Most nonprofits make program decisions based on a mission rather than a strategy. They rally under the banner of a particular cause. And because their causes are so worthwhile, they support any programs that are related to their core missions. It's hard to fault people for trying to improve the state of the world, but that approach to making decisions is misguided. Acting without a clear, long-term strategy can stretch an agency's core capabilities and push it in unintended directions. The fundamental problem is that many nonprofits don't have a strategy; instead, they have a mission and a portfolio of programs. But they hardly make deliberate decisions about which programs to run, which to drop, and which to turn down for funding. What most nonprofits call "strategy" is really just an intensive exercise in resource allocation and program management. This article outlines for nonprofits a four-step process for developing strategy. The first step is to create a broad, inspiring mission statement. The second step is to translate that core mission into a smaller, quantifiable operational mission. The third step is to create a strategy platform; that is, the nonprofit decides how it will achieve its operational mission. Decisions about funding and client, program, and organizational development are all made here. And step four is making reasoned, strategic decisions about which programs to run and how to run them.
The land of fried chicken and hush puppies likes its snacks steeped in fat, and Southland Baking Co. has always been happy to oblige. Its Chizzlewits are crumbly, full of saturated fat, and delicious. As a result, Southland has a solid foothold in its market. But to Peter Schmidt, Southland's vice-president and general counsel, every day seems to bring more evidence that products like Chizzlewits are becoming the new tobacco. A New York lawyer has just sued a company like Southland for supposedly making his client fat. A House subcommittee is holding hearings on the fat content of baked goods. And Mothers Opposed to Obesity in Kids is lobbying for warning labels on all foods containing sugars and saturated fats. Southland is trying to come up with a leaner version of Chizzlewits, but the results haven't been encouraging. As Arthur, a little boy in a test group, says with a scowl after taking a bite and spitting it out: "It looks like a Chizzlewit, but it doesn't taste like one!" Should Schmidt tell his CEO that Southland needs to recast its product lines? In R0403Z, commenting on this fictional case study are Kenneth B. McClain, a trial lawyer based in Independence, Missouri; Laurian J. Unnevehr, a professor at the University of Illinois at Urbana-Champaign; Pam Murtaugh, a consultant in Madison, Wisconsin; and Richard Berman, the executive director of the Center for Consumer Freedom in Washington, D.C. Commenting on this fictional case study in R0403A and R0403Z, are Kenneth B. McClain, a trial lawyer based in Independence, Missouri; Laurian J. Unnevehr, a professor at the University of Illinois at Urbana-Champaign; Pam Murtaugh, a consultant in Madison, Wisconsin; and Richard Berman, the executive director of the Center for Consumer Freedom in Washington, D.C.
The land of fried chicken and hush puppies likes its snacks steeped in fat, and Southland Baking Co. has always been happy to oblige. Its Chizzlewits are crumbly, full of saturated fat, and delicious. As a result, Southland has a solid foothold in its market. But to Peter Schmidt, Southland's vice-president and general counsel, every day seems to bring more evidence that products like Chizzlewits are becoming the new tobacco. A New York lawyer has just sued a company like Southland for supposedly making his client fat. A House subcommittee is holding hearings on the fat content of baked goods. And Mothers Opposed to Obesity in Kids is lobbying for warning labels on all foods containing sugars and saturated fats. Southland is trying to come up with a leaner version of Chizzlewits, but the results haven't been encouraging. As Arthur, a little boy in a test group, says with a scowl after taking a bite and spitting it out: "It looks like a Chizzlewit, but it doesn't taste like one!" Should Schmidt tell his CEO that Southland needs to recast its product lines? Commenting on this fictional case study in R0403A and R0403Z, are Kenneth B. McClain, a trial lawyer based in Independence, Missouri; Laurian J. Unnevehr, a professor at the University of Illinois at Urbana-Champaign; Pam Murtaugh, a consultant in Madison, Wisconsin; and Richard Berman, the executive director of the Center for Consumer Freedom in Washington, D.C.
The sequel (1740.1) describes the emergence of a high-profile public lobbying effort called Save AmeriCorps. It details the full-court press effort-including the use of national and local media, political contacts of board members, and a range of public events-meant to convince Congressional appropriators to approve an emergency supplemental budget which would include additional funds for Americorps grants. Finally, the fact that the Coalition's effort falls short, at least in the near-term, raises questions about the long-term impact of such lobbying-as well as the more fundamental question about whether it makes sense for volunteers and nonprofit organizations to look to government for salaries and operating funds. HKS Case Number 1740.1
The (B) case, details the decisions which the Corporation for National and Community Service made as to how best to estimate the funding needs for the Trust. The (B) case (1740.0), however, goes on to frame political questions which develop when the National Service Trust is judged to be "under-funded". Specifically, it frames the question of whether and how organizations which receive federal grants to hire AmeriCorps "volunteers" should organize to resist budget reductions which appear to be in the offing as a result of the financial problems of the Trust. A field which had been relatively unorganized and, indeed, was notable for factions (eg. national versus local) and competing interests, must decide whether to seek to create a united front to lobby for higher funding. The case describes the range of obstacles to the construction of such a political coalition and raises questions both about the logistics and the wisdom of doing so. HKS Case Number 1740.0
The (A) case (1739.0) focuses on the early years of the program in the 1990s, providing a definitive account--based on interviews with those who drafted the authorizing legislation--on how the program was conceived and structured and how it gained Congressional approval, including the political reasons for directing some AmeriCorps grants to large, multi-state "national direct" organizations such as Teach for America, and others to small, local organizations funded through state "service commissions". Ultimately, the case narrows its focus to the public financial management question about how to fund a special trust fund from which education awards for AmeriCorps members are paid. The case raises the question of how to fund the National Service Education Trustthe mismanagement of which comes to spark the 2002-2003 budget crisis affecting the entire programin a way that is both prudential but not overly expensive. In combination with the beginning the of the (B) case, this case can be used to discuss estimation models for funding a wide variety of public benefits, including such analogues as public pension systems such as the US social security system. HKS Case Number 1739.0
Sony's first household robot, AIBO, couldn't do much of anything useful. By reframing AIBO as a pet, the company found a way to capitalize on the product's imperfections and attract an unusually diverse group of new customers.
Managers pay lip service to employees as "valuable assets." But when numbers are down, staffers are often seen merely as costs to be cut. Treating employees like the assets they are can do more for your company than build morale.
E. Lawrence Kersten thinks corporate America could use a good dose of demotivation. Carrying products that promise to "unleash the power of mediocrity," Kersten's company, Despair Inc., has just the ticket.
For years, managers assumed that the best way to take advantage of opportunities abroad was to ally with local companies. But a fundamental shift in the cost/benefit equation has led businesses to forgo partnerships in favor of owning foreign affiliates outright.
Wise allocation of assets across both stocks and bonds can help companies reap higher returns from an asset mix that includes equities without assuming unacceptable risk.
In mid-2003, Morgan Stanley and JPMorgan launched a number of structured credit products that had exposure to correlations in the credit risks of the firms underlying the TRAC-X index: tranched TRAC-X NA, tranched TRAC-X Europe, and options on both TRAC-X NA and TRAC-X Europe. The values of these TRAC-X derivatives were determined by some key parameters: the probabilities of default of each of the firms covered in the index, the recovery rates of the underlying corporate debt instruments in the event of default, and credit risk correlations among the underlying firms (plus, the value of TRAC-X options was also influenced by the volatility of CDS premiums). Tranched TRAC-X and other tranched products were often quoted in the market at prices that were expressed through an implied correlation parameter. Among the issues facing Morgan Stanley's Lewis O'Donald was the implication of the "implied correlation" quotations on the tranched products. Taken at face value, the quotations available in the market seemed to indicate that different tranches on the same underlying index of firms were trading at different implied default correlations. The market prices of the different tranches implied different default correlations for the same set of underlying firms--meaning that credit protection for the same set of underlying firms could be bought or sold at prices that assumed that the defaults of the underlying firms were correlated differently from the viewpoint of different tranches. This correlation skew across the different TRAC-X tranches represented a form of pricing discrepancy.
A manager recounts his experience firing the person he was asked to replace and reflects on the challenges of the experience. Teaching Purpose: To role-play and reflect on tasks that entail harming other people to fulfill one's responsibility.
Palliser is Canada's second largest furniture company. The company has production facilities in Canada, Mexico, and Indonesia and experimented with cutting and sewing leather in China. The company is looking at further expanding the relationship with China. Ever since Palliser set up a plant in Mexico, the company faced increasing competitive pressure from Asia, especially China. The president of Palliser must decide what form this relationship should follow: an investment, either wholly or partly owned, or through subcontracting?
In 2002, Apax Partners had to decide whether to accept a less-than-perfect offer for one of its portfolio companies or to refinance it. This company, a maker of paper industry consumables with a global presence, had been purchased in 1999 and performed extremely well since then. Despite being a solid, cash-generative operation, it didn't excite a lot of interest in the market. An early exit at a good multiple would be helpful for Apax's current fund and future fund-raising efforts, whereas refinancing would allow Apax to take some money off the table and share in future upsides. Which is the better choice?
Set in the fall of 2003, covers managerial challenges facing the CEO and COO of Aspire Public Schools, a nonprofit charter school management company. In operation since 1999 and funded by prominent national foundations and venture philanthropies, Aspire operates 10 public charter schools in northern California. The leadership team at Aspire is contemplating expanding to Los Angeles, a move rich with operational and strategic complexity. Covers in detail Aspire's financial, operating, and instructional models.
Chronicles the development of Freeport's nearly 30 years of mining operations in Indonesia. Building on a mining concession awarded by the country's government, headed by General Suharto, in 1973, Freeport steadily built its mining output to nearly 200,000 cubic feet/day of ore, rich in copper. In spite of the company's attempts to address environmental issues and the stakes of indigenous people, critics were unimpressed by the company's efforts to improve. With the toppling of the Suharto regime in 1998, the company has to survive under a new government.
When the $19 billion merger of Silicon Valley legend Hewlett-Packard and Houston-based PC giant Compaq Computer Corp. legally closed on May 3, 2002, both companies had already devoted an immense amount of time preparing for the challenges that lay ahead. Chief among these challenges was avoiding the culture clashes that often accompany large mergers. This issue was particularly relevant given the very different cultures of HP and Compaq. This case provides an inside view of the integration planning process undertaken to create "The New HP," highlighting the work of the integration office, known as "the cleanroom," and the human resources team of HP vicepresident Jackie Kane. Also describes the dilemma facing one division manager, Rich Marcello, who struggled with the implications of a clean room decision.
This case examines both the nature of competition between two formidable firms and how they continue to transform themselves. See also "Package War: FedEx vs. UPS".