About our shortcomings....Are we perfect yet?
A bit over a year ago we wrote about our shortcomings. What has happened since then, an update.
A bit over a year ago we decided to put our shortcomings on the website. Having our shortcomings out in the open would be an incentive for ourselves to actively work on them. We didn’t know how people would react though. Would it scare them off or would they appreciate the transparency? Luckily it was the latter. We got quite a few positive reactions.
In the end, we all have our shortcomings, it’s just that some people do a better job hiding them. But instead of pretending we don’t have shortfalls we choose to acknowledge them, embrace them… and then brutally kill them off. No mercy.
So let’s see how unmerciful we’ve been.
Shortcoming 1: We don’t know what the net social impact is of our efforts.
Ouch. We immediately flunk the test here. The short answer is that we still don’t know this. The good news, though, is that as of recently we have dedicated resources to this. Judith, who runs the Lendahand Foundation, has ample experience with measuring impact and has started working on this. In a few months we will have a much better understanding of the actual impact our investors, and by extension we ourselves, create.
Verdict: In the middle of improving this.
Shortcoming 2: The interest rates for the end borrowers are high.
We are increasingly financing companies directly (rather than through a financial intermediary). As a result, we see more and more that we are able to provide financing at competitive rates. Direct financing is a lot harder to do, but we are very content with the progress. Also, we believe we have been able to drive down the cost of funding by making use of emerging (financial) technologies. For instance, by linking to a specialized digital exchange services company, some of our investees are now paying less on the conversion of Euros to their local currencies. Together with our larger economies of scale, this will lead to a more efficient lending process. For small companies operating in emerging markets, borrowing will still not be cheap in the foreseeable future. But the least we can do is to try and get those rates down by doing our part in opening up the market.
Verdict: Very much on our way.
Shortcoming 3: Difficulties giving our Foundation the TLC it deserves.
Where Lendahand is all about providing entrepreneurs with financing so that they can grow their companies, our Foundation is about empowering these entrepreneurs through training. Until recently we were struggling trying to get the most out of the foundation. We even came to the point where we asked ourselves whether it would be better to just dissolve the foundation. Having this option on the table opened our eyes and made us realize how important the foundation is for Lendahand in embedding impact in our DNA. Within Lendahand the Foundation can now be seen as our impact hub. Next, to providing training sessions to the entrepreneurs we finance, it is actively involved in our setting up of a new high-impact platform as well as measuring the impact we are creating (see Shortcoming 1). That is no mean feat!
Shortcoming 4: The inability to distinguish important from unimportant stuff.
Truth be told, the lack of understanding of what is really important has led to energy leakage. There are so many opportunities for us to chase that it’s easy to lose the bigger picture. Actions were not always aligned and the team as a whole has not always operated in the most optimal way. That’s why we decided to adopt the Objectives & Key Results framework.
This framework is about inspirational goal setting. Ambitious but realistic objectives are set and measured by key results. Annual company-wide OKRs are used as inspiration for teams to determine their own OKRs each quarter. The scores are visible for us all on the internal team wiki page. The OKRs are not tied to individual monetary rewards or performance reviews.
We’ve immediately noticed that the framework has led to fruitful discussions about setting the right priorities. It’s also an easy framework for new joiners to slide into. And importantly, it makes it easier for people to say no to new (but oh so cool) initiatives. The OKR framework is what gives us focus.
Shortcoming 5: We don’t have enough
sensible people women in the team.
Of our last 6 hires, 4 were female. Also, the supervisory board that we are about to set up will most likely consist of 2 women and 1 man. We can definitely still improve but there is a better balance in the team than a year ago.
Status: Solved for now.
Shortcoming 6: Lack of (talented) ping pong players.
Since we integrated a pongbot in Slack (our internal messaging system) we have lots of ping pong matches going on. This has definitely resulted in better skills. We were pretty proud when Tobias, the #1 on our leaderboard, won against a consultant who played competitively for 17 years. Hey, we’re not that bad after all!
As you can see, we have been able to address most of our weak points. Of the 6 shortcomings, really only the one on measuring impact remains. The beauty/nasty of it is of course that as you are removing your current shortcomings, new ones will pop up. We will always be improving ourselves. Soon we will publish an updated list of shortcomings on our website. Never a dull moment!
I like to use the skills I obtained from my experience in the investment banking industry in London to help provide children in developing countries a better future. A sustainable investment strategy improves the future of others as well as your own.
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