Blog Hub

# Calculating ROI of buying in bulk/on sale

0 0

I recently saw a video on YouTube with advice from Mark Cuban on how to get rich. I found one piece of advice particularly interesting: that buying non-perishable consumable goods in bulk or on sale is going to give you a better return on investment than any traditional investment opportunities (stocks, real estate, etc.). Return on investment (ROI) is a financial concept – it’s a measure of how beneficial it is to tie up money in a particular investment. I was curious to calculate the ROI from buying goods in bulk, and the only example I found online of someone attempting the same calculation used a bizarre and almost certainly incorrect method.

First, we can define ROI for traditional investments. ROI is typically given in percent per year: if a certain stock has an ROI of 10%, that means that if you buy $100 of that stock, you could sell it one year later for$110. The simplest ROI calculation can be made as follows:

We can see that plugging in the numbers from the stock example above (an amount paid of $100, a final value of$110, and being invested for 1 year) indeed gives an ROI of 0.1, or 10%. A slightly more complicated example might be that you buy a rental property for $200,000, the property has a net income of$1,500/month, and after 8 years you sell the property for $300,000. Plugging in these numbers (final value = 300,000 + 1,500*12*8, amount paid = 200,000, and years invested = 8) gives an ROI of about 10.5%. This would indicate that the rental property was only a slightly better investment than the stock. Most traditional investments that don’t require a large amount of capital will have ROIs from 5 – 15%, so that’s the target that buying in bulk should beat if Mark Cuban’s advice is sound. It should be noted that this ROI calculation assumes you pay the total cost up front and collect the total value at the end of the investment. In reality, the rental property is more valuable than we’re calculating with this simple formula, since you collect rent over the course of owning the property, not in a lump sum at the end. This means you could be reinvesting that rental income as you receive it, and you could be earning additional returns in the meantime that we’re not accounting for. Even so, this ROI calculation is still useful for comparing different investments, and we’ll ignore this timing shortcoming for now. ROI of buying in bulk Buying in bulk isn’t exactly an investment, but it follows the same principle since we’re tying up our money in something (in this case, non-perishable consumables rather than stocks or real estate) because we think we’ll end up with more money in the long run. As an example, suppose that I typically buy a$10 package of toilet paper which lasts me one month. In a year, I’ll go through 12 of these packs, spending $120 on toilet paper. At a bulk supply store, I might have the opportunity to buy a year’s worth of toilet paper for$100, a 17% savings. What would the equivalent ROI be? Here the amount paid is clearly $100. For the simple ROI calculation, we can say that the final value is$120, since I’m getting $120 worth of toilet paper compared to my usual shopping habits, and we can say that I’m invested for 1 year, since I have to pay for the toilet paper 1 year ahead of when I’ll finish using it. In this case, the ROI would be: The equivalent of a 20% return, much better than most traditional investments! ROI of buying on sale We can also use the same formula to calculate ROI for situations when a product is on sale. Suppose I go to the store one day and the toilet paper I usually buy is$7 a pack (30% off). What’s the ROI, and how much should I buy? In this case, the ROI of a particular pack of toilet paper depends on how far in the future I’ll end up using it. Each pack costs $7 and gives me$10 of value, but the number of years invested depends on how many packs I’m buying. For example, for my sixth pack it will take half a year before I use it, which yields:

That sixth pack has an ROI of 104%, an awesome investment! Suppose I really go to town and buy 5 years worth of toilet paper. That means for the last pack, I’ve invested that $7 for 5 years, and the ROI is given by: While still a reasonable return, a 30% discounted pack of toilet paper that I don’t use until 5 years later isn’t necessarily beating traditional investments. Carrying costs and increased consumption The calculations above neglect some costs which could potentially reduce the ROI on buying in bulk/on sale. The first is carrying cost, which refers to the cost of storing a bunch of stuff that you aren’t using yet. For some goods (like toothpaste) this probably isn’t a big deal, but for the toilet paper example, it likely would be. Suppose I bought 2 years worth of discounted toilet paper, as in that case the last pack would still have an ROI of almost 20%, which is a very solid return, but I only have enough room in my apartment to store 1 year worth of toilet paper. My building rents storage bins for$60/year which would be sufficient to store all the extra toilet paper, so for the first year I have to spend an extra $60 to hold all the toilet paper. In this case, the overall ROI would be given by: Since I have to pay extra money to be able to store the toilet paper, it completely kills the savings, and I’m left with a meager 2.6% ROI. Usually carrying cost is more difficult to factor into the calculation than this, but it’s worth keeping in mind that if a large portion of your house is being used for storage, buying in bulk probably isn’t doing you that much good, and you could lower expenses overall by living somewhere smaller without the bulk buying. Another trap you should be careful of is increased consumption of the good you bought in bulk. In the bulk toilet paper example (12 packs for$100), the value I’m getting is \$10/month, since that’s how much I usually spend on toilet paper. If I start using toilet paper to clean up spills in the kitchen since I have so much TP lying around (whereas I used to use reusable sponges), and this causes me to go through 12 packs of toilet paper in 11 months, then my ROI would be:

By increasing my consumption by ~9%, the original ROI of 20% is cut almost in half. So while buying in bulk/on sale can provide good ROI, you should be careful about carrying costs and increased consumption, which can negate or even reverse the return.

