Small Business Development Center

Kim Horan set up a meeting with Pia Chock from the Small Business Development Center about possibly partnering with them for business consulting/mentoring of for our loan recipients. The SBDC is federally funded resource that allows clients to meet with their mentors as often as they need and it would provide its services for free.

Also joining us was Len Fukushima from Merrill Lynch. Len had a nbunch of really interesting ideas to consider:
— go to banks and credit unions around town, ask for $5,000 to fund a micro-loan, and in return they get to place one person on the Loan Selection Committee to ensure accountability
— go to the respective Chambers of Commerce (Filipino, Chinese, Japanese) and ask them for free membership for the loan recipients
— centralized bookkeeping system: standardize the process by having a link from the central website to Quickbooks or other accounting software; each borrower would have her/his own password and account; the SBDC mentor could help with inputting the data (sales, receipts, etc.)

Ultimately, as Len and Pia pointed out, there needs to be accountability built into this program. How does the mentoring work after the loan is given out? How do encourage borrowers to work together with their peer groups to enable success? And when things go wrong, we need to be able to ask "Who is to Blame?" And then we need to know how to fix the problems and educate the people so that we can continue moving forward.

Hawaii Angels, Women's Fund

Met with Chenoa Farnsworth from Farnsworth Consulting, Hawaii Angels, and the Women's Fund.

She cited mentoring as the key component to making sure a micro-lending project could work. For reference she recommended Jump Start, "a nationally recognized non-profit transforming the economic impact of entrepreneurial ventures and the ecosystems supporting their growth." They key to having effective mentors is to 1) pay them a reasonable wage to ensure that they are 2) reasonably, if not highly, qualified. This makes me second guess my desire to partner with undergraduates from the Shidler School of Business. If we go that route then we should probably focus exclusively on graduate students.

Other resources we could pursue are:
— Hawaii Alliance of Non-Profit Organizations
— Economic Development Administration, Gail Fujita
— American Savings Bank, Kaulana Park
— Oahu Economic Development Board/Enterprise Honolulu, Pono Shim

Finally, one area we need extra help and expertise in is servicing of loans. To accomplish that we will probably need to get a loan officer from a local bank either to join our board or provide us with consultation on how best to achieve that goal.

House Bill 198 and 1380

Representative Jessica Wooley crafted the following "School gardens" legislation, House Bill 198:

‘S302A- School gardens. (a) All schools are authorized to grow food in school gardens for consumption in their school meals programs; provided that food products used in
a school meals program shall be inspected and certified as safe by the department of agriculture.

Testimony in favor came from the Environmental Caucus of the Democratic Party of Hawaii as well as the Kokua Foundation, and the National Heart Association. The main objections came from local farmers who cited the food safety certification process as not being articulated clearly enough in the language. DOE Superintendent Kathryn Matayoshi also submitted testimony that the schools would not be allowed to use produce harvested in school gardens as part of the National School Lunch Program unless the Department of Agriculture certified it. Apparently they can, however, eat the lunch as part of a snack or other program so long as it's not part of lunch.
Ultimately this bill was combined with House Bill 1380, Relating to Hawai'i Grown Produce, but there was no authorization. Instead this bill calls for a task force to:
"Examine the feasibility of establishing school gardens, to grow food for consumption as part of each school's lunch program, specifically looking at food safety certification issues;" The task force will submit its findings prior to the 2012 session when it will be taken up again. (It would be great to get Eliza Lathrop on that task force.)
So it looks like liability concerns are slowing this idea down, but progress was made and there is a chance to fight for it another day.

Island Innovation Fund

Jessica Horiuchi, Kevin Kawahara, and I had a good conference call conversation with Kina Mahi to get feedback about our IIF proposal.

On the positive side, they liked our connections to community partners and the level of in-kind contributions. She mentioned that to their knowledge no one else out in the community seems to be making loans at the $5,000 level so they found that attractive.

On the other end, they questioned the impact and scalability of our proposal (only 3-5 loans for an $85,000 grant) and our ability to sustain the effort over the long term. One factor that worked against us is that we don't have any cash at the moment or any other funding source to provide stability for our operations. They were also hoping to see a greater understanding of the loan processing and default procedures for the loans and a stronger connection to existing local micro-lending organizations.

