Governance

This incubator’s mission is in writing and is current, clear and appropriate. [View]

This incubator’s stakeholders and sponsors understand the mission and support it. [View]

This incubator has a business/strategic plan that supports its purpose. [View]

This incubator’s board of directors or advisory board is organized and involved in order to help the program achieve its purpose. Members are focused on responsibilities to the incubator and its clients. [View]

This incubator’s board includes diverse representation from the business community, including current and former entrepreneurs. [View]

This incubator has sufficient stakeholders (sponsors and supporters) to support its operations, ensure its sustainability and assist in the development of client companies. [View]

This incubator’s mission is in writing and is current, clear and appropriate.

Central to any incubation program’s existence is its mission, which guides the program’s activities and development. NBIA recognizes developing and employing incubator mission statements as an industry best practice, noting the need to “obtain consensus on a mission that defines the incubator’s role in the community and develop a strategic plan containing quantifiable objectives to achieve the program mission.” Based on a feasibility study or business plan, a mission statement serves as a point of reference for creating and achieving goals and staying on task.

A mission statement should describe an organization’s fundamental purpose clearly and succinctly. Imprecise language and wordiness can lead to unclear goals, conflicting expectations, and, ultimately, a mission that’s impossible to achieve. When crafting or revising a mission statement, be sure to avoid generalities and trim the statement down to essential information. What’s distinctive about the incubator? Is it focused on stimulating economic growth? Bringing life science innovations to market? Building technology companies? A mission statement ought to reflect a specific purpose such as these.

A mission statement also should be motivational. It’s important to involve board members, major stakeholders, and key staff members in the writing or revision process in order to gain their support. A mission statement that inspires commitment from these key players helps everyone focus on and work toward the same purpose, thus promoting the success and longevity of an incubation program.

Because a mission statement guides an incubator’s activities, it should be in written form and easily accessible to staff and board members. This makes it easier to keep mission at the center of discussions about new goals, programs, or services and to confirm that these goals, programs, or services are compatible with the program’s stated purpose. Conflicts with the mission could indicate the need to rethink the new idea or, on occasion, to revise the mission statement. Ideally a mission statement is a stable document, but significant changes in the environment might necessitate revisions.

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, p. 8.

For further information on mission statements, see:

• Cammarata, Kathleen, “How to Create an Effective Mission Statement,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp. 44-46.



• BoardSource
  The Mission Statement
  Explanation of mission statements, tips for how to create and revise mission statements, and examples



• Bplans.com
  Writing a Mission Statement
  Guidelines for writing a mission statement and examples



• About.com
  How to Write a Mission Statement
  Guidelines for writing a mission statement and examples

For sample incubator mission statements, see:

• Emerging Technology Centers, Baltimore, Md.



• Ohio University Innovation Center, Athens, Ohio



• Rutgers Food Innovation Center, Bridgeton, N.J.



• Santa Fe Business Incubator, Santa Fe, N.M.



• USC Columbia Business Incubator, Columbia, S.C.



• West Texas A&M University Enterprise Network, Amarillo, Texas

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This incubator’s stakeholders and sponsors understand the mission and support it.

It’s important to involve board members, major stakeholders, and key staff members in the writing or revision process of a mission statement in order to gain their support. A mission statement that inspires commitment from these key players helps everyone focus on and work toward the same purpose, thus promoting the success and longevity of an incubation program.

Because a mission statement guides an incubator’s activities, it should be in written form and easily accessible to staff and board members. This makes it easier to keep mission at the center of discussions about new goals, programs, or services and to confirm that these goals, programs, or services are compatible with the program’s stated purpose. Conflicts with the mission could indicate the need to rethink the new idea or, on occasion, to revise the mission statement. Ideally a mission statement is a stable document, but significant changes in the environment might necessitate revisions.

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, p. 8.

Mission statements help an incubator’s management and board avoid being led astray by tangential “opportunities.” If every member of an incubator’s board or staff has a different idea of what the program’s mission is, the incubator will never be able to satisfy everyone, and the force of the program will be wasted in nonproductive endeavors. Therefore, it’s vital that the mission statement be developed by board and staff leadership and approved by the board. The discussions that will lead to its creation provide important opportunities to consider and discard ideas and come to a consensus on the core purpose of the program.

Mission statements also provide a basis for identifying key criteria that will be used to judge whether the program is, in fact, achieving what it sets out to do. This means that the impact data the incubator management will collect should be directly related to the program’s mission. Again, this means securing consensus and support from stakeholders and sponsors on the mission statement – and how the mission is being achieved.

Dinah Adkins
NBIA President & CEO

For further information on mission statements, see:

• BoardSource. The Nonprofit Board Answer Book, 2nd Edition, Jossey-Bass, 2007, pp. 10-15. (Available from the NBIA Bookstore.)



• About.com: Nonprofit Charitable Orgs
  How to Write Nonprofit Mission Statements
  General Information about mission statements, tips for writing a good mission statement, and examples



• Free Management Library
  Basics of Developing a Mission, Vision and Value Statements
  General information about writing an effective mission statement



• The Grantsmanship Center
  How to Write a Mission Statement
  General information about writing an effective mission statement

This incubator has a business/strategic plan that supports its purpose.

Fulfilling a mission requires strategic planning—mapping out where an incubator is headed in the next year or more and how it’s going to get there. A strategic plan provides a clear picture of quantifiable goals, objectives, and tasks within a given time frame, and keeps an incubator focused on its fundamental purpose.

An incubator’s staff members, often in combination with its board of directors, are usually responsible for developing a strategic plan on a regular basis—at least every three to five years. It’s important to review an incubator’s strategic plan once a year to ensure that it still makes sense (given any significant changes in the environment).

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, p. 8.

Incubator business plans vary in content and format, depending on the project focus and who prepares the document, but most contain some common elements. For example, most business plans begin with an executive summary describing the origins, purpose, and general background of the incubator project. The executive summary sums up the work already accomplished on the project, and what is planned for the program in the future.

The opening section of the business plan also should include your incubator’s mission statement. It’s also important for the business plan to state how the incubator will meet that mission.

Following is a sample outline of an incubator business plan:

• Executive Summary


• Mission and Objectives


• Client Focus


• Organizational Structure


• Legal structure


• Board composition


• Services and Programs
  
  • Services for incubator clients
  
  
  • Programs for entrepreneurial assistance
  
  
  • Business assistance providers


• Marketing, Public Relations, and Client Recruitment
  
  • Marketing and public relations plan
  
  
  • Client recruitment strategy


• Client Application, Selection, and Graduation Process
  
  • Application guidelines
  
  
  • Selection and screening process
  
  
  • Sample application
  
  
  • Graduation policy


• Staffing Plan
  
  • Staffing structure and job descriptions
  
  
  • Staff selection and training plan


• Facility
  
  • Description of the incubator facility
  
  
  • Technical requirements


• Budgets
  
  • Operating pro formas for at least two years

Adapted from Boyd, Kathleen, Developing a Business Incubation Program – Insights and Advice for Communities, NBIA Publications, 2006. p. 56.

For further information on strategic planning, see:

• Barry, Bryan W. Strategic Planning Workbook for Nonprofit Organizations, Fieldstone Alliance, 2007. (Available from the NBIA Bookstore.)



• Free Management Library
  All About Strategic Planning
  General overview of strategic planning process with links to more specific information



• NonProfitExpert.com
  Strategic Planning
  Basic overview of strategic planning with links to the answers frequently asked



• Quick MBA
  The Strategic Planning Process
  Outline and explanation of the steps in the strategic planning process

For further information on business planning, see:

• U.S. Small Business Administration
  Writing a Business Plan
  Series of links to information on writing a good business plan



• Entrepreneur.com
  Business Plans
  Links to information on business plan basics, the elements of a good business plan and how to get assistance with writing a business plan

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This incubator’s board of directors or advisory board is organized and involved in order to help the program achieve its purpose. Members are focused on responsibilities to the incubator and its clients.

The difference between a thriving incubator and one struggling to keep its head above water sometimes comes down to the effectiveness of its board of directors.

In addition to fiduciary obligations and hiring the incubator manager, a board of directors’ purpose includes thinking strategically and setting broad policy that will ensure the incubator attains the goals and objectives outlined in its mission statement. In order to achieve that purpose, all board members must first understand and be committed to the incubator’s mission. Board members who show weak commitment (or who have personal or professional agendas) can devastate a program. That’s why NBIA highlights the need to “build an effective board of directors committed to the incubator’s mission and to maximizing management’s role in developing successful companies” as a critical industry best practice.

