Tuesday, October 25, 2005

Cooperation is the Path to Reinvention

Recently, Tech Futures reminded NEO of its shared need for reinvestment in education. By investment, NorTech’s Chris Varley clearly means more than throwing money at the issue. Chris is calling for more cooperation among learning institutions, employers and NEO citizens, as he asserts:

"The solution? Well, if it were easy someone else would have already done it, but it means tackling and improving our educational and workforce training efforts at every level, from pre-school through graduate school. And that means lots of different organizations focused intently on the "pieces and parts" but in ways that are coordinated and mutually supportive."

The good news is that cooperation is happening. We’ve heard about it at Polaris Career Center. It is Cuyahoga County’s Joint Vocational School for 11th and 12th grade students, as well as a place where adults can receive new training and companies bring employees to learn the latest in best practices.

Polaris had been struggling to keep high school students interested in its manufacturing related coursework. However, the problem was turned on its head once the vocational school teamed with Tooling University, the Cleveland-based e-learning service for manufacturing skills.

The vocational school is now grappling with the enviable challenge of managing demand and requiring waiting lists for its manufacturing related classes. Polaris is witnessing phenomenal gains in student performance, combined with dramatic drops in disciplinary referrals. These students are on a path to lifelong learning. Case in point, Polaris’ Geoff Andrews reports that e-learning metrics allow school administrators to closely monitor student study habits. He has documented instances where kids were actively studying Polaris coursework while on spring break in Florida. That’s powerful.

Increasingly we’re realizing that NEO citizens have many of the resources needed to reinvent our economy. However, we’re also recognizing the need for NEO citizens to break from parochial behaviors and make investments in cooperation -- regionally, economically, academically. It is the surest path to producing the synergies that can transform our economy and deliver a comparative advantage.

Wednesday, October 12, 2005

A Solution for Strengthening NEO Leadership?

Lev Gonick is on to something for the NEO region. It goes well beyond lighting the wire underneath us and his work with OneCleveland. We think it goes beyond anything he might imagine. And we think he would agree.

Lev spoke today at the City Club. He told how OneCleveland is allowing for OpenSource leadership, which breaks from past styles that have been everything from laissez faire to autocratic.

Considering that OpenSource leadership is unlike anything our region has ever experienced, we looked elsewhere for comparisons. We arrived at the leadership style of USSR’s Mikhail Gorbachev and his introduction of glasnost, which opened Soviet society to the free exchange of ideas and thoughts. His social program was the catalyst for parting from destructive behaviors and led to an embrace of a culture previously unknown to its citizens.

As we understood Lev today, he sees OneCleveland paving the way to true democracy for NEO. The regional area network enables our leaders to have greater connections to ideas, thoughts and concepts, some of which we identified previously.

It doesn’t stop there. Lev insists NEO citizens will have visibility into the actions of these leaders, as well as improved access to them. Furthermore, we’ll have a forum for delivering critical feedback, which when embraced has the power to transform – people, organizations, regions. It’s these dynamics, we suspect, that can embed accountability into the NEO environment and inoculate us against self-destructive behaviors.

In other words, we're hoping Lev is telling us that our region now has a window to discover its shared vision and translate it into a comparative advantage. These kind of discoveries inspire ideas, which are the true currency in today’s global economy. And these ideas can attract brains/talent and investment, addressing many of the “Quiet Crisis” symptoms and allowing for a more sustainable NEO region.

We’re beginning to believe that OneCleveland is lighting the way to the full Cleveland. But even we know not to get ahead of ourselves. We know the human animal resists change. And we know that rule of nature applies to those of us who reside in the region that’s home to the Dawg Pound. As much as the Russians embraced new freedoms, they also have inoculated themselves against these when electing their current leader Vladimir Puttin, whose leadership style resembles Stalin more than Gorbachev.

Thus, at the end of the day we still need strong leaders who can act with resolve. The powers of OneCleveland can strengthen solutions to our region’s fundamental challenges, but we understand it can’t eliminate these threats. That job remains the duty of NEO citizens.

Tuesday, October 11, 2005

Please No More Business as Usual

We’re encouraged by findings from NorTech on the need for pre-seed and seed investments in NEO start-up companies that have been recently reported by news media. Our takeaway is that our region’s economy can’t be reinvented without a change in how we collectively do business in NEO. We realize that more investment is needed; however, we also regonize why it has been lacking.

Institutional investors are smart people. They know how to invest and where. They have fiduciary responsibility to do so. Yet they’re reluctant to invest in early stage funds that invest NEO start-ups. Why? We look to missing fundamentals for the answers, such as a lack of economic infrastructure and limited managerial talent. Money alone can’t remedy these.

Most early stage companies need talent more than money. These companies are typically started by people who were resisting convention and didn’t want to be part of an organization that demanded standards, protocols, policies and controls. Ironically, once these guys succeed at validating a new concept, their brainchild evolves into an early-stage company that needs exactly what they’ve always resisted: standards, protocols, policies and controls. Their success demands new talent. There’s a limited supply of this, especially in NEO. To get it here, requires a great deal of cash and substantial company equity, more than most entrepreneurs are willing to forfeit. Without the appropriate talent or support services, most start-ups risk squandering early stage investments.

How do we as a region overcome these fundamental challenges? Our client, Glengary LLC, is a great example of an early stage investment fund that’s breaking from business as usual in NEO. It was started with that objective in mind as its Founding Partners were determined to reinvent early-stage investment for the benefit of NEO.

Glengary invests almost exclusively in NEO start-up companies. It does so with a combination of human and financial capital. Glengary has a team of serial entrepreneurs or Operating Partners who have managed businesses from start-up to IPO. Glengary's people help NEO entrepreneurs grow businesses and realize visions, without sacrificing control. When this happens, our region becomes a nest for talented entrepreneurs, and infrastructure and investment naturally follow.

The Founding Partners of the “venture catalyst,” the guys who gave the seed money to start it, are also active. These are NEO business leaders, like Thomas Sullivan, Joseph Gorman and Albert Ratner; all of whom lend expertise and make contacts to introduce Glengary client companies to customers located in markets throughout the globe.

It is this kind of active investment that is necessary for overcoming fundamental challenges to early stage company success in NEO. Compareable solutions can be found elsewhere at GLIDE, JumpStart and ShoreBank. We hope our region’s leaders continue to support these and resist business as usual, which is likely to give us only more of the same and which the citizens of this region are increasingly unwilling to tolerate.