This is a CTP of initiative: Impact Hub London King’s Cross (UK)
This CTP is about hiring a new managing director at IH KC and the implications for the enterprise. The ‘turning’ of this CTP is described in terms of professionalization and a shift from a significantly unhealthy financial situation to a decently healthy financial situation. As the managing director recalls: “When I joined the financial situation was more than horrible, we didn’t have any money. We were in debt. We were running loss every month. I made lots of changes. (…) So mainly, that is one of the major turning points. From absolutely no money, to a healthy finance situation”.
The change of staff took place in May/ June 2012 and consisted of hiring a managing director with a background in business administration and international business management, and with 6 years of experience in working in social business. The goal was to professionalize the operational at IH KC. As reported by the managing director, upon her joining the IH KC “there was lots of waste and lots of money not well used and they did not have the vision to see this. (…) There was no way you could manage a team the way it was.” Part of the turning was the implementation of a strict work ethic: “I was very strict and straight. There is grey in many occasions, but for rules it is black and white” (Managing director).
The changes within the practices of IH KC had an effect on the relations with the members. The managing director elaborates, “at the time I came in we had no money, so some members took advantage of that situation. They would try to squeeze some deals that are not favourable for the Impact Hub. Fearing of losing the member, the old management many times would accept that. But I didn't, I made everyone pay their fair share to have access to our facilities”. So when the managing director implemented new rules it completely changed the relationship with the members: “I think the changes I wrote, some of them meant being more restrictive with members who were overusing the workspaces. (…) When I came I said we need rules and they need to count for everyone”. This did not result in dissatisfying members, on the contrary; the IH KC received compliments about the increase of professionalism.
At the same time, it also influenced the day to day practices of the IH KC staff: “Because the team was not very well structured, people had no accountability for what they did. One of the biggest changes I did was to redesign the roles and make everybody responsible for what they did. (…) Now everybody is accountable for their actions, and you learn from what went wrong and don’t do it again” (Managing director). These changes made it possible for the IH KC to focus on its mission. As indicated by the managing director: “At that time I proved that to be able to do our mission, to foster those members and to foster the relationship with them, you need to free your minds from day to day problems. In this way you can come up with a good program”.
The managing director had a work ethics that was considerably different from the work ethic that had been common at IH KC. She describes: “I came from a place where our work ethics is very different from the European. In Brazil, especially in the time I grew up, there were no jobs. You’d do everything for your job. People would go above and beyond. People here (Europe) have a different way of seeing work; work is complementary to your life, it is not your life.”
This CTP revolved mainly around one individual, i.e. the managing director. Still, the decision to hire a managing director, and the choice for a specific person was the result of a collaborative decision. Members of the board, staff, and members of the IH KC conducted the job interview.
The actual implementation of operational changes required the cooperation of the managing director with others, including the shareholders (who allowed to loan more money to make it possible to restructure the operations), and the whole team of staff (including a community manager, an operation manager, a head host and a large number of volunteers). This did not go without contestation and disagreement (see CONTESTATION).
Another important factor with considerable influence on the redesign of the day-to-day operations was the automatisation of the software, i.e. the implementation of Nexudus (see CTP IMPLEMENTATION NEXUDUS).
It is crucial to highlight the importance of one of the board member(s) and his role in backing the new managing director in times of tensions between the members of staff and the new managing director. The managing director indicates that one of the board members “openly addressed the members of staff” in a meeting in which he explained his “trust and confidence” in the changes that were imposed by the new managing director.
Some crucial preceding events have led to the emergence of this CTP. The CTP is so important that to a certain extent the whole history of IH KC led to this CTP and its future was depending on it.
One preceding development was the increasing awareness that the previous managing director was not living up to the tasks. This awareness emerged amongst both the board members as well as the previous manager herself. As the managing director recalls: “I think s/he was overwhelmed by the situation and s/he realised this job was not for her. (…) They needed somebody to replace her, which was triggered by the fact that s/he was asking to leave”.
The unhealthy financial situation and the unstructured character of the operations were not only ascribed to the former managing director. The whole team did not fulfil its roles as expected. “There were people who were coming in for work at any time they wanted. Often people would not show up at all”. The work culture before the CTP was considered unprofessional: “They mixed up a relaxed atmosphere with not being professional” (Managing director).
Also a shift in ownership, from the initial founder to a group of shareholders had a positive impact on the practices of the IH KC (see CTP ‘CHANGE IN OWNERSHIP). The managing director elaborates the importance of this event: “I think for the functioning of the IH KC, this transition from one single owner, to a structured multiple ownership was really positive”.
The CTP can be regarded as an accelerant for other events and developments within the practices of the initiative. The professionalization, the improved financial situation and the implementation of the new software (see CTP IMPLEMENTATION OF NEXUDUS) are the clearest examples of this.