USS Abraham Lincoln

Last week I had the opportunity to land on the aircraft carrier USS Abraham Lincoln— "Shall Not Perish!" What an incredible sensory experience to go from 150 mph to 0 in less than three seconds and then to walk out on the flight deck to see the hive of activity undertaken every day to launch fighter jets and then land them safely. As was my experience on the submarine USS Charlotte, the level of professionalism and competence of these sailors, some of them barely college age, was incredibly impressive and patriotism-inspiring. The leadership of the commanders was first rate as they went out of their way to make sure their charges received constant feedback and acknowledgment for their efforts. We got to speak to the Captain as he navigated the ship, the Admiral about the overall strategy of our naval forces, and every support commander from the Air Boss to the meteorolgists to the main mechanics. At each meal we sat with sailors, pilots, or Chief Warrant Officers to hear their "Navy stories" and they were all impressive. Just the thought of being away from families for six months— many of them missed the births of their children— and the forthrightness with which they approached their duties was truly admirable. Allright enough writing; I will let the pictures speak for themselves.

Native Hawaiian Government Reorganization Act

I've been working with Rep. Jessica Wooley on HB 1627 the state version of the Akaka Bill which seeks to "provide a process for the reorganization of a first nation government by Native Hawaiians and its subsequent recognition by the State of Hawai'i."

The arguments for such a measure are the same as for the Akaka Bill on the federal level: the Hawaiian monarchy was illegally overthrown, the United States issued a formal Apology Resolution acknowledging that violation of international law, native Americans and Alaskans have that type of relationship already.

The arguments against, based on the testimony submitted, is much more extensive and is summarized as follows:

• Violates constitution of Kingdom of Hawaii
Richard Kinney, Free Hawaii: “Queen Liliuokalani was the Constitutional Soveriegn of all her subjects of the Hawaiian Kingdom. Not only those of the Indigenous Native people of her Kingdom.”
Ken Conklin: “…violates the first sentence of the first Constitution of the Kingdom of Hawaii (1840)… the kokokahi (one blood) sentence: God has made of one blood all rces of people to dwell upon the Earth in unity and blessedness.”
KeAloha Aiu: “The Hawaiian Kingdom was a fully operational, fully recognized, progressive, sovereign, independent, neutral nation. Its body politic consisted of people from many different ethnicities and races, not just ‘native’ Hawaiians.’”
William Burgess: “…there has never been in Hawaii, even during the years of the Kingdom, any ‘tribe’ or government of any kind for Native Hawaiians separate from the government of the rest of Hawaii’s citizens.”
Joseph Heaukulani: “In regard to self-determination, this bill seems to have forgotten those subjects of the Hawaiian Kingdom who were not of ‘aboriginal, indigenous, native descent,’ but were instead naturalized alien foreigners that were thereafter considered to be native and who also lost their natural to self-determination with the overthrow of the Hawaiian Kingdom on January 17, 1893.”
Dennis Ragsdale, Kingdom of Hawai’i: “Neither the written Constitution for the Kingdom of Hawai’i or its statutory laws made any reference to aboriginal status, right or privileges of anyone. The Constitution and statutory laws of the Kingdom of Hawai’i did make provisions for citizens and aliens, and their respective rights within and under the representative government.”

• Violates U.S. Constitution
Ken Conklin: “The clear purpose of the bill is to authorize the creation of an entity with governmental powers, but restricted to people who have at least one drop of Hawaiian native blood. That racist concept is unconstitutional under the 14th amendment of the U.S. Constitution.
William Burgess: “Congress…does not have the power to create a tribe arbitrarily (U.S. vs. Sandoval)
Charles Zahn: ..restricted to people who have at least one drop of Hawaiian blood…is unconstitutional under the 14th amendment of the U.S. Constitution.”
Garry P. Smith: “How can the state recognize native Hawaiians as a tribe when they are not and never have been a tribe?”
Kealii Makekau: “Creation of a Nation or Tribe is not authorized in the Constitution.”

• Disenfranchises Hawaiians
Sue Haglund: “HB 1627 does not establish a proper representation of native Hawaiian voice… in creating a ‘commission’ appointed by a governor, and the required criteria in defining ‘qualified Native Hawaiian constituent’ yet fails to establish a required criteria of a commission nine-member appointees.”
Raymond Heaukulani: “…sounds as if the governor can appoint anyone s/he wills regardless of whether they should be qualified to decide who is Hawaiian and who is not…”
David M.K. Inciong, II: “To usurp the Hawaiian Kingdom by creating a tribal governing entity to replace it, is repugnant to the international laws, U.S. Constitutional laws, Hawaiian Kingdom laws and moral rights of its citizens…We Hawaii patriots do not subscribe to the racist WASP Manifest Destiny doctrines that this bill supports. (?)”

• Does not recognize the illegality of annexation
Koani Foundation: “HB 1627 does not address the real issue of the theft of the Hawaiian nation and the injuries that stem from that… joint resolution, (not an official treaty, therefore, no lands were ceded) title to the lands of the Hawaiian Islands, to this day, still reside with the lawful Hawaiian Kingdom government and its people.”
Leon Siu, Free Hawaii: “There was no ‘treaty of annexation.’…the Hawaiian Kingdom still exists…”

• Clarification of “native Hawaiians”
Cheryl Lovell-Obatake: “I am a Kuleana land owner. I request clarification on the definition of native Hawaiians.”

• Unnecessary bureaucracy
KT Yungeirott: “Just creating another department. Hawaii cannot afford this.”


I used to think that it made sense for Hawaiians to have the same government to government relationship with the US that native Americans and Alaskans enjoy. But after reading over the bill and the testimony I'm having a hard time reconciling the fact that the government being proposed never actually existed in the history of Hawai'i. None of the constitutions of the Kingdom of Hawai'i required a person to have "aboriginal" blood so I find it hard to conceive of how this bill restores something based on that unprecedented premise. If it remains "race-based" then it's also easy to see how this proposal violates the 14th amendment of the US Constitution, and therefore won't stand up if brought to trial as it most certainly will by Bill Burgess, Ken Conklin et. al.

Peter Drucker— Chapter 2, Leadership is a Foul-Weather Job

Chapter 2— Leadership is a Foul-Weather Job

Fortunately or unfortunately, the one predictable thing in any organization is the crisis. That always comes. That’s when you do depend on the leader.

The most important task of an organization’s leader is to anticipate crisis. Perhaps not to avert it, but to anticipate it. To wait until the crisis hits is already abdication. One has to make the organization capable of anticipating the storm, weathering it, and in fact, being ahead of it. That’s called innovation, constant renewal.

The lesson for leaders of non-profits is that one has to grow with success. But one also has to make sure that one doesn’t become unable to adjust. Sooner or later, growth slows down and the institution plateaus. Then it has to be able to maintain its momentum, its flexibility, its vitality, and its vision. Otherwise, it becomes frozen.

Non-profit organizations have no “bottom line.” They are prone to consider everything they do to be righteous and moral and to serve a cause, so they are not willing to say, if it doesn't produce results then maybe we should direct our resources elsewhere. Non-profit organizations need the discipline of organized abandonment perhaps even more than a business does. They need to face up to critical choices.

The starting point is to recognize that change is not a threat. It’s an opportunity.

Changes in Mind-Set and Mentality— The lesson is, Don’t wait. Organize yourself for systematic innovation. Build the search opportunities, inside and outside, into your organization. Look for changes as indicators of an opportunity for innovation.

First, organize yourself to see the opportunity. If you don't look out the window, you won’t see it.

Then, to implement the innovation effectively: the most common mistake± the one that kills more innovations than anything else— is the attempt to build too much reinsurance into the change, to cover your flank, not to alienate yesterday.

Next, the problem of organizing the new: It must be organized separately. If you put new ideas into operating units the solving of the daily crisis will always take precedence over introducing tomorrow. So when you try to develop the new within an existing operation, you are always postponing tomorrow. It must be set up separately. And yet you have to make sure the existing operations don't lose the excitement of the new entirely. Otherwise, they become not only hostile but paralyzed.

The Innovative Strategy— Successful innovation finds a target of opportunity. Somebody who is receptive, who welcomes the new, who wants to succeed and, at the same time, has enough stature, enough clout in the organization so that, if it works for him or her, the rest of the organization will say, Well, there must be something to it.