It’s also worth noting that if you buy something on sale which you normally wouldn’t buy at all, it can’t be treated as having an ROI in the sense we’re looking at here. While you can still get value from it, you’re not saving money since in the absence of the sale you wouldn’t have bought the item, and therefore wouldn’t have spent any money at all.

Some interesting math

There is some interesting math to explore following this treatment of buying in bulk/on sale as an investment. We can rearrange the ROI equation to find how much of a good we should buy when it goes on sale based on the ROI we want to achieve:

where t is how much of the thing we should buy in years (for example, if the calculation yields t = 2, you should buy enough of the item on sale to last you 2 years). This is plotted for a few target ROI values below:

As an example, if you’re targeting an ROI of 50%, and the laundry detergent you usually get is 40% off, our ROI calculations say you should buy ~1.3 years worth of detergent. If you want an ROI of 100%, you should only buy 9 months worth of detergent, whereas if you are happy with an ROI of 25%, you can buy ~2.3 years worth of detergent. This chart can also be used to decide whether buying in bulk is worth it. In this case, if the bulk point is up and to the left of your target ROI curve, you shouldn’t buy, but if it’s down and to the right, you should. For example, if we can get a 17% discount by buying 1 year worth of toilet paper, that point is located up and to the left of all three of these ROI curves, indicating that it’s a worse ROI than any of those values (we know it’s 20% from calculating it before).

In general is seems like the ROI on buying in bulk/on sale is very good, so why don’t we “invest” more of our money this way? The funny thing about this “investment” is that the better the ROI, the less money we’re able to invest. Looking back at the toilet paper example, for something that has a bulk discount of 17%, the most I’d be able to “invest” for one year is 83% of my typical annual spending. If the bulk discount was instead 33%, corresponding to an ROI of 50%, I’d only be able to “invest” 67% of my typical annual spending. Larger discounts lead to higher ROI, but they also lead to lower investment potential:

Typically when you find a good investment opportunity, you want to put as much of your money in it as possible. However with buying in bulk, your investment potential is inherently limited by your normal spending, and is lower the better the discount.

# My progress during Season 3 of Rocket League

0 0

It should be readily evident from some of my other posts that I love Rocket League. I started playing ranked matches during Rocket League’s Season 3 (which ran from June 2016 through March 2017), and towards the end of August 2016 I started tracking my progress in a spreadsheet. I kept track of my skill ratings (similar to an Elo ranking) in the different playlists using a stat tracking website and once a week I would run through each of the default all-star trainings five times as an alternative metric for mechanical skills.

I had originally had very ambitious plans for what I would do with the stats I collected, but since it’s been two months since Season 3 ended I wanted to post something before the project lost all momentum. Perhaps I’ll revisit this in more detail later, but for now the project has culminated in a simple page posted here which lets you explore different ratings/rankings over time or number of games played.

There are a few points I found interesting from exploring the data:

• My unranked rating (rating from playing in casual playlists) stayed more or less constant over all of Season 3, even though I undoubtedly improved over that time period.
• Looking at a playlist rating vs. number of games played (e.g., Standard rating vs. Ranked standard games played) I hit a plateau in Duel and Solo standard, but not in Doubles or Standard. Perhaps through the latter half of Season 3, my teamwork improved more than other mechanical skills, which doesn’t show up as much in Duel or (unfortunately) in Solo standard.
• I plateaued fairly quickly in Keeper and Striker training, while I continuously improved in Aerial training. Keeper plateaued because I quickly approached 100% completion, whereas Striker seemed to always hover around 70%. I’m not sure why I’m not better at Striker even after spending so much time on it.

# From Prototype to Fruition (Session 3)

0 0

The last session of this three-week workshop discussed how we assess risk and test our assumptions.

For the first part of the class, we wrote down three key risks on stickies and assigned them to a box on the Lean Canvas – mine were around whether our paying customers were interested in design thinking methods at all, whether our funding model would require us to spend the bulk of our time catering to our paying customers rather than our low-income beneficiaries, and (if we focus on teacher training over student engagement) whether a lack of resources would prevent teachers from being able to implement what they learned.

Reading through the notes articulated by others in our class made it clear that the most well-articulated risks are those that have an implicit benchmark and are measurable. Most risks lie in the solution/unique value proposition categories, followed by revenue streams and channels.

Experimental design

Running an experiment to test our assumptions requires the following components:

• Hypothesis: the key assumption to test
• Subjects: who you will test the assumption with, how they will be recruited and by when
• Interventions: how you’ll test the assumption
• Data: what data will be collected and how it will help formulate a new hypothesis if they invalidate the original hypothesis
• Decision rule: what type of response will be considered as validating the hypothesis and what types of responses will be considered as invalidating

Here are the experiments I came up with:

Experiment #1: Will they pay for it?

Test subjects: 10 businesses/organizations I reach out to as a IEP GPI Ambassador, to chat about the links between creating innovative work environments and positive peace-building
Interventions: At the end of the presentation, I’ll offer to run a short (paid) workshop in the future, demonstrating the skills Building Bridges teaches and how they are applicable in multiple contexts; funds will go to BB operations
Data: If they agree, all good. If they offer other types of benefits in return – e.g. use of their spaces for BB, it indicates some support but not the kind I expected. If they decline, oh well.
Decision rule: If we get 3/10 firms on board, I think that’s a hugely promising start to some potential strong partnerships.

