"Level 5" refers to a five-level hierarchy of executive capabilities, with level 5 at the top. Level 5 leaders embody a paradoxical mix of personal humility and professional will. They are ambitious, to be sure, but ambitious first and foremost for the company (school, non-profit, etc.), not themselves.
Below "Level 5" is:
• "Effective Leader"— Catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.
• "Competent Manager"— Organizes people and resources toward the effective pursuit of pre-determined objectives.
• "Contributing Team Member"— Contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting.
• "Highly Capable Individual"— Makes productive contributions through talent, knowledge, skills, and good work habits.
Level 5 leaders set up their successors for even greater success in the next generation, whereas egocentric Level 4 leaders often set up their successors for failure.
...look out the window to apportion credit to factors outside themselves when things go well. At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.
... display a compelling modesty, are self-effacing and understated.
... are fanatically driven, infected with an incurable need to produce sustained results. They are resolved to do whatever it takes to make the company (school, non-profit, etc.) great, no matter how big or hard the decisions.
...display a workmanlike diligence— more plow horse than show horse.
...attribute much of their success to good luck, rather than personal greatness.
Sunday, July 24, 2011
Monday, July 11, 2011
Meeting with Kina Mahi, Hawai'i Community Foundation
Kina Mahi from HCF/Island Innovation Fund and formerly of Hawai'i Community Loan Fund was very gracious to attend one of our Kuleana meetings (along with her three-month old daughter) to share her knowledge of micro-lending.
Kina shared with us how the Hawai'i Community Loan Fund existed for approximately ten years from the mid-to-late 90's to the early 2000's. They specialized in non-bankable loans to individuals and families to start businesses. They serviced about 30-45 active loans ranging from $15,000 to $100,000. (Although an article from the Advertiser puts the top range at $250,000. Either way, that's way higher than we propose.) Some of the enterprises that received loans were Ho'ala School and a restaurant on the North Shore that is still around (I forgot the name). The staff consisted of some very talented people who did loan servicing, accounting, and technical assistance that helped to customize the payback route for each loan.
They started off with $1.5 million in seed money from local banks and OHA. The interest rate charged was usually about 12-14% and was used to fund their revolving loan fund. Ultimately they ran out of operating capital to pay the salaries of the staff members and they were reluctant to charge much higher interest rates in order to be more financially sound.
One of the challenges they faced, as expected, was getting people to pay back their loans, one of the many arguments skeptics make about micro-lending in Hawai'i or any other first world economy. Some borrowers would say things like "you're a non-profit so we don;t need to pay you back." Kina said they also found a direct linear relationship between borrowers' credit scores and repayment/delinquency rates. One of their problems is that they didn't have a cut off for a minimum credit score for applicants. (We don't plan to either, but we're hoping that the referral process from our partner agencies will help us avoid some of those pitfalls.)
Other areas that she said we should be aware of or look to implement:
— a standardized program to train borrowers. (We can hopefully look to Maui Economic Opportunity or even Grameen America for workable models in that area.)
— collateralization. Rebecca Soon mentioned that this is very difficult with low-income borrowers but is still a good idea, especially if the money borrowed is used to buy inventory of some kind.
— technical assistance is important, but mentoring could possibly make up for a lack of quantifiable metrics
— board representation by the banks can be good or bad, depending on mission. She mentioned that we should look to the credit unions as well.
— reporting to credit agencies could also be a good idea
— engendering a professional environment is important to create a higher level of expectation from the borrower
— private donors tend to be better over the long term versus foundations or even banks (who expect their money to be paid back)
— Loan Loss Reserve— 20% of loans outstanding— crucial!
One idea that came out of the discussions was to create steps in the loan implementation process that reinforce the idea of success for the borrower. For example, finishing the basic financial education course should be celebrated with a formal occasion; making eleven consecutive payments could then allow the borrower to skip the twelfth. We could even time it around Christmas time so that if the borrower makes a minimum of six consecutive payments on time then s/he could skip the payment in December or January to offset holiday bills.
All in all it was a great conversation about what is possible, what to look out for, and how difficult micro-lending can be.