If you plan first and then try to sell, you’re going to miss the important things. But you also waste years of time. Selling has to be built into planning, and that means involving the operating people. But don’t forget one thing: everything new requires hard work on the part of the true believers— and true believers are not available part time.

How to pick a leader— First I would look at what the individuals have done, what their strengths are. The first thing to look for is strength— you can only perform with strength— and what they have done with it.

Second, I would look at the institution and ask: What is the one immediate key challenge?

Then I would look for character, or integrity. A leader sets an example, especially, a strong leader. He or she is somebody on whom people, especially younger people, in the organization model themselves.

In the non-profit agency, mediocrity in leadership shows up almost immediately. One difference clearly is that the non-profit has a number of bottom lines— not just one…in non-profit management, there is no such one determinant. You deal with balance, synthesis, a combination of bottom lines for performance.

…the non-profit executive has a multiplicity of constituencies— each of which can say no and none of which can say yes. The multiplicity of constituencies is reflected in your boards, your trustees, who are likely to be intensely involved in running the agency.

You can’t be satisfied in non-profit organizations with doing adequately as a leader. You have to do exceptionally well, because your agency is committed to a cause. You want people as leaders who take a great view of the agency’s functions, people who take their roles seriously— not themselves seriously.

Your Personal Leadership Role— The new leader of a non-profit doesn’t have much time to establish him/herself. Maybe a year…the role has to fit you…the role you take also has to fit the task…the role has to fit expectations.

You have to two things to build on: the equality of the people in the organization, and the new demands you make on them.

The leaders who most effectively, it seems to me, never say “I.” They don’t think “I.” They think ”we”; they think “team.” They understand their job to be to make the team function. They accept the responsibility and don’t sidestep it, but “we” gets the credit. There is an identification (very often, quite unconscious) with the task and with the group. This is what creates trust, what enables you to get the task done.

As a leader you are visible; incredibly visible. And you have expectations to fulfill…You are constantly on trial.

Most organizations need somebody who can lead regardless of the weather. What matters is that s/he works on the basic competences.

1) As the first such basic competence, I would put the willingness, ability, and self-discipline to listen. Listening is not a skill; it’s a discipline.

2) The second essential competence is the willingness to communicate, to make yourself understood.

3) The next important competence is not to alibi yourself. We either do things to perfection, or we don’t do them. We don’t do things to get by. Working that way creates pride in the organization.

4) The last basic competence is the willingness to realize how unimportant you are compared to the task. Leaders need objectivity, a certain detachment. They subordinate themselves to the task, but they don’t identify themselves with the task. The task remains both bigger than they are, and different.

When effective non-profit leaders have the capacity to maintain their personality and individuality, even though they are both totally dedicated, the task will go on after them. That is the hallmark of the truly effective leader, who doesn't feel threatened by strength.

What attracts people to an organization are high standards, because high standards create self-respect and pride.

Most leaders I’ve seen were neither born nor made. They were self-made. We need far too many leaders to depend only on the naturals. It’s that willingness to make yourself competent in the task that’s needed to create leaders.

The Balance Decision— One of the key tasks of the leader is to balance up the long range and the short range, the big picture and the pesky little details…the balance between concentrating resources on one goal and enough diversification.

The even more critical balance, and the toughest to handle, is between being too cautious and being rash….timing— and this is always of the essence.

I’ve seen more institutions damaged by too much caution than by rashness, though I’ve seen both…know your degenerative tendency and try to counteract it

…the balance decision between opportunity and risk. One looks at the decision: Is it reversible? And what kind of risk is it? The one asks: Is it a risk we can afford? Or the trickiest of them all, the risk we can’t afford not to take…The balance decisions are what we need non-profit leaders for, whether they are paid or volunteer.

The Don't’s of Leadership— Effective leaders have to spend a little time on making themselves understood.
Don’t be afraid of strengths in your organization…you run far less risk of having pople around you want to push you out than you risk by being served by mediocrity.

Don't hog the credit.

Don’t knock your subordinates. A leader has responsibility to his subordinates, to his associates.

Keep your eye on the task, not on yourself. The task matters, and you are a servant.