Experiment #2: Will we be able to prioritize our key activities with this funding model?

Test subjects: Same as above.
Interventions: Same as above.
Data: I’ll offer the workshops in different ways – pitch it as a potential partnership, as a CSR project, as a one-time employee benefit to different companies – and see what elicits the highest willingness to partner with us.
Decision rule: If companies are willing to offer, for a 2-hour taster session, an amount that corresponds to 20% of our regular workshop series costs, I take that as a promising sign of WTP for a more detailed 2-3 day corporate workshop covering all workshop costs, that still only requires <20% of the time I would put in to the regular BB sessions. It may turn out differently, though, and they may want to partner in other ways, so I’d have to re-think that funding model.

Experiment #3: Will teachers use what they learn?

Test subjects: Teachers at St. John’s MMV.
Interventions: During the summer workshop series [for kids], I’ll facilitate teacher participation by (1) inviting them to an exhibition, (2) offering interested teachers materials (activity guide of easy challenges + worksheets) to adapt some of the activities for their own classes.
Data: If teachers express interest, it indicates that they might enjoy a workshop tailored for them. If they agree to taking the materials/ask questions, that indicates further buy-in. If they share stories of actually completing the challenges with their classes, then it’s possible to implement with few resources.
Decision rule: I’ll try to distribute materials to 5 interested teachers. If 2 follow through, I’d consider that a success.

Which assumptions to test first?

Interestingly, I thought we should have done this exercise before designing the experiment. We took our three risk-stickies and tried to gauge an order of importance of results from the experiments. In my case, it ended up being funding model > selling design thinking > teacher implementation of trainings.

Then, we tried to gauge how easy it would be to design an experiment. Selling design thinking was, in my case, the easiest one, and the graph looked like this.

It looks like Experiment #1 is the easiest. I’m not sure if it’s worth it to build Expt #2 into it, and still run #3 in the background since I’ll be working at St. John’s this summer. I think the plan should be to keep it simple, and play it by ear.

# From Prototype to Fruition (Session 2)

0 0

Last week, we discussed some challenges around the lean canvas – from clear descriptions, to unique value propositions vs. solutions, to the different between a for-profit business idea and its form(s) as an impact venture. We also started assessing the risks inherent in our ideas.

Thinking in this way is new to me, and doesn’t come easily. To stretch my muscles, I tried to envision Building Bridges as a series of different ventures and assess the risks inherent in each (I’d love to hear feedback in the comments!).

*

Building Bridges right now is a volunteer-driven initiative using the arts – theatre, visual arts, creative storytelling – to foster self-expression and sustained dialogue between Sri Lanka’s diverse youth. We depend on grants for our work, all of which goes towards materials, transport, and accommodation during our rural programming.

I’d like to change this for several reasons. Firstly, I believe artists and arts educators deserve to be paid. Secondly, not having to scramble for money all the time gives me space to focus on other important aspects of the organization. Thirdly, we all have other jobs, so this is an excellent opportunity to innovate without jeopardising anyone’s job security (while testing the kinds of work I hope to do in future).

Our greatest successes include long-term programmes that have built trust in three key at-risk communities, as well as recognition through the Queen’s Young Leaders Award and Forbes 30 Under 30.

Our greatest challenges are around financial stability, monitoring/evaluation, and scaling our bespoke programmes.

So! Here are my ideas around some potential futures for Building Bridges:

For-profit enterprise (see PDF here)

Comments: I imagine this as a benefit corporation (although the model doesn’t exist yet in Sri Lanka). I would use my training as a Global Peace Index Ambassador to create conversation around the connection between building key soft skills and peace-building, and encouraging for-profit organizations to re-envision their mission through an endeavour that benefits both company employees and under-served communities.

It might strengthen those links through some form of internship or apprenticeship, but this doesn’t quite fit with our peace-building mission (or does it?). One benefit is that, with enough customers, it’s possible to work small – for just one person to do X number of corporate trainings during the week and to run an after-school programme in the evenings (i.e. not worry about the training-teachers part of the model, at least at first).

Risks: The corporate payment structure for workshops doesn’t address the issue of building a team of skilled facilitators. This new structure also works best when it benefits teachers rather than the students, but in the past, we’ve found that schools are more welcoming of after-school programs for students who wouldn’t otherwise have them (it gives the teachers a break!). It’s hard to know if teachers want further training, or even whether willing but resource-strapped teachers will be able to make their training actionable – so I’m running a dedicated pilot workshop series with teachers this summer. It also requires a significant investment of time away from what we want to do (work with low-income kids) and what we would do most (do corporate workshops) to make that happen.

Impact Partnership (see PDF here)

Comments: This version focuses on scale (potentially impacting all Sri Lankan children, who should technically all have access to government-issued text books) as a deliberate challenge to our current model, which works with around 100-200 students over a year, mostly because this kind of scale is hard to control, risks the most dilution, and makes me thoroughly uncomfortable. I feel least equipped for this version, although I could definitely manage gaining legitimacy through a design thinking training partnership with educators I’ve worked with through the Queen’s Young Leaders Award programme, or from MIT and Stanford, if I wrangled sponsorship.

Risks: It veers more into the realm of general curriculum development, and seems to entail policy shifts – pushing for conflict resolution training to be a mandatory part of teacher training, for example. It also requires more understanding than I currently have around a number of factors, such as processes involved in curriculum development and teacher training courses and certification in Sri Lanka. Finally, it’s hard to measure whether the text books are used as intended (although dedicated teacher training and school awards might help spur innovation). Legitimization around new teaching methods is also a stumbling block – does it count if the education evangelist is not ‘MIT’ but an MIT grad, for example? Also, if we pull in international experts, a language barrier is inevitable. Finally, I’ve found our textbooks to contain some ideologically iffy content in the past – I am concerned that there might be a lot of compromise in how content is written and presented.

Nonprofit Foundation (see PDF here)

Comments: This version envisions an independent training center and exhibition space (or rather, several of these facilities), and has the potential to be the most independent in terms of curriculum, and relies on both grants and course fees for its operations. In many ways, it’s a mash-up of the previous models, but requires more brick-and-mortar facilities.

Risks: It’s super ambitious, and requires having partnerships with elite organisations and individuals before we can sustainably engage with our low-income, at-risk communities. Building and maintaining facilities are expensive undertakings. Some of the other risks from previous models also apply, such as challenges regarding legitimisation, language barriers, and time taken away from our most needy end users.

The questions I’m most interested in are: what’s your advice for small, measurable steps for testing these (or similar) ideas without breaking the bank? Which of these ideas can be realistically combined? What risks am I overlooking?

# May: From Conflict to Collaboration

0 0

Nobody likes conflict, and we’ll often do all we can to avoid it. The problem is that agreeing too much is just as dangerous. It’s possible to end up with the unpleasant situation that management expert Jerry B. Harvey calls the Abilene Paradox, where everyone agrees to a course of action that nobody really wanted. It happens when everyone just ‘goes along’ with an idea because they wanted to please the group, and causes a lot of resentment and blame-shifting.

But it’s inevitable that we will disagree with someone in our family, on our team, in our community, online, on the bus, at the supermarket, and especially with people who don’t share our values. What do we do then?

In the last post, I discussed some strategies for being present with your team while keeping your eye on future goals. This month, we’ll be looking at how to work through team disagreements productively. I learned many of these tips from the Queen’s Young Leaders programme, as well as an MIT course called Leading Creative Teams.

In times of conflict, you could force people to agree with you, accommodate the concerns of others without considering your own, avoid the conflict altogether, or try to come to a compromise that partially satisfies everyone. These work sometimes, but certainly not always.

Most often, the approach that works best, especially when issues are critical, maintaining supportive relationships is key, and there’ enough time to consider the problem, is to really dive into collaboratively solving the problem. Here are some tips suggested by David A. Whetten and Kim S. Cameron in their book, Developing Management Skills, for facilitating collaborative problem-solving over mere consensus-building:

Phase 1: Identify the problem

Recognize that if someone’s actions are bothering you, this is your problem to work through – but invite them to solve it with you. Describe your problem clearly, like this: “When you do ___ , it results in ___ , and I feel ___ .” Try not to include statements that place blame or point to personal failings. Be clear, and keep trying if you feel misunderstood. Encourage discussion and dialogue, and perhaps identify one piece of the problem to solve at a time.

If you find yourself in the reverse position, show genuine concern for their problem. Ask them to clarify their position, focusing primarily on the interests underpinning them. Asking “Why do you feel this way? Why are you advocating for this?” can open up the potential for empathy and solution-building. Honestly look for elements of truth you can agree with and attempt to problem-solve together.

If you’re the one facilitating a team dispute, suggest this problem-solving approach to working through the conflict. Bring all the facts to the table: this might mean doing a bit of extra research – and always focus on these, rather than emotional states.

Phase 2: Generate the solution

Establish what everyone has in common: being clear about existing shared goals and values makes it easier to focus on what’s really important. Develop multiple alternatives to solving the problem: this encourages conflicting parties to move away from a polarising “either-or” situation, and not feel like they have to defend their position tooth and nail. Invite everyone to brainstorm options for mutual gains. Encourage the parties to think about how fairness should be judged: this shifts mind-sets from “What do I want?” to “What makes most sense?” and keeps everyone focused on issues rather than personalities. Make sure each participant has the same amount of time to speak. Finally, infuse the situation with humour, if you can; it reduces tension and makes collaboration more enjoyable.

Phase 3: Formulate an action plan and agreement

Make sure everyone is clear on the outcome, and steps for moving forward. Frame success in terms of real gains and not perceived losses: encouraging the team to reflect on how a discussion constitutes a real improvement disspates any bitterness.

Phase 4: Implement the solution and follow-up where necessary

Sometimes, plans will go awry, and the problem can persist. It’s helpful to schedule a check-in at some point after the problem-solving session to see if things are going as discussed.

*

Feedback

I’ve always hated conflict, but framing it as a collaborative puzzle makes it less terrifying. In particular, I’ve found that design thinking methods and tools are helpful for making collective problem-solving a fun and stress-free endeavour – and that’s what we’ll discuss in the next installment. What are your ways for working through conflict?

*

Personal Challenge

The hardest parts of conflict resolution, for me, are (a) accepting that when something is bothering me, that it is my problem to work through, and (b) finding points of agreement when others critique me – so that’s what I’ll be working to improve on!

*

• Get to the heart of the matter with the Five Whys

# From Prototype to Fruition (Session 1)

0 0

I’m using my time as an exchange scholar at Stanford to take a number of short pop-up classes at the d.school; I’m hoping they will provide some useful tools for both incorporating into current Building Bridges programmes and for thinking about where we are heading next. One of these is From Prototype to Fruition – it’s a three-week taster taught by Stefanos Zenios and Matthew Glickman, drawing from the two-quarter GSB course Start-up Garage, and it’s offered within the d.school to encourage a quick-and-dirty, iterative approach to developing business models.

There are a number of (very different) potential paths to fruition – for example, B2B, B2C, for-profit partnerships, impact partnerships, impact ventures, and public benefit ventures. This is useful to think about, because my own conception of Building Bridges is evolving. It started out as a volunteer initiative serving youth on the margins, and up until quite recently I would have said that I would like to see it established as a non-profit. That being said, I’m not sure if I want it to be dependent on grants and foundations, largely because I’m realizing how much I would like to be able to pay my team in recognition of their skill as artists and teachers. I’m not attached to any particular path, though, and it is certainly a useful exercise to think about how I would structure the venture differently if I wanted to make a profit, or if I valued one of our offerings over another.

(It’s perhaps important to note that this class is taking place in California, where the possibilities for balancing profit, people, and purpose are becoming more nuanced, but that I would most likely register BB in Sri Lanka, where options are far more limited. That being said, it can be useful to operate in a not-yet-existing sphere to imagine exciting possibilities.)

It can quickly become overwhelming to consider all the possible directions a venture can take. Stefanos and Matt shared a fourfold tool for getting our ideas on paper quickly and legibly: the lean canvas  and its variations (the lean impact canvas, lean partnership canvas, and lean impact partnership canvas). This might be because I’m a historian and I like to know where ideas come from and how they mutate, but I wish we’d spent a bit of time discussing how all these tools came to exist and their relationship to the rest of the toolbox out there. Admittedly, it is possible to find answers to these questions via google, but still!

The lean canvas was adapted from Alexander Osterwalder’s business model canvas (BMC) by Ash Maurya to fit better with lean startup principles: the Key Partners box is replaced with the Problem box, Key Activities with Solution, Customer Relationships with Unfair Advantage, and Key Resources with Key Metrics. Maurya has also written a really interesting blog post on what he changed and why.

The lean partnership canvas is almost identical to the lean canvas, although Customer Segments becomes Licensing Partners, and Channels becomes Paths to Partners.

The lean impact canvas includes lines for Mission Statement/Intended Impact, and swaps out Unfair Advantage for Key Partners, which makes it more like the original BMC – and makes me wonder why Unfair Advantage is deemed unnecessary. In filling out a draft canvas for class, it seemed that there was a lot of overlap between Stakeholder Segments and Key Partners. (Also, what makes the lean impact canvas different from the social lean canvas, which keeps the Unfair Advantage intact?)

The lean impact partnership canvas has the same structure as the lean partnership canvas, and, like the lean impact canvas, includes lines for Mission Statement/Intended Impact and swaps out Unfair Advantage for Partner Impact. I do wonder what the difference is between Intended Impact and Partner Impact. I also wish we’d briefly discussed or alluded to the theory of change and logic model referenced in the Impact section of the lean impact canvas.

If I sound really critical, that’s because being a critic is my day job. I’m actually really looking forward to testing out these four canvases and producing some models for testing next week! Also, apologies for the poor photo quality – I’ll attach better-quality soft copies soon.

*

I’m familiar with some of these ideas already, because as part of Leading Change, the course for Queen’s Young Leaders, we discussed the Business Model Canvas (handy guides available here and here) with our tutor Simon Boot – and I worked through a first draft of the canvas in a small group during residential week. Later, he also alerted me to the Social Business Model Canvas, which is possibly better suited for ventures like Building Bridges.

Also, if you’re curious, Acumen+ is currently offering two courses through NovoEd that seem to cover some of the same material: Lean Startup Principles for Social Impact, and Business Models for Social Enterprise.

Featured image via ProductHub

# From Prototype to Fruition (Session 1)

0 0

I’m using my time as an exchange scholar at Stanford to take a number of short pop-up classes at the d.school; I’m hoping they will provide some useful tools for both incorporating into current Building Bridges programmes and for thinking about where we are heading next. One of these is From Prototype to Fruition – it’s a three-week taster taught by Stefanos Zenios and Matthew Glickman, drawing from the two-quarter GSB course Start-up Garage, and it’s offered within the d.school to encourage a quick-and-dirty, iterative approach to developing business models.

There are a number of (very different) potential paths to fruition – for example, B2B, B2C, for-profit partnerships, impact partnerships, impact ventures, and public benefit ventures. This is useful to think about, because my own conception of Building Bridges is evolving. It started out as a volunteer initiative serving youth on the margins, and up until quite recently I would have said that I would like to see it established as a non-profit. That being said, I’m not sure if I want it to be dependent on grants and foundations, largely because I’m realizing how much I would like to be able to pay my team in recognition of their skill as artists and teachers. I’m not attached to any particular path, though, and it is certainly a useful exercise to think about how I would structure the venture differently if I wanted to make a profit, or if I valued one of our offerings over another.

(It’s perhaps important to note that this class is taking place in California, where the possibilities for balancing profit, people, and purpose are becoming more nuanced, but that I would most likely register BB in Sri Lanka, where options are far more limited. That being said, it can be useful to operate in a not-yet-existing sphere to imagine exciting possibilities.)

It can quickly become overwhelming to consider all the possible directions a venture can take. Stefanos and Matt shared a fourfold tool for getting our ideas on paper quickly and legibly: the lean canvas  and its variations (the lean impact canvas, lean partnership canvas, and lean impact partnership canvas). This might be because I’m a historian and I like to know where ideas come from and how they mutate, but I wish we’d spent a bit of time discussing how all these tools came to exist and their relationship to the rest of the toolbox out there. Admittedly, it is possible to find answers to these questions via google, but still!

The lean canvas was adapted from Alexander Osterwalder’s business model canvas (BMC) by Ash Maurya to fit better with lean startup principles: the Key Partners box is replaced with the Problem box, Key Activities with Solution, Customer Relationships with Unfair Advantage, and Key Resources with Key Metrics. Maurya has also written a really interesting blog post on what he changed and why.

The lean partnership canvas is almost identical to the lean canvas, although Customer Segments becomes Licensing Partners, and Channels becomes Paths to Partners.

The lean impact canvas includes lines for Mission Statement/Intended Impact, and swaps out Unfair Advantage for Key Partners, which makes it more like the original BMC – and makes me wonder why Unfair Advantage is deemed unnecessary. In filling out a draft canvas for class, it seemed that there was a lot of overlap between Stakeholder Segments and Key Partners. (Also, what makes the lean impact canvas different from the social lean canvas, which keeps the Unfair Advantage intact?)

The lean impact partnership canvas has the same structure as the lean partnership canvas, and, like the lean impact canvas, includes lines for Mission Statement/Intended Impact and swaps out Unfair Advantage for Partner Impact. I do wonder what the difference is between Intended Impact and Partner Impact. I also wish we’d briefly discussed or alluded to the theory of change and logic model referenced in the Impact section of the lean impact canvas.

If I sound really critical, that’s because being a critic is my day job. I’m actually really looking forward to testing out these four canvases and producing some models for testing next week! Also, apologies for the poor photo quality – I’ll attach better-quality soft copies soon.

*

I’m familiar with some of these ideas already, because as part of Leading Change, the course for Queen’s Young Leaders, we discussed the Business Model Canvas (handy guides available here and here) with our tutor Simon Boot – and I worked through a first draft of the canvas in a small group during residential week. Later, he also alerted me to the Social Business Model Canvas, which is possibly better suited for ventures like Building Bridges.

Also, if you’re curious, Acumen+ is currently offering two courses through NovoEd that seem to cover some of the same material: Lean Startup Principles for Social Impact, and Business Models for Social Enterprise.

Featured image via ProductHub

# April: Future Visions, Current Actions

0 0

The first three challenges for the year focused on identifying our strengths, tracing how personal history shapes our sense of self and values, and how to use these insights to clarify what we do, who we do it for, and how to leverage our personal networks of power.

The next three challenges revolve around leading and working with a team. While there are countless resources out there, it can all feel a little overwhelming. Where do you even start? How do you manage the delicate balance between leading and managing, macro-visions and micro-tasks, or present operations and future visions?

This particular challenge distills some of the hardest questions into three areas of focus: looking to the future, preparing yourself and your team for it, and making the most of the present moment – and offers three resources designed to help you in each area. As always, links are at the end of the post.

Part 1: Creating and communicating a shared vision

Your compass comes first – in other words, you need to know what future you’re working towards before you take the first step. If that Future feels too set in stone or too weighty to consider sans panic, remember that you can always recalculate, just like your GPS device – in fact, you should.

It will help to look back on the notes you made over the last month on your purpose, people, and unique power. What stands out? What is it about the present that makes you dissatisfied or troubled, what are you trying to change for a better future, with whom are you doing it, and how?

Now, the critical question: if this vision is at the heart of organisation (or project), can your team articulate it in the same way as you do? In other words, are you on the same page? More importantly, how do you get on the same page?

I’ve found that the DIY Toolkit’s Theory of Change worksheet is a super little resource for framing a dialogue around shared vision. It logically maps out the key aspects of your work in a way that can be discussed collaboratively, and kept somewhere prominent as a quick reminder.

Have a look here, and work through it with your team. It takes some time to do well, but it’s just one thing and it’s totally do-able. If you wanted, you could ask each team member to fill it in separately, and then have a discussion about how your collective answers diverge, and if there are ways to knit these varied responses into a logical and cohesive single statement.

As the DIY Toolkit instructions point out, it also serves as a good tool for checking in on all your projects, if you have a number of them running simultaneously, to see if they are aligned with each other and the greater vision.

