A review of ‘Effective Capacity Building in Non-Profit Organizations’

 

In this post I would summarize the main points of this week’s assigned readings and apply it to my venture.

The reading, ‘Effective Capacity Building in Non-Profit Organizations’ talks about building capacity and its importance in any venture and especially non-profit ventures. Since my venture is a social venture, there are many pointers one I could incorporate into my organization, especially at a stage where I am setting down processes and administrative structures.

The authors argue that most non-profits tend to focus on the goal and the means to achieve it rather than building up an effective capacity. This could be due to the fact that most donors want to see tangible results – the so called “brick and mortar” effect. This is also helped because the link between building capacity and increased social impact is not seen very clearly. However the authors quote many examples to back their claim that building capacity is essential for a successful non-profit. The authors propose a capacity framework

• Aspirations: Purpose and Objectives
• Strategy: Means to achieve the aspirations
• Organizational Skills: Planning, Resource Management, Performance measurement and networking capabilities.
• Human Resources: Staff and volunteers.
• Systems and Infrastructure: Physical infrastructure, processes and technological assets.
• Organizational Structure: How the company is organized.
• Culture: The thread that binds the company together. Behavior, Norms and Practices.

So how would I adopt these 7 principles into my firm?

Aspirations: We addressed aspirations last week, where we had a detailed look at mission, vision and goals.

Strategy: Having defined the mission, vision and goal very clearly, I how have to decide how does my venture go about achieving them. Keeping in mind that I want to maximize social impact (of lighting people’s life), the main strategy of the venture must revolve around networking with villagers and setting up distribution channels. To do this I propose to divide my venture into business segments by geographical regions within the state of Karnataka. I would propose an initial division by the number of districts in the state and assign one team per district. This gives a total of 30 working teams. Each of this team is assigned the specific goal of maximizing the sale of Solar Lamps. A half-yearly performance review is done to evaluate the progress of each of these teams. Monthly team meetings are held to motivate, correct and discuss strategies/ share learning’s. It is important in this exercise to underline the fact that performance is NOT evaluated based just on the number of lamp sales (because the teams might find a way to sell it to a wholesale market which would defeat the purpose of the organization). Performance would be measured based on the number of households who have been provided light and the reach of the team into previously un-explored areas.

Organizational skills: This point overlaps with the previous point to some extent. But one fact that must be underlined is that the importance of creating local networks. This is the key to my ventures survival. And this cannot happen without every member sharing the vision of my company. The real question is how does one ensure that this happens? This is where, linking the performance of each team to the ability to establish sales in previously unexplored areas becomes even more important. However I am yet to develop a quantifiable, measurable indicator to do this.

Human Resource: The key to my business. Human resource must be local to the districts they are from. There is no way a person from the urban background can relate to rural problems (and vice-versa). This makes it very important to assign the right people to the right locations. Secondly, motivation is something that must be kept high. A news letter can publish comments/feedback from satisfied customers and this can be directly attributed to the teams. There must be a general “feeling” in the organization that the organization is run by the teams and not by the CEO. A flat working structure must be maintained. Another possibility is the fact that I (the CEO) spends 2 days each month with one team, doing what they do, to motivate the staff and better understand the problems they face. I have found, in my previous large organization, that there is a clear disconnect between the policies of the higher management and the actual ground realities. This causes a HUGE loss in motivation among colleagues. The common complaint is, “What do those guys, sitting in the boardroom know about what’s out there”? This attitude must be avoided at all costs.

Success must be celebrated together and so must failures. Responsibility must be shared for both among every single individual.

Systems and Infrastructure: Being a social venture with a small capital, this is the point where we could go wrong. In order to minimize costs, it can so happen that we do not pay the infrastructure as much importance as the other fields. But this is the ground reality and this is a constraint.. Having said that, any infrastructure that is seen to contribute to the social impact cannot be denied. Transportation to each of the teams, good housing in the rural areas, need to be set up. This also means setting up branches in each of the districts, which I had not previously factored into my economic calculations. This now means that there is a correction in my estimates. With regards to systems, I believe I have addressed the processes involved in timely reporting and the general method of flow of information between the teams and the management (I dislike this word, but use it more in the context of “Central Node”).

Organizational Structure: I have addressed this in each of the above points.

Culture:  The crucial aspect of my organization. I have addressed this before, but I reiterate that it is imperative that my organization tries to give a feeling of a flat structure. This is a good way to keep motivation high. At no point must any of the colleagues feel that they are being coerced to do things. Work must be out of mutual respect to each other.

Having addressed each of the above 7 points, I notice that there is a lot of flux between each of the above areas. Is this okay? Or is it important to maintain the clear distinction between each of the 7 areas. What do you think?

I tried to also adopt the ‘McKinsey Capacity Assessment Grid’ to my firm. I would refrain from posting the results here, as the post would run into pages. However the general observation is that the venture ranks between 1 and 2 for most of the categories.

As the venture development stage progresses, I cannot but think of the complexities involved in setting up a venture. I had always thought it to be easy, requiring only motivation. But now, the readings, the classes and the exercises have given me a good foundation to incorporate strategies that I need for my venture. That is, after all, the value of education.