There is also one single development that is not connected to this CTP, but did effect the practices of the IH KC. Shortly after the new managing director was hired, there was an increase in the rent of the location of almost 100%. The managing director points out that “it was because of this that we were put in the negative again. (…) Otherwise we would be in a better financial situation and would not have needed the loan from (one of) the shareholders”.
When asked whether there was an ‘endpoint’ to the CTP, the manager recalls a meeting in October 2013 to discuss the financial year. It was “a very good feeling” to see the positive results being presented. Already before, there had been some meetings to prepare and discuss the results. “It was an evolving process. I think there was a meeting to present the first draft of the accounts and the board was very pleased (…). That was the time that I felt recognized for the changes and the things that went good (…). By that time, I had to present the budget for the following year. There were also some pay rises for some members of the staff. Everyone was really pleased, that gave me more confidence to continue the change that was needed”.
This CTP is accompanied by various kinds of contestations, particularly between the new managing director and the staff.
Firstly, there was contestation about who to hire: Who was the right candidate for the job? As a board member indicates: “In terms of choosing between candidates, there was lots of disagreements and I won. In the most democratic way possible, but I think I felt like the people who were informing the decisions, didn’t have a full understanding of what the issues were broadly. Whereas, [the legal director] and me were much better informed whom that person should be. And to this day we both would say we made an absolute brilliant decision”. More specifically, the disagreement was about how the candidates were presenting themselves and their ability to do the job: “little things like [the managing director’s] English wasn’t as good as some of the natives who were candidates. I think those things were getting in the way of what was her valid experience that other people didn’t necessarily see. I think mainly that. Just purely different opinion on who we thought was best qualified to do the job” (Board member).
A topic that inflicted many disputes was a discrepancy between the ideologies on ‘how to run a Hub’. On the one hand, there was the new managing director who is convinced that running an IH is essentially the same as running any other business. On the other hand, there was the belief amongst other members of staff that running a social enterprise like the IH is a whole different ballgame: “It wasn’t easy when I got in. (…) People felt, 'she doesn’t know what she is doing; she doesn’t know what social business is'” (Managing director).
This together with a completely different work ethics created situations in which the managing director needed to confront the team about their job performance: “To be able to accomplish our mission, we need to free our mind of small things. I had a community manager who was doing the hosting and was chasing members who were not paying. That doesn’t make sense. I need a community manager free to do her job”. At one point, the managing director had to say to one of the staff members that she needed to focus “Look, I need you to focus at this point at least 90% of your time on your job so the community manager is being free to do her job properly”. This also meant that some people could not spend as much time as they wanted on other things, i.e. more priority was placed on performing the work according to job descriptions.
According to the managing director, the most contestations were between her and members of staff, and not so much with the members (i.e. customers) of the IH KC. One of the issues that was continually brought up for discussion was on ‘how to manage’ members who were taking advantage of the financial situation of the IH KC. While there were some members complaining about new rules, this was mostly a matter of explaining the rules to them. “It was more the team that did not accept than the members complaining. (…) Of course the board was a bit worried about the members, but we did not have any members leaving because they were unhappy with following the rules” (Managing director). At the end, the managing director could apply her way of working, “because I had the board behind me”.
While awareness grew amongst both the board members as well as the previous manager herself, that she was not living up to the tasks, asked directly, the current managing director argues, “there was no anticipation, but people were glad that I was hired as a managing director”.
The main lessons that the managing director contemplated are very straightforward. To her, the IH KC should get rid of the idea that running a social innovation requires a different way of running a business than running another kind of enterprise. “It’s a huge lesson for the IH KC that you need to be professional no matter what, then you have the time and energy to do what you want to do, and you are able to focus on your mission”. To summarize this: “I think we need the right balance between a commercial model and being impact driven” (Managing director).
Looking back on the way she implemented her changes, the key word mentioned is “professionalism”, which means “having your systems in place” (Managing director). Additionally, she argues that things could have been done differently in the interest of the IH KC. “Looking back I would have speeded some of the changes a bit up. I slowed them down to not have a clash (with members of staff). This would have been good for the development of the Hub”.
A board member argues, “every time you employ someone you get better at it. (...).You need different people at different times of the organisation’s life. Also what are you willing to sacrifice or negotiate on in terms of someone’s skill level which I told I was very clear on and I have been proven wrong”. More concrete, she indicates that she had thought that a leader needs to have impeccable written and spoken English skills. However, she admits that she “was kind of proven wrong on that because she was managing and getting respect from members and staff. I think that is really, so I was proven wrong on an agree on that point”.
Another insightful lesson from the board member relates to the different (hosting) cultures that can be useful in developing a Hub. “We can’t expect, Western-European hosting cultures being the only way. We have a really fascinating community at Impact King’s Cross, it’s a very transient city and very transient part of the city. How you build and maintain a long relationship with people when you are working in a very busy and transient metropolis”.
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