Case studies

Because U.S. legislators are often most attentive to the issues raised by people who create jobs in their states, Bob Epstein, a local business owner, has been asked by activists to help lobby for a bill that would mandate the reduction of greenhouse gas emissions in California. Before deciding whether he should work to establish the business community's backing for this bill, Epstein must weigh the pros and cons of supporting measures that might put his business (and standing in the community) at risk.

Use the 4 I's framework to evaluate the nonmarket environment, assess the political impact of the potential coalitions in favor of and opposed to the bill, identify the type of politics that characterizes the situation, and describe the strategies each side will likely use in contesting the bill.

Paul Hamann was senior vice president of The Night Ministry, a Chicago-based not-for-profit organization. In October 2003 he received a phone call from the wife of the Reverend Tom Behrens, the founding president and the public face of the organization. She told Hamann that Behrens had suffered a massive stroke and that doctors were unsure of his prognosis. Behrens had been walking the streets of run-down Chicago neighborhoods since 1976, looking for people in despair, listening to their needs, and offering them a helping hand and a consoling presence. In the intervening twenty-seven years, he had built The Night Ministry into a well-known organization that helped thousands of adults and youth every year. No succession plan, if one existed, had ever been conveyed to senior management. Now Hamann was unsure when or even if Behrens would be able to work again. If Behrens returned to work, would he be able to continue to lead the organization? If not, who would lead The Night Ministry going forward, even if it were just for the near term, and who would make that decision? How would the community and major donors react to a new leader?

Understand Founder's Syndrome and why it is unique to the nonprofit industry

The case highlights Mike Gilliland, who built a single organic foods store in 1987 in Boulder, Colorado, into Wild Oats Markets, a chain of natural foods stores that by 2001 had annual sales of $1 billion and stores in 38 states. The case includes a history of the natural foods business and explores why Gilliland's timing was so favorable. By the 1980s, when Gilliland got started, the natural foods business had grown and matured, consisting mostly of small specialty stores selling locally grown natural foods. Although the industry was created by the California counter-culturists, it was built into a national phenomenon by the second generation of leaders, including Gilliland and Whole Foods founder John Mackey. The natural foods industry was clubby and congenial until Gilliland sought to grow his business beyond Boulder, Colorado, expanding into four states, including California. Mackey responded by moving into Boulder. Whole Foods became the nation's number one natural foods seller by the early 1990s. Whole Foods went public in 1992, and Wild Oats, in 1996. Whole Foods's success had begun to erode Wild Oats's market share, hurt sales growth, and depress the stock price. Gilliland favored taking Wild Oats in a new direction, modeled after Henry's Marketplace, a San Diego chain that Wild Oats had purchased in 2000. Henry's approach was to offer a product mix that appealed to a broader range of people than did the natural foods stores. Henry's competed effectively with Whole Foods because it had a different customer base; the stores were cheap to build if the company wanted to expand; and the company had showed sustained growth since its founding in 1943. But the Wild Oats board of directors disagreed, opting instead for continuing on the same path. The board also expressed an interest in replacing Gilliland. He now had to weigh his options and contemplate leaving the company he had nurtured for the past twenty

This case can be used to examine the importance of long-range planning. Entrepreneurs tend to be reactive; they often succeed because they seize opportunities when they become available. The ability to recognize an opportunity and to seize it is an important entrepreneurial strength, but it can prove fatal if not balanced with proactive strategic planning.