On capacity building

I found this article harder to decipher and understand than the articles we have read so far. The points argued here were not as tangible as the earlier concepts we discussed, at least to me. Also, I had to distinguish what would work for a non-profit and for a for-profit given the article is for a non-profit context and my venture is probably going to be for-profit.

This being said my key impressions:

-Continual revisiting, rethinking and revising your goals and along your strategies and tactics.

-Experienced and good management

-Patience and persistence

Planning Ahead for Organizational Capacity

Like many of my classmates have indicated, I have a lot more in the way of plans and presentations that I do actual organizational capacity. That's not unexpected, though--we're all students starting with an idea and building around it, so of course the plans will come first. The ability to plan ahead and see the organizational capacity we'll need to develop, however, is one of the biggest differences between a new entrepreneur and an experienced one. The experienced entrepreneur already has a sense of what the organization will need to look like in the near and not so near future, which would give him/her better guidance in what needs to be done to get there. For new entrepreneurs, however, everything is completely novel.

Being in the new entrepreneur camp, this is something I find the most difficult. When speaking with people about what I'm trying to do with onlyinpgh, I feel very comfortable--as Professor Zak has stated in the past, we are all the world's leading expert in our venture. When talking about the mechanics of how I'm going make it happen, though, I quickly lose confidence. I've never led an organization before, and given that there are no policies or procedures to fall back on, I feel like I'm moving forward by the seat of my pants.

I've read a couple of books that have been helpful in this regard. One in particular is "The E-Myth Revisited" by Michael E. Gerber which suggests laying out the organizational structure from day one and filling it with names as the company progresses. Another I've recently purchased is "The HR Toolkit for Dummies" which has a lot of great information on how to do all the nitty-gritty admin and HR stuff we'll need to do when starting to hire employees. The hardest part, though, is finding time setup all the organizational infrastructure in advance of actually having people.

Anyone have any suggestions for how to carve out time for building capacity?

My Organizational Capacity Assessment

The article on capacity building in non-profits organizations, while not providing a strategy that would be directly comparable to one a for-profit venture like mine would adopt, nevertheless contains some interesting insights about the underlying organizational structure required for growth. The idea of capacity framework pyramid with higher level and foundational elements tied by an overarching organizational culture strikes me as pertinent to any company, non-profit, etc. and a good way to analyze my venture.

Like a lot of ventures that are just starting up (if I can even say that- it will probably be a few years before I could pull together the resources and planning for a project like the Foundry Lofts idea), I feel like my plan is long on the higher level parts of the capacity pyramid and short on the foundational parts. I have definite aspirations for the Foundry Lofts project and more generally for a business specializing in green/sustainable preservation. Through my work in this class, I am actively developing a long-term business strategy. At the same time, however, I don't have the human resources (a team with specialized skills in green preservation), systems and infrastructure, or organizational structure.

Related to what I posted last week about the development of a working team, I think this article on capacity also highlights the fact that, if you don't have the foundation in place (i.e. the right people in the right organizational structure to suit the venture's needs and assure smooth operation), scope creep becomes inevitable as you the entrepreneur take on too many tasks and try to make the impossible happen. There is something of a parallel to non-profits here, because many non-profits would prefer to just create new programs to address more and more issues, leaving the new work to the same people who can become overwhelmed. This is something I want to avoid; a somewhat large-scale redevelopment project like the one I have outlined through this class requires a great team, a solid foundation.

Capacity building and my social venture

Due to many reasons, non-profit organizations tend to focus on creating new programs and keeping the administrative cost low instead of building the organizational capacity to achieve their aspiration effectively and efficiently.

One of the first guidance that the professor gave us at the beginning of the course was “Think Big.” This concept grabbed my attention. Aiming for big is important. The paper “Effective Capacity Building in Nonprofit Organizations” is about that, building the capacity to achieve the big aspiration.

The paper mentions seven elements for building the capacity of an organization, and then, supported by real examples, the paper concludes with three lessons learned:

- The act of resetting aspirations and strategy is the first step in improving an organization’s capacity. A new aspiration or strategy can only be transformative if it is then used to align the other aspects of organizational capacity.

- Leadership and good management is important to make capacity building happen and are willing to “own” it and drive it down through the organization.

- Patience is required. Nonprofit managers and related people need to set expectations accordingly.

Having a software engineering background, I have learned about capability models in software organization. They go through several levels of capability maturity. I could relate the paper with the capability maturity models in software. In these models, being the most prominent the CMMI (Capability Maturity Model Integrated) [1,2], the capability is represented in 5 different levels. The highest level is the one that innovates and asses itself by conducting analyses.

I found many analogies to the building capacity for non-profit organization where the organization increases capacity by addressing the seven interconnected elements.

From my “Senior Force” venture perspective, the paper gave me guidance on the aspects where I should put my eyes (or ears) on. My goal is to start locally but within two years cover global market. Said that, I must have in mind capability building for the venture.

Given the phase that the venture is in (starting phase), the elements that I should focus one are: aspirations, strategy, human resources, systems and infrastructure, and organizational structure.

