Dom and Her MBA: Year of Learning Summarized

Purpose in life: 
To empower those around me to be healthy and inspired individuals through creating opportunities for community engagement.

Constraints: 
none.


How will I measure my success: 
Smiles and love surrounding me.

The SINGLE bottom line is...

...PURPOSE. 

This weekend was full of presentation both in our COR 530 class as well as the Madonna League presentation. There was a lot of talk of the triple bottom line and even the quadruple bottom line. I kept thinking of Jill's Ted Talk. There is only one bottom line that we should be using to measure our success and that is purpose.  Financial, environmental, and social goals and targets are all set to guide to achievement of our purpose. As Jill Bamburg says "what you measure is what you mange" 

I believe the new regenerative economy will demand transparency of purpose. Purpose is how we will evaluate the businesses in our lives. If a business’s purpose is the highest financial returns to its shareholder this is not wrong or right. It is up to the stakeholders to evaluate that purpose and how it fits into their own lives. If the highest financial returns to shareholders is not what the community of stakeholders desires the business will not achieve its purpose and find that is no longer needed in the business community.

In this Forbes Article (http://www.forbes.com/sites/stevedenning/2011/12/21/why-a-firm-has-only-one-bottom-line/)  Steve Denning writes that only a single goal can be maximized. Often the de facto bottom line is returns to shareholders. He challenges business to adopt a bottom line of delighting customers and by doing so business will be making decision that are better for their employees, the environment, and creating financial gains. 

I look forward to reading Jill's future paper on the NEW single bottom line! 

For those that haven't seen this: 

http://tedxtalks.ted.com/video/Purpose-in-Business-Measuring-W

Let's take a short break from food and food systems today to talk about bikes. Why bikes, here in Seattle bike-to-work month has just come to a close. Thousands of Seattlites put on their helmets and pedaled to work. This is the 3rd year I've actively logged miles and participated in this event. The first time was probably 5 years ago and boy have things improved in those 5 short years.  I loved seeing all the progress Seattle has made making biking a safe activity! I don't claim it is perfect but it is a lot better. I also think we are getting to a critical mass of bikers. I no longer feel like the odd ball biker that drivers are not used to seeing but rather I'm one of 10 bikes at each intersection. In mass numbers we are more visible and car drivers are getting more used to looking for a biker. I know I feel that way as a car driver.

The advancements in Seattle biking infrastructure hasn't been without cost. The 10-year bike master plan has a price tag of $240-million. While that sounds like a big price tag it really if you spread that over 10 years it is about $24-million a year. The SDOT average yearly roads and infrastructure total budget is around $374 a year. Another way to say this is that only 6% of our yearly budget goes to building and expanding our infrastructure for bike transportation in Seattle. Keeping up the road and the system, we currently use to get around the city is expensive and as the infrastructure continues to age and wear out. It will only continue to cost more!

Many educated people have researched and proven that investing in bike infrastructure is well worth the investment.



Here is a short list of the community savings cities can capitalize on when investments on made on bike infrastructure.

Individuals and families reduce their monthly expenditures on gas
Individuals and families increase their activities levels improving overall health
City save on reduced costs of road maintenance
Retail business near bike lines have increased sales
Car commuter spend less time in traffic saving both time and money spent on gas

This is a short list but adds up to millions of yearly savings easily paying back the initial 10 year investment. Check out these resources of folks who have blogged about and done some of the research around putting numbers to these claims. It's not speculation anymore!


Here are a few blogs that spell out nicely the cost and benefits of investing in bicycle infrastructure as well as a report recent report done by League of American Bicyclist.

http://issuu.com/bikeleague/docs/economic_benefits_bicycle_infrastructure_report

http://www.seattlemag.com/article/10-year-bicycle-master-plan-1

http://bikeportland.org/2008/04/30/magazine-editor-blames-bike-lanes-for-portland-fatalities-7388
http://bikeportland.org/2012/10/25/money-talks-the-economic-impact-of-livable-streets-79306
http://dc.streetsblog.org/2012/05/01/fhwa-small-investments-in-bikeped-infrastructure-can-pay-off-in-a-big-way/

And this is a book that I would love to check out: Bikenomics: How Bicycling Can Save The Economy. http://microcosmpublishing.com/catalog/zines/3664/

Lastly to just bring this all back to food the more we rely on human powered transportation the more we get to eat, the more money we have to spend on good food, and the more we can choose to support a healthy regional food system. bam!

