Why the Counsellor does have to run 10
organisational and one financial reason require a counsellor to run 10
Nuclei. Both reasons are interlinked.
Practical experiences of Nuclei in all continents show that fulltime
counsellors are able to manage 10 Nuclei with one or two meetings or
other activities per month, a total of between 10 and 20. This is
quite a lot of work and keeps the counsellor rather busy, but for a
well organized one it is possible.
About 15 member entrepreneurs
participate in one Nucleus on average. This corresponds to the best
number for group work (see
What is the minimal and maximal number of participants per Nucleus?).
Consequently the counsellor is responsible for the management of
about 150 members.
There is an unwritten rule in
business chambers and associations that the salary of a counsellor
corresponds to more or less 150 monthly membership fees. This holds
true in various countries such as Brazil, Sri Lanka
where salaries and membership fees are between 5% and 10% of the
This signifies that a counsellor
with 10 Nuclei / 150 members self-finances his / her own costs.
At least her / his gross salary. In case the membership fees are so
high than less membership fees correspond to the counsellor's salary
or there are more than 150 entrepreneurs participating in the 10
Nuclei, then the Nucleus entrepreneurs finance in addition partly /
fully the additional personnel costs like social security etc.,
eventually even partly office, transport and other costs.
In other words: a Nucleus buys
and pays about 10% of the counsellor’s working time capacities,
which equals roughly two working days per month.
In case the counsellor manages
less than 10 Nuclei with less than 150 members then the counsellor’s
costs are subsidized / co-financed by the other non Nucleus chamber
members. In the short run this causes hardly any difficulties,
especially in the starting phase of Nuclei. But in the long run the
non Nucleus members will complain: we pay the cost of the service
which they use.
aspect of Nuclei and this calculation are important elements of the
logic of the Nucleus Approach. The objective is the creation of a
service system in the chamber or business association, which the
entrepreneurs are capable and willing to finance by themselves. Only in
this case sustainability will be possible: the chamber and the
entrepreneurs continue the Nucleus work without external interventions
entrepreneurs are capable and willing to finance only a limited
membership fee. Therefore the membership fee in many chambers is
traditionally very low. The trick is to offer a product
– the Nucleus with its counsellor
which they can afford. Each Nucleus entrepreneur “buys” a small share of
the counsellor’s service. S/he gets a very valuable and demand based
return without further financial cost through the exchange and
cooperation with the other Nucleus members.
aspect of the Nuclei and the whole Approach play frequently an important
role during the introduction process of the Nucleus Approach. The
employment of a counsellor may worry the president, treasurer or CEO
because of the follow-up costs and the financing. These doubts can be
reduced with the presentation of above calculation and the system’s
new presidents and / or treasurers assume their positions in the chamber
they frequently observe that the cash box is rather empty, that the
chamber has to cut costs and the counsellor is relatively expensive.
Then, especially if the leaders of the chamber do not understand the
objectives and effects of the Nuclei well, the almost compelling
reaction is the dismissal of the counsellors and the stop of the Nucleus
This is not
theory. This is daily reality!
In Brazil and
also in Sri Lanka, chambers stopped the Nuclei and dismissed the
counsellors with the only argument “Too expensive, we do not have the
financial means.” In one of the first chambers, which had started Nuclei
in 1991, such process started in 2007. Already a couple of years before,
the board of directors decided to dismiss the experienced costly
counsellors and to contract younger, inexperienced ones for lower
salaries. In both cases the president of the Nucleus Council explained
to the chamber president that in this case all the Nucleus members would
quit the chamber membership.
The presidents changed their mind. The Nuclei and counsellors continued.
But we know other
cases where Nucleus entrepreneurs did not have yet the power and the
courage to negotiate with the chamber leaders in that way. The Nuclei
stopped working because the counsellors were dismissed.
Recommendations for CEO and counsellor
Keep the figures
10 Nuclei / 150 members
mind as a rule of thumb.
Organize the work and yourself in
a way that 10 Nuclei can be served. There are always temporarily
Nuclei more active that need more attention. But this can be
balanced out with those ones less active.
Check once per year the total of
the membership fees paid by the Nucleus entrepreneurs per month
(rough calculation) and compare the sum with the salary / the costs
of the counsellor. Depending on the membership fee system eventually
the number of attended Nucleus members has to be adapted.