• The aspiration has been dealt with the Vision in previous week.
• For the strategy, I believe I should make good use of partnership with other organization. This will help the venture increase its visibility in the market. For the purpose, a good win-win strategy should be devised.
• For me, the human resource is one of the most challenging problems. Getting the correct people to work with me is not a trivial task, but indeed an important one.
• In terms of systems and infrastructure, the main activity to focus is the planning and decision making. The venture will require a good planning where the scare resources (time, people and money) are optimally used.
• Also at this stage well defining the organizational structure could be helpful to prepare for the growth. The required roles

The other two elements, organizational skills and the culture may be dealt as they come along.

The paper gave me good starting point for the capability building, but I still feel it somewhat abstract. For example, how do I keep a coherent action for the strategy? How do I implement an organizational process? Is it documented? How the knowledge is diffused (or transferred) within the organization?

One of the characteristics of good startup-CEO is to be able to learn on the job. So that is what I am doing (and keep doing), learn as I go. For the mean time, I will use the papers assessment grid to guide myself in the capacity of the venture.

References

[1] Mark C. Paulk, “A History of the Capability Maturity Model for Software,” 2009

[2] CMMI® for Development, Version 1.3, SEI, 2011

Capacity Building - A new perspective

Until today I had always linked the term capacity building to Human Resources building or scaling up. I did not have a holistic view of the term capacity building. This reading refreshed my views on the term "Capacity Building" in the context of not-for-profit organisations. The capacity framework diagram gives a birds eye view of the basics of capacity building.

I also had the impression that capacity could be built only if you had funding/resources. But the case study on the Vera Institue of Justice proved me wrong by demonstrating how innovation could be used to effectively reorganize and restructure the company. Some of the tips I picked up for my social venture from this was

• Creating Volunteer opportunities (Powerful Schools)
• Creating Strategic partnerships/ Alliances ( America's Second Harvest)
• Constantly measuring performance/progress using any methodology like Balance Score cards ( Citizen Schools)

These sound practical ideas could help us develop our ventures into organizations that not only deliver but also perform well internally. I read another paper on capacity building by the Urban Institute and the authors had the view that capacity building was very important for not-for-profits as they interact closely with the community. Working for problems faced by society not-for-profits have the closest link to the community and have constant interactions with them. To enable societies to perform better and play an active role in contributing to the community, it is important for not-for-profits to have great capacity building skills.

I also found the Capacity Assessment Grid, a rather useful and easy tool which could help identify gaps in capacity building process in all areas. I would definitely use this tool in the early stages of my venture to identify strong and weak areas in capacity building.

Though I have learnt a lot from this reading , I am confused as to whether capacity building is something which is done while an organization is being launched or when its growth face begins ! It would be great to have your views on the same.

Organizational design for building capacity

In terms of building capacity, the impact of Driving for a Better Future will be directly proportional to the number of low cost automobiles it’s able to deliver to its target population. Where the goal is to avoid large outside investments, growth will also be directly related to how quickly automobiles can be received, repaired, and delivered to a qualifying customer. Inventory flow time reduction is critical to reducing capital costs. This is outlined in academic theory, such as Little’s Law which states that the average number of cars being repaired will be dependent on the average time to repair and the arrival times between orders (demand). I plan to run the internal aspects of the business as an engineering project whenever possible because this is what I’m most comfortable with as the senior leader. A car at the garage will be costing me money, instead of being in the driveways of people that need them. This will be the primary justification behind development decisions as the business grows.

This realization helped me define another critical member of my management team will need to be an expert in repairing compact cars with particular familiarity in finding fast, inexpensive repair solutions. This person will mostly be required in developing a ‘streamlined repair’ and ‘standard fixes’ process, a sort of list that offers volunteer mechanics a carefully outlined, but general process for completing a project. It will also outline the optimal fixes for common issues afflicting the secondary market cars we’re targeting. The expert mechanic and expert auto appraiser will also be required to develop a process for finding the most economical cars to purchase. If purchasing evolves into the dominant acquisition strategy, the process will need to carefully balance finding cars that have been totaled due to high repair costs, while still being economically feasible to repair. In this case, the repairs needed to make the car roadworthy will most likely be labor intensive tasks where the primary cost driver would be the hourly charges of a professional shop.

Although the aforementioned assessments about the cost to repair and the basic process of restoring a car would be comfortable for me to manage on my own, it probably wouldn’t be feasible at any significant scale. I could process one car at a time, but if there is as large of a market as I suspect for Driving for a Better Future, there will be enough demand to support much higher output volumes. In this case, the last two weeks of course materials stress how important it will be to get expert input on the repair and acquisition processes. We also discussed the importance of a knowledgeable team with just one lead decision maker. I plan to fill the latter role. Even if it needs to be treated as a temporary out of pocket expense, hiring the right resources (such as was summarized by Samaritan Inn hiring a 28 day rehab program expert) will dramatically improve the growth of my business. It will result in a higher quality and lower cost, alongside the ability to deliver more vehicles to the customers that need them.