Part 2: Making yourself redundant

Leaders have to have one foot pointing toward the future while the other is still planted in the present. You have to make plans, but also tick off today’s to-do list. The art of this delicate balance is about creating a plan to make yourself redundant.

The idea of making yourself redundant – i.e. empowering your team to do the things you used to do, freeing you to tackle the newer/harder/more interesting/more [x] things – is not new. I’m not sure where I first read or heard of it, but the moment it really stuck was during a (wonderfully illuminating) conversation with Azam Bakeer Markar.

The logic behind this is that if you’re the only one with the fabulously unique skill set or expertise, there is no way you can scale. So you have to share – what you know, how you do it, and means for success – with other people so they can serve and enable others too, just as you did.

Delving into why this is a frightening idea for many is its own post, and I’ll be looking at that in later months. For now, I will simply say that if you want to be stuck doing the same thing forever (i.e. if you don’t want to innovate) then, yes, not sharing is the way to go.

For everyone else who has ever wanted to create an idea and let someone else run with it so they can get back to creating more new ideas, or who wish they had a hundred clones so that they could 10ox their impact, or who see how brilliant their team is and just want to amp up that brilliance…what’s the way forward? What’s a really great way to make yourself redundant?

For this, I recommend Michael Bungay Stanier’s The Coaching Habit. The book reminds me of a really great design thinking session (more on this in a couple of months) in that it is really a guide to building the habit of asking better questions – not coming up with better answers. The book is pretty easy to get through (although harder to put in practice, given how much we like to tell people what we think the answer should be), and it suggests that any good coaching session consist of the following questions:

• The Kickstart Question: “What’s on your mind?”
• The AWE Question: “And what else?”
• The Focus Question: “What’s the real challenge here for you?”
• The Foundation Question: “What do you want?”
• The Lazy Question: “How can I help?”
• The Strategic Question: “If you’re saying yes to this, what are you saying no to?”
• The Learning Question: “What was most useful for you?”

A good coach gives the ‘coached’ time and space to frame their own questions and come up with their own answers, because that’s how magic happens…which is why I didn’t recommend resources for creating the best handbook ever, so that they can do exactly what you did in your role. Figuring out transitions – who will be doing more or less of what – is an organic and surprising process. It’s not about merely passing the buck from one bot to another.

Part 3: Facilitating actionable meetings

Working in teams is hard. Getting from the beginning to the end of a project without wanting to shake your collaborators is hard. Coming up with great ideas…and then executing them, is hard, hard, HARD.

I’m of the opinion that one huge culprit is The Team Meeting. Not the ones that are quick check-ins to get everyone up to speed, but the ones that try to elicit ideas and get the ball moving while everyone is sitting down and often feeling a little slow – for some, that’s early morning, while for others it’s post-lunch.

Everyone’s varying energy levels – and confidence about speaking in a group – is admittedly one major challenge. Another is that “coming up with lots of ideas” and “whittling them down” are two separate tasks that we often mash together into one activity. The radical-ideas-with-potential often go unsaid, especially by those with less confidence in their ideas.

For this last, present-focused work, I recommend Alison Coward’s Great Teams. She goes over five key areas: starting with your own mindset, building your team, starting the project, generating great ideas, and getting work done. I found out about her work through the Queen’s Young Leaders Award, and found her advice to be extremely practicable.

Great Teams is a great handbook, because it walks the reader through alternatives to the tired old team meeting for coming up with ideas and executing them, while making sure you’re listening to your whole team. I highly recommend it!

…and that’s all for this (extremely meaty) challenge.

*

Feedback

Thoughts? I’ve distilled it down to what I believe the threefold role of a team leader should be, but perhaps you would disagree. If so, I’d love to hear what you consider most important, and what resources you turn to most often.

*

Personal challenge

I wrote this post because these are the areas I want to stretch my muscles the most in. I often work alone, so it’s important to schedule time for communicating with others. I also tend to accumulate a lot of resources for my work, and wonder if by immediately sharing them with my team I’m really overwhelming them rather than supporting them on their own path. Finally, we work from different locations, and it is extra important to keep up the momentum as we move from a great idea to a great completed project. This isn’t something to ‘fix’ in a month, but rather something to keep in my sights for always.

*

# April: Future Visions, Current Actions

0 0

The first three challenges for the year focused on identifying our strengths, tracing how personal history shapes our sense of self and values, and how to use these insights to clarify what we do, who we do it for, and how to leverage our personal networks of power.

The next three challenges revolve around leading and working with a team. While there are countless resources out there, it can all feel a little overwhelming. Where do you even start? How do you manage the delicate balance between leading and managing, macro-visions and micro-tasks, or present operations and future visions?

This particular challenge distills some of the hardest questions into three areas of focus: looking to the future, preparing yourself and your team for it, and making the most of the present moment – and offers three resources designed to help you in each area. As always, links are at the end of the post.

Part 1: Creating and communicating a shared vision

Your compass comes first – in other words, you need to know what future you’re working towards before you take the first step. If that Future feels too set in stone or too weighty to consider sans panic, remember that you can always recalculate, just like your GPS device – in fact, you should.

