[syndicated from my blog at blogs.ft.com/mba-blog]
One of the first tasks I was asked to tackle for the California Fisheries Fund was the challenge of measuring the performance of the fund and its mission impact. Not in strictly financial terms, either. The goals of the CFF are three-fold:
Increase conservation measures supporting commercial fish stocks and their natural habitats.
Help revitalise California’s coastal fishing communities after decades of economic decline.
Assist fishery related businesses to make the transition from open-access to a catch-share based management regime.
Capitalised currently at $5M, you’ll notice something missing from those goals: nothing about earning the investors a financial return. While the goal of the fund is to remain solvent and self-supporting, this is a mission-driven, financial instrument, providing low-cost capital to higher risk businesses in need.
And nothing quite like it exists anywhere else in the world. So where was I going to begin? Not knowing what I didn’t know, my first step was to examine the existing state of the fund and I dived into the loan files of our current portfolio of borrowers. I wanted to know what the businesses we were helping were all about. This meant looking through financial statements, re-examining the business plans presented with each application and building a simple model to understand the various dynamic interactions at play within the fishery: economic, environmental, and social.
Not a simple task, but a mental exercise I found very helpful as I then took a step back and began the thought experiment of examining the fund fully deployed:
What are the impact goals we want to see? What actions are we as a fund taking? What are the intermediate outcomes that might be measurable? At what cost? Where will the data come from? Who is going to be doing all of this measuring in the future? As a start-up, the CFF still has only two full-time employees plus two interns for the summer. That is not a lot of staff to go around.
So what can we hope to do? Analyse the system and then simplify and standardise a proposed group of metrics. I don’t have the answer yet, but am making steady progress. Working with a group of PhDs and other fishery experts, we are taking an innovative approach to this unique challenge and focusing on what should be measured and can be measured. Business as usual for the EDF.
Wednesday, July 29, 2009
Following that vision thing...
[syndicated from my blog at blogs.ft.com/mba-blog]
Everyone who works at the Environmental Defense Fund wants to change the meaning of the term “business as usual”.
The EDF was founded with its original intent to do just that, through whatever means necessary, to force those who were harming the natural environment to stop and pay society for their ecological “sins.”
You might even be familiar with its old unofficial slogan, “sue the bastards”. Despite this history, the EDF may currently be the leading proponent of market-based solutions and for working with corporations to find “the ways that work”. How did this happen?
This morning I found myself yet again in the conference room, this time with Fred Krupp, the president of EDF for the past 25 years. With these questions in my mind, I was priveleged to hear at first hand from the man who was instrumental in that change.
Which is where I get to the vision thing. Fred has had his eye on the ball pretty much since he was a kid in New Jersey. He has been focused on the environment his entire career, starting as a lawyer, activist and then as the director of EDF.
Something that seems to me to be more important than keeping his eye on the ball, however, has been his ability to know where he wants to hit that ball. He has harnessed the deep desires of the environmental movement for change and focused on the outcomes that everybody wants.
What he ceased caring about in the late 1980s was the methods used to get there. Inspired by the wild-eyed entrepreneurial spirit that resides in the American business world, he has helped transform what it means to do business in America. Together with a crack-team of economists, he helped create and enact the idea of cap-and-trade for pollutants, which has been a run-away success for acid rain pollution and is likely to do the same for carbon dioxide, eventually.
This type of vision took courage. Courage to stand up to much of the environmental movement he had been a part of for his entire life, as well as having the tenacity to fight through the barriers that entrenched corporate interests had put up against change. Who knows how many countless hours he spent laying out and selling this idea to stakeholders at all levels of our economy?
These are a few of the lessons I am learning this summer. This is true leadership.
Everyone who works at the Environmental Defense Fund wants to change the meaning of the term “business as usual”.
The EDF was founded with its original intent to do just that, through whatever means necessary, to force those who were harming the natural environment to stop and pay society for their ecological “sins.”
You might even be familiar with its old unofficial slogan, “sue the bastards”. Despite this history, the EDF may currently be the leading proponent of market-based solutions and for working with corporations to find “the ways that work”. How did this happen?
This morning I found myself yet again in the conference room, this time with Fred Krupp, the president of EDF for the past 25 years. With these questions in my mind, I was priveleged to hear at first hand from the man who was instrumental in that change.
Which is where I get to the vision thing. Fred has had his eye on the ball pretty much since he was a kid in New Jersey. He has been focused on the environment his entire career, starting as a lawyer, activist and then as the director of EDF.
Something that seems to me to be more important than keeping his eye on the ball, however, has been his ability to know where he wants to hit that ball. He has harnessed the deep desires of the environmental movement for change and focused on the outcomes that everybody wants.
What he ceased caring about in the late 1980s was the methods used to get there. Inspired by the wild-eyed entrepreneurial spirit that resides in the American business world, he has helped transform what it means to do business in America. Together with a crack-team of economists, he helped create and enact the idea of cap-and-trade for pollutants, which has been a run-away success for acid rain pollution and is likely to do the same for carbon dioxide, eventually.
