Case in Point: The Heartland Angels

Heartland Angels, Inc. might be described as a private equity network that helps investors identify companies in which to invest. However, the focus of the individuals who make up Heartland Angels extends well beyond investing. While the “core” of Heartland Angels is its network of investors, it is also a network of mentors, advisors, and consultants who work together to provide knowledge, share expertise, and introduce a slate of management assets to enthusiastic entrepreneurs and newly established management teams.

Ronald L. Kirschner, MD, is the president of Heartland Angels.3 In some ways, Dr. Kirschner’s career has been similar to those of typical physicians. He has practiced medicine for 23 years. He has served as the president of the Irving Park chapter of the Chicago Medical Society. He taught at the Illinois Masonic Medical Center and was previously an assistant professor at Southern Illinois University School of Medicine. He also completed residencies in emergency medicine at the University of Chicago and in anesthesia at West Virginia University.

That is where Dr. Kirschner’s career as a typical physician ends. Throughout his life, Ronald Kirschner has had an unquenchable thirst for knowledge and an equally demanding curiosity. He has always been interested in how different methods might improve the quality of life for individuals, families, and entire communities. His studies in medicine, science, and business have prompted his interest in how to best set the stage for individual, team, and organizational success. He has confidence in the potential of science and technology to improve life but realizes there are many situations in which the right resources aren’t available to innovators.

This realization led Dr. Kirschner to broaden his focus beyond the practice of medicine. He became actively involved in health care innovation and development, startups, and private equity. While still practicing medicine, he established three companies dealing with nutrition, managed care, and health care resource utilization. He served as a subject matter expert on health care issues to the Illinois State government. He served as a VP of technology development for a biotechnology company and was involved with the board of directors of a company that develops FDA-approved cancer treatment drugs based on traditional Chinese medicine. He has also helped the owners and leaders of a slate of early stage companies make funding, planning, and development decisions. After spending time on these various activities, Dr. Kirchner recognized the need for a network of investors, mentors, advisors, and consultants to help stimulate local innovation in a more coordinated way. To do so, Dr. Kirschner established Heartland Angels.

The Heartland Angels business model is unique. It brings human, intellectual, and financial capital together to achieve two important objectives: to serve as a catalyst of innovation and to provide the means by which early stage organizations will not only survive but thrive. Heartland Angels targets companies that focus on three areas: scienceand technology-based innovations; retail, manufacturing, and distribution; and telecommunications and information technology. Heartland Angels has established a track record of identifying promising startups and helping them succeed. Heartland Angels’ approach consists of four components:
1. The team establishes a highly structured approach to funding viable innovations.
2. A comprehensive analysis is conducted with early stage management teams to identify the opportunities, blind spots, biases, and challenges needing action.
3. Experts and executives with deep expertise provide real-time guidance and assistance.
4. Protocols are established to ensure optimal communication and leveraging of resources and capabilities between the investor network and portfolio company.

These four components form the basis for accelerating the success of each new venture.

Dr. Kirschner realized early on that Heartland Angels’ network of mentors, advisors, and consultants would have to set it apart from other private-equity firms. To succeed, they would have to work together to gain the trust, confidence, and commitment of entrepreneurs and newly established management teams. He recognized that to gain trust, his network would have to prove through its words and actions that it is on the side of the entrepreneur. They had to help
each management team with both their short-term and long-term
success.

To execute on this goal, Dr. Kirschner established several key priorities to help ensure that the Heartland Angel network would deliver value:
■ All investment opportunities would need to fall within the three core priorities for the Heartland Angels: science- and technologybased innovations; retail, manufacturing, and distribution; and telecommunications and information technology.
■ A structured evaluation for investors was necessary at the front end of the process. This front-end evaluation would assess risks associated with the opportunity.
■ An analysis for entrepreneurs was also necessary. This wouldsurface both the internal strengths and weaknesses as well as the external opportunities and threats that the management team would need to address.
■ A deeper operational review would evaluate matters of technology, systems, processes, governance, and management practices. This evaluation would define a blueprint for management and also would reveal the founders’ biases and blind spots.
■ The completed analysis informed an evaluation of the management team itself, surfacing both strengths and competency gaps that would need to be addressed.