Moral Engagement vs. Situational Variables

The academic paper entitled "Motivation To Create Social Ventures: A Theory of Moral Engagement" develops the theory of moral engagement to explain the motivation underlying the creation of social ventures . The author attempts to answer the question: Are social entrepreneurs driven by selfish interests or by a sense of mission - that is the betterment of the world?

Within the executive summary, moral engagment is defined as "a cognitive process in which the individual feels strongly committed and determined to create a social venture to address a social need." With the definition, the author leads the reader through the reasoning to reach the conclusion as to how moral engagement is "the main determinant of people's intention to start social ventures."

Social Entrepreneurs vs. Business Entrepreneurs vs. Philanthropists

Social Entrepreneurs:

• focus on creating social value
• attempts to fullfil a social need
• wealth is just a means to an end
• the primary objective is social creation
• involved in the creation and management of the social venture

Business Entrpreneurs:

• focus on creating economic value
• wealth creation is the way of measuring value creation
• desires to exploit a business opportunity

Philanthropists:

• only provide resources to help address social issues
• provide resources to help social ventures accomplish their mission, but they are not themselves involved in the management of the social venture
  

The above figure attempts to denote the process in which a social venture is created through the realization of unmet social needs.

The author notes: "In developing a strong sense of moral engagement, social entrepreneurs are more motivated to help others than to fulfill their selfish interests." This statement leads me to ask the question, can a social venture idea begin out of selfish interest?

LinkedIn founder Reid Hoffman’s 10 rules of entrepreneurship

http://venturebeat.com/2011/03/15/reid-hoffman-10-rules-of-entrepreneurship/

Deliberations on Business Systems and Infrastructure

Before reading the cases presented in the article of Effective Capacity Building in Nonprofit Organizations, I have been wondered how I could ensure that my venture attracted enough funds, and with limited number of initial donations coming in, where I shall use them on. Capacity building was not on the top of my list, as it requires a large amount of money and such money is from people who resonate with the mission of the venture to help the uninsured get medical services, but not with improving the “operating capacity” of the organization. However, after reading through several cases, I believe that it is a must and strategic task to do for the venture.

The Samaritan Inns is a great eye opener for me, as it did something that the government was unable to offer and excel. My venture is very similar to it on this aspect. Due to huge cost, tight federal budget, complicated budgeting process and various stakeholders involved, offering health insurance is not something that the government can achieve in the short term. My venture needs to pick up where service is left, i.e. those who are not covered by any types of insurance. I also need to figure out a way to cover other possible medical costs incurred on my customers. What Samaritan Inns offered was huge for participants, by expanding the government program with housing facilities and treatment facilities. After the funding for 28-day rehabilitation program was discontinued, they decided to enhance their capacity by providing a full-set of services for the addicted.

This is something worth thinking for my venture. Shall I offer a full-set of services and products to help the uninsured reduce medical costs? If so, how and what are the steps to realize it? It requires much planning, networking, skills and obviously lots of money. To realize it, there are a few other things that the venture needs to offer to help people reduce medical costs:

• Partnering with community health agencies and clinics to offer uninsured medical services and needs
• Educating how to use insurances to reduce costs: e.g. choosing hospitals and physicians for different services
• Building healthy lifestyle and maintaining scientific diet: tips on food, exercise, fitness, drug prescriptions

In essence, the vision of my venture stays the same, making it possible for people to get medical services. The strategy may need to expand from offering health insurance to other programs like those mentioned above. These new programs will come to full play gradually, with the first two realized within the first two years of operation, and the third offered gradually since the middle of 2nd year.

Planning of Capacity Building
To understand where my venture will stand from day one to the future, I will apply McKinsey and Company’s evaluation tool for measuring capacity level against my venture. This tool will be available to all founders from day one and they will be asked to score the aspirations, strategy, organization skills, human resources, systems and infrastructure, organizational structure and culture. Key findings from the evaluation will be well recorded and analyzed for improvement in Capacity Building Log. I have designed this log to keep track of scores from each founder and their comments on future improvement. (Due to space limit, the Log will not be presented here.)

Arrangement on Using the Capacity Building Log:
• Evaluation is due once a year consistent with the end of fiscal year period. The scoring tool will be available to all founders and staff members three months before deadline.
• Score entered by staff, if any, will altogether account for a weight of 20%, while each founder’s opinion accounts for 16%.
• All scores and comments will be entered in the Capacity Building Log.
• All founders will sit together to analyze what these scores mean and to especially focus on written comments on improvement.
• Based on analysis of the scores, all founders will draft a plan to enhance the capacity of the organization to be approved by the Board.

Having understood the importance of building capacity for a venture philanthropy, I am wondering how I can strike a balance between using donors’ money and improving the venture for long-term and bigger benefits. To ensure the success of initial launching of the venture, shall I focus on the program first, at least within the first 6 months or the first year? Or shall I start from get-go to build capacity? Above all, important and beneficial for the venture, capacity building would not mean much if the venture cannot be launched or operated successfully in the first place.

Whom Should You Hire at a Startup? (Attitude over Aptitude)

http://techcrunch.com/2011/03/17/whom-to-hire-at-a-startup-attitude-over-aptitude/

Building my company’s Vision

 

I would spend the space and my time today discussing the highlights of the article ‘Building Your Company’s Vision’ and applying it to not just to my venture but also my own approach to starting this venture.

