because the turnover is so low.
Thank you Bob Billings. I agree with you 100%. The staff themselves has severely hurt the coop with their childish behavior.