Who is the SEC and why should you care?

My team this quarter is diving head long into the world of securities. For a bunch of die hard foodies this is a new world.  Yes, we even had a conversation that when something like 'what exactly is a security'... For those of you courious a security is a broad term to explain financial investment tools that include debt, equity, and derivitives.  These securities that are created can then be sold and traded on primary and secondary markets.

So when the foodies set out to help farmers get access to more capital through connecting them with investors our has been to make sure we follow the federal rules set by the Securities and Exchange Commision. A quick visit to their website and you quickly learn this a beast of an organziation. Information is layed on information and finding clear cut set of rules you must follow is not very straighforward (and this doesn't even cover any state regulation).

For me it was helpful to take a step back and think about the SEC first in a historical context and why it was created in the first place. The story of the SEC begins with the stock crash of October 29, 1929 and the subsequeant great depression. Shortly after Congress passed The Securities Act of 1933 and The Securities Exchange Act of 1934. Under the act publicly-traded companies were now obligated to disclose investment risk and information about the state of their business. Also, companies in the buesiness of selling and trading securities were now legally required to put the interest of their investors first.

The SEC misison is stated as "is to protect investors, maintain fair, orderly and efficien markets, and facilitate capital formation." Also stated is "all investors, wether large or small institution, or private individuals should have access to certain basic facts about investment prior to buying it and so long as the hold it."

There are four divisions of the SEC overseeing key participants in the securities world. (1) coporate finance, (2) trading and markets, (3) managment (dealing with mutual funds, proffisional fund manager, analysist), (4) enforcement and (5) risk, strategy, and rinancial innovation. The SEC has five appointed commisioners who serve five-year terms. The chairman of the SEC is appointed by the president. Interestly only three of the five commissioners can belong to the same political party.

The years since have seen several amendmends these include:

The Securities Act Amendments of 1975 created the Municipal Securities Rulemaking Board (MSRB) which writes rules governing broker dealers engage in municipal securities transactions.

Sarbanes-Oxley Act of 2020 set new stanards for public company boards, management and public accounting firms.

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is finanical regulatory reform legislation passed in repsonse to the late 2000's recession. The Dodd-Frank Act focused on these seven three areas: (1) Regulating credit cards, loans and mortgages; (2) stopping banks from gambling with depositors' money; (3) regulate risky derivatives; (4) bringing hedge funds trades into the light; (5) overseeing credit rating agencies; (6) increasing supervision of insurance companies; and (7) reforming the Federal Reserve.

The Jumpstart Our Business Startups Act includes provisions that require the SEC to undertake various initiatives, including rulemaking and studies touching on capital formation, disclosure and registration requirements.

So when I mentioned layers and layers of information when you go to the SEC website it's the layers of these Act's and Amendments makes it hard for the novice to sift through and find the information. There are acts, rules, regulations and exemptions for almost everything that has to do with securities. The most helpful for our project was a section of the SEC focused on small business. In this section we found a lot of regulations and exemptions meant to help small business overcome some of the high cost barriers to presuing capital formation mechnisms.

So I bet you are asking about now what happens if you don't follow the SEC rules. The SEC will either bring a civil action again individuals or organization or enforce administration sanctions. With the recent rise in crowdfunding some platforms because of their structure where forced to register as broker dealers and until they complied with these regulation had to halt opertions.

But don't be fooled SEC is a law enforcement division and will act accordingly if there investigation warrent civil prosectution. There website reads "First and foremost, the SEC is a law enforcement agency. "


So friends that is who the SEC is and why you should care. They rule the land of securities and exchange and yes, you should care what they think. If you don't like what they do or think they should do something different it is proably advised to push for a change in the laws rather than just ignoring them. But hey, who am I to tell you want to do :)

The Farm is a Community Asset

It's a sunny afternoon here in Boulder and I've found myself a cozy coffee shop with free wifi in hopes of sharing some of the reasons I find myself in this outdoor hippie haven called Boulder.

