1. Leading with Innovation, Learning from Failure The Corps Network 2014 National Conference February 11, 2014 The Corps Network 2014 National Conference1

2. Introduction Presenters: Wendy Butts – Los Angeles Conservation Corps Dan Knapp – Los Angeles Conservation Corps Jeff Parker – Northwest Youth Corps February 11, 2014The Corps Network 2014 National Conference2

3. LA Conservation Corps Mission: LA Corps’ primary mission is to provide at-risk young adults and school-aged youth with opportunities for success through job skills training, education and work experience with an emphasis on conservation and service projects that benefit the community. 400 18- to 24-year-old Young Adult Corps corpsmembers who receive on-the-job training, paid work experience and attend our charter school site to complete their high school education 500 14- to 17-year old corpsmembers who perform paid community beautification work in Clean & Green 250 14- to 18-year-old students enrolled in two full-time charter high school sites (operated by The Education Corps) 6,000 elementary and middle school students (ages 10 to 14) from 16 LAUSD schools who participate in after school enrichment activities and receive tutoring services in our After School Program February 11, 2014The Corps Network 2014 National Conference3

4. Northwest Youth Corps Mission: To help youth and young adults learn, grow, and experience success. Work in 5-state area 800 16- to 19-year-old participants 150 18- to 24-year-old participants 60 full-time high school students Residential and non-residential formats February 11, 2014The Corps Network 2014 National Conference4

5. Introduction Workshop outline: 1.Discuss the drivers of innovation 2.Discuss the potential risks of innovation 3.Case Study Analysis 4.Lessons Learned 5.Share risk reduction and analytical tools February 11, 2014The Corps Network 2014 National Conference5

6. What Drives Innovation in the Corps Industry? Diversify Funding Streams Increase Participant Outcomes/Services Integrate Operations Particular Staff Expertise and/or Passion Opportunity Other? February 11, 2014The Corps Network 2014 National Conference6

7. What is the Risk of Failure? Financial shortfall Unmet participant outcomes Mission drift Harm to brand Bad public relations Other? February 11, 2014The Corps Network 2014 National Conference7

8. What is Your Organizational Risk Tolerance Level? Risk Tolerance Spectrum o Staff o Board o Participants o Other Stakeholders Difference between “need to” and “want to” Size of the opportunity Organizational culture Organizational experience – positive and negative February 11, 2014The Corps Network 2014 National Conference8

9. Case Study: Los Angeles Conservation Corps’ Weatherization Program Challenges and Lessons Learned February 11, 2014The Corps Network 2014 National Conference9

10. The Program Design 1.Long Beach Community Action Partnership 2.Los Angeles Conservation Corps Network LA Conservation Corps – lead Long Beach Conservation Corps San Gabriel Valley Conservation Corps California Conservation Corps February 11, 2014The Corps Network 2014 National Conference10

11. Wx Program Organizational Chart February 11, 2014The Corps Network 2014 National Conference11

12. Benefits for LA Conservation Corps Good platform for on-the-job training for corpsmembers Mechanism for accessing and capitalizing on the influx of ARRA funding Good source of contract funding with a sustainable infrastructure for growth Potential profit-generating social enterprise project February 11, 2014The Corps Network 2014 National Conference12

13. What We Knew/Didn’t Know in Planning Phase Cash flow was going to be an issue Partnership lacked key expertise/was co-dependent Staff training was extensive and time-consuming CSD was bogged down with ARRA-funded projects and couldn’t provided needed support Not enough skilled professionals were available LBCAP would choose to inspect all homes at 100% Collaboration with LBCAP would be difficult February 11, 2014The Corps Network 2014 National Conference13

14. A Problematic Implementation Multiple trips to homes meant low or no profit- margin Billing cycle was too short; LACCN missed opportunity to bill for services provided Higher than expected standard of work quality created issues February 11, 2014The Corps Network 2014 National Conference14

15. The Intervention Harsh financial realities Requests for reimbursement/ programmatic changes unaddressed Analysis/realistic expectations/forecasting February 11, 2014The Corps Network 2014 National Conference15

16. The Final 18 Months Measurable losses + Questionable management changes + Issues with financial reporting = Unsuccessful program February 11, 2014The Corps Network 2014 National Conference16

17. What We Didn’t Know/Should Have Done (in Retrospect) Relationship with partner difficult to manage 6- to 8-year recovery of start-up costs Depleted human capital/low skills levels of staff Ensured conflict resolution process at start Delineated clear expectations at start Created exit plan during Planning & Design Better plan for contingencies Build in checks & balances/better reporting to stakeholders Reported on finances throughout implementation February 11, 2014The Corps Network 2014 National Conference17

18. Primary Causes of Failure Lack of control of primary functions, inc. marketing Lack of oversight of and systems for program Insufficient program modeling of costs, finances & operations Management structure of partner February 11, 2014The Corps Network 2014 National Conference18