My first thoughts as I read the article were quite simply, “Wow”. The article opened up several avenues of thought which I had simply not cognized in my earlier research. The article broadly talks about setting a company’s vision. A vision, the article says, is comprised of the following components:

Core Ideology

“It is more important to know who you are than to know where you are going as the world around you changes”.

A profound statement. This statement helped me set the bedrock of ideology of my venture. It is important that this core ideology does not change despite the company’s journey into the future. What is the one ideology that I will not compromise under any circumstance? This was a very hard question. This was when I realized that for my company, Light My Home it would be “To bring a light to every single dark home”. Simple, short and direct. Yes. This felt right.

Core Values

“ The key is not what values an organization has but that it has core values at all”

“To identify core values push with relentlessly honesty to define what values are truly central”

“These should be so fundamental that you would hold them regardless of whether or not they are rewarded”

The above lines from the article stood out from the rest and helped me on my way to determine my company’s values. I tried to come up with my company’s values from these inspirational lines:

• Profit only from actions that are beneficial to the society.
• Making an emphatic point that India can be energized despite all odds!
• Business without excuses. Social impacts without excuses.

Big Hairy Ambitious Goals (BHAG)

BHAG are essentially short term goals as opposed to the never attainable Company’s ideology.

• Become the most widely available low cost solar lamp distribution company in India.
• Make high tech solar lamps as widely available as a tooth brush.(It must be in every hand).

Personal Reflections

This article not only has major implications is setting the moral backbone of the company, helps me hire people who match this goal but also has major implications in my capacity as a leader. This article has got me asking questions (The 5 Why technique) like “Why do I really want to start this company”. No this is not a philosophical question. It is, I believe, very important to articulate my motivation is starting this company.

The article also sparks off thoughts is asking myself what my core values are as a leader of this venture. What personal values do I set for myself? Are they/ Should they be in line with the company’s goals? I think that these questions are very pertinent and may just decide the motivation and energy that we put towards all our social ventures.

Also, what if the core ideology and the core values jeopardize the very existence of the company itself. What does one do then? Does one abandon ship and bail? Or does one go down with the ship on principles? These are larger questions each one of us must answer in the early stages of our ventures. However uncomfortable they might be, they must be answered by keeping our ego’s and biases aside for a few minutes. Hard, but helpful!

In It For The Long Haul

While completing the readings for this week, the article that stood out the most was "The Team." As I become weary of the lack of fresh ideas that I feel I am developing, I have come to realize that I do need help, essentially from my own "team." Effectively, my own team will assist me in what I like to think of as "creativity block" as well as the development and maturation of "The People's Station" in order to bring it into realization. The portion that has proven the hardest in thinking about the team, as the article noted, is thinking of them as equal shareholders in this venture, as I hold the notion "it was my idea." However, this equality is crucial in the development process and sustainability of this venture. As I reflect on this article in choosing my team, I must ask myself what qualities are the most important in a person in order to develop this venture into a success?

Building an Organisation.

• http://www.inc.com/inc5000/2010/quiz-whats-your-hiring-style.html

The quiz on this link is for already existing businesses which are up and running. But I think by doing this quiz it helped me think about these questions as to how I would hire people and at what level I would like to be engaged in the hiring process. Its a great way to start your HR Planning. I do agree with the article in our reading on having a five cornerstone team , but having those five people from your close friends and family according to me is not a good idea. Having a few people from family and friends is fine but not too many. As it complicates relationships and makes doing business difficult. I would ideally like to hire from various backgrounds to have a creative and innovative workforce.

Some other web pages that had some useful information:

• http://www.inc.com/guides/2010/06/tips-for-hiring-great-employees.html
• http://under30ceo.com/top-5-hiring-tips-for-start-ups/
• http://boss.blogs.nytimes.com/2011/03/01/the-hidden-costs-of-bad-hiring/

Core Values:

Help people discover sustainability in every day living.

Help children develop their entrepreneurial skills.

Innovation is the main cornerstone of our work.

Profit, from work that benefits humanity.

Core Purpose:

To be a role model and tool for sustainable living practices in India.

BHAG - Big Hairy Audacious Goals:

Introduce Sustainable living as a way of living in Indian homes and corporations.

Vivid Description:

We will deliver services to businesses and homes in India that become the standard for sustainable living worldwide using Innovative techniques to adapt to culture change. In affect preserving the earth for future generations.

As entrepreneurs we are investing so much of our own personal time and effort in building an organisation, will giving someone an equal stake in the business ( as the article suggested) evoke the same passion and feeling towards the organisation? It would be great to have your thoughts on the same.

Management Team

Building the management team has been something I've been struggling with since started out with onlyinpgh. While the 5-headed structure as described in "The Team" certainly covers the things that a business will surely need, it seems to me that it isn't necessary to have all 5 people from the outset. There are certainly cases where smaller founding teams built a startup and hired people to fill the other roles mentioned, and 5 just seems like a large number of founding people.

