Workshop 2 Speaker Notes- Business Formation

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Sustainable Business Workshop, August 22, 2013


Topic today: Business Formation: How Does a Business Grow?


After we develop the Seed, the next step is Formation.

  • How do you hire the next person? How does the living organism begin to change in order to grow?

How does a business grow naturally?


  • Scaling:


  • Hiring


  • New Product or Service


  • Changing How


  • Teaming with Another


Natural Model of Growth:

  • Starts with one cell:


  • Then cell divides:


  • Then cells specialize:


Living Business Framework: See diagram

At Center, the Seed, what we call the Living Business

Inner circle: leadership systems

Formation circles: Must haves:

 * Competency:  without a competency, you don't have the beginnings of a business.  Here you will have the beginnings of taking a passion of yours and moving that into a business.  Without competency, you have nothing but a passion.  If you don't have the competency, then you need to form relationships with other orgs in order to get that competency.
 * Next you need to form your Products or Services (need a certain set of competencies in order to do that)
 * Operations:  ability to produce or supply product or service
 * Community Experience:  serving and caring.  Out of this is where you will get your 3D yield: Profitability, helping Community and taking care of the Planet.  This is when all that gets realized.  This is where you make money (profit), where you take care of the earth somehow, and where you help to build form and improve community.  The community experience is the fruit or yield of our seed.

The above is the framework for how a business can grow.

Leadership systems: important to

Ecosystem: the environment in which your business exists and operates

Broader Community: outer circle - all of this exists within the broader community.

Example: I want to start a new product. Woman's eyebrow product: Do we have the competency within our group to develop a product. If not, before you try to develop a product, find someone who has that comp and for a relationship with them or have then joint the company. Look at the chart and figure out what it is that you do well. Then, when you bring someone else in, figure out what they do well and where in the diagram they would fit into your organization.


Within Living Business Circle:

As the Seed connects to Leadership Systems, we need systems that cone ct the seed to Leadership

  • North Mission
  • Priorities: What do we really care about? Priorities have to be in line with our North
  • Community and culture: style and quality of relationships
  • Information: does your org work on hearsay, back channel info, or are you operating like an open book, transparency.

Energy Flows:

Purpose: people want to work on something that is purposeful and they want their work to have purpose

Love: Without love, there is a breakdown of energy

Information: information is energy

Money: Money is stored energy


Competencies:

Competency = skill + experience applied If you can't apply your skill, then you don't have sufficient competency

  • Core competency - essential for creating yield
  • supporting network - attorney, accountant, other experts

Learning is the way we actually grow competency and then competency will actually create growth in the business.

Product/Service devel:

  • Create and refine
  • 3D yield
  • Prototype
  • Comm solution

Operations: Making/Delivering product

  • Process
  • Quality
  • supplier communty
  • Internal community/Human development: have to focus on development of your employees

Community Experience:

  • whole experience: The experience is part of your business, not necessarily something you sell. People are willing to pay for a whole experience
  • 3D yield is realized
  • Customer community relationship.


When someone says I want to grow my business in a certain was, this is the format that is necessary - a natural framework within which it can grow.


Example: Matt Dibble: Final Five was born as a video production company. they recorded video, edited, and produced video. Matt wasn't happy doing that. Found that his real passion was telling the story of other people's passions. Then the key was finding the partners who could actually help Matt to tell the important stories - took quite a while before they found the right people. To find other people who were on the same journey, same value systems, right talents and competencies to fill that need in Matt's business.

Matt evolved that seed and refining it from video production to story telling. so next step, who can do the video. But first of all, am I a good enough story teller? If there is a misalignment between your seed or value system and someone else you're working with, then you have a problem. You're trying now to mash up with the other person's culture, north, priorities, etc. Can be tricky. If you want to grow your business, will you be growing it from within the company or using people/services from outside? Do you want to grow your number of clients? does that mean then that you have to grow your Operations bubble - producing / delivering?


Comments from the group:

  • Matt Sitek: A story is what gives a lot of this life. the community helps to add to and tell the story, and community helps to define what is needed for this org. Matt's story - get him to repeat it again. Care, feeding and nurturing of the story happens in the seed bubble.

David Broner: if you want people to follow you, you have to tell them where you're going - you have to be transparent about where you're going, what path you're on - thats the information piece.

Deep root is what propels a business - less energy expended.

A deep immersion in a story - this is part of the seed development. You need to immerse yourself in a business in order to understand what that is. Hands on is important because that is where you develop a deep understanding and competency for your business. If you don't know what competency looks like you don't know how to find someone who has that competency.

Matt Sitek: When designing a product/service, core to that is relationships/ecosystems. This can define who you work with and how you do your work. Pill Pouch is now a product and a service - it's really about understanding the relationships FIRST before you even can have a good understanding of your product or service and whether you have a product or a service in the first place.

Value of the variety of competencies around you, how they can be brought together to produce a variety of products or services - Mt. Elliot Maker Space

You get an idea for a new product/service - first 2 questions you ask: Q1: Is this consistent with our Seed and our North? Q2: Do we have the competency to even produce or provide this?

Bob: It's a cycle. Be comfortable recognizing that this whole process is a cycle that you will repeat many times. It's an evolution - rather like an onion with many layers.

Importance of communication (Jeff): Working with others you will be bringing in different ideas and ways of doing things and values. So communicating clearly is vital. What do you value? what is good enough for you? for me?

Neal: If a person has a competency in a narrow area… at what point do you bump up against the reality that there aren't a lot of people interested in my product or service? Figure out: what is the connectedness with the community solution (size, price, interest): at this point you will be able to figure out if there is even a desire for this product. You might find that your end product is something different from what you originally thought - growing Kale vs. selling Kale cookies. A business accelerator will set you up with an oven and everything you need to make kale cookies, without ever even finding out if there is a need and desire for kale cookies in the community. don't rush into it. let the process unfold.

We're in Detroit NOW. We need to be helpful and encouraging to those coming to the city with their ideas, lots of people and in the development phase of a business, and we at GG should help them as best we can.

Always possible to go back to the seed. often people move forward with an idea , then move backward because something wasn't working, so they return to the seed Heather's comments - get a recap of that. Nothing wrong with going back to the beginning - it's a sign of maturity - going backward is often really a move forward. Some of best decisions made are when businesses pull back from something. Experience and knowledge is really made up of failures. You can't and shouldn't try or expect to achieve things without failing.