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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.

Practices most represented among high-achieving programs are having a written mission statement, selecting clients based on cultural fit, selecting clients based on potential for success, reviewing client needs at entry, showcasing clients to the community and potential funders, and having a robust payment plan for rents and service fees. All of these practices are highly correlated with client success.

Excerpted from Lewis, David A., Elsie Harper-Anderson and Lawrence A. Molnar, Incubating Success: Incubation Best Practices That Lead to Successful New Ventures, University of Michigan, 2011, p. 7.

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. (Available from the NBIA Bookstore.)

Remember when developing a mission statement that it should:

  • Focus incubator management and governing board on what the program wants to achieve
  • Clearly define the incubator’s value proposition to potential clients
  • Reflect consensus among all stakeholders on the program’s purpose
  • Provide a basis for criteria that can be used in judging the incubator’s performance

When developing a mission statement, questions to consider include:

  • What is the ultimate value the incubator brings to its clients and supporters?
  • What is distinctive about the incubator? What differentiates it from other business development programs or services?
  • Do you serve all types of companies, or are you focused on a specific industry sector?
  • What are your goals? For example, do you want to foster entrepreneurship in your community regardless of company size? Or do you want to stimulate economic expansion by building high-growth businesses?

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. A confusing mission statement will interfere with a coherent marketing message, limiting your ability to attract quality clients. An overly broad mission can lead to a haphazard lineup of services, strangling your effectiveness and confusing clients.

The discussions that lead to the creation of the mission statement provide important opportunities to consider and discard ideas and come to a consensus on the core purpose of the program. That’s why it’s important to involve board members, major stakeholders, and key staff members in the writing or revision process. 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.

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. The impact data the incubator management collects 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.

Equally important is to review your mission statement periodically—perhaps when you revise your three- or five-year strategic plan—to see if any refinements or enhancements need to be made based on how the organization or the community in which it operates has evolved since the program’s inception. For example, perhaps your community has achieved its goals for creating a critical mass of software companies and now needs to focus on developing another sector. Perhaps your mixed-use incubator serves a far higher percentage of technology companies than it did originally, or it may find itself with more manufacturing.

Adapted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, pp. 5-6. Also see in this book: "A Vision/Mission Statement," "Tying the Mission to Community Needs" and "Honing the Mission Statement," pp. 6-7. (Available from the NBIA Bookstore.)

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. (Available from the NBIA Bookstore.)
  • 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:


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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. (Available from the NBIA Bookstore.)

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:


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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. (Available from the NBIA Bookstore.)

Something about the standard strategic planning retreat always bothered Karl LaPan. “My feeling was strategic planning should be about advancing rather than retreating,” says LaPan, president and CEO of the Northeast Indiana Innovation Center.

His issue was more than semantic, however. The whole idea of a strategic plan was troublesome. “For most boards, strategic planning is kind of perfunctory,” LaPan says. “You wind up with a seventy-two-page strategic plan that nobody’s going to read but me.”

LaPan wanted a way to get the depth of a strategic planning process, but without the doorstop that often results. He wanted to engage his board without overwhelming them. He wanted to tie strategic goals to the incubator’s mission and to a handful of measurable results.

He wanted a strategic plan on a page. Not finding anything in standard business literature, he created one himself.

LaPan’s Strategic Plan on a Page (SOAP) workbook walks users through a process to think through strategic goals as they relate to mission and to focus on the most important measurable outcomes. Then all the most important information is gathered on a single legal-sized sheet of paper.

The single-page approach has been especially helpful in keeping his stakeholders informed about NIIC’s progress. “Most of these people don’t understand the nuances of incubation, and they don’t want to,” he says. “They don’t spend enough time in the organization to get into the nitty-gritty.” SOAP highlights the three most important goals for the year; at each board meeting, LaPan reports on how the staff is progressing toward achieving each goal. “It gives them a really clear look at the organization,” he says. “Here are the most important things they should be asking us about every time they see us.”

The plan also has been popular with funders, LaPan says. “I met with a foundation before the [2009] holidays, and they said they had never seen anything like this from a nonprofit,” he says. “It was a differentiator for us.”

LaPan also ties staff performance to the plan. “In our goals for each year, every person’s key measurable goals are connected to one of the five key goals of the organization,” he says. “It’s great for building ownership, accountability, and for simplifying thinking.”

That’s important, he says, because it is so easy for busy incubator managers and staff to focus so much on their daily to-do lists that they forget to consider the big picture. “We have to work on ourselves as agents of change and connect our to-do list to results,” he says. “If all we do is come in and do all the tasks of the day, we never have time to do that strategic thinking.”

And that’s what LaPan was after: a process that would allow him to think big. “Most of us put together strategic plans that are incremental—‘we’re going to do 3 percent more than last year,’” he says. “SOAP encourages me to think in a dynamic way that says, ‘What if?’”

The result is that single page, which LaPan laminates and keeps on his desk. “Every morning I think, ‘What are the three to five things I can do today to advance us toward our objectives?’” he says. “SOAP is a living, dynamic, iterative document that helps me do that.”

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, pp. 8-9. (Available from the NBIA Bookstore.)

Incubator management must develop and implement a realistic business plan to deliver value so the program can generate the revenues needed to support operations. A reliable business model provides the operating framework in which to implement the program’s value proposition, monitor financial performance through a consistent budgeting process, and apply sound accounting practices. The business plan, combined with continual monitoring, also provides the tools required to make operating adjustments when necessary. Senior staff should review the incubator’s business plan annually, making sure that its goals have been attained, that financial projections reflect viable future revenue streams, and that operating expenses fall in line with the realities of the incubator’s daily operations.

Many incubators model best practices by developing business plans similar to those they may require of their clients. Developing a business plan helps the incubator run like a business and ensures a thorough annual review of the program’s operations and financial matters. A business plan also includes marketing and public relations plans and describes core programs. It is important to tie these sections together to ensure that the incubator’s value to its clients and stakeholders is clearly understood, both in terms of what is to be achieved (goals) and how the incubator will achieve them (tasks).

While not all sections of a business plan need to be updated annually, reviewing the plan and updating financial pro formas and other sections can help the CEO manage the incubator responsibly and promote regular consideration of program organization, client services, and other factors. 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 reviews the work already accomplished on the project and lays out what is planned for the program in the future.

The opening section of the business plan also should include your incubator’s mission, because the business plan must show how the incubator will meet that mission.

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 34. (Available from the NBIA Bookstore.)

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. (Available from the NBIA Bookstore.)

For further information on strategic planning, see:

  • Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, "Strategic Planning Retreat," Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 9. (Available from the NBIA Bookstore.)
  • 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:

  • Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, "A Strategic Business Plan," Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 9. (Available from the NBIA Bookstore.)
  • 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.
(Available from the NBIA Bookstore.)

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

In addition to supervisory and advisory roles, nonprofit governing boards in the United States have fiduciary duties toward the organizations they govern. Fiduciary duties are both legal and financial:

Entrusted with guarding the organization’s assets and reputation, board members must make prudent decisions that are in the best interest of the organization, without subjecting it to unnecessary risk…. A board member’s oversight role entails governance setting and maintaining high standards of financial accountability; establishing and adhering to guidelines for ethical and legal behavior; and operating in a transparent manner so that … stakeholders understand how and why critical decisions were made. [Board Source, The Nonprofit Board Answer Book. San
Francisco: Jossey-Bass, 2007.]

Good governance also requires that the board approve policies related to the election and rotation of new board members, avoidance of conflict of interest, requirements for regular attendance, and assessments of the board itself. The board should consider whether it is optimally organized to conduct business on behalf of the incubator, whether it reflects the current needs of the program, and whether it has taken care to ensure the succession of incubator management. Incubator management can work with the board chairman or executive committee to ensure that the board is educated about its responsibilities and receives training in good governance.

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, pp. 10-11. (Available from the NBIA Bookstore.)

Advisory boards offer advice and counsel but do not have the same legal fiduciary duties as governing boards. Such boards can be helpful in some settings, such as incubators that operate under a host such as a university, college, or economic development organization that governs the program. Advisory board members could include incubator stakeholders, entrepreneurs, financiers, and other members of the business community, and they may provide advice to the program and to its clients.

Since the governing board of the incubator’s host or sponsor (e.g., university board of trustees or economic development agency board) may have responsibilities of which the incubator is only a small subset, a dedicated advisory board can focus specifically on the incubator and its clients’ needs. Advisory boards can fulfill many of the tasks and responsibilities of governing boards, although they would not hire the incubator CEO or have legal duties to guard the financial strength of the organization. Nonetheless, a strong advisory board can provide significant value to a business incubation program. For example, a strong advisory board can give added weight to decisions regarding incubator operations and services by serving as a sounding board and by providing objective advice from a group with a wide array of experiences and expertise.

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 13. Also see in this book: "Working With a Large Board," "Board Retreat" and "LBTC Advisory Board," pp. 11-12. (Available from the NBIA Bookstore.)

For further information on boards of directors and advisory boards, 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. (Available from the NBIA Bookstore.)

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.

The presence of a graduate firm representative on the advisory board is statistically significantly related to half of the 31 measures of success. This is 20% more than the number of statistically significant relationships generated by having a technology transfer specialist on the board – the next highest category (see Table 20). 

Table 20: Number of Significant Chi-Squares Between Board Professional and Measures of Success

 

Advisory Board Member

#

%

Graduate Firm

16

51.6

Technology Transfer Specialist

10

32.3

Accountant

7

22.6

Patent Attorney

6

19.4

Business Attorney

6

19.4

Federal Economic Development Official

6

19.4

State Government Official

5

16.1

Corporate Executive

5

16.1

University Official

5

16.1

Marketing Expert

5

16.1

Local Economic Development Official

4

12.9

Chamber of Commerce

4

12.9

Incubator Manager

4

12.9

Experienced Entrepreneur

4

12.9

Representative of the Finance Community

3

9.7

Real Estate/Developer

3

9.7

Local Government Official

3

9.7

State Economic Development Official

0

0.0

As incubation theory would predict, the next three most important areas of expertise are accounting, intellectual property (patent attorney), and general legal expertise. Government actors also play a key role in enhanced client performance. In the case of business incubation, the presence of government officials – be they elected officials or economic development officials – ensures a degree of community embeddedness necessary for incubation program success. Ensuring their participation assists in educating these critical funding sources about the incubation program and its successes. Government actors also can help promote the incubator to a wider community and help attract key stakeholders from the business community. Having an experienced entrepreneur on the board who is not a graduate of the incubator is correlated with four measures of success, the same as for a local economic development official, chamber representative, and incubator manager.

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. (Available from the NBIA Bookstore.)

Recent business incubation research suggests that having political representation on an incubator’s board of directors is correlated with success because it ensures that the incubator has government support and that government officials are knowledgeable of, and can bring resources to, the incubation program. However, there is no guarantee that politicians will make good board members; some do not attend meetings, and continuity issues can arise when newly elected officials assume office. There is potential danger if they view the incubation program as an initiative of their predecessor and do not continue to support it. Thus, it is important 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. Additionally, politicians who serve on an incubator’s board should be subject to the same attendance and participation requirements that regulate the conduct of the rest of the board.

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 from 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. (Available from the NBIA Bookstore.)

Established in 1988 as a joint venture between Louisiana State University, the Baton Rouge Chamber of Commerce, and the Louisiana Public Facilities Authority, the Louisiana Business & Technology Center is owned and operated by LSU as a component of the E. J. Ourso College of Business. It also has a number of contracts with city, state, and federal agencies to provide business counseling and other economic development services.

LBTC historically has leveraged its stakeholder relationships to define a broad mission beyond business incubation and job creation. Working with its stakeholders, LBTC has established itself as an economic development engine for the area and, more broadly, the entire state of Louisiana. For example, LBTC operates Small Business Development Centers, is the liaison for SBIR grants from the state’s NASA labs, and offers entrepreneurship outreach in rural and disaster areas.

“We expanded services and mission to take advantage of market conditions and funding opportunities,” D’Agostino says.

Keeping all those government stakeholders happy is simple, D’Agostino says: “Give the stakeholders what they want.” He believes incubator management should determine what motivates stakeholders and what they want out of the incubator and their association with it. “In the case of LBTC, we have two separate sets of stakeholders [clients and supporters], who to a great extent want the same thing: to be associated with a quality program that accomplishes the economic development goals set out by the board,” he says.

The quality program part is not a problem: LBTC was NBIA’s 2005 Randall M. Whaley Incubator of the Year, was a finalist for NBIA’s 2007 Incubator Innovation Award, and won the Incubator Innovation Award in 2009. Its recognition is external as well: LBTC staff and programs have won awards from the Association of University Research Parks, the Federal Laboratory Consortium, the Louisiana Department of Economic Development, the Southern Growth Policies Board, the U.S. Economic Development Administration, and the U.S. Small Business Administration.

To spread the word about the incubator’s accomplishments—and provide tangible proof of such to stakeholders—D’Agostino maintains an active publicity effort, sending press releases on incubator activities or clients nearly every day. (He drafts the releases or has an intern do it; LSU’s public relations department polishes and sends them.) Once a week, D’Agostino collects press clippings and any other information on LBTC to send to stakeholders.

The incubator also publishes an annual report with data on patent activities, job creation, payroll/tax base, capital formation, and revenue of all client companies in the aggregate for both the current year and historically.

“Stakeholders fund and support winners,” D’Agostino says. “Clients and affiliates seek help from winners. Publicity implies that entrepreneurs need to seek out LBTC to maximize their success, and the numbers reported in the press and elsewhere tell funding groups to get behind a winner.”

Excerpted from Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, p. 16. (Available from the NBIA Bookstore.)

For further information on incubator stakeholders, see the following:

Books:

  • Colbert, Corinne, Dinah Adkins, Chuck Wolfe and Karl LaPan, "Stakeholder Surveys," and "Integration into Broader Economic Development Goals," Best Practices in Action: Guidelines for Implementing First-Class Business Incubation Programs, Revised 2nd Edition, NBIA Publications, 2010, pp. 16-18. (Available from the NBIA Bookstore.)
  • 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. (Available from the NBIA Bookstore.
  • 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. (Available from the NBIA Bookstore.)

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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