Who makes up a strong board of directors? Ideally, people with diverse backgrounds and skills. An incubator board might include business assistance professionals, technology experts, and anyone else with resources, know-how, and commitment to the incubator’s mission. Of course, developers and managers should think long and hard about choosing sponsors, who frequently expect and receive board appointments. An unruly board member who also is a sponsor can create problems for everyone.

A major part of a board of directors’ work is long-range planning—strategizing about everything from the incubator’s values and mission to its budget, capital campaigns, and organizational charts. An effective board focuses its attention on policy and setting a work plan for the incubator. To ensure that these responsibilities don’t fall by the wayside, some boards set meeting agendas that allow time for thinking about the future or schedule half-day retreats where they can focus on the long-range plan. A board of directors that’s highly involved at the strategic level can make a significant difference in the incubator’s performance.

Another major board task is to support the incubator manager. Members can help out by hosting visitors, networking with stakeholders, and making presentations—demands that can divert the manager’s time away from assisting clients. Board members also can play a direct role in growing successful companies, by offering legal or financial expertise, participating on advisory boards, or making investments. However, they must understand that in these roles they are serving as volunteers under the direction of the incubator manager, not as a member of the incubator’s governing body. Don’t assume board members understand their roles. Be sure to use bylaws, orientation manuals, and one-on-one meetings to emphasize their duties as policy makers, not managers.

In order to cultivate a strong working relationship, the board of directors and incubator manager need to communicate openly and regularly. While the manager should make sure the board knows about significant matters within the incubator, the board should be respectful of staff and avoid micromanaging.

The effectiveness of a board of directors depends in large part on the meetings. Carefully thought-out agendas will help the board maximize meeting time, especially if board members come well prepared. Although meetings shouldn’t be excessively long, they should allow ample time to cover agenda items and for members to interact. If a board meets once a month, meetings might take an hour or two; if it meets just three or four times a year, meetings might require an entire day.

It’s not a bad idea for the board of directors to implement a yearly self-assessment, which can help reinforce members’ responsibilities, clarify differences of opinion, and demonstrate to sponsors and stakeholders the board’s commitment and integrity.

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, p. 16-17.

Hiring incubator management can make or break an incubator. Thus, it is extremely important that the board hire the highest quality staff, provide appropriate compensation and recognize succession planning as an important duty. This is particularly vital given that almost all incubation programs have small staffs (1.8 in 2006, down from 2.4 in 2002 and 2.8 in 1998, according to NBIA’s State of the Business Incubation Industry reports for those years). Furthermore, the manager or president of the incubator is the one person upon whom almost everything rests – program quality, positive impacts, the respect in which the program is held in the business community, and the incubator’s ability to develop support from the many community resources (universities, workforce development specialists, investors, etc.) needed by the program and its clients.

The board must also take into consideration to what extent board members or committees will involve themselves in advising clients. And board members will be called on to use their own contacts to bring resources to the incubator – these resources could be university technology experts, business development professionals, corporate sponsors, or others.

Thus, it is important for the board to recognize its responsibility for ensuring the program’s success – through maintaining the highest commitment to quality, hiring the right management, ensuring the incubator’s financial sustainability, and requiring that the program maintains high performance and exhibits positive impacts as individual managers come and go. It’s really all about the companies. The incubator can only succeed if they succeed and that means serving the companies is job # 1. All resources must be pointed in that direction.

Dinah Adkins
NBIA President & CEO

For further information on boards of directors, see:

• BoardSource. The Nonprofit Board Answer Book, 2nd Edition, Jossey-Bass, 2007. (Available from the NBIA Bookstore.)



• Gerl, Ellen, “Cultivating Great Boards,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp.102-107. This chapter is also available as a PDF Quick Reference document from the NBIA Bookstore ($5/members and $10/nonmembers).



• BoardSource: Building Effective Nonprofit Boards
  BoardSource Web Site
  Entire Web site contains information on a variety of topics related to working with a board of directors



• Free Management Library
  All About Boards of Directors (For-Profit and Nonprofit)
  Specific information about board operations and board governance



• NonProfitExpert.com
  Board Guide
  Specific information on how to identify and invite good board members

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This incubator’s board includes diverse representation from the business community, including current and former entrepreneurs.