Kina shared with us how the Hawai'i Community Loan Fund existed for approximately ten years from the mid-to-late 90's to the early 2000's. They specialized in non-bankable loans to individuals and families to start businesses. They serviced about 30-45 active loans ranging from $15,000 to $100,000. (Although an article from the Advertiser puts the top range at $250,000. Either way, that's way higher than we propose.) Some of the enterprises that received loans were Ho'ala School and a restaurant on the North Shore that is still around (I forgot the name). The staff consisted of some very talented people who did loan servicing, accounting, and technical assistance that helped to customize the payback route for each loan.
They started off with $1.5 million in seed money from local banks and OHA. The interest rate charged was usually about 12-14% and was used to fund their revolving loan fund. Ultimately they ran out of operating capital to pay the salaries of the staff members and they were reluctant to charge much higher interest rates in order to be more financially sound.
One of the challenges they faced, as expected, was getting people to pay back their loans, one of the many arguments skeptics make about micro-lending in Hawai'i or any other first world economy. Some borrowers would say things like "you're a non-profit so we don;t need to pay you back." Kina said they also found a direct linear relationship between borrowers' credit scores and repayment/delinquency rates. One of their problems is that they didn't have a cut off for a minimum credit score for applicants. (We don't plan to either, but we're hoping that the referral process from our partner agencies will help us avoid some of those pitfalls.)
Other areas that she said we should be aware of or look to implement:
— a standardized program to train borrowers. (We can hopefully look to Maui Economic Opportunity or even Grameen America for workable models in that area.)
— collateralization. Rebecca Soon mentioned that this is very difficult with low-income borrowers but is still a good idea, especially if the money borrowed is used to buy inventory of some kind.
— technical assistance is important, but mentoring could possibly make up for a lack of quantifiable metrics
— board representation by the banks can be good or bad, depending on mission. She mentioned that we should look to the credit unions as well.
— reporting to credit agencies could also be a good idea
— engendering a professional environment is important to create a higher level of expectation from the borrower
— private donors tend to be better over the long term versus foundations or even banks (who expect their money to be paid back)
— Loan Loss Reserve— 20% of loans outstanding— crucial!
One idea that came out of the discussions was to create steps in the loan implementation process that reinforce the idea of success for the borrower. For example, finishing the basic financial education course should be celebrated with a formal occasion; making eleven consecutive payments could then allow the borrower to skip the twelfth. We could even time it around Christmas time so that if the borrower makes a minimum of six consecutive payments on time then s/he could skip the payment in December or January to offset holiday bills.
All in all it was a great conversation about what is possible, what to look out for, and how difficult micro-lending can be.
Meeting with Dana Tokioka and Keith Emerson from Tradewind Capital Group
Dana Tokioka and Keith Emerson were very gracious to take me to lunch to offer feedback on the Kuleana business plan.
They encouraged us to emphasize the mentoring component along with loan payback/accountability and life skills as features of our program that will distinguish us from other micro-lending ventures. It's also crucial to highlight the true impact of the money donors will contribute so that people don't feel they are throwing their funding at an abstract goal. How we measure success, both tangibly and intangibly, are important message to convey.
Scale was another area that they wondered about. It's not the first time we've heard that concern and certainly won;t be the last. It's a question we will confront for the foreseeable future: how will we be able to serve more and more people, especially if our program proves to be successful.
Other helpful questions:
Is $5,000 enough to really cover start-up costs of a viable business?
What are the legal implications or restrictions of what we're proposing?
How do you make winners out of the people who's businesses fail (and many, if not most, of them will)?
They encouraged us to emphasize the mentoring component along with loan payback/accountability and life skills as features of our program that will distinguish us from other micro-lending ventures. It's also crucial to highlight the true impact of the money donors will contribute so that people don't feel they are throwing their funding at an abstract goal. How we measure success, both tangibly and intangibly, are important message to convey.
Scale was another area that they wondered about. It's not the first time we've heard that concern and certainly won;t be the last. It's a question we will confront for the foreseeable future: how will we be able to serve more and more people, especially if our program proves to be successful.
Other helpful questions:
Is $5,000 enough to really cover start-up costs of a viable business?
What are the legal implications or restrictions of what we're proposing?
How do you make winners out of the people who's businesses fail (and many, if not most, of them will)?