Addressing these priorities in a proactive manner allowed Dr. Kirschner and the network to identify the best ways to provide support for each new venture. Achieving success as a startup is no small task. Each management team must address competitive challenges, prepare for short- and long-term growth, apply leadership and management capabilities, plan and coordinate resources, distribute products or deliver services, hit key milestones, and execute an agreed-upon exit strategy.

To raise the likelihood of success, Dr. Kirschner established a network of individuals to provide needed guidance and support. Although Heartland Angels’ broad network of resources stands ready to provide needed assistance and support, new ventures typically receive initial guidance and direction primarily from Dr. Kirschner. He uses this time to sensitize the management team to deficiencies and capabilities that need to be addressed in the organization’s business plan in order to give them initial credibility when presenting to prospective investors. For example, a management team might add a CFO before presenting its business plan so that the team is better equipped to firm up the financial forecast.

Dr. Kirschner helps each new venture prepare in order to present a compelling case for its founders’ vision to prospective investors. From his perspective, a compelling case requires speaking from both conceptual and tactical perspectives. Conceptually, Dr. Kirschner helps
ensure the entrepreneur can tell others about the vision for their product, service, or company. It is important for prospective investors to understand why it should exist, where it currently stands, and where it is headed into the future. It is important for the entrepreneur to demonstrate a thorough and well-considered understanding of the problem they are going to solve. Tactically, Dr. Kirschner helps ensure the founder can prove to others that the management teamhas thought through the full spectrum of business issues, considerations, and implications involved in successfully executing their strategy. Here, Dr. Kirschner tries to expose personal biases and blind spots likely to impede their success. This could include gaps in research and development, transfer of knowledge and technology, marketing, supply chain management, manufacturing, distribution, or scaling strategies.

The range of capabilities that Dr. Kirschner helps them consider extends well beyond the topics taught in a typical MBA program. To garner the interest of prospective investors, the entrepreneur must do the following:
■ Share insights, realizations, and lessons that go beyond the technology, services, products, or financials. The entrepreneur must share something meaningful, something likely to resonate “with folks outside of the room.”
■ Tell a credible and believable story about where the idea came from, how the product or service will meet a need, how many individuals are willing and able to purchase the product or service, and the challenges the company will face on the road ahead.
■ Describe how the product or service will benefit society. Simply generating revenue or gaining wealth is not compelling for the type of investors Heartland Angels works with.
■ Demonstrate through experience and commitment that the entrepreneur has the fortitude to take this idea from concept to reality. The catalyst for this falls outside of dollars and cents—it falls within the heart and mind of the leader.
■ Address how any technology-related aspects of the plan are a viable solution to an everyday concern, challenge, or problem. Technology for its own sake is a trip to be avoided.
■ Create excitement with the prospective investors. A good idea will compel them to ask questions. The best ideas will prompt follow-up questions. Dr. Kirschner watches for both.

Only after the founder and management team have demonstrated an ability to tell a conceptually and tactically compelling story are they allowed access to the Heartland Angels’ broad network of alliances, mentors, advisors, and consultants.

Heartland Angels has established relationships with professionalmservices firms, service providers, and academic institutions that help amstartup with execution and the necessary coordination of resources.mThese alliances are mutually beneficial in that they allow organizationsmto showcasemdiscoveries and innovations, establish strategic relationships in adjacent industries, source prospective employees, and share mutually beneficial information within the alliance. These alliances also provide information and data likely to prove useful to management teams preparing to present to prospective investors. Alliance members frequently work together to identify opportunities to join forces. To enable these connections, Heartland Angels will frequently sponsor social events that allow entrepreneurs from different industries and disciplines to network and share stories.

Heartland Angels established a formal mentoring program designed to provide concrete and timely guidance to entrepreneurs. Like most mentoring programs, the Heartland Angels’ mentor establishes a lasting and trusting relationship with the entrepreneur. The mentor helps develop self-awareness and a better understanding of their context. This can include help to:
■ Outline goals and objectives for moving forward,
■ Clarify personal values that are key to short- and long-termsuccess,
■ Identify and capitalize on opportunities for personal and professional development,
■ Surface and take steps to address personal weaknesses, or
■ Recognize and take steps to mitigate personal biases and blind spots.