Where I'm at, however, is certainly not optimal. I am the only "founder" of onlyinpgh, and while I have no problem with giving equity as part of a compensation package for talented people, it seems like after running the website for 2 years and working on developing the business for almost 1 year now, the founder ship has sailed.

It is obvious, though, that I need to find people to fill the other needs. I've been working with a technical expert on a freelance basis for about a month and things are going well with developing the prototype, but he's not an official employee at this point. I also recognize that I need help with interface design (that's how I translate "delivery specialist" for my venture), sales, marketing and a financial advisor. On the mentor front, however, there are a number of people that have been closely involved thus far and have already proven extremely valuable.

Some other advice I've received regarding finding founders/partners is that while it's very important, it's important not to rush. In a lot of ways it's like a marriage--you need to make sure you're compatible with each other, and that's not something that can get done hastily. It'd be great to find at least a sales person before officially launching, but my gut tells me that will be difficult to do. Otherwise, my plan right now is to hire people when I can to fill the roles as they become critical and offer them a bigger role if they pan out.

The Venture Character and Team

So, I did some mental wrestling myself to explore and define my venture's character:

Core values:

-Sustainable economic growth on all levels (individual, state, global)

-Environmental stewardship

Core purpose:

-Increase consumer awareness and proactive participation in energy conservation.

-To facilitate deployment of advanced energy technologies amongst consumers

-To bring technologies from labs to the real world

Core ideology:

-To transform energy consumers into independent and self-sustainable beings

BHAG:

-Introduce energy conservation as a major and popular global energy source

Vivid description:

Promoting energy conservation will enable balancing the negative effects of energy supply and demand dynamics. This will both boost sustainable economic growth and protect the environment from externalities.

About the team:

As of now we are two co-founders. Both my partner and I are well-rounded analysts possessing diverse skill sets in engineering, economics and policy. However, we need a strong software engineer who can build the web and Facebook app interfaces. We are currently interviewing some candidates. What I am having difficulty with the most is, should the developer be a stakeholder, an employee or a contractor? One article suggests to treat the teammates as equal shareholders but there is no consensus in the pertinent literature. I would appreciate feedback on this.

Additional Thoughts on How to Form a Strong Management Team

This week’s readings focused on how to build a strong management team for our startups. As mentioned in “The Team,” a startup management group should consist of an Entrepreneur, Technical Innovator, Delivery Specialist, Salesperson, and Financial Advisor (West 2002). The book excerpt, along with the other readings, do a good job of explaining who we need on our team to make our startups a success, but given how crucial having a good team is to the success or an organization, I wanted to provide additional information on how to go about forming a good management team.

Below is a list of articles that highlight how to attract highly skilled people who believe in your idea and can “steer it through to success” (West 2002):

· http://www.entrepreneur.com/growyourbusiness/howtoguides/article83618.html

· http://www.allbusiness.com/business-planning/business-plans-management-team/3791223-1.html

· http://onstartups.com/tabid/3339/bid/158/Startup-Founders-You-Don-t-Need-A-World-Class-Management-Team.aspx

The third article is especially interesting in that it claims that startup companies need cohesive “execution teams” rather than “management teams” and expresses additional views that conflict with the readings (OnStartups.com 2006). Does anyone know of any additional articles, blog posting, etc that offer any other views that oppose our readings? If so, please share.

Sources:

OnStartups.com. 06 01, 2006. http://onstartups.com/tabid/3339/bid/158/Startup-Founders-You-Don-t-Need-A-World-Class-Management-Team.aspx (accessed 03 14, 2011).

West, Southon and. The Team. The Beermat Entrepreneur, 2002.

Vision

Truly great companies understand the difference between what should never change and what should be open for change. Being able to manage the intrinsic value of the company and the changes in world, such as markets, technology, competition and resources.

Vision provides guidance about what core to preserve and what future to progress towards. From the reading, we are told that A well- conceived vision consists of two major components – core ideology and envisioned future. In the article on 14 ways to be a great startup CEO, the first point outlined was the need for the CEO to be a keeper of the company vision, being able to keep things on course and standing firmly on the fundamental values in which the company/ organization was built is very necessary. Have a consistent value that would always exist despite every technological, market or even leadership change. As stated by the article, Core ideology is that glue that holds the company together as it grows, decentralizes, diversifies, expands globally and develops workplace. While core values are the essential and enduring beliefs of the organizations. The vision of a company makes us understand that while financial values are important to the company/organization there is a more deeper reason in why they exists. For example Heinz College not only exists to get our $36,800 per student tuition per year, but the core purpose of Heinz College is to create men and women for intelligent actions.

Well after doing the readings and sitting back and thinking of everyone's social venture, it is clear that while we all hope to achieve financial gain, we are also seeking to make the society a better place with our ventures. And hopefully all our visions stand the test of time.

Can a strong process substitute when there is decentralized management team?

After revising my social venture plan, my focus will be more local to the area that I grew up in. The majority of stakeholders in my business will be part time supporters who offer their services based on a passion for fixing cars and helping those in the local community who are struggling economically.