David Brooks— The Social Animal: Mindsight
The truth is, starting from before we are born, we inherit a great river of knowledge, a great flow of patterns coming from many ages and many sources. The information that comes from deep in the evolutionary past, we call genetics. The information revelaed thousands of years ago, we call religion. The information passed along from hundreds of years ago, we call culture. The information passed along from decades ago, we call family, and the information offered years, months, days or hours ago, we call education and advice.
Some people believe that humans are careful theorizers...rational scientists, constantly weighing evidence and testing explanations.
However, a rival hypothesis states that we automatically simulate others, and understand what others feel by a version of what they are experiencing, in ourselves. In this view we are unconscious Method actors who understand by sharing or at least simulating the responses they see in the people around them. We're able to function in the world because we partially permeate each other's minds and understand— some people more, some less. Human beings understand others in themselves, and they form themselves by reenacting the internal processes they pick up form others.
...the processes of perception and evaluation are intermingled...the more two people imitate each other's movements, the more they like each other— and the more they like each other, the more they imitate.
Minds are intensely permeable. Loops exist between brains. The same thought and feeling can arise in different minds, with invisible networks filling in the space between them.
Most jokes are intensely social and bubble up when people find a solution to some social incongruity. Laughter is a language that people use to bond, to cover over social awkwardness or to reinforce bonding that has already occurred.
People are born into relationships— with parents, with ancestors— and those relationships create people... a brain is something that is contained within a single skull. A mind only exists within a network. It is the result of the interaction between brains, and it is important not to confuse brains with minds.
Some people believe that humans are careful theorizers...rational scientists, constantly weighing evidence and testing explanations.
However, a rival hypothesis states that we automatically simulate others, and understand what others feel by a version of what they are experiencing, in ourselves. In this view we are unconscious Method actors who understand by sharing or at least simulating the responses they see in the people around them. We're able to function in the world because we partially permeate each other's minds and understand— some people more, some less. Human beings understand others in themselves, and they form themselves by reenacting the internal processes they pick up form others.
...the processes of perception and evaluation are intermingled...the more two people imitate each other's movements, the more they like each other— and the more they like each other, the more they imitate.
Minds are intensely permeable. Loops exist between brains. The same thought and feeling can arise in different minds, with invisible networks filling in the space between them.
Most jokes are intensely social and bubble up when people find a solution to some social incongruity. Laughter is a language that people use to bond, to cover over social awkwardness or to reinforce bonding that has already occurred.
People are born into relationships— with parents, with ancestors— and those relationships create people... a brain is something that is contained within a single skull. A mind only exists within a network. It is the result of the interaction between brains, and it is important not to confuse brains with minds.
David Brooks— The Social Animal: The Map Meld
Marital satisfaction generally follows a U-shaped curve. couples are deliriously happy during the first years of marriage. Their self-reported satisfaction declines and bottoms out when their children hit adolescence, then it climbs again as they enter retirement.
There's something to the old joke that women need to feel loved in order to have sex and men need to have sex in order to feel loved.
Highly educated women are much more likely to perform oral sex, engage in same-sex activity, and experiment with a variety of other activities than less-educated women. Religious women are less adventurous than non-religious women, though the desires of religious men are not much different than those of secular ones. (Roy Baumeister, The Cultural Animal: Human Nature, Meaning, and Social Life
They say that foreplay for a woman is anything that happens twenty-four hours before intercourse.
An organsm is not a reflex. It's a perception, a mental event... some women can achieve orgasm just by thinking the right thoughts... the mental traits that are associated with ease of orgasms— a willingness to surrender control, the ability to be hyptnotized, the inability to control thoughts during sex...
There's something to the old joke that women need to feel loved in order to have sex and men need to have sex in order to feel loved.
Highly educated women are much more likely to perform oral sex, engage in same-sex activity, and experiment with a variety of other activities than less-educated women. Religious women are less adventurous than non-religious women, though the desires of religious men are not much different than those of secular ones. (Roy Baumeister, The Cultural Animal: Human Nature, Meaning, and Social Life
They say that foreplay for a woman is anything that happens twenty-four hours before intercourse.
An organsm is not a reflex. It's a perception, a mental event... some women can achieve orgasm just by thinking the right thoughts... the mental traits that are associated with ease of orgasms— a willingness to surrender control, the ability to be hyptnotized, the inability to control thoughts during sex...
Subscribe to:
Posts (Atom)