Thursday, February 26, 2009

Sightseeing

Bob and I took a short journey across town to visit a competitor yesterday. This is one way of measuring our performance. This particular store didn’t even exist when Bud’s started so it’s great to now have a competitor by which to compare our organization.

Going in the front door, I joked with Bob about how long it would take until we saw one of our customers. We opened the door and we were greeted by one of our customers walking out. We saw another customer sitting on a couch messing with his blackberry. Bob and I sat down on opposite sides next to him.

“This is a shakedown,” I said. He looked up shocked like he was a child who had just been caught with his hand in the cookie jar and then laughed.

“What are you doing here?” he asked. And then he explained how he was just at our store like he needed to justify what was going on. We are going to invite him to a future focus group to learn more about our business.

When this particular store opened, we worried about its impact on our sales. Would the new store cause our slice of the pie to become smaller? Over time, we discovered that the pie wasn’t limited by size. The entry of competitors into the market actually caused the pie to grow. We have seen growth in our sales as well as in the number of individuals and businesses that want to donate to us. Having more home improvement thrift store players in our community builds the marketplace as a whole for this particular industry. Customers shop at both stores. If they can’t find an item at one they try the other. But even so, we like to lovingly compete against them like two brothers in a close-knit family.

One of the great dangers of running any successful business is complacency. There is a tendency to get stale over the course of time. In some ways, Bob and I feel a bit stale at Bud’s right now. Our visit helped us to see our strengths and our weaknesses in light of this particular competitor. We walked away with some ideas and some other questions to ponder.

Now, it’s time to debate whether we should try to overcome the areas where we are weak? Or should we double down, and focus on our particular strengths? That is the one common and ever so essential question for any business. How wide is the particular focus for your individual business? You can’t be everything for everybody. With limited resources, one must choose. But if you become too focused sometimes you put yourself in danger of losing what makes you strong. These are good questions to ponder for any startup or for a business about to enter its 15th year, like Bud’s Warehouse.

Wednesday, February 25, 2009

Measuring

You can’t manage what you don’t measure. In the for-profit business world, measurement is about the bottom-line. Businesses seek to measure quantifiable factors that lead to increased profits. But in traditional non-profits, performance is not measured by income and expenses, but by the accomplishment of the charity’s mission—a more difficult undertaking than a for-profit’s straightforward measurement of profits and losses. When you add the double bottom line of a faith venture that seeks both profits and mission, measuring becomes even more challenging. Most non-profit faith ventures must measure performance for its donors and foundations. The for-profit faith venture has to diligently commit itself to measuring the mission side of its performance in order to overcome the natural inertia of focusing solely on the business side of the mission.

And what about faith? How do you measure the spiritual? For Belay Enterprises, it comes down to one basic question: How best do you quantify life-change in a faith-based job-training organization that works with individuals overcoming significant employment challenges like felony convictions, homelessness and past addictions?

The reality is that many non-profits are lousy at measuring the intangible world of mission. (Bridgestar provides some reasons for this weakness in its newsletter article “Strongly Led, Under-Managed”) It’s only been in the last decade that charities, following the demands of foundations and the leadership of venture philanthropy organizations, have begun developing measurements that better monitor the accomplishment of mission. Up to that point, most groups measured simple figures like the number of individuals served or the accomplishment of specific goals. Some only told stories of how their program changed an individual’s life.

Today, the more measurement-savvy social ventures collect information on the people they serve and then ask if those program participants are better off than people in similar circumstances who didn’t go through the program. They look at factors like a reduced need for public assistance, a decrease in recidivism rates, and an increase in wage earnings because the person participated in the program. (Jed Emerson has written an excellent short article, “But Does It Work” on this topic in the Winter 2009 Stanford Social Innovation Review)

Over the last 10 years, one of the best tools I have found for faith ventures employing individuals rebuilding lives is REDF’s Social Return on Investment matrix. This downloadable tool provides a format to collect data measuring the change in social services needs by program participants. The matrix also measures the business performance of the enterprise.

Several years ago, Meghen Duggins, a student at Eastern University, performed a SROI on Bud’s Warehouse. The study showed that for each dollar invested in the business, Bud’s Warehouse generated $5 in financial returns and $5.50 in social service savings. Over time, the business grows and provides increased social savings for the community.

In my opinion, the SROI is a fantastic starting point for any social venture. Undertaking this management exercise identifies areas that faith ventures can focus on for future measurements of success. But the SROI doesn’t capture the faith side of the faith venture. I will explore my developing thoughts on new measurement components in a future post.