I'm here for the 4th annual Slow Money gathering happening this Monday and Tuesday. Are you're unsure of what Slow Money is all about go check it out!! (http://www.slowmoney.org). Slow Money is about bringing money back down to earth: literally. Both in the speed in which it is invested and deinvested and in the kinds of things we invest money. Slow Money's website starts off with this statement “In order to enhance food security, food safety and food access; improve nutrition and health; promote cultural, ecological and economic diversity; and accelerate the transition from an economy based on extraction and consumption to an economy based on preservation and restoration, we do hereby affirm the following Slow Money Principles....”

I spent some time on the plane ride today reading Marjorie Kelly's book Owning Our Future. The first half of the book is a engaging narrative of how we got to the current state of the economy. While this was much of my course work in the first quarter of my BGI MBA I still enjoyed Kelly's story telling narrative. Once she establishes the big pictures, she goes deeper and finds alternative models of doing business that are happening right now. These included cooperatively owned business, cohousing developments, and community banks. She claims the future of business will be one of generative business. I agree. She claims generative business follows these five principles. Living Purpose, Rooted Membership, Mission-Controlled Governance, Stakeholder Finance, and Ethical Networks. I won't go into detail here as this wasn't the original point of my post, but I think it frames so well why I am here. I want to find ways to create generative business. Especially business focused on creating a healthy, stable, generative and engaging regional food system.

When I think about what is wrong with our food system and why the regional food system is lagging, one of the things that I continually come back to is that small to mid size farmers are not making money. Most farmers I've talked with don't want/need to make a lot of money and do not want luxurious lifestyles but they do want to have enough money to continue to farm and maybe make sure they themselves, and their families have health insurance. This seems to me a reasonable expectation.

One of the issues my project team identified in the first quarter was the lack of capital for farmers. I've spent some time researching this further and what I find interesting is there are actually a lot of fairly low cost capital options for farmers. Anna Richter identifies some of them in her blog http://sustainablepickle.wordpress.com/2013/04/24/financing-your-agricultural-dreams/ when she discusses how a first time farmer might fund their dreams.

I was specifically drawn to two models of financing that are currently available to farmers. The first is a large national network called Farm Credit Network. Our Northwest branch is called https://www.northwestfcs.com/. They are very progressive and funding many local farm business throughout the region. The Farm Credit Network is all lender-owned. Meaning if you borrow money from the Farm Credit you become a member with stakeholder rights and patronage yearly benefits. This is pretty cool and from what I've been able to research they are making a lot of positive impacts in the local food movement as well as simply keeping farming in our region. One thing I noticed they didn't talk about was sustainability. Which is interesting but also not surprising. I think sustainability for traditional farmers may mean a variety of different things, but when you get past the jargon you often find out most farmers are passionate about their soil, animals, and the health of the environment; it is their livelihood. Sadly, the current economic system puts such economic pressure on their business they are forced to make short term decisions to keep their farms operating. If farmers were making more money maybe these decisions would be non issues.

I think that while the Farm Credit is great I can't help but wonder how farmers can pay even low interest rates. With thin to nonexistent profit margins even low interest rate loans can be a burden.

I truly believe that for our regional food system to be healthy and vibrant we need local community engagement and investment. An investment that is made that is about preserving our current and future food not strictly about stock market return rates. What if it become cool to invest or even own a share of your local farm. Something beyond the common CSA weekly box model. In some parts of the country getting a weekly CSA box or shopping the co-op are cool so why not take it to the next level. With increasing fuel cost, environmental degradation, peak phosphorus, etc it is a good idea to hedge our risk and invest in regional food systems. Small farms in our region exist but how do we create community wealth through these farms? This is a questions we need to be dealing with.

