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266. Is bigger necessarily better?

During this year’s SCAA Symposium and Expo, and the inevitable slate of follow-up calls the week after, the issue of size kept coming up in my conversations.  There was the roaster that bemoaned how small it was, wishing it could do more to meet the demands of its partners.  There was the roaster that felt like it was just getting big enough to do the kinds of things with its partners it always dreamt of doing.  And there was one importer that suggested its growth had positioned it in a sweet spot from which it could take more risks with its partners.  These conversations evoked past discussions I have had with coffee importers and roasters around the issue of growth, and suggested that when it comes to making partners happy, bigger may be better.

Years ago, I had a few conversations with a noted importer that was in the midst of a strategic planning process.  This importer was committed to direct and transparent trading relationships.  It did not move a huge volume of coffee.  In general terms, it was at a kind of Jerry Maguire crossroads, deciding between two broad courses of action — deepening its relationships at origin or growing its share of the marketplace.  A significant number of its trading partners suggested that if it was seeking impact at origin, the best thing it could do was to triple its volume.  They loved the trading model.  They couldn’t get enough of it.  Literally.  They wanted to migrate more of their overall volume into the kind of trading relationship this importer offered.

I struggle with this issue, because I do believe that in many ways the Catholic intellectual E.F. Schumacher was right when he suggested that Small is Beautiful.  I have worked with, learned from and been inspired by lots of roasters that are small, indeed, doing the right thing by farmers and managing to turn a profit in the process.

But it is hard to deny the benefits that come with growth when it is paired with thoughtful reinvestment in farmer-focused innovations in research and programming.  Growth can mean more resources to put into action all the good ideas that direct trading relationships tend to foster (and the ability to attract investors looking to leverage their own resources).  It can mean getting more of the right people around the table for innovation (which fosters further growth).  It can mean more effectively projecting innovation and influencing other stakeholders in the coffee industry (and expanding impact through imitation).

For development agencies, reaching and sustaining “scale” is the Holy Grail.  The donor focused on scale might say: “You do nice work with 5,000 farmers.  But how do you reach 5,000,000?”

Small can — and does — generate great ideas and put them into practice.  Big can help get them funded and take them to scale.

1 Comment

  • Michael,
    As my CRS colleague you know that the CRS Fair Trade coffee program here in the States has been holding the tension between big and small for awhile now, especially thanks to your early leadership in the program’s design. But I will take this posting as an opportunity to reflect for your readers on some happenings in the movement that I think speak to the issue but in terms slightly different than growth of volume alone.

    Last week I had the honor of gathering with 40 or so representatives of businesses, farmer and farmworker groups, nongovernmental organizations, and academics to consider what it will take to strengthen the fair trade movement in North America. While I was cautious about the process, having been disappointed by the lack of tangible outcomes from similar endeavors in the past, I entered the process hopefully because of two key factors: the range of stakeholders was very broad. Never before had so many voices from important segments of the fair trade community, including farmworkers in the United States, gathered together. Also, the proceedings—from advance preparation to whole group decision making—were based on consensus. This combination of participation and sharing power created a platform for advancement and dare I say growth.

    On at least a couple of occasions, I had the opportunity in break-out groups and private conversations to share the quip, “Small is beautiful, but big isn’t necessarily bad.” I referred to my own personal experiences of working in an a large organization (one colleague was surprised to learn that CRS has about 5,000 employees worldwide), the success of large-scale projects achieved by development organizations and socially responsible companies, and the recognition that many big companies of today grew from small, entrepreneurial endeavors. Despite the gathering of some legendary fair traders, fully dedicated companies, and activists, the remark was generally well received with a very important caveat: that volume growth, expansion of reach, accumulation of power all need to happen on the basis of trans-formative core values and participatory decision making.

    These were not all pie-in-the-sky idealists who deny the benefits of growth. Indeed one representative from the United States shared the example that in her cooperative “small family farmer” was growing from operations with 300 head of cattle to as much as 3,000. Her point was the coop wasn’t opposed to growth but that their model had to adapt slowly and openly to the tensions, contradictions and possibilities.

    All to say, I think that your point that small ideas can be taken to scale by big endeavors is well taken. The crux of the issue, which has been the focal point of my commentary in light of Fair Trade for All, is that process is as important as product. I believe fundamentally that no matter how brilliant the idea, no matter how lucrative the initial results, if a process was ill-conceived and executed it will be bankrupt in the end.

    This, of course, holds true for the stakeholders that came together last week. We had to admit that the big guys sometimes dominated because they filled a void created in part by our inaction. An inaction that I would suggest is sometimes outcome of a f lack of clarity, an inability to follow through, and myopia about right vs. wrong. The North American fair trade movement needs strategies and structures for values-based innovation. If our process doesn’t yield results than we can’t blame the big guys.

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