Tuesday, February 24, 2009

Why?

Suffering. The world seems filled with it right now. Neighbors. Co-workers. People at church. Individuals panhandling on the side of the road. Folks dealing with illnesses. Men and women struggling with addictions. The question inevitably comes: Why?

When I was younger, I gamely tried to answer…to fix. But now, it’s better to listen and to journey alongside. Sometimes we remind that we have a Savior that also suffered. But still the question arises: Why?

Maybe singer songwriter David Wilcox has some insight in his song “Show the Way” from his 1994 Big Horizon album:

Look, if someone wrote a play just to glorify
What's stronger than hate, would they not arrange the stage
To look as if the hero came too late he's almost in defeat
It's looking like the Evil side will win, so on the Edge
Of every seat, from the moment that the whole thing begins

It is…Love who makes the mortar
And it's love who stacked these stones
And it's love who made the stage here
Although it looks like we're alone
In this scene set in shadows
Like the night is here to stay
There is evil cast around us
But it's love that wrote the play...For in this
darkness love can show
the way

David Wilcox, "Show the Way"

Monday, February 23, 2009

Fragrance

My eyes were drawn to the late model refrigerator recently donated to Bud’s Warehouse and now displayed on the showroom floor. I opened the door to see if the inside matched the attractive exterior. An unpleasant aroma assaulted my nose and changed my opinion. There are few smells worse than a donated refrigerator gone bad. Indeed, we spend much time attempting to avoid nasal abuse by scrubbing newly arrived refrigerators with high-powered cleaning agents. But occasionally one sneaks by or it is coated with some odor-causing agent that is impervious to our efforts. As they say, one bad smelling refrigerator can spoil the whole bunch.

But in the opposite way, a pleasant aroma attracts interest like the warm smell of hot chocolate on a cold winter day. Or hot burritos and tacos ready for a surprise birthday luncheon for one of our employees. Some smells invite while others repel.

Similarly, there are people that naturally attract others and there are individuals that make people want to leave. One person who continually draws people in like fresh baking bread is my friend Jude DelHierro of Confluence Ministries. I like spending time with him because he is a living example of someone who “spreads everywhere the fragrance and knowledge” of God. (2 Corinthians 2:14, NIV)

For the last two months, Jude has been dreaming about a Christian businessperson purchasing a laundromat that is for sale in Confluence’s West Colfax neighborhood. Last Friday, Jude and I finally figured out a time to visit the laundromat together. We showed up two hours too late. The owner, an immigrant from Cambodia, told us he had just returned from his attorney’s office where he had signed the closing documents. He seemed upset. Jude asked him some simple questions. Where are you from? How long have you owned the business? What are your future plans? The man opened up to us. He shared how his American dream had taken a very bad turn. He now hoped to turn the page and start over.

Jude asked him if it would be all right if we prayed for him. The man observed that we must believe in God. We said yes and asked him if he did. He nodded and we spent the next five minutes praying for him right in the middle of a bustling laundromat. I smelled the soap from the washers and the fabric softener from the dryers. I heard Jude speak words of blessing. During a sad day filled with one man’s disappointment, I smelled the aroma of grace.

Thursday, February 19, 2009

Is Solar an Opportunity for Faith Ventures?

I am a big fan of Homeboy Industries in Los Angeles as I explained in a recent post. This past weekend, the Wall Street Journal detailed a new solar industry-training program started by Homeboy in the past year. I smiled when I read this because I have been brainstorming new job training opportunities over the last few months. One of the concepts that I am exploring is solar energy installation.

We are always looking for opportunities to create businesses that employ individuals rebuilding lives from addiction, homelessness or felony convictions. The perfect opportunity provides a skilled labor-intensive position in a sustainable industry with the possibility of living wages. The burgeoning solar industry seems like it may offer such a mix of opportunity over the next few years in Colorado.

I blogged last year about how the sustainable energy industry is growing in Colorado because of its proximity to the National Renewable Entergy Labs in Golden. The Wired grant provides funds to train individuals with felony convictions for jobs in this industry. In a similar way, solar energy installation is a great job opportunity for individuals with felony backgrounds if we can find a solar training partner. It appears that the new tax credits for solar energy installation finally make such an option cost-effective for the typical homeowner. And even if the industry doesn’t prove itself to be sustainable in the long run, it is a useful first step towards training in HVAC and electrical contracting---other fields we have felt would be attractive for the clients we serve. For organizations or individuals interested in building a high-impact faith venture, I think the solar industry deserves further examination.

