Archive for January, 2008

…but savor what you have today. I recently checked out the website for a new local company, Julep Nail Parlor, and followed along to the blog by its entrepreneur founder, Jane Park. She had recently written a post about about the tensions between working to put good process in place from the beginning, but also wanting to personalize and enjoy things while they’re small. Someting about that value she was seeking to hold resonated for me.

Interestingly, the phrase of my own that first came to mind was: don’t let the perfect be the enemy of the good. For me that touchphrase is a reminder that one can analyze forever, but to accomplish something you need to get out and do it well enough. On the face, that’s seems the opposite of what she is talking about – she’s out there doing it, and hanging onto some perfect even when she knows she’ll have to relinquish it eventually for good. So why do those two mantras connect for me? After some feeling about it, I think it’s because both are ultimately saying it’s about the journey, not about the end. That concept for me has been a big shift that BGI is helping me internalize rather than merely intellectualize. Who We Are and How We Work Together is more important that what we actually do.

In entrepreneurship we’re now reading Built To Last, and that seems to be what they’re saying as well. They talk about being clock-builders rather than time-tellers: To build a truly great company, your product goal has to be the company itself more than any particular product. The company can then stand on its own, independent of the founders.

Collins and Porras also talk about core values vs practices. In the ParlorGames blog, Jane mentions a friend questioning her commitment to handwritten notes when it’s something she won’t be able to continue. It’s not consistent with “start as you mean to go on”. When talking with Darrin that catches his attention – he particularly dislikes when people justify a decision primarily on consistency. Consistency, perhaps, is a practice, not a value. And so for Julep, “start as you mean to go on” may be a practice they work to follow,but the core value seems to be something deeper.

“Begin as you intend to go on” (what it evolved to in my brain) also reminds me of another cherished guide-phrase: “Every step you take towards justice must have justice in it.”, I can still remember the visiting interim director of the Highlander Center saying it, with a smile. There is an end, but how we get there matters. “Be the change you want to see in the world.” And now I have Colins and Porras, saying we should be clock-builders, not time-tellers.

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I was forwarded a paper (thanks Jorji!) on how more diverse boards tend also to do a better job with basic board responsbilities. This paper has an excellent section on board conflicts of interest (a topic just a few posts ago) that covers the topic better than I did, so I’m including it wholesale.

from Nonprofit Governance in the United States by Francie Ostrower for The Urban Institute.

Financial Transactions between Nonprofits and Board Members Under the law, board members owe the nonprofit a duty of loyalty, which requires them to act in the nonprofit’s best interest rather than in their own or anyone else’s interest (Brody 2006). The IRS Good Governance guidelines caution that “in particular, the duty of loyalty requires a director to avoid conflicts of interest that are detrimental to the charity.” 10 Against this background, the purchase of goods or services by nonprofits from board members or their companies raise special concerns about who such transactions really benefit. In a guide for board members, one state attorney general’s office warns that “caution should be exercised in entering into any business relationship between the organization and a board member, and should be avoided entirely unless the board determines
that the transaction is clearly in the charity’s best interest.”11
In 2004, a proposal to restrict nonprofits’ ability to engage in these transactions was included in the Senate Finance Committee’s draft white paper but met with considerable opposition from some nonprofit representatives. The president and CEO of Independent Sector, for instance, warned that prohibiting economic transactions “could be extremely detrimental to a number of charities. . . . Public charities, particularly smaller charities, frequently receive from board members and other disqualified parties goods, services, or the use of property at substantially below market rates.” A similar objection was voiced by the executive director of the National Council of Nonprofit Associations, which is composed primarily of smaller and mid-size nonprofits.12 There has also been concern over the impact on nonprofits in rural and smaller communities, where a trustee’s law firm or bank may be the only one in the area.13 Regardless of disagreement over whether public charities should be allowed to engage in financial transactions with board members, there is agreement on the fact that any such transactions should be transparent to the board, and that policies are in place to ensure that such transactions are in the nonprofit’s best interest. Recent IRS draft guidelines are emphatic on this point. They call on boards to require members to disclose annually any financial interest that they or a family member has in a business that transacts with the charity, and to “adopt and regularly evaluate an effective conflict of interest policy” that, among other things, includes “written procedures for determining whether a relationship, financial interest, or business affiliation results in a conflict of interest” and Nonprofit Governance in the United States 7 specifies what is to be done when it does.14 Furthermore, as noted earlier, the IRS has instituted a question on the Form 990 asking nonprofits whether they have a conflict of
interest policy in place.

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In the last several years I’ve begun shopping at my local natural food co-op, because I want someone to navigate the increasingly shoal-infested waters of understanding food chemicals and what might or might not be good for me. The PCC Natural Markets is wonderfully informative and activist on issues relating to packaging, genetically modified foods, organics and dairy methods among many other issues. In the last year they’ve taken on High Fructose Corn Syrup (HCFS) – an ingredient more and more correlated with, though perhaps not yet proven to be causing of, poor nutritional health. About two years ago I myself decided to use this ingredient as an indicator of food I didn’t want to be eating and have nearly eliminated it (and therefore many surprisingly ordinary products, like ketchup) from my diet. Over the last year PCC worked with many of their suppliers to eliminate the ingredient from their stores. Some suppliers reformulated, some products were dropped.

In the January 2008 newsletter the PCC appropriately trumpets this accomplishment, but notes that one challenge is that some companies have simply switched from listing HFCS in their ingredient labels to instead calling it “glucose fructose syrup”. I have noticed previously that Gatorade is one such product, and I confess I was a bit suspicious when I saw it. A quick websurf reveals that “glucose fructose syurp” is what the UK calls HFCS. This is interesting to me. Clearly, the message has gotten through that customers don’t like to see HFCS on product labels because at least Gatorade, owned by PepsiCo since 2001, has made an effort to disguise it. That kind of deliberate deception is simply nauseating to me. If they know customers don’t like it, they should formulate away from it. To meet the market’s taste and cost considerations but dissemble about how (because customers might actually use that in their purchasing decisions, even if you disagree about their reasoning) is evil.

This reminds me of something that has long irritated me about business advertising. Look at any corporate TV advertising for business systems: Microsoft, HP, you name it. You’ll see a racial rainbow of shiny workers in whatever office they’re gleefully employing the product in. Obviously at least the marketing department has figured out that diversity and equity are values that mean something to their target audience. Human Resources probably knows it too, but damned if corporate leadership does because those TV ads are nothing like reality.

In B-school it was interesting to take marketing as someone who has always been outside the field – they almost convinced me that marketing really is the core of business. Unfortunately these examples show where marketing gets its bad reputation: the marketers seem to know what’s right – but apparently all they can do is talk about it. It’s a problem that they do, even though they can’t seem to make it happen.

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