I’m actually convinced that my venture will be even more dependent on people's direct inputs than a traditional start-up business. But my challenge will be making these inputs constructive to the overall goal. It seems relatively easy to find people who can unite around a cause if it’s their primary career focus and you’re able to offer them some kind of defined salary or opportunities for recognition. In pursuing talent to help with my venture, I can’t really offer those types of incentives. The people that I’m targeting will be volunteers with families, full time jobs, or other interests. Although one of the goals is to find interested mechanics in training and vocational students, this will require an even more careful balance. The use of a school’s facilities in human resources will require special care in maximizing the learning potential for these participants and respecting that they’re not yet ‘professionals’.

In moving forward, I will need to give more definition in focus to the process of restoring the cars and set things up so that a project can easily transition between people with minimal downtime. This will help safeguard against high volunteer turnover, or simply the fact that a single person won’t likely have the time to do a full restoration completely alone. Initially, my focus will be on defining the roles and positions within my venture and in the value creation process. Each project must be broken into chunks, or stages. Because restoring a car is a complex set of activities, I eventually want to implement a stage gate process to make the strategy clear to all volunteers and ensure the most consistent path to efficient restorations. While I do need to establish ties to funding and volunteer sources to help me establish and manage the venture, these will likely be arms length relationships. In the day to day operations of my business, having a strong process should help keep things running smoothly even if there is very little structure in the management team itself.

http://en.wikipedia.org/wiki/Stage-gate_model

Building a Management Team that Can Deal with Unique Technical Challenges

A few of the points that stood out for me in the "14 Ways to Be a Great CEO" article were the need to defer to other team members in matters of expertise and to have enough technical knowledge to be able to be on top of what your technical team is doing. While I probably won't be hiring a web designer or getting involved with writing any code, I think this applies to the technical side of my business that I need to learn more about. Historic preservation is, after all, a rather complex process that requires constant oversight, and the same goes for LEED-certified construction processes. I do have some background in areas that are important to the overall business model (project management, sustainable development, and even construction to a certain extent), but I need to get some experience in historic preservation and green construction before I do anything else. The hard part won't be in learning U.S. architectural history or a list of LEED-certified building materials; rather, I think I and my venture will experience the most difficulty in keeping projects in line with their technical requirements. For example, windows in historic buildings can often be a challenge because they are simultaneously protected and energy inefficient. The venture will have to be able to navigate its way through problems like these.

When I think about creating the perfect management team, it seems to me like a four cornerstones approach might be applicable. The only thing I can see that would be different is that, given the two distinct technical apsects of this type of work, there would be a lot of overlap among the entrepreneur, technical innovator, and delivery specialist. Ideally, I as the entrepreneur would be joined by 1. someone with experience in green construction 2. an expert in historic preservation who can collaborate with me on all aspects of a project. There is bound to be some disagreement between these two conerstone individuals. The historic preservation expert will want to preserve as much of a building as possible while failing to take into account some changes that could be made to improve energy efficiency, indoor air quality, etc. In the same way, a green construction manager might be willing to sacrifice an important building feature without taking into account its importance to the overall structure.

In general, I see the organization of this venture arranged into a standard hierarchy, with myself at the top and the four cornerstones directly below me. But I do expect there to be a lot of collaboration between cornerstone individuals whose work scopes overlap with one another. There will then be two mini working teams, with historic preservation and green construction working together with me to make decisions regarding the acquisition and renovation of potential projects, and the sales and financing team working with me to develop a marketing strategy, set rent rates, etc.

The team and the vision.

Building the team and the company’s vision.

The Team

The first article “The Team” talks about the Five People: the entrepreneur, the technical innovator, the delivery specialist, the sales specialist, and the financier.

I do believe that those five people make sense, but the hard part is to actually gather those five people together (or the rest four). Since I came to CMU, I had in mind starting a venture. Therefore I’ve been looking for those other people by becoming member of organizations such as TIE (The Indus Entrepreneurs), and attending seminars, conferences and related events. So far, meeting the right people seems to be a hard task.

“The best place to look for cornerstones is among the people you know.”

Well, this means I should expand my people network. So far, most of the events I’ve been attending were academic and industry events. Perhaps I should explore social events.

14 Ways To Be A Great Startup CEO

This article lists up 14 concrete ways to be a “great startup CEO.” I believe many of them apply not only for startup, but for existing business too.

In the list, there are couple that I need to strengthen (or learn).

Find The Smartest People And Defer On Domain Expertise. Finding the smartest people has been one of my quests. I have seen many smart people, but it is hard to persuade them to join my venture, as they look for safer job.

Be A Good Link Between The Company + Investors. I still, have not had chance to deal with investors. When the time comes, I shall be ready.

Have An Uncanny Ability To Say No. Saying No is not easy for me. In the past, this meant a lot of wasted time trying to cope with dilemmas. I shall learn to say No.

Be A Great Communicator. I know that talking does not always mean communicating. Being able to communicate, to be able to clearly articulate the information, and mediate among people, is an ability that can be learned and refined.

Building Your Company’s Vision.

In this article, the authors say that a well-conceived vision consists of two components: core ideology and envisioned future.

The core ideology is a consistent identity that transcends product or market life cycles, technologies, and leaders. It in turns consists of core values, essential tenets of an organization, and core purpose, organization’s reasons for being.

