Measuring mutual value

The Mutual Value Measurement (MVM) Framework helps co-operatives and mutuals (CMEs) to measure their total value creation through a set of common dimensions and shared language about measuring and reporting mutual value.

The MVM Framework uses six dimensions to cover the unique areas of value that CMEs generate.

MVM dimensions

MVM Dimensions

Commerciality

CME members are commonly provided with direct and/or ‘in kind’ economic value. Direct economic value may take various forms such as providing members with products and services that are essential for the operation and success of the business, as well as numerous cash-based savings such as special discounts and sales, rebates or vouchers.

‘In kind’ economic value can be generated through offering members with products and services at lower prices or higher quality than would otherwise typically be available. Some examples include cheaper home loan rates and insurance premiums, bulk purchase discounts, and locally-based and highly trained staff.

Shaping Markets

Across CMEs, mutual value may arise from maintaining a substantial market presence – sometimes referred to as the ‘value of existence’. One aspect could be playing the role of an 'honest broker' to prevent or circumscribe price gouging, disrupt existing markets that fail to meet consumer demands, and to provide greater collective bargaining power. Another aspect is providing products and services that may otherwise not be available, especially if they are perceived as unattractive from a narrow commercial perspective. Beyond the value of existence, offering alternative business models through providing traditional products and services in potentially distinctive ways, testing new business models and providing proof of concept for emerging innovative products were seen as other ways to shape markets.

Member Relationships

 In order to build and maintain meaningful and ongoing member relationships, having open and honest communication between the CME and its members is crucial. This can be based on providing a basket of products and services to members, particularly items that are tailored to member needs and/or are exclusive to members. Providing frequent opportunities to communicate with members through formal and informal face-to-face meetings are some other ways to solidify member relationships.

Linking members to decision making is important in terms of owner governance.  Involving members in decision making, and through incorporating the members' viewpoint into managerial decision making and thinking.

Community Relationships

This dimension recognises the importance of investing in and delivering benefits for the broader community. Across CMEs, the scope of community benefit is understood in various ways, extending either to the immediate family and interpersonal network of members, to specific groups in the community or to an entire geographic area. Delivering community benefits also involves direct financial investments, that are available not only to members but the wider community. This could be provided in various forms such as sponsorships, the provision of needed education, advocacy and infrastructure.

 CMEs may also play an advocacy role or empower individuals to bring about change in society.

Ecosystem and Reciprocity

Unlike pure competition, CMEs understand mutual value as the potential (either desired or undesired) for all parties to be able to benefit from being stakeholders of the CME. The importance of reciprocal relationships to CMEs is often expressed through the emphasis placed on sustainable growth. Growth is related not only to the CME itself, but it is also spoken about in terms of growing the ecosystem of which the CME and its members are a part of.

For CMEs, growth is not a straightforward goal, as it is in many for-profit organisations. Instead, growth is depicted as a strong sign of a well-functioning set of reciprocal relationships and a virtuous circle, which can be evidenced through an increase in membership numbers, revenue, profitability and/or the number of products and services provided.

The Mutual Mindset

The term mutual mindset forms the foundation of the five dimensions previously discussed. This term refers to the distinctive ways of operating the organisation, particularly with emphasis given in CMEs to act more ethically and responsibly in contrast to commercial organisations. As CMEs are there to serve members and the community over the long-run, they may be perceived as more stable and resilient to short-term shocks than comparable non-CME organisations. The mutual mindset dimension is about doing the right thing, long term focus, being trustworthy, and staffing and governance.

How the MVM Dimensions work together

MVM dimensions