This type of vision took courage. Courage to stand up to much of the environmental movement he had been a part of for his entire life, as well as having the tenacity to fight through the barriers that entrenched corporate interests had put up against change. Who knows how many countless hours he spent laying out and selling this idea to stakeholders at all levels of our economy?
These are a few of the lessons I am learning this summer. This is true leadership.
Monday, July 27, 2009
Who wants to be a rock star?
[syndicated from my blog at blogs.ft.com/mba-blog]
Five weeks ago, I left the comforting environs of Cambridge, Massachusetts and MIT Sloan for the unknown challenges awaiting me with the California Fisheries Fund.
Anticipating a huge cultural shift, I was prepared for pretty much anything, other than the highly professional, financial district high-rise in San Francisco where the CFF is co-located with the EDF.
I was also not expecting that I would find myself using nearly every subject I covered in my first year of MBA studies. Within the first two weeks.
No, that is not an exaggeration.
In my role so far, I have used pretty much everything taught to me during MIT Sloan’s (in)famously quantitative Core, including accounting, data modeling and statistics, micro-econ and intro game theory, marketing, organisational processes, finance. Check, check and check, check, double-check. And how about branding, sustainable business strategies (S-Lab), and systems dynamics? Again: check, check, check. Is this unprecedented? When talking to my closest friends and classmates at other internships, absolutely. I think I have used a broader-based set of skills than any MBA intern I know (hopefully not mis-using them!), including all those folks who ended up in management consulting roles, tech start-ups and especially you out there in investment banking.
So let’s take a look at how that has been possible and take you back a bit to those first few days, when I first ran into this bunch of economic thought leaders, PhDs in Marine Ecosystems and entrepreneurs. I arrived and found myself climbing a three-day cliff of a learning curve about catch-shares, a highly innovative fishery management system the EDF has been backing and which is finally gaining traction in the US regulatory system due to its success around the world in defeating the Tragedy of the Commons. The training was called “So You Want to be a Catch Shares Rock Star?” and to this day is one of the most well-structured and informative training sessions I have received anywhere, with a great balance of theory and practical application.
But more to the point, this training was geared at folks who have been immersed in oceans issues such as fishery management and declining commercial stocks for years. I had been through a two-day simulation exercise in MIT Sloan’s S-Lab, but was certainly not even close to the level of expertise of my colleagues. Intimidating? A bit. Intellectually challenging? Indeed. But awesome and inspiring? Absolutely!
After three days I had a good grasp of the underlying policy situation surrounding California’s coast groundfish fishery and of the market forces CFF was trying to harness through its innovative lending structure. And that is when the fun really began.
Five weeks ago, I left the comforting environs of Cambridge, Massachusetts and MIT Sloan for the unknown challenges awaiting me with the California Fisheries Fund.
Anticipating a huge cultural shift, I was prepared for pretty much anything, other than the highly professional, financial district high-rise in San Francisco where the CFF is co-located with the EDF.
I was also not expecting that I would find myself using nearly every subject I covered in my first year of MBA studies. Within the first two weeks.
No, that is not an exaggeration.
In my role so far, I have used pretty much everything taught to me during MIT Sloan’s (in)famously quantitative Core, including accounting, data modeling and statistics, micro-econ and intro game theory, marketing, organisational processes, finance. Check, check and check, check, double-check. And how about branding, sustainable business strategies (S-Lab), and systems dynamics? Again: check, check, check. Is this unprecedented? When talking to my closest friends and classmates at other internships, absolutely. I think I have used a broader-based set of skills than any MBA intern I know (hopefully not mis-using them!), including all those folks who ended up in management consulting roles, tech start-ups and especially you out there in investment banking.
So let’s take a look at how that has been possible and take you back a bit to those first few days, when I first ran into this bunch of economic thought leaders, PhDs in Marine Ecosystems and entrepreneurs. I arrived and found myself climbing a three-day cliff of a learning curve about catch-shares, a highly innovative fishery management system the EDF has been backing and which is finally gaining traction in the US regulatory system due to its success around the world in defeating the Tragedy of the Commons. The training was called “So You Want to be a Catch Shares Rock Star?” and to this day is one of the most well-structured and informative training sessions I have received anywhere, with a great balance of theory and practical application.
But more to the point, this training was geared at folks who have been immersed in oceans issues such as fishery management and declining commercial stocks for years. I had been through a two-day simulation exercise in MIT Sloan’s S-Lab, but was certainly not even close to the level of expertise of my colleagues. Intimidating? A bit. Intellectually challenging? Indeed. But awesome and inspiring? Absolutely!
After three days I had a good grasp of the underlying policy situation surrounding California’s coast groundfish fishery and of the market forces CFF was trying to harness through its innovative lending structure. And that is when the fun really began.
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