The envisioned future is an audacious goal (in the paper referred as BHAG, Big, Hairy Audacious Goal), along with a vivid description of what will be like to achieve that goal.

The authors in the paper mentions that the core ideology is act of discovery whereas the envisioned future is act of creativity. Therefore, at this moment, for my venture I can come up with a envisioned future (but not the core ideology):

“To become world-wide recognized senior force market place in 10 years”

“We will provide service were senior people can feel productive and find most adequate place where they can deliver their experience and knowledge to the fullest. We will innovate to make the technology readily available and easily adoptable by the seniors.”

Personal thoughts

I had read two books from Collins and Porras (the author of the last article): “Built to Last,” and “From Good To Great.” Just as I found both books very insightful in business management, I found the article very helpful to understand about the organization's vision.

The questionnaire and simulation based approaches for discovering core ideologies and creating the BHAG seems reasonable and practical.

The “envisioning” is also consistent with one of the books I recently read “The Innovator's Way,” by Peter Denning, and Robert Dunham.

In this book, the authors mention envisioning as one of the key practices that leads to Innovation. Here, the authors describe envisioning as “Vivid, concrete, compelling stories about new worlds embodying possibilities, and means to get there.”

Said this, having a vision for the company is important not only as defining the identity but also for driving innovation.

* I strongly recommend the three books I mentioned above.

Central Worth (Core Values)

I am glad the article mentioned core values to be a competitive disadvantage. As I was reading I was thinking "Well being stubborn (as in standing for something special) isn't profitable forever, otherwise everyone would do it and be profitable." But that really does make a company special and a true force, in my opinion. If the company survives while sticking to its guns, it will be stronger for it. Yet a company could easily go under because its unwillingness to budge in the face of adversity for the sake of consistency. An excellent example was 3M, it sold several fully developed branches of its company for the sake of its core value: staying on the curve of innovation, not perfecting old products.

From building your companies vision a few ideas stem from this write up to apply to my venture.

I strongly feel to this point the core value I have naturally magnetized to is accountability and reliability. With my service I would be the supreme trustworthy source to the musical industry. The way to achieve that is through utter commitment to consistency and completely thorough work. The idea of not changing values but changing markets brings up another excellent point of evolving your business. If at one point your market does not seem to support your cause or product, it is suggested to change markets. For the sake of survival and creating more profit / social return on investment I see this as the best and very witty choice. However in the consistency of your product there maybe a 'lost in translation' moment. Not all forms and versions of your service may translate from one market to another, otherwise the new market would have been part of your old market. Although in regards to my product, consistency only would pertain to quality and thoroughness of information.

What makes you wake up and do what you do every day?

Why? Why? Why? Why? Why?

After Why? number 4, should have you stripped to your core value/s and drive. I love this proof. Why? Because it strips down layers and gets to what makes a heart beat. Why? Because flesh and blood to a skeleton of a plan fills it out but without the heart, the body of the product would die and cease to live. Why? The heart drives to sustains what all else follows. Why? That is what the heart does, it is life, the brain just interprets and is a puppet for the heart.

Why?

Core Ideology and Envisioned Future

Building Your Company’s Vision is an enlightening piece for me. It clarifies several concepts that are confusing and abstract, but are also critical for success of companies. By relying on the vivid example of Sony, I discover my venture’s core ideology and future in the following description:

Core Ideology
Core Values
• Nurturing wide partnerships with national, regional and local community leaders
• Embracing challenges and difficulties; creating the impossible
• Bringing out the best in people
• Encouraging equality and equal opportunities
Purpose
To create a healthcare system that all people enjoy quality health services regardless of income and needs, and an environment of equal access to quality healthcare

Envisioned Future
BHAG
Become the most serviceable, most caring and most accessible healthcare service source for the uninsured and underserved population
Vivid Description
• We will offer the most cost-efficient products and healthcare solutions for the uninsured and underserved in the United States;
• We will create a healthcare mechanism that all healthcare organizations rely on each others’ strengths to deliver best services for people;
• We will succeed with truly caring services and customized products;
• We will become a healthcare brand that is well-known in the country, a solid supporting harbor that poor people believe that they can always turn to and rely on;
• We will drive away people’s fear and sheer thought of lacking healthcare and medical services.

In the end of the article, it summarizes the key to success of “Built-to-Last” companies is “building the strength of their organization as their primary way of creating the future”. While I am thinking the strength of my venture, i.e. offering unprecedented healthcare opportunity with thriving community partnerships, I have a question in mind: Does the strength of organization that it relies on to create the future change with time? If so, how will it change? If not, how shall an organization discover such strength?

Final word: a cool web page to check out: Diary of a Social Venture Start-up, which offers a series of stories on some key aspects of starting a social venture.
http://www.good.is/post/diary-of-a-social-venture-start-up-building-your-team/

How to Launch Your Company

http://www.greentechmedia.com/articles/read/how-to-launch-your-company/

What Every Entrepreneur Could Learn from Justin Bieber

http://techcrunch.com/2011/03/01/what-every-entrepreneur-could-learn-from-justin-bieber/