It will help to look back on the notes you made over the last month on your purpose, people, and unique power. What stands out? What is it about the present that makes you dissatisfied or troubled, what are you trying to change for a better future, with whom are you doing it, and how?

Now, the critical question: if this vision is at the heart of organisation (or project), can your team articulate it in the same way as you do? In other words, are you on the same page? More importantly, how do you get on the same page?

I’ve found that the DIY Toolkit’s Theory of Change worksheet is a super little resource for framing a dialogue around shared vision. It logically maps out the key aspects of your work in a way that can be discussed collaboratively, and kept somewhere prominent as a quick reminder.

Have a look here, and work through it with your team. It takes some time to do well, but it’s just one thing and it’s totally do-able. If you wanted, you could ask each team member to fill it in separately, and then have a discussion about how your collective answers diverge, and if there are ways to knit these varied responses into a logical and cohesive single statement.

As the DIY Toolkit instructions point out, it also serves as a good tool for checking in on all your projects, if you have a number of them running simultaneously, to see if they are aligned with each other and the greater vision.

Part 2: Making yourself redundant

Leaders have to have one foot pointing toward the future while the other is still planted in the present. You have to make plans, but also tick off today’s to-do list. The art of this delicate balance is about creating a plan to make yourself redundant.

The idea of making yourself redundant – i.e. empowering your team to do the things you used to do, freeing you to tackle the newer/harder/more interesting/more [x] things – is not new. I’m not sure where I first read or heard of it, but the moment it really stuck was during a (wonderfully illuminating) conversation with Azam Bakeer Markar.

The logic behind this is that if you’re the only one with the fabulously unique skill set or expertise, there is no way you can scale. So you have to share – what you know, how you do it, and means for success – with other people so they can serve and enable others too, just as you did.

Delving into why this is a frightening idea for many is its own post, and I’ll be looking at that in later months. For now, I will simply say that if you want to be stuck doing the same thing forever (i.e. if you don’t want to innovate) then, yes, not sharing is the way to go.

For everyone else who has ever wanted to create an idea and let someone else run with it so they can get back to creating more new ideas, or who wish they had a hundred clones so that they could 10ox their impact, or who see how brilliant their team is and just want to amp up that brilliance…what’s the way forward? What’s a really great way to make yourself redundant?

For this, I recommend Michael Bungay Stanier’s The Coaching Habit. The book reminds me of a really great design thinking session (more on this in a couple of months) in that it is really a guide to building the habit of asking better questions – not coming up with better answers. The book is pretty easy to get through (although harder to put in practice, given how much we like to tell people what we think the answer should be), and it suggests that any good coaching session consist of the following questions:

• The Kickstart Question: “What’s on your mind?”
• The AWE Question: “And what else?”
• The Focus Question: “What’s the real challenge here for you?”
• The Foundation Question: “What do you want?”
• The Lazy Question: “How can I help?”
• The Strategic Question: “If you’re saying yes to this, what are you saying no to?”
• The Learning Question: “What was most useful for you?”

A good coach gives the ‘coached’ time and space to frame their own questions and come up with their own answers, because that’s how magic happens…which is why I didn’t recommend resources for creating the best handbook ever, so that they can do exactly what you did in your role. Figuring out transitions – who will be doing more or less of what – is an organic and surprising process. It’s not about merely passing the buck from one bot to another.

Part 3: Facilitating actionable meetings

Working in teams is hard. Getting from the beginning to the end of a project without wanting to shake your collaborators is hard. Coming up with great ideas…and then executing them, is hard, hard, HARD.

I’m of the opinion that one huge culprit is The Team Meeting. Not the ones that are quick check-ins to get everyone up to speed, but the ones that try to elicit ideas and get the ball moving while everyone is sitting down and often feeling a little slow – for some, that’s early morning, while for others it’s post-lunch.

Everyone’s varying energy levels – and confidence about speaking in a group – is admittedly one major challenge. Another is that “coming up with lots of ideas” and “whittling them down” are two separate tasks that we often mash together into one activity. The radical-ideas-with-potential often go unsaid, especially by those with less confidence in their ideas.

For this last, present-focused work, I recommend Alison Coward’s Great Teams. She goes over five key areas: starting with your own mindset, building your team, starting the project, generating great ideas, and getting work done. I found out about her work through the Queen’s Young Leaders Award, and found her advice to be extremely practicable.

Great Teams is a great handbook, because it walks the reader through alternatives to the tired old team meeting for coming up with ideas and executing them, while making sure you’re listening to your whole team. I highly recommend it!

…and that’s all for this (extremely meaty) challenge.

*

Feedback

Thoughts? I’ve distilled it down to what I believe the threefold role of a team leader should be, but perhaps you would disagree. If so, I’d love to hear what you consider most important, and what resources you turn to most often.

*

Personal challenge

I wrote this post because these are the areas I want to stretch my muscles the most in. I often work alone, so it’s important to schedule time for communicating with others. I also tend to accumulate a lot of resources for my work, and wonder if by immediately sharing them with my team I’m really overwhelming them rather than supporting them on their own path. Finally, we work from different locations, and it is extra important to keep up the momentum as we move from a great idea to a great completed project. This isn’t something to ‘fix’ in a month, but rather something to keep in my sights for always.

*