Thursday, February 12, 2009

Job Market Realities

We have seen a large increase in the number of individuals applying for jobs at Bud's Warehouse over the last few weeks. The recession seems to finally be impacting the availability of warehouse and construction jobs in our community. This is happening at the same time that Bud’s Warehouse has several individuals ready to transition from our job-training program into employment in the community. We are now wrestling with the same dilemma that we experienced after 9/11. We have large numbers of people that want into our program while it is becoming more difficult to transition individuals out into better paying “real world” positions.

So, unfortunately, the fear factor starts to rise in our program employees. We’ve always had to walk a fine line between encouraging our staff to actively search for jobs as they near the end of our program while assuring them that we will not graduate them until they have a new opportunity.

But the reality is that most of our program participants really don’t want to leave us. Bud’s Warehouse has succeeded in creating an enjoyable and nurturing Christ-centered workplace that often isn’t found out in the real world. Individuals like working in our affirming workplace but we only accomplish our mission when they transition into better paying jobs in the real world.

Our hope is that in some small way our workplace can encourage other followers of Christ to create life-giving workplaces. Or, even better, that our program participants are equipped to positively impact other workplaces by being that light in a sometimes dark world.

Tuesday, February 10, 2009

Open Source Stimulus

I like a good idea. And today I discovered at least two great ones.

My entrepreneurial friend Scott Yates, who sold his start up a few years ago to Traffic.com, detailed his close encounters with Dallas Maverick's owner Mark Cuban. It seems that Mark wants to create an economic stimulus plan that actually creates new businesses. He has invited aspiring entrepreneurs to post their ideas open source style to his blog. He will commit to funding the best ones.

Scott took the challenge and posted an idea called Second Saturday Science. Mark liked the concept and has been communicating with Scott throughout the day.

By the way, Scott was a valued participant during our second Faithventure Focus Event this past fall. I wonder if Mark Cuban would have any interest in a venture idea that would use a sustainable business to create opportunity for individuals rebuilding lives? If you have such an idea, maybe it is time to share.

Wednesday, February 4, 2009

Obama's Faith-Based Rhetoric Dialed Back

It appears that President Obama plans to take a more nuanced position on faith-based hiring provisions than he declared on the campaign trail this past fall. In a recent post, I shared how removing President Bush's allowance for limiting management hires to a particular religion would in many ways take the faith out of faith-based initiatives. Now, Obama seems to agree and is poised to announce a willingness to evaluate such issues on a case-by-case basis. This is a wise decision and extends what may be President Bush's biggest legacy. As we develop new faith venture businesses that employ individuals rebuilding lives from addiction, homelessness and prison, this allows us to continue seeking government investment for start-up funds.

"Mr. Obama's goal, much like President George W. Bush's, is to harness the
power of churches and other religious groups to solve some of the nation's
toughest social problems. But almost from the start, the Bush plan was ensnared
by constitutional questions about the separation between church and state, most
notably whether an organization that received tax dollars can make hiring
decisions on the basis of religion.

As a candidate, Mr. Obama came down firmly against such hiring. But on
Thursday, he will take a more nuanced position, saying that these issues should
be decided on a case-by-case basis, said Joshua DuBois, the 26-year-old former
campaign adviser who will be named to head the White House Office for
Faith-based and Neighborhood Partnerships."

"Faith-Based Program Gets Wider Focus," Wall Street Journal, February 4, 2009

Tuesday, February 3, 2009

Blue Shirt and Khakis

One day, a few years ago, a co-worker and I stopped at Office Max to pick up some labels for a mailer. From the moment we walked in the door the staff was all over us trying to help. A woman greeted me from across the printer desk 500 feet away asking if she could point me to what I needed. Everywhere we walked someone was ready to help. I was handed flyers. I was offered shopping carts. A manager hovered in the background following us around the store. I found myself becoming annoyed.

I mentioned to my co-worker that they must have been expecting a secret shopper evaluation. As we waited to check out, I noticed a delegation of five corporate looking managers entering the store. My co-worker laughed because they were all dressed in the exact same outfit that I was wearing: a blue shirt and khakis. Now, no one seemed very interested in showing us the love.

This experience reminded me of the great reversal Jesus talks about at several points throughout Matthew and Mark in the Bible. Those that thought they were first became last but those who were last became first. Or else it teaches, for a customer service business, that there is a fine line between smothering love and abandonment.

Belay Venture Partners Program Selects First Founder

I’m excited to announce that Belay Enterprises has chosen Brittany Marlett as our first participant in the Venture Partners Program. B...