Imagine someone presented you with an opportunity to invest in a new business, let’s say, for example, a new organic food store down the street.
Before you decided to invest, or not invest, would you want to know everything you could about the people who would be running the store?
Would you want to evaluate whether or not those people were sufficiently qualified and skilled to increase the likelihood that the store would succeed, and thereby eventually give you a return on your investment?
I think it’s common sense that you would.
After all, the store will be competing against entrenched competitors like Whole Foods, and other specialty grocery stores.
Are the Right People Running the Show?
When you receive the prospectus revealing all the details about your potential investment, you expect the management team to be experts at all-things business: marketing and sales, operations, finance, and human resources.
But wait.
As you turn to the page with all the details about the management team, you read through long paragraphs extolling the virtues of the CEO who has battled the poultry industry for decades concerning their cruel treatment of chickens. He successfully lobbied for federal legislation that required more humane treatment of chickens.
You read how the marketing director invented a new organic coffee farming method that eliminated the need for any chemical pesticides.
Finally, you read how the COO helped build the first successful organic cotton processing plant in his native Georgia.
Commendable accomplishments, for sure.
But if I were evaluating an investment in this business, I would want to see a leadership team with a successful track record in the retail grocery business!
Just because someone is a passionate warrior for advancing the cause of the organic food industry, that does not mean he or she knows how to successfully compete in the specialty retail grocery business.
I present this example because many of the Pregnancy Help Centers that I work with make this fundamental strategic error.
In my experience, most PHCs are led by folks with strong track records in Christian ministry, or in some type of social justice movement.
Few PHCs are led by business professionals who have strong resumes proving they know how to compete, and win, from a market share perspective, against tough competitors.
Investors Beware
Many pro-life philanthropists invest in PHCs led by social justice warriors because the philanthropists confuse passion for the pro-life cause, with the professional expertise required, to successfully execute a business plan.
This is especially interesting because many of those same philanthropists themselves made their money as successful business people, so you would think they would evaluate their philanthropic investments in PHCs more strategically.
What causes them to make this fundamental error?
We’ll explore that tomorrow.
Regards,
Brett