Who makes up a strong board of directors? Ideally, people with diverse backgrounds and skills. An incubator board might include business assistance professionals, technology experts, and anyone else with resources, know-how, and commitment to the incubator’s mission. Of course, developers and managers should think long and hard about choosing sponsors, who frequently expect and receive board appointments. An unruly board member who also is a sponsor can create problems for everyone.

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, p. 16.

How do you find the right people for your board? First, understand that boards have “life cycles,” says David Cattey, former manager of the Business Technology Center in Columbus, Ohio. The Business Technology Center’s original board had key organizational acumen, but the board needed different skills when “we decided to reinvent ourselves with a larger facility more focused on high-growth, high-wealth-generating companies.”

Current board members, who represent major investors in the incubator’s capital campaign, have the ability to raise big bucks and connect incubator clients with major industry players. For instance, Cattey says, one board member in the financial sector linked a client with a major accounting firm’s national office charged with studying the health-care industry. Its staff collects information about the state of the industry, impacts of legislation, best practices and trends.

Only your organization can decide on the appropriate cast of characters. Do you need fund raisers, people whose reputation adds credibility, or a board composed with client consulting needs in mind? A diverse representative mix is desirable.

Excerpted from Gerl, Ellen. “Cultivating Great Boards,” A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004, pp. 102-107. This chapter is available as a PDF Quick Reference document from the NBIA Bookstore for $5 to members and $10 to nonmembers.

Most incubator managers agree that politicians do not make the best board members. They tend not to attend meetings. Also, continuity issues arise when new elected officials assume office. NBIA has found that some managers choose to make elected officials ex officio board members to provide opportunities for involvement while ensuring that the position is tied to the office rather than the individual.

At NBIA we also believe that there is a place for business leaders and current and former entrepreneurs on every board. Boards that are composed entirely of academics, agency representatives or elected officials typically don’t have a “been there, done that” knowledge of the issues faced by company founders or the expertise to assist them. So ensure that a certain number of board seats are reserved for individuals who understand these issues, as well as business service providers (accountants, attorneys, etc.) who can provide access and advice.

Occasionally, incubator management must deal with an existing board that is no longer doing its job. Perhaps no term limits were set and the board makeup is wrong for the organization; perhaps board members aren’t taking their responsibilities seriously and don’t come to meetings. In these cases, the incubator manager should consider how to work with the chairman or an executive committee to undertake a critical examination of board performance and, perhaps, reorganize. Maybe new committees are necessary or board bylaws, policies and procedures need to be developed or revised to ensure staggered terms, term limits, regular attendance and responsible contributions. Any examination of the board should also take into consideration its makeup and the relevance of that makeup to the incubator’s current and future needs. While such situations must be handled sensitively, an incubator manager or CEO who is a competent chief executive should be able to help the board maximize its contributions to the program. The manager should not be intimidated by the fact that the board hires and fires the incubator manager. He or she should recognize and address board-related problems and facilitate board improvements. This takes political savvy and diplomacy, as well as gaining support from the chairman or executive committee and the trust of the board as a whole.

Dinah Adkins
NBIA President & CEO

For further information on boards of directors see:

• BoardSource. The Nonprofit Board Answer Book, 2nd Edition, Jossey-Bass, 2007. (Available form the NBIA Bookstore.)



• BoardSource: Building Effective Nonprofit Boards
  BoardSource Web Site
  Entire Web site has many resources on building and working with a board of directors



• Entrepeneurship.org
  Bringing Experience to the Board
  Story to highlight positive aspects of working with board members



• Free Management Library
  All About Boards of Directors
  Specific information about board operations and board management

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This incubator has sufficient stakeholders (sponsors and supporters) to support its operations, ensure its sustainability and assist in the development of client companies.

Over the years, business incubation professionals and scholars have defined stakeholders both narrowly and broadly. Some use the term to refer simply to financial sponsors, while others use the term to describe everyone in a community or region who stands to benefit from an incubation program.

