Leading with Innovation,
Learning from Failure
The Corps Network 2014 National Conference
February 11, 2014
February 11, 2014
Introduction
Presenters:
• Wendy Butts – Los Angeles Conservation Corps
• Dan Knapp – Los Angeles Conservation Corps
• Jeff Parker – Northwest Youth Corps
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LA Conservation CorpsMission: LA Corps’ primary mission is to provide at-risk young adults and school-aged youth with opportunities for success through job skills training, education and work experience with an emphasis on conservation and service projects that benefit the community.• 400 18- to 24-year-old Young Adult Corps corpsmembers who receive on-
the-job training, paid work experience and attend our charter school site to complete their high school education
• 500 14- to 17-year old corpsmembers who perform paid community beautification work in Clean & Green
• 250 14- to 18-year-old students enrolled in two full-time charter high school sites (operated by The Education Corps)
• 6,000 elementary and middle school students (ages 10 to 14) from 16 LAUSD schools who participate in after school enrichment activities and receive tutoring services in our After School Program
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Northwest Youth Corps
Mission: To help youth and young adults learn, grow, and experience success.• Work in 5-state area• 800 16- to 19-year-old participants• 150 18- to 24-year-old participants• 60 full-time high school students• Residential and non-residential formats
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Introduction
Workshop outline:
1. Discuss the drivers of innovation2. Discuss the potential risks of innovation3. Case Study Analysis4. Lessons Learned5. Share risk reduction and analytical tools
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What Drives Innovation in the Corps Industry?
• Diversify Funding Streams• Increase Participant Outcomes/Services• Integrate Operations• Particular Staff Expertise and/or Passion• Opportunity• Other?
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What is the Risk of Failure?
• Financial shortfall• Unmet participant outcomes• Mission drift• Harm to brand• Bad public relations• Other?
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What is Your Organizational Risk Tolerance Level?
• Risk Tolerance Spectrumo Staffo Boardo Participantso Other Stakeholders
• Difference between “need to” and “want to”• Size of the opportunity• Organizational culture• Organizational experience – positive and negative
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Case Study: Los Angeles Conservation Corps’
Weatherization Program
Challenges and Lessons Learned
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The Program Design
1. Long Beach Community Action Partnership2. Los Angeles Conservation Corps Network• LA Conservation Corps – lead• Long Beach Conservation Corps• San Gabriel Valley Conservation Corps• California Conservation Corps
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Wx Program Organizational Chart
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Benefits for LA Conservation Corps• Good platform for on-the-job training for
corpsmembers• Mechanism for accessing and capitalizing on
the influx of ARRA funding• Good source of contract funding with a
sustainable infrastructure for growth• Potential profit-generating social enterprise
project
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What We Knew/Didn’t Know in Planning Phase
• Cash flow was going to be an issue• Partnership lacked key expertise/was co-dependent • Staff training was extensive and time-consuming• CSD was bogged down with ARRA-funded projects
and couldn’t provided needed support• Not enough skilled professionals were available• LBCAP would choose to inspect all homes at 100%• Collaboration with LBCAP would be difficult
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A Problematic Implementation• Multiple trips to homes meant low or no profit-
margin• Billing cycle was too short; LACCN missed
opportunity to bill for services provided• Higher than expected standard of work quality
created issues
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The Intervention
• Harsh financial realities • Requests for reimbursement/
programmatic changes unaddressed• Analysis/realistic expectations/forecasting
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The Final 18 Months
Measurable losses + Questionable management changes +
Issues with financial reporting = Unsuccessful program
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What We Didn’t Know/Should Have Done (in Retrospect)
• Relationship with partner difficult to manage• 6- to 8-year recovery of start-up costs• Depleted human capital/low skills levels of staff• Ensured conflict resolution process at start• Delineated clear expectations at start• Created exit plan during Planning & Design• Better plan for contingencies• Build in checks & balances/better reporting to stakeholders• Reported on finances throughout implementation
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Primary Causes of Failure
• Lack of control of primary functions, inc. marketing
• Lack of oversight of and systems for program• Insufficient program modeling of costs,
finances & operations• Management structure of partner
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Lessons Learned• Buy-in & collective responsibility• The importance of planning• The power of partnership• Looking forward & looking back• It’s ok to make mistakes/knowing when to say
when• Power in the wrong hands
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Where Do We Go From Here?• Leadership has changed the way it works
together and what it reports to the Board• Business plans for any off-mission programming
and/or new endeavors• Creation of simple to read and understand
financial, programmatic and strategic reporting tools with monthly info. on unbilled receivables, profit & loss (by project), hidden & uncovered costs and administrative expenses.
