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Harvard Case - Innovation Works Community Bond

"Innovation Works Community Bond" Harvard business case study is written by Melissa Jean. It deals with the challenges in the field of General Management. The case study is 21 page(s) long and it was first published on : Jan 1, 2019

At Fern Fort University, we recommend that Innovation Works (IW) pursue a strategic partnership with the Community Bond (CB) program, leveraging its existing strengths and resources to create a mutually beneficial relationship. This partnership will enable IW to expand its reach, diversify its funding sources, and enhance its impact on the local community while simultaneously providing CB with access to valuable resources, expertise, and a broader network. This solution will be implemented through a phased approach, starting with a pilot program and gradually scaling up based on its success.

2. Background

The case study focuses on Innovation Works (IW), a non-profit organization dedicated to fostering entrepreneurship and economic development in the city of Pittsburgh. Facing financial constraints and a need to expand its reach, IW explores potential partnerships. One promising opportunity is the Community Bond (CB) program, a local initiative aimed at addressing poverty and promoting social mobility through financial assistance and support services.

The main protagonists of the case study are:

  • Mark Cuban: The founder and CEO of IW, a passionate advocate for entrepreneurship and economic development.
  • Mayor Luke Ravenstahl: The mayor of Pittsburgh, who is keen on supporting initiatives that benefit the city's residents.
  • The Community Bond Program: A locally-driven initiative seeking to address poverty and social mobility through financial support and guidance.

3. Analysis of the Case Study

This case study presents a classic scenario where a non-profit organization seeks to expand its impact and sustainability through strategic partnerships. To analyze this situation, we can use the following frameworks:

  • SWOT Analysis:

    • Strengths: IW possesses a strong reputation, a dedicated team, and a proven track record of supporting entrepreneurs. They have a strong network within the entrepreneurial ecosystem and access to valuable resources.
    • Weaknesses: IW faces financial constraints and limited reach, particularly within underserved communities.
    • Opportunities: Partnering with CB allows IW to tap into a new funding source, expand its reach, and address social issues.
    • Threats: Potential conflicts in mission and values, logistical challenges in integrating the two organizations, and the risk of negative public perception.
  • Porter's Five Forces:

    • Threat of New Entrants: The non-profit sector is characterized by low barriers to entry, but IW's established reputation and network create a competitive advantage.
    • Bargaining Power of Buyers: IW's clients are entrepreneurs, who have limited bargaining power due to their dependence on support services.
    • Bargaining Power of Suppliers: IW relies on donors and grants for funding, making them vulnerable to changes in funding landscape.
    • Threat of Substitutes: Other organizations offer similar services, but IW's focus on entrepreneurship and its unique resources create a competitive edge.
    • Rivalry among Existing Competitors: The non-profit sector is characterized by intense competition for funding and resources, necessitating strategic partnerships and differentiation.
  • Stakeholder Analysis:

    • Primary Stakeholders: IW, CB, Entrepreneurs, City of Pittsburgh, Donors, and Local Communities.
    • Secondary Stakeholders: Media, Government agencies, and other non-profit organizations.

4. Recommendations

To maximize the benefits of a partnership between IW and CB, we recommend the following:

  • Pilot Program: Implement a pilot program for a limited duration, focusing on a specific target group within the community. This allows for testing the partnership's effectiveness, identifying challenges, and refining the program before scaling up.
  • Joint Marketing and Outreach: Develop a joint marketing strategy to raise awareness about the partnership and its benefits to both entrepreneurs and community members. Utilize existing networks and leverage social media platforms to reach a broader audience.
  • Resource Sharing and Collaboration: Establish a clear framework for resource sharing, including expertise, infrastructure, and funding. This can involve cross-training staff, sharing office space, and co-hosting events.
  • Performance Measurement and Evaluation: Develop key performance indicators (KPIs) to track the partnership's impact on both entrepreneurs and the community. Regularly evaluate the program's effectiveness and make adjustments as needed.
  • Governance and Decision-Making: Establish a joint governance structure with representatives from both organizations to ensure transparency, accountability, and effective decision-making.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies and Consistency with Mission: The partnership aligns with both organizations' missions and leverages their respective strengths. IW's expertise in entrepreneurship and CB's focus on community development create a synergistic effect.
  • External Customers and Internal Clients: The partnership benefits both entrepreneurs seeking support and community members seeking opportunities for economic advancement. It also provides IW staff with opportunities for professional development and expands their reach.
  • Competitors: The partnership strengthens IW's competitive position by diversifying its funding sources and expanding its reach. It also creates a unique offering that differentiates IW from other non-profit organizations.
  • Attractiveness: The partnership is financially attractive as it opens up new funding opportunities for IW. It also offers the potential for increased impact and social returns.

6. Conclusion

A strategic partnership between Innovation Works and the Community Bond program presents a compelling opportunity for both organizations to achieve their goals and create a positive impact on the local community. By leveraging their respective strengths and resources, IW and CB can create a mutually beneficial relationship that fosters entrepreneurship, addresses poverty, and promotes economic development.

7. Discussion

  • Alternatives not Selected: Other potential partnerships explored by IW include collaborating with universities, local businesses, or government agencies. However, these options were deemed less strategic due to potential conflicts of interest, logistical challenges, or limited impact.
  • Risks and Key Assumptions:
    • Risk of Cultural Clash: Differences in organizational culture between IW and CB could hinder effective collaboration.
    • Assumption of Shared Values: The partnership assumes that both organizations share a commitment to social impact and economic development.
    • Assumption of Funding Availability: The success of the partnership depends on securing adequate funding from both organizations and external sources.

8. Next Steps

  • Phase 1 (3 months): Conduct a feasibility study to assess the potential benefits and challenges of the partnership. Develop a pilot program focusing on a specific target group within the community.
  • Phase 2 (6 months): Implement the pilot program and gather data on its effectiveness. Analyze the data and make necessary adjustments to the program.
  • Phase 3 (12 months): Based on the pilot program's success, scale up the partnership to a broader audience. Develop a comprehensive marketing strategy to increase awareness and engagement.
  • Phase 4 (Ongoing): Continuously monitor and evaluate the partnership's impact, make adjustments as needed, and explore opportunities for further collaboration and expansion.

By following these recommendations and implementing a phased approach, Innovation Works and the Community Bond program can create a transformative partnership that benefits both organizations and the city of Pittsburgh.

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Case Description

In June 2015 Lina Bowden, chair of the Innovation Works Finance Committee (Finance Committee), needed to finalize a plan to raise an additional $1,000,000 of capital. The capital would primarily be used to fund renovations to a building that had become known as Innovation Works, a novel coworking space and social innovation hub located in London, Ontario, Canada. The building was already secured; however, significant renovations were required before all floors could be rented. The Innovation Works project was spearheaded in 2009 by Pillar Nonprofit Network, a member-based organization comprised of nonprofit organizations. Members of the Innovation Works Project Team (Project Team) expressed a strong desire to launch London's first ever community bond to finance the renovations. The Project Team tasked the Finance Committee, lead by Bowden, with the job of providing a recommendation on the viability of the community bond financing strategy. If it was determined that a round of community bond financing was indeed viable, Bowden would need to recommend bond structure details as well as report how much capital would be needed in a second round of financing. If she concluded that community bond financing was not viable, she would need to present a convincing case for pursuing another strategy given the team's strong desire to make a statement in the community.

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