NBIA considers stakeholders to be any nonstaff persons who have a vested interest in the success of an incubation program. This broad definition might include sponsors, service providers, board members, successful entrepreneurs, community leaders, and even community members who would benefit from a strengthened economy.

Stakeholders can foster an incubator’s success by marketing the program, encouraging promising entrepreneurs to apply for admission, and providing client firms with resources and expertise. “[Developing] stakeholder support, including a resource network that helps the incubation program’s client companies and supports the incubator’s mission and operations” is an industry best practice and integral to a business incubator’s development.

Although the majority of an incubator’s fundamental and enduring stakeholder relationships are formed during the development stage, these relationships require careful nurturing once the incubator is operational. And, of course, new stakeholders might come on board as the incubator matures, requiring additional relationship management.

A healthy relationship between stakeholders and the incubator manager depends on each having appropriate expectations of the time, energy, and other resources invested in the relationship. The time an incubator manager spends on maintaining stakeholder relationships should be on par with the expected benefits. Sometimes, however, this is not the case. For instance, when a sponsor demands excessive amounts of the incubator manager’s time, it takes valuable one-on-one time away from clients. To minimize this problem, a designated board member or committee of board members can work with sponsors. Also, the manager should refuse participation of any sponsors or other stakeholders whose motivations are not in the incubator’s best interests.

It’s vital for stakeholders to have realistic expectations of what the incubator can accomplish in a given time frame. Educating stakeholders about the business incubation process and setting realistic goals from the outset are two good strategies for managing expectations. It’s better to meet or surpass realistic projections than to make fantastic promises you can’t keep and risk losing stakeholder support.

Some stakeholders, such as local politicians, might not be involved in the daily operations of an incubation program. Others, such as service providers and board members, can play an important role in the most important facet of business incubation, client assistance. A service provider network gives clients access to business professionals offering legal, accounting, insurance, financing, and other types of expertise not available from the incubator staff. Board members might participate on client advisory boards or even make investments. This type of close involvement helps them have a better understanding of the business incubation process, which, in turn, makes them better able to promote the program in the community.

Taking time to manage relationships with stakeholders and acknowledge the service and support they provide is important to the incubator as well as its client companies. Without the support of stakeholders, the incubator’s value to clients diminishes considerably.

Excerpted from Cammarata, Kathleen, Self-Evaluation Workbook for Business Incubators, NBIA Publications, 2003, pp. 24-25.

For further information on incubator stakeholders, see the following:

Books:

• From A Comprehensive Guide to Business Incubation, Completely Revised 2nd Edition, NBIA Publications, 2004:
  
  • Cammarata, Kathleen, “Managing a Network of Service Providers,” pp. 114-118. This chapter is available as a PDF Quick Reference document from the NBIA Bookstore ($5/members; $10/nonmembers).
  
  
  
  • Walker, Brian, “How to Leverage Volunteer Assistance,” pp. 119-121.
  
  
  
  • Erlewine, Meredith, and Linda Knopp, “Building Relationships at the Bank,” pp. 133-136.
  
  
  
  • Walker, Brian, “Connecting Clients with Angel Investors,” pp. 246-251. This chapter is available as a PDF Quick Reference document from the NBIA Bookstore ($5/members; $10/nonmembers).


• Colbert, Corinne, A Practical Guide to Business Incubator Marketing, NBIA Publications, 2007. Contains information on identifying potential partners, developing marketing messages and working with the media, among many other topics.



• Boyd, Kathleen, Developing a Business Incubation Program – Insights and Advice for Communities, NBIA Publications, 2006. Contains information on identifying support during incubator feasibility assessment, accessing funding sources and managing stakeholder expectations in the early years.

Articles:

• Colbert, Corinne, “Managing Stakeholder Relationships,” NBIA Review, December 2005.



• Casey, Mary Alice, and Corinne Colbert, “A Meeting of Minds: It’s Educational All Around When Incubators and Academia Come Together,“ NBIA Review, February 2006.



• Holohan, Meghan, “Paying Up: How to develop and maintain successful sponsor relationships,” NBIA Review, April 2008.



• Knopp, Linda, “Lobbying 101: How incubator managers connect with legislators,” NBIA Review, December 2007.

These articles are available free to members in the iReview online archives or as PDF Quick Reference documents from the NBIA Bookstore ($5/members; $10/nonmembers).

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