I'm brought back to a quote from Marjorie Kelly about ownership. I wonder if some of the answers are around how we think about ownership of our food system. Who is our farmer and who owns the rights to the community benefits farms add to the local citizens. In the same way we as a society continue to push business to internalize negative externalitities like pollution why can't we as a community internalize the positive value of sustainable regional farms.


“..The idea that ownership is a bundle of rights, which can be unbundled and distributed in novel ways. They show that the problem is not the disaggregation itself but the purpose behind it. When the Haroldson's gave a twig of ownership rights to a mortgage lender, which wielded it against them, extractive purpose was the problem. With the community land trust and catch shares, twigs of ownership are given to parties with Living Purpose and in some cases, disaggregation helps create solutions” -Marjorie Kelly

There are conservation programs such as Equity Trust (http://equitytrust.org/) that help farmers, communities, and cooperatives keep farmland in community ownership. While these models are not perfect they do keep the farm as a community asset protecting the lands from the pressures of developers or becoming someones second home.

Farms are community assets and I'd be willing to pay/invest just to ensure regional farms are their for the next 10, 20, 100 years. My reward for my investment is simply the community benefit. I'm in grad school right now and have no money to put my money where my mouth is so this is all very theoretical to me. If I had money to invest how much would I be willing to invest with only a community return? What if there was a slow financial return? or none at all at the community farm stopped farming?

Can we work with farmers to rethink the ownership of farmland that empower the farmer and engage the community?

This is why I am at Slow Money, I don't know the answer but I'm inspired to hear what others are doing and how they are thinking about this important issue.

B2B Marketing: How it is Special

Currently in school we've been learning about marketing strategies. The business that my team is profiling this quarter is a produce distributor, OGC. Since OGC is in the business of selling to other business I've wondered if there is any significant difference in marketing to businesses versus directly to consumers. I found a white paper called “Why is Business to Business Marketing Special?” by M. Harrison, P. Hague, and N. Hauge of B2B International. I found it informative on some of the differences between marketing to consumers versus Businesses. I've summarized the 10 differences the white paper identified here.

1) B2B Markets Have a More Complex Decision Making Unit
The decision making unit in a business to business (B2B) model can be made up of one person acting on behalf of an organization, but it can also be made up of several individuals on a committee or is a decision that will need to be vetted through several layers of an organization that usually involves several different experts i.e. finance specialist, operations specialist. As a result of this complex decision making process a business to business marketer needs to demonstrate a high level of expertise to adaquetly address the multifaceted business decision making unit. B2B marketers also need to be diligent and patient as decisions often take longer to vet. Not every decision a business makes must be vetted through multiple levels of a company. The Risk-Value Purchasing Decision Matrix below represents relative risk and value decisions a business must make. Marketers in the high value & high risk quadrant must often be the most knowledgeable and diligent.

low-risk, low value: Decisions in this quadrant are made often by one person, possibly more junior in the organization. Relatively little thought goes into the decision as there is low risk if the decision is wrong.
low risk, high value: Often this quadrant is raw materials and involve a mixture of technical and purchasing personnel. A low price without impacting quality is important.
low-value, high risk: This quadrant includes items such as office insurance. Purchase decisions are usually made by specialists and purchases. Purchasers in this quadrant are required to have the expertise, such as a lawyer, to assess risk in each unique transaction. Price is not the driving factor in this quadrant.
high-value, high risk: Plant equipment or other high priced infrastructure would fall in this quadrant. Company leadership would be involved in this type of decision making including possibility a CFO, R&D director, Production Director, Purchasing Director, Head of Legal, CEO, etc.

2) B2B Buyers are More ‘Rational'
Business to Business buyers are more rational and less whimsical about purchasing decisions. Business purchasing units are less susceptible to whims and indulgences and more critical about price, quality, and return on investment. While emotions are still relevant for a business to business buyer a B2B marketer is best served focusing on trust and security.

3)B2B Products are Often More Complex
Business to Business products are often customized and need to be integrated into the business systems. As a result B2B marketers need to be fully informed about their product or services. B2B sales, while not always, rely heavily on the technical sale. B2B sales staff should strive to be extremely experienced and knowledgeable.