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Where Do We Go From Here? (cont.)
• Information on new projects shared during planning phase/key strategic planning info. reported on by quarter
• Financial management infrastructure reviewed/checks and balances integrated
• Collaborative approach to decision making• Continue to work on relationship building/only
enter into contracts/situations that make good business sense
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Process for Program Innovation
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Opportunity Market Study
Due Diligence
Testing Assumption
sInnovation
Analytical Tools for Innovation
Market study
• Market size• Market growth rate• Market profitability• Cost structure• Market trends• Key factors for success and sustainability
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Analytical Tools for Innovation
Due Diligence Research
LACC Project Evaluation Questionnaire
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Analytical Tools for Innovation
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Revenues 2014 Budget 2015 Budget 2016 Budget Optimized Budet Optimized Budet
Total Revenue $ 452,865 $ 508,830 $ 581,400 $
713,400 $ 840,300
Indirect Charges
Direct Expenses
2014 Budget 2015 Budget 2016 Budget Optimized Optimized
Total Expense $ 452,686 $ 505,420 $ 581,394 $ 701,237 $ 815,228
Total Revenues $ 452,865 $ 508,830 $ 581,400 $ 713,400 $ 840,300
Subtotal Income (Loss) $ 179 $ 3,410 $
7 $ 12,164 $ 25,072
Pro Forma –Test Every Assumption
Analytical Tools for Innovation
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Cash Flow –Test Every Assumption
Year 1 Revenue Starting Surplus September October November December January February March April May June $ 70,522 $ 54,785 $ 51,881 $ 29,381 $ 38,381 $ 48,881 $ 50,381 $ 47,381 $ 48,881 $ 32,381 Year 1 Expense September October November December January February March April May June $ 50,382 $ 46,382 $ 46,382 $ 42,882 $ 43,882 $ 45,382 $ 43,882 $ 45,382 $ 46,882 $ 42,382 Year 2 revenue Starting Surplus September October November December January February March April May June
$ 19,032 $ 85,434 $ 64,144 $ 61,065 $ 51,065 $ 55,065 $ 59,732 $ 60,400 $ 59,065 $ 59,732 $ 52,400 Year 2 Expense September October November December January February March April May June $ 65,185 $ 59,851 $ 59,851 $ 55,185 $ 56,518 $ 58,518 $ 56,518 $ 58,518 $ 60,518 $ 54,518 Year 3 revenue Starting Surplus September October November December January February March April May June
$ 41,961 $ 102,590 $ 79,064 $ 75,602 $ 63,102 $ 68,102 $ 73,935 $ 74,768 $ 73,101 $ 73,935 $ 64,768 Year 3 Expense September October November December January February March April May June $ 80,055 $ 73,389 $ 73,389 $ 67,555 $ 69,222 $ 71,722 $ 69,222 $ 71,722 $ 74,222 $ 66,722
Analytical Tools for Innovation
February 11, 2014
Working Capital –Test Every Assumption
September October November December January February March April May June
Year 1 $ 20,140 $ 28,543 $ 34,042 $ 20,540 $ 15,039 $ 18,537 $ 25,036 $ 27,034 $ 29,033 $ 19,031
Year 2 $ 39,281 $ 43,574 $ 44,789 $ 40,670 $ 39,218 $ 40,433 $ 44,315 $ 44,863 $ 44,078 $ 41,960
Year 3 $ 64,495 $ 70,170 $ 72,384 $ 67,931 $ 66,812 $ 69,025 $ 74,572 $ 75,951 $ 75,665 $ 73,711
September October November December January February March April May June $-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
Year 1Series2Year 2Series4Year 3
Discussion
Examples from the Group
What were the lessons learned?
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Contact Us:• Wendy Butts, Managing Director, LACC
213/362-9000 x206/[email protected]
• Dan Knapp, Deputy Director, LACC213/362-9000 x242/[email protected]
• Jeff Parker, Executive Director, NYC 541-349-7500 [email protected]
February 11, 2014