Heartland Angels has also established a network of voluntary advisors who are best suited to assist early stage companies operating within a particular industry or sector. These advisors help establish accountability within the management team and ensure that everyone delivers on their accountabilities, achieves their performance objectives, and performs in accordance with predefined outcomes. The advisors’ focus differs from the role the mentor plays. The advisors help teams respond to nuanced situations and circumstances, and address challenges pertaining to specific matters of organizational structure, strategy, technology, systems, processes, and practices. The advisor serves as a trusted generalist and many times is the only person with whom the entrepreneur, small business owner, or management team member is comfortable sharing initial thoughts and ideas. The advisor frequently helps the entrepreneur think through issues, considerations, and implications. They occasionally participate in crucial conversations and help facilitate critical meetings. Advisors typically provide introductions to thought leaders, professional services firms, and consultancies that are likely to prove useful and beneficial to the entrepreneur in the future or when certain situations or circumstance emerge. Heartland Angels advisors have practical experience. They help entrepreneurs translate a raw idea into a compelling vision and transform a group of new employees into a high-performing team. They also help managers think and act like leaders and provide guidance and direction on what the management team can do to help set the stage for short- and long-term success.

In addition to the advice and expertise, the Heartland Angels established a network of service providers who offer support in areas such as business planning, accounting, marketing, supply chain management, and manufacturing. Heartland Angels helps set the stage for a successful partnership with these providers, ensuring that they are more than just transactional relationships. Individual consultants and consulting firms are required to complete a comprehensive and detailed questionnaire when applying to the network, and once accepted they must provide references. The Heartland Angels network database provides a profile of each individual consultant and
service provider, including details on capabilities relevant to early stage
companies.

These are the key actions and steps Dr. Kirschner takes to leverage the hands of his fellow investors and partners. Collectively, they offer greater value to the early stage ventures they work with than Dr. Kirschner could alone. In making these connections, he is constantly expanding and leveraging a wide network for the benefit of these ventures. He gladly gives his own time where he sees the opportunity. By doing so, Dr. Kirschner leads by example. As others follow his lead, he bolsters trust and confidence within the overall Heartland Angels network.

Winning Hearts, Engaging Minds, and Leveraging Hands

Strategic leadership entails enlisting others who can help provide insight and drive change. To enlist others, it is essential to win the hearts, engage the minds, and leverage the hands of others. To win hearts, ask others to contribute to a cause that is meaningful and important to them, think and act as a selfless steward, and take steps to include and involve stakeholders in important decisions. To engage minds, strive to share information others will need and solicit input on how to proceed. To leverage hands, take steps to make connections between parties that can apply knowledge, skills, and abilities where they will have the greatest impact.

Taking actions like these can attract, engage, and retain individuals, which is crucial to success. Enlisting others can also free up capacity for matters of strategic importance. Committed partners can also enhance strategic thinking by bringing creative and innovative ideas. As a close colleague in a professional services firm points out, in some cases 1 + 1 = 4.

We’ve now reviewed the actions that individuals can take to gain insight, drive change, and enlist others. Having examined what effective strategic leadership looks like, this prompts a question we are often asked but have yet to address in this book: How might an individual bolster his or her ability to think and lead more strategically? We address this important question in the next chapter.

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Case in Point: The Heartland Angels

Heartland Angels, Inc. Dapat dikatakan sebagai jaringan ekuitas pribadi yang membantu para ivestor untuk mengidentifikasi perusahaan mana yang baik untuk berinvestasi. Untuk sementara inni fokus dari Heartland Angels adalah sebagai jaringan dari investor, dan juga bekerjasama dengan konsultan untuk memberikan pengetahuan dan memperkenalkan pengusaha yang antusias mengenai manajemen.

Ronald L. Kirschner, MD, adalah presiden Heartland Angels. Dia telah menjabat sebagai presiden Irving Park, dari Chicago Medical Society, dan mengajar di Illinois Masonic Medical Center dan sebelumnya menjadi asisten dosen di Southern Illinois University School of Medicine. Demikianlah akhir karir dari Dr. Kirschner. Selama ia hidup, Ronald Kirschner tak letih-letihnya belajar untuk mendapatkan ilmu sebanyak mungkin yang ia bisa. Studinya di bidang kedokteran, pengetahuan dan bisnis telah mendorong minatnya dalam mengatur bagaimana cara untuk melakukan yang terbaik untuk menjadi seorang individu, tim dan organisasi untuk mencapai kesuksesan.

         Sadar akan hal tersebut, Dr. Kirschner segera memperluas fokus pembelajarannya melebihi prakteknya sebagai dokter. Sementara ia masi belajar di bidang kedokterannya, Dr. Kirschner mendirikan tiga perusahaan, di bidang nutrisi, perawatan kesehatan, dan pemberdayaan sumberdaya kesehatan. Dr. Kirschner pun menjabat menjadi orang penting di beberapa perusahaan baik milik swasta maupun pemerintah. Setelah menghabiskan waktu yang begitu banyak dengan melakukan berbagai kegiatan, Dr. Kirschner merasa dapat lebih fokus untuk melakukan koordinasi, sehingga ia pun mendirikan Heartland Angels.

          Heartland Angels adalah model bisnis yang unik. Heartland Angels membawa sumber daya manusia, intelektual dan secara finansial untuk mencapai dua tujuan penting yaitu untuk melayani sebagai katalis inovasi dan untuk menyediakan sarana organisasi tahap awal agar tidak hanya bertahan hidup tetapi berkembang. Heartland Angels merupakan perusahaan yang memfokuskan pada tiga bidang, yaitu inovasi berbasis science technology; ritel, manufaktur dan distribusi; serta telekomunikasi dan teknologi informasi. Pendekatan Heartland Angels terdiri dari 4 komponen :

1.       Tim yang menetapkan pendekatan yang terbaik untuk mendanai inovasi.

2.    Analisa yang komprehensif dilakukan untuk mengidentifikasi peluang, blind spots, dan tantangan yang membutuhkan tindakan.

3.     Para ahli dan eksekutif dengan keahlian ny menyediakan bimbingan secara real-time dan menawarkan bantuan.

4.     Protokol ditetapkan untuk memastikan komunikasi yang maksimal dan kemampuan antara investor dan portofolio dari perusahaan.

Keempat komponen diatas membentuk dasar untuk mempercepat keberhasilan dari setiap usaha yang baru.

Dr. Kirschner menyadari bahwa harus ada perbedaan cara memperlakukan sesuatu, untuk berhasil mereka harus bekerja sama untuk mendapatkan kepercayaan, keyakinan dan komitmen dari pengusaha dan tim manajemen mereka. Ia menyadari bahwa dalam sebuah tim dibutuhkan kerjasama, baik dalam jangka pendek maupun panjang.

Dr. Kirschner mencari beberapa prioritas utama yang digunakan untuk membantu jaringan dari Heartland Angels bahwa mereka akan memberikan suatu dampak :

1.     Semua peluang investasi yang ada perlu berhubungan dengan tiga prioritas utama dari Heartland Angels.

2.       Evaluasi yang terstruktur bagi investor diperlukan di bagian depan suatu proses. Evaluasi front-end ini akan beresiko terkait kesempatan yang ada.

3.       Analisa bagi pengusaha juga diperlukan.

4.       Tinjauan yang lebih dalam mengenai evaluasi hal tentang teknologi, sistem, proses, tata kelola, dan praktik manajemen.

5.       Analisa yang komplit akan diberitahukan dari evaluasi tim manajemen itu sendiri.

Mengatasi prioritas tersebut, secara proaktif Dr. Kirschner dan jaringannya mengidentifikasi bagaimana cara terbaik untuk memberikan dukungan kepada setiap usaha baru.  Dalam mencapai kesuksesan, bukanlah hal yang mudah terutama bagi usaha yang baru pertama kali berjalan. Setiap tim manajemen dalam setiap usaha baru tersebut harus memikirkan cara untuk mengatasi persaingan kompetitif, perkembangan usaha jangka pendek maupun panjang, merencanakan sumber daya yang diperlukan, bagaimana cara untuk distribusi, dan melaksanakan strategi yang sudah direncanakan.

Untuk meningkatkan kemungkinan keberhasilan, Dr. Kirschner membangun network of individuals untuk menyediakan bimbingan dan dukungan yang diperlukan. Dr. Kirschner akan menggunakan waktu yang ada untuk menyadarkan tim manajemen tersebut akan kekurangan dan kemampuan yang harus diperbaiki dalam merencanakan bisnis di dalam organisasi dan memberikan kredibilitas awal ketika presentasi kepada calon investor.