4) Limited Number of Buying Units in B2B Markets
It is not unusual for even the largest B2B companies to have 100 or fewer customers. This concentration of key accounts means that B2B marketing is very relationship based. Today many business purchasers are looking to create partnerships with their suppliers. B2B are well served to align themselves with businesses that share similar values.

5) B2B Markets Have Fewer Behavioral and Need-Based Segments
While the consumer products to have 10-12 market segments, it is not uncommon for the average business to business market study to produce only three or four. Typical segments include: (1) Price-focused segment - These are often business with low margins and service/product of low importance. “Extras” are not often important. (2) Quality and brand-focused segment - These business purchases are made on best product available information. Often these businesses have high margins and are usually medium-sized or large. They regard product/service of high strategic importance. (3) Service-focused segment - Businesses in this segments require product quality and range. These businesses are often in time critical industries, small to large with high volumes. (4) Partnership-focused segment - Business in this segment seek trust and reliability and regard the supplier as a strategic partner. They are often large, operate on relatively high margins, product/service is of strategically important.

6) B2B Personal Relationships are More Important to B2B
Personal relationships are very important in the B2B markets. It is not uncommon for B2B suppliers to have loyal customers. As a result B2B will spend a large amount of their marketing budgets on developing these personal relationships and retaining knowledgeable technical staff. The B2B sales person is focused on a limited number of quality-driven relationships often focused on face to face contact.

7) B2B Buyers are Longer-Term Buyers
Business are often making expensive and long-term purchases including capital expenditures and technology upgrades. These purchases are both of high value but often require routine follow-up. B2B marketers are also motivated to ensure lasting relationships as there are fewer business accounts about. Again, relationship building with a technically focused sales team is the focus of a B2B marketing.

8) B2B Markets Drive Innovation Less Than Consumer Markets
Business to business companies are much more responsive to trends rather than seeking to predict (unlike the consumer markets). This is because their customers are more clearly defined and trends easily identified. B2B customers have accessible data from upstream that allows them to carefully assess their options before making decisions. This does not imply there is no innovation rather it is driven by upstream data and complete market intelligence.

9) Consumer Market Rely Far More on Packaging
Simply put, packaging is functional and for the consumer. B2B companies resources are better spent on developing relationships and expertise.

10) Sub-Brands are Less Effective in B2B Markets
It is thought that B2B branding has increased over the years. A while a strong brand is important, sub brands and multiple brands can be confusing and even insulting to business purchasers. Values transmitted. B2B marketers branding should ensure its business values and recognize that less is more, and it is better to have a coherent brand that all can relate to rather than sub-brands.

The "Why is Business to Business Marketing Special?" reports highlights the importance of relationships in business to business marketing. Much of the other reading we are doing this quarter about operations and supply chains also highlights the importance of the relationships. When we relate this back to OGC we discover that OGC continues to foster long term relationships with customers. OGC is not a flashy consumer brand but rather has a dedicated sales staff that provides customers with one on one customer service, reliable information and a trustworthy product.

OGC has recently started a ‘brand' of produce called Ladybug that is exclusively grown in Oregon, Washington, and Idaho. The Ladybug brand is often joint marketeted with OGC's retail clients. Currently the joing branding includes in store displays that highlight the farmers. This presents a unique opportunity for OGC to add value to its products. While this type of joint marketing does not neatly fit into the 10 highlights of a B2B company above, produce (and food in general) has a unique opportunity for this type of innovative partnership. It is a marketing strategy that highlights the whole supply chain creating transparency, trust, and reliability not only for the business purchasing the produce, but for the consumer who will eventually eat the produce.  






M. Harrison, P Hague, & N. Hague. 2013. Why is Business to Business Marketing Special? retrieved from: http://www.b2binternational.com/publications/white-papers/b2b-marketing/

A day with the Organic Elders....