Differentiate eventually between the membership fees the
entrepreneurs should pay and those they really paid.
As long as the figures do not fit
together, the counsellor’s position remains vulnerable. Try to
change this by starting more Nuclei and by attracting more Nucleus
If the figures fit together,
present them to the Nucleus members, their presidents and to the
board of directors. This is marketing in the counsellor’s own
Of course, this
requested numbers of Nuclei and participants provoke easily objection.
Here are some typical arguments:
Counsellor 1: For me the
quality of the Nucleus work has priority and not the
Counterargument: The point is not quality or quantity but
quality and quantity which is respectively financed by the
Nucleus members with their membership fees. To run only five Nuclei
as fulltime counsellor means to supply them with gold for the price
of silver. To spend 20% of the working capacities and to charge only
for 10% is a non entrepreneurial attitude and discredits easily the
whole Nucleus Approach in the chamber. Or: a carpenter does not sell
a table worth 200 $ to a client who wants to spend only 100 $.
Instead s/he will adapt the product and produces a table worth 100
Counsellor 2: I am part
time counsellor and have additional tasks in the chamber.
Counterargument 1: Try to change this. The counsellor learns the
biggest part of his / her work through own experiences with
different Nuclei. Therefore, s/he should gain these experiences as
fast and as intensely as possible in order to reach the necessary
quality and efficiency in moderation and Nucleus management. A
counsellor with one to three Nuclei will hardly ever gain the
necessary experiences. In this case it is better to stop all Nucleus
Counterargument 2: Employees with different working areas in the
chamber present in case of poor performance in one area the excuse
that they had to do too much in the other one. Consequently it is
difficult to evaluate and assess their output and performance.
Normally a fulltime counsellor is much more efficient than a part
time one and it is easier to assess her / his performance.
Entrepreneur 1: we have so
we need the counsellor more than 10% of his / her time!
Counterargument: Perfect. Then do not “buy” 10% of the counsellor’s
time capacities but for example 20%
and pay the double membership fee. Or if you want a counsellor
fulltime for your Nucleus then pay 10 membership fees per month. At
the end the Nucleus entrepreneurs have to finance at least the
counsellor’s salary. Whether this happens through more members or
through higher membership fees is not relevant.
Counsellor 3: We create
additional income for the chamber through training and other
activities which finance the counsellor’s costs.
Counterargument: I do not know one chamber with a sophisticated cost
calculation and accountancy system for training and other activities
which include all costs, also overhead costs, salaries, depreciation
on equipment, buildings, etc. Normally a chamber should be glad to
be able to charge the direct costs of the activity plus a certain
percentage as contribution to the overhead costs. (See
Download Form for the calculation of Nucleus activities
Download Finances /
Download Membership fees about the finances and the membership
fee system of a chamber). Therefore, to maintain that the Nucleus
entrepreneurs finance the counsellors’ costs
through membership fees plus fees for training and other activities
to proof this is almost impossible.
respective data in Brazil, there is presently hardly a counsellor
running ten Nuclei. The president of a chamber in the northeast of Santa
Catarina, where the development of the Nucleus Approach started,
admitted in 2007: “It’s true. This rule we forgot over the years!”
In the rest of
Brazil this rule apparently was not included as element during the
dissemination process. When we asked the CACB
– Confederation of the Chambers of Commerce
about the reason that about one third of the once promoted chambers had
given up running Nuclei the answer was: Presumably because of the end of
the SEBRAE subsidies (SEBRAE: Brazilian SME promotion institution).
Obviously this is only half of the truth: the subsidisation of chambers
for some time can be justified with the financial gap during the
starting phase, when the chamber has to bear already the counsellor’s
costs but the number of Nuclei and membership fee paying Nucleus
entrepreneurs is still small. If at the end of the subsidization period
10 Nuclei with 150 participants do not exist the chamber will observe
that it has still the burden of the costs of the Nuclei but not the
respective income to finance the counsellor. Consequently it stops the
problem is not the end of the subsidy but that the subsidy has not been
replaced by other income (membership fees) in time.
21/10/2008 - MueGlo / Simone