MANAGERIAL PROCESS SKILLS

1. MANAGERIAL PROCESS SKILLS MMS-I,Sem.-II CHANAKYA BATCH2008-09DATE- 19/01/2009PRESENTED TO: Dr. (Mrs.) Vilasini G. Patkar PRESENTED BY: Anandita Singh Roll No.- C-34

2. EIGHT BASIC PRINCIPLES FOR NONPROFIT ENTREPRENEURS :BY JERR BOSCHEE

3. ABOUT THE WRITER: • Jerr Boschee has spent the past 20 years as an advisor to social entrepreneurs in the United States and abroad. • He is the founder and executive director of the Institute for Social Entrepreneurs, 9560 Dogwood Circle, Eden Prairie, Minnesota.

4. INTRODUCTION • Social entrepreneurship is the work of a social entrepreneur. • Someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. • Business entrepreneur typically measures performance in profit and return. • A social entrepreneur assesses success in terms of the impact s/he has on society.

5. INTRODUCTION: • Social entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors. • The main aim is to further its social and environmental goals. • This need not be incompatible with making a profit - but social enterprises are often non-profits. • Social enterprises are for ‘more-than-profit’

6. INTODUCTION • Social entrepreneurship has moved now into the mainstream. • For years they were hovering around the edges of the nonprofit sector. • By learning from the past mistakes, nonprofit veterans have given eight basic principles for nonprofit entrepreneurship.

7. 1. Earned income is paramount.

8. Traditional nonprofit sector – • Driven by a reliance on philanthropy, voluntarism, and government subsidy. • Earned income has been viewed as something extra. • Social entrepreneurs – • On revenue side, earned income has become the primary goal. • Philanthropy, voluntarism, and government subsidy are added value but not the central.

9. Tectonic shift – not well understood or accepted by many in the sector. • Two reasons:- • FIRST – • Failure to perceive the difference between “innovation” and “entrepreneurship”. • Innovation – doing something new. • Entrepreneurship – doing something that makes money.

10. Social Entrepreneurship – a label for almost any new approach that has a social outcome. • It’s an innovation i.e. to design, develop, and implement a new program. • It’s an Entrepreneurship – useful to sustain it without depending on philanthropy, and government subsidy.

11. SECOND: • Forget the most important difference between earned revenue and donated revenue. • Earned revenue – leads to sustainability and self – determination. • Donated revenue – leads to dependency and kindness of strangers.

12. Dependency – risk for social entrepreneurs, therefore, unwilling to take. • Passionately committed to become financially self- sufficient – in order to do more mission! • Traditional sources of funding became less available during 1980s and 1990s. • More and more non-profits discovered the importance of paying their own way. • Became genuine social entrepreneurs.

13. 2. Be a player or don’t play at all.

14. Peter Drucker – Began preaching a new gospel to nonprofits in the early 1990s. • Helped social entrepreneurs sharpen their organizational focus and expand their impact. • Given advice to CEO of General Electric to do improvement in the Company – stop trying to be all things to all people. • Repeatedly urged non- profits to do the same. • Calls it “organized abandonment”.

15. Ducker's advice runs against the grain of the traditional non-profit mentality. • Process is agonizing. • An important caveat: Being a social entrepreneur does not mean eliminating a program just because it loses money.

16. If a nonprofit is the best or the only provider of a program that’s critically needed, it has an obligation to continue the program. • A managerial challenge is to find other sources of revenue to cover the cost. • Social entrepreneurs have discovered that reducing the number of programs they offer actually enables them to serve more people. • Because they have the time and resources to expand their efforts.

17. 3. Starting a businessventure is not the onlypath to success.

18. Creating a business isn’t the only way to be successful as a social entrepreneur. • The most important is “earned income strategies,” which have nothing to do with starting a business venture. • The two approaches differ substantially in terms of purpose, expectations, and structure:

19. Earned income strategies: • Almost every nonprofit has opportunities for earned income lying follow within its existing programs. • By exploiting the opportunities , nonprofits can register impressive gains. • Raises their percentage of revenue from earned income by as much as 15% within one to three years.

20. Business ventures: • Once a nonprofit has gained experience with earned income strategies, it may consider launching a formal business venture. • The goals would be much more ambitious and the strategy completely different. • The only reason for a nonprofit to start a business venture is to exploit a specific opportunity for significant growth and profitability.

21. 4. Unrelated businessactivities are dangerous.

22. Most nonprofit entrepreneurs have started business venture unrelated to their mission in the late 1970s and mid-1980s. • Those nonprofits learned a painful lesson : Attempting to start an unrelated business venture means they were lost. • The business ventures being started by nonprofits today are emerging directly from their core competencies and basic strengths.

23. Now, nonprofits have been concentrating on two types of ventures: • Affirmative businesses: • John DuRand of Minnesota Diversified Industries (MDI): • Invented the concept of an “affirmative business” in the early 1970s. • Became the most common form of social enterprise.

24. Unlike a sheltered workshop, an affirmative business is created specifically to provide • permanent jobs, • competitive wages, • career opportunities, • and even ownership for people who are disadvantaged, • whether it be mentally, physically, economically, or educationally.

25. Over the years, DuRand took MDI from an initial investment of $100 and seven employees to a $68 million business employing more than 600 people • who were developmentally disabled. • Recently, dozens of other nonprofits have followed his example.

26. Mission-driven product or service businesses. • Non profits delivers mission-driven products or services directly to clients. • Although payment may come from a third party such as a government agency or entitlement program or from a private insurance company. • Unlike affirmative businesses, few of these businesses actually employ the people they serve.

27. Examples- • Assistive devices for people who are physically challenged, • Personal care services to help elderly people at home, • Interactive instructional programs for potential high school dropouts, • Seminars for couples contemplating divorce, • Hospice care for terminally ill patients, and many, many others.

28. 5. Be patient–and don’t runout of money.

29. Social entrepreneurs are badly famous for underestimating the amount of time and money they’ll need to reach their goals. • According to a study, significant revenue for most companies doesn’t begin to flow until the seventh year of existence. • And by the sixth year, the nature of the business has typically changed completely.

30. Nonprofits must invest in their business ventures. • If they cling to a cost mentality, their chances for success are minimal.

31. 6. Recognize the differencesbetween innovators,entrepreneurs, andprofessional managers.

32. Innovators, entrepreneurs, and professional managers are all needed in the organization, but at different times. • Rarely an individual possess more than one of the three skills. • Innovators • Are the dreamers. • They create the prototypes.

33. Entrepreneurs • Are the builders. • They turn prototypes into going concerns. • Professional managers • Secures the future. • Trustees, ones who install the systems and other parts of the infrastructure. • Make sure that the going concern keeps going.

34. Unfortunately, in the nonprofit sector – • Resources are scarce, organizations try adjust the people into positions where they don’t fit. • Adopts entrepreneurial strategies which arises from having an innovator trying to do an entrepreneur’s job. • Or a professional manager trying to be an innovator, and so on.

35. 7. The “nonprofit” culturegets in the way.

36. Culture: • In the nonprofit world - a collection of unspoken compacts that tell us who we are, who we serve, why we serve them, and how. • Must undergo a radical set of changes.

37. Five of the most important changes are: • Be willing to take risks. • Make tough choices about staff members. • Relinquish control. • Emphasize market pull. • Price more aggressively.

38. 8. Remember the NoahPrinciple.

39. Importance of making a commitment. • There aren’t any guarantees— except for one. • If you always do what you’ve always done, you’ll always get what you’ve already got. • According Wayne Gretzky, the Hall of Fame hockey player, "I always missed a hundred per cent of the shots I never took.”

40. So the pioneers have learned to live by the Noah Principle: No more prizes for predicting rain. You only get a prize if you build an ark.

41. REFERENCE • www.socialent.org • www.wikipedia.com

42. e-banking 42