Dr. Kirschner membantu setiap pengusaha yang baru membuka usaha dengan cara memberikan kasus untuk diselesaikan, kasus ini membantu pengusaha tersebut dalam menentukan visi perusahaannya. Dari sudut pandangnya, kasus yang baik akan membahas mengenai persperktif konseptual dan tactical. Secara konseptual, Dr. Kirschner membantu pengusaha untuk memastikan kepada konsumen akan visi untuk produk atau jasa yang perusahaan tawarkan, hal tersebut penting untuk masa depan. Dari sisi tactical Dr. Kirschner membantu memastikan pendiri usaha untuk dapat membuktikan kepada orang lain bahwa tim manajemen telah berpikir melalui spektrum yang penuh masalah bisnis, pertimbangan, dan implikasi yang terlibat dalam berhasil melaksanakan strategi mereka.

Pengusaha harus melakukan hal dibawah ini jika mereka ingin mendapatkan calon investor :

-          Membagi wawasan, realisasi, dan pembelajaran mengenai teknologi, jasa, produk, atau keuangan.

-          Memberitahu cara yang kredibel dan dipercaya bagaimana ide itu berasal, bagaimana produk atau layanan akan memenuhi kebutuhan, berapa banyak orang yang bersedia dan mampu untuk membeli produk atau layanan, dan tantangan perusahaan akan menghadapi jalan di depan.

-          Menjelaskan bagaimana produk atau layanan akan menguntungkan masyarakat.

-          Menunjukkan melalui pengalaman dan komitmen bahwa pengusaha memiliki ketabahan untuk mengambil ide dari konsep secara realita.

-          Mencaritahu bagaimana setiap aspek yang berkaitan dengan rencana adalah solusi yang layak untuk setiap tantangan yang ada.

-          Membuat kesenangan dengan calon investor.

Heartland Angels telah menjalin hubungan dengan perusahaan profesional jasa, penyedia layanan, dan lembaga akademis yang membantu startup dengan eksekusi dan koordinasi yang membutuhkan sumber daya. Aliansi ini menyediakan informasi data yang berguna bagi tim manajemen untuk disajikan kepada calon investor. Untuk membangun koneksi seperti itu, Heartland Angels sering menjadi sponsor acara-acara sosial yang memungkinkan pengusaha dari industri untuk dapat berbagi cerita.

Heartland Angels membentuk sebuah network untuk penasihat sukarela yang digunakan untuk membantu tahap awal perusahaan yang beroperasi dalam indutri tertentu. Penasihat ini membantu pengusaha untuk membangun akuntibilitas dalam tim manajemendan memastikan bahwa setiap orang memberikan akuntabilitas mereka masing-masing. Fokus seorang penasihat berbeda dengan peran mentor. Penasihat membantu tim untuk merespon situasi dan keadaan yang berbeda, dan tantangan yang berkaitan dengan hal tertentu dari struktur organsisasi, strategi, teknologi, sistem, proses, dan praktik. Penasihat sering membantu pengusaha memikirkan masalah, pertimbangan, dan implikasi. Penasihat juga biasanya memberikan perkenalan kepada para pemimpin yang akan bermanfaat bagi pengusaha di masa depan. Mereka membantu pengusaha menerjemahkan ide mentah menjadi sebuah visi dan mengubah sekelonpok karyawan baru ke dalam tim yang memiliki kinerja yang tinggi. Mereka juga membantu manajer berpikir dan bertindak seperti pemimpin dan memberikan bimbingan dan arahan pada apa yang tim manajemen dapat lakukan untuk membantu mengatur panggung untuk keberhasilan jangka pendek maupun panjang.

Heartland Angelsjuga mebentuk network penyedia layanan yang menawarkan dukungan di bidang-bidang seperti perencanaan bisnis, akuntansi, pemasaran, manajemen rantai pemasok, dan manufaktur. Heartland Angels membantu mengatur panggung untuk partnership yang sukses dengan adanya pelayanan ini. Network database dari Heartland Angels menyediakan profil masing-masing konsultan individu dan penyedia layanan, termasuk rincian tentang kemampuan yang relevan untu ktahap awal perusahaan.

Hal diatas adalah tindakan utama dan langkah-langkah yang diperlukan oleh Dr. Kirschner untuk memanfaatkan tangan sesama investor dan mitra. Mereka menawarkan nilai yang lebih besar kepada pengusaha untuk membangunn usaha dari tahap awal. Dr. Kirschner memimpin dengan contoh, karena ia senang memberikan waktu sendiri pada saat ia melihat sebuah kesempatan.

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