Last Thursday I attended the Next Generation all day intensive at Organicology. It was a star studded event of the organic movement. I enjoyed getting the opportunity to listen and talk with folks who have been in the organic trade movement for thirty plus years. I was continuously struck by the passion and dedication that these folks have for the organic movement. Many organic leaders spent the first part of their career making little or no money and being told they were hippie activists with no real cause. Now many of them are the experts in their field continuing the fight for organics as business owners, policy advisors, and farmers. Here is the list of the organized leader (there were also many other leaders in the room besides these folks):

Anne Schwartz, Owner, Blue Heron Farm & Executive Committee of Washington Tilth;
Bob Scowcroft, Founder & former Executive Director of the Organic Farming Research Foundation*;
Bu Nygrens, co-owner, Founder & Director of Purchasing, Veritable Vegetable;
Lynn Coody, Founder & Principal of Organic Agsystems Consulting;
Mark Lipson, Organic & Sustainable Agriculture Policy Advisor, USDA, Office of the Secretary*;
Dag Falck, Organic Program Manager, Nature's Path
Michael Funk, Chair & Co-Founder of United Natural Foods Inc*;
Roger Blobaum, Organic Research Coordinator, The Ceres Trust;
Theresa Marquez, Mission Executive, Organic Valley/CROPP Cooperative*;
Zea Sonnabend, Policy Specialist, CCOF & Organic Farmer, Fruitilicious Farm*
*Recipient of Organic Trade Association's Leadership Award - the highest honor given annually to an individual who has shown leadership and vision in furthering goals of the organic movement.

I found it interesting that at the beginning of the day I wasn't as passionate about organic as the leaders in the room. Organic, in my opinion, is a step in the right direction but are not to be confused with sustainable agriculture. What I learned after listening to the leaders (or Elders) was how the association I have with organics is only a fraction of what these Elders believe organics stand for, as well as what they believe the should stand for. We had some inspiring conversation about the values of organics. We all share the same values for our food system: health, social equity, environment, and community. But the USDA certified ‘organic' is currently only addressing the farming practices that pertain to chemicals. This is great, but as I mentioned it is NOT sustainable farming. USDA Organic doesn't address fuel in tractors, how the produce is packaged, living wages for farm workers and the water used. Organics are also not creating equity in the food system. It could even be argued that because organics are sold at a premium they create less equity. One of my big take-aways from this all day intensive was that as part of the next generation of champions we need to continue the fight for both sustainability and equity in our food system. Maybe it will be new certifications, maybe it will be new government regulation, maybe it will be new social services, or new innovative business (and maybe, or rather hopefully, it will be all of these things). We need to accomplish something as and possibly more meaningful than the USDA organic standard in the next thirty years.

One thing that came up often as well was the idea of Organic as a transparent movement. I think our entire food system needs some serious transparency. If transparency is the future, then how do we get folks to take the first step? Who is going to be brave enough to admit their weakness, and the areas that need improvement and risk their competitors taking advantage of their weakness. The business world is historically cut-throat after all.

The Intensive structure allowed folks who have been in their professional careers in the organic food industry for 30 plus years to talk about not only the organic movement but talk about leadership. Questions we got to ask included: (1) what were the characteristics they thought were assets to their career, (2) what where some of their biggest mistakes, (3) what were some words of wisdom they had to pass on, and (3) what they thought they could learn from the next generation. Dag Falk's words of advice stuck with me; to be fearlessly transparent as the biggest asset to his career and the biggest suggestion he has for the next generation. He talked about a current challenge in the industry that is in need of some fearlessly transparent champions. It was around this idea that we need to make sure consumers understand that the USDA organic standard is a practice standard (as in the fruit isn't tested rather farms are inspected). He believes that if this isn't clarified to consumers there could be a backlash and hurt the movement. He also talked about why he was part of the Non-GMO project. It is a project that tests produce and products to insure there are no GMO's contamination. Some of his peers in the Organic movement thought it best to not address the issue of Organic products being contaminated with GMOs. He didn't agree. He thought it was best to be transparent and then provide another tool. The non-GMO project provides customers a verified scientific quantified certification that the product is below a certain GMO contamination. It is actually a consumer tool that pairs nicely with the USDA Organic certificate if you ask me.


Fearlessly transparent. I like it.