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The Nucleus Approach

Introduction

Nucleus and SME statistics

Statements of chambers and SMEs

Impact: What changed? Interview with Jordi Castan

Sustainability

Legal property of the Nucleus Approach

Nucleus

Definition

Types of Nuclei

Manual for the Nucleus

The start

9 criteria for the selection of a sector

How to kill a Nucleus

Chambers and Associations

Lobby and Public Private Dialogue

Benchmarking of chambers

3.         Nucleus: Definition and Operating Mode

A “Nucleus” is a circle of entrepreneurs (eg carpenters, hotels, exporters, women entrepreneurs) within a chamber or association, which is moderated, organised and accompanied by a chamber employed counsellor[1].

The optimal size of a Nucleus is 12 to 30 entrepreneurs.

It is important that the groups are sufficiently homogeneous, with the members sharing daily life and work experiences but also sufficiently heterogeneous enough so as to allow the entrepreneurs to exchange their different ideas, problems and solutions.

Under the counsellor’s guidance the entrepreneurs start to

  • identify their subjectively perceived problems;

  • determine their causes;

  • look for solutions within their group (motto “entrepreneurs counsel entrepreneurs”)

  • start common activities in order to arrive at further reaching ideas and solutions. These can also be lobby activities in order to improve the economic framework conditions.

This results in the SMEs’ demand for services from bottom to top which in turn influences the service providers’ supply of services offered.

Tried and tested instruments are:

  • to motivate and support SMEs in reducing mutual distrust and in raising awareness of common features and potentials by eg organizing visits and excursions;

  • to introduce participatory methods of learning, group work, planning and organisation, “action learning” – practitioners learn from practitioners –, benchmarking with the best colleagues’ companies

  • to offer counselling services at workshops instead of seminary rooms;

  • to promote upgrade training and practical training for entrepreneurs as well as their staff;

  • to stimulate common events, purchases, marketing activities, expositions and trade fairs, tenders for orders;

  • to initiate vertical and horizontal value chains through linkages between different Nuclei[2].

The possibilities are virtually inexhaustible; see the catalogues of activities started by Nuclei.


[1]    Compared to organisational structures in German chambers, a Nucleus can be considered a legally dependent guild within a chamber.

[2]    The bibliography presented in chapter 8 contains catalogues of activities started by Nuclei.

4.         Organisational Development (OD) of business chambers

Chambers are founded primarily on the basis of problems perceived in the entrepreneurial environment, which is to be improved by lobbying activities. In developing countries it is often not known that chambers have a second core function, i.e. providing services. This is what SMEs are most interested in because they expect and require an immediate return for their membership fees. If services not offered, most entrepreneurs are not interested in the chamber.

Efficient chambers and associations, being elements of the meso level, can play an important role in the development of local, regional and national economies. Projects of technical cooperation often focus their promotion on equipment, on subsidizing running costs – especially the salaries of fulltime employees, and on training of fulltime and honorary staff. The assumption is, “Those who know more will act better.” However, due to the institutionalised rotation of the leadership in chambers this approach to their promotion is limited in terms of sustainability.

The hypothesis of the Nucleus Approach is that sustainable OD change in chambers occurs only if its members request qualitative and quantitative performance and results from fulltime and honorary staff, if they claim ownership of the chamber and if they actively engage themselves in its design.

Thus, the Nucleus Approach aims at influencing the relations among its board of directors, staff and members. A single member usually has no forming influence on the chamber. Members organised into a Nucleus, however, influence the chamber directly as well as indirectly. Thus, a constructive field of tension develops within the organisation: Once the Nucleus entrepreneurs experienced a certain performance level of fulltime and honorary staff, chances are that they will insist on this level to be maintained also after personnel changes. This means that members, not external donors, provide an essential stimulus for the activities of a chamber and its organisational development.

  • The foundation of Nuclei often is the first real service a chamber provides for its members. With Nuclei, the chamber be­comes more attractive for SMEs and conse­quently can increase their membership.

  • Nuclei with their counsellors require a new type of staff in the chamber. This results in new leadership requirements at management level.

  • Nuclei bring along new demands to the board’s and the management’s quality and quantity of performance both in the field of lobbying and in service provision.

  • New activities lead to changes in the public relations work.

  • Growing membership requires organisational changes.

From many small changes, all with their inherent dynamics, gradually an organisational change process emerges which does not just lead to simple adjustments of the governing paradigm but results in a new one: Now the chamber no longer acts as a “business club” but as an efficient lobby institution and professionally managed service provider.

This change process must be designed with a long term vision in order to have sustainable impact. It often requires an entire new generation of fulltime and honorary actors.

BDS versus Nucleus Approach?

In the international BDS discussion some argue that chambers should not supply services themselves but leave it to commercial providers who could deliver them more efficiently. The following arguments show a different view:

- In general, an enterprise does not contact a com­mercial provider at first. The risk is too high looking at the service costs in relation to sales and profit. It is in addition difficult for the entre­preneur to identify suitable specialists, because these tend to do what they know to do rather than what is needed what could be something completely different.

- The counselling of chambers focuses on the one hand on many small issues, on the other hand on accompanying search processes to identify business problems, its causes and im­pacts. Sometimes it is not very well structured and an unpurposive picking in the fog. A good business counsellor serves as sparing partner in this process who supports the entrepreneur by confirming, doubting and stimulating new ideas. In the case of bigger problems a commