by Dennis E. Powell
What do you do, how do you do it, and how much does it cost? What's the return on that investment? Those are short, simple questions that practically always have long, complicated answers. They are also questions that incubator managers need to answer regularly and ought to be prepared to answer always.
Your stakeholders want to know about your program. Some have formal reporting requirements. Some merely seek to stay informed. Some incubation programs that are part of larger organizations or institutions have just one stakeholder to satisfy, while others with diverse revenue streams from multiple organizations may need to file a broad array of forms and reports annually or quarterly.
"If you're receiving funding from the federal government, the chances are the reporting requirements are fixed, one size fits all, and there's nothing you can do except comply," says Tracy Kitts, NBIA's vice president & chief operating officer. "But for others, there may be some flexibility. You may be able to provide equivalent figures that you have, rather than calculating similar numbers that could take a lot of time to compile."
Stakeholder reporting is often much more than letting financial benefactors know how you spent their money. It is an important tool in demonstrating how efficient and cost-effective business incubation is, compared with other means of economic development and job creation.
Some programs have found stakeholder education is easier when stakeholders are involved intimately with the incubator. An example is Delaware Technology Park in Newark, Del.
DTP's board includes all relevant stakeholders, including the president of the University of Delaware, the secretary of Delaware's Economic Development Office and executives from both large and small companies in the region, says J. Michael Bowman, president and CEO of the program. This assures stakeholders are in on decisions and keeps them in a position of informed advocacy.
"Together, we continually share real-time information," Bowman explains. "But we also formally meet four times each year. During those meetings, the metrics are presented and analyzed." With full working knowledge of the park's operation and decision-making, those stakeholder-board members are better equipped to explain the program to others in their respective organizations. This positions them both to justify expenditures and to educate others about the importance and efficacy of business incubation.
Indeed, the term "stakeholders" can be broadly drawn, with every taxpayer a stakeholder to some extent in programs that receive public financing. When programs educate the public, support for them is likely to grow, and the few concerns the public might have — such as the notion that incubator clients benefit from perceived subsidies to help them compete with nonincubated companies — are allayed.
"I also meet monthly with the leaders of the county and city — ours is a college town — for issue discussions," Bowman says. "DTP is the technology hub for the state and has access to many support systems and services from the state, university and private sector. The continuum of events, conferences, seminars and so on in DTP keeps everyone current."
Baltimore's Emerging Technology Centers takes a formal approach to keeping stakeholders informed. "We provide an annual report and quarterly board reports with updated statistics and meet with stakeholders as requested," says Ann Lansinger, ETC's president.
The annual report runs several pages, beginning with a statement of "Company Statistics and Achievements." This describes important milestones reached by client companies during the year, including funding received, program graduates and awards received. It then describes new client companies and the program's recruitment process, including the organizations involved in client selection.
Stakeholder education is important to ETC, as demonstrated in a section of its annual report describing efforts to increase program awareness among all its stakeholders. "Building strong bonds with related organizations and partners is the key to increased awareness of the ETC and attraction of quality clients," it says. "In so doing, we have successfully built a positive image and are becoming increasingly well-known locally, nationally and internationally."
ETC's annual report isn't merely a document looking back on the facts and figures of the previous year. It also looks ahead, describing goals for the coming years and areas where growth is expected and improvements are planned. For example, in the 2010 report, ETC expressed the goal of reducing its need for local subsidy while increasing its benefit to the city of Baltimore.
A well-thought-out report doesn't just inform stakeholders; it wins them over where there is doubt and builds support among existing advocates. Each year, the Innovation Depot in Birmingham, Ala., publishes a bright, four-color report folder illustrating how the program has benefited the city, using easily understood charts and figures. It shows the incubator facility on the cover and provides statistics and highlights (for the incubator and client companies) on the first inside page. The third page illustrates the program's economic impact, and the back page lists the organization's officers and directors.
The report is both brief and surprisingly comprehensive, serving as a powerful advertisement for the incubation program.
In many respects, the lines between reporting to stakeholders, educating stakeholders and advocating for an incubation program dim to near invisibility. For instance, a Spotlight article on page 15 describes an event held last month by abi Innovation Hub in Manchester, N.H., in which companies were invited to make pitches. But this differed from most pitch contests in that the first round of judging was done by local residents invited to a free reception by the incubator.
"This is part of our continuing effort to make local residents aware of what we do here," says Michele Petersen, chief operating officer at abi. "It draws attention to us, builds support for what we do and teaches people about business incubation and about our program."
There are, of course, formal reporting requirements involving the expenditure of grants and other revenues received by incubation programs.
"Knowing the numbers you will need ahead of time is a lot better than trying to put them together at the last moment," Kitts advises. "Often, one stakeholder will want figures that are very similar to those needed by another. So it can save you time in the long run if you try to negotiate to see if they will accept the number you already have rather than put you to work calculating figures that are almost, but not quite, the same.
" Incubation programs registered as 501(c)(3) organizations must undergo regular audits to maintain their nonprofit status, and these audits frequently provide much of the information required by stakeholders, he explains. "If you are dealing with a big federal agency or another body that distributes a lot of money to a lot of grantees, chances are their reporting requirements are pretty strict. You'll have to give them what they require in the form that they require. But in other cases, you'll find that they're often willing to be very flexible. It certainly doesn't hurt to ask."
Membership note: During its membership restructure, NBIA added slots in each membership category to allow you to add stakeholders to your membership so they can learn more about the business incubation industry. To see if you have open slots on your membership, e-mail email@example.com.
J. Michael Bowman, president and CEO, Delaware Technology Park, Newark, Del.
Tracy Kitts, vice president & chief operating officer, National Business Incubation Association, Athens, Ohio
Ann Lansinger, president, Emerging Technology Centers, Baltimore
Susan Matlock, president & CEO, Innovation Depot, Birmingham, Ala.
Keywords: advocacy, effective communication, sponsor, stakeholder development, stakeholder relationship management
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