19. Lessons Learned Buy-in & collective responsibility The importance of planning The power of partnership Looking forward & looking back It’s ok to make mistakes/knowing when to say when Power in the wrong hands February 11, 2014The Corps Network 2014 National Conference19

20. Where Do We Go From Here? Leadership has changed the way it works together and what it reports to the Board Business plans for any off-mission programming and/or new endeavors Creation of simple to read and understand financial, programmatic and strategic reporting tools with monthly info. on unbilled receivables, profit & loss (by project), hidden & uncovered costs and administrative expenses. February 11, 2014The Corps Network 2014 National Conference20

21. Where Do We Go From Here? (cont.) Information on new projects shared during planning phase/key strategic planning info. reported on by quarter Financial management infrastructure reviewed/checks and balances integrated Collaborative approach to decision making Continue to work on relationship building/only enter into contracts/situations that make good business sense February 11, 2014The Corps Network 2014 National Conference21

22. Process for Program Innovation February 11, 2014The Corps Network 2014 National Conference22 OpportunityMarket Study Due Diligence Testing Assumptions Innovation

23. Analytical Tools for Innovation Market study Market size Market growth rate Market profitability Cost structure Market trends Key factors for success and sustainability February 11, 2014The Corps Network 2014 National Conference23

24. Analytical Tools for Innovation Due Diligence Research LACC Project Evaluation Questionnaire February 11, 2014The Corps Network 2014 National Conference24

25. Analytical Tools for Innovation February 11, 2014The Corps Network 2014 National Conference25 Revenues2014 Budget2015 Budget2016 Budget Optimized Budet Total Revenue $ 452,865 $ 508,830 $ 581,400 $ 713,400 $ 840,300 Indirect Charges Direct Expenses 2014 Budget2015 Budget2016 Budget Optimized Total Expense $ 452,686 $ 505,420 $ 581,394 $ 701,237 $ 815,228 Total Revenues $ 452,865 $ 508,830 $ 581,400 $ 713,400 $ 840,300 Subtotal Income (Loss) $ 179 $ 3,410 $ 7 $ 12,164 $ 25,072 Pro Forma –Test Every Assumption

26. Analytical Tools for Innovation February 11, 2014The Corps Network 2014 National Conference26 Cash Flow –Test Every Assumption Year 1 Revenue Starting Surplus September October November December January February March April May June $ 70,522 $ 54,785 $ 51,881 $ 29,381 $ 38,381 $ 48,881 $ 50,381 $ 47,381 $ 48,881 $ 32,381 Year 1 Expense September October November December January February March April May June $ 50,382 $ 46,382 $ 42,882 $ 43,882 $ 45,382 $ 43,882 $ 45,382 $ 46,882 $ 42,382 Year 2 revenue Starting Surplus September October November December January February March April May June $ 19,032 $ 85,434 $ 64,144 $ 61,065 $ 51,065 $ 55,065 $ 59,732 $ 60,400 $ 59,065 $ 59,732 $ 52,400 Year 2 Expense September October November December January February March April May June $ 65,185 $ 59,851 $ 55,185 $ 56,518 $ 58,518 $ 56,518 $ 58,518 $ 60,518 $ 54,518 Year 3 revenue Starting Surplus September October November December January February March April May June $ 41,961 $ 102,590 $ 79,064 $ 75,602 $ 63,102 $ 68,102 $ 73,935 $ 74,768 $ 73,101 $ 73,935 $ 64,768 Year 3 Expense September October November December January February March April May June $ 80,055 $ 73,389 $ 67,555 $ 69,222 $ 71,722 $ 69,222 $ 71,722 $ 74,222 $ 66,722

27. Analytical Tools for Innovation February 11, 2014The Corps Network 2014 National Conference27 Working Capital –Test Every Assumption September October November December January February March April May June Year 1 $ 20,140 $ 28,543 $ 34,042 $ 20,540 $ 15,039 $ 18,537 $ 25,036 $ 27,034 $ 29,033 $ 19,031 Year 2 $ 39,281 $ 43,574 $ 44,789 $ 40,670 $ 39,218 $ 40,433 $ 44,315 $ 44,863 $ 44,078 $ 41,960 Year 3 $ 64,495 $ 70,170 $ 72,384 $ 67,931 $ 66,812 $ 69,025 $ 74,572 $ 75,951 $ 75,665 $ 73,711

28. Discussion Examples from the Group What were the lessons learned? February 11, 2014The Corps Network 2014 National Conference28

29. Contact Us: Wendy Butts, Managing Director, LACC 213/362-9000 x206/wbutts@lacorps.orgwbutts@lacorps.org Dan Knapp, Deputy Director, LACC 213/362-9000 x242/dknapp@lacorps.orgdknapp@lacorps.org Jeff Parker, Executive Director, NYC 541-349-7500 jeffp@nwyouthcorps.orgjeffp@nwyouthcorps.org February 11, 2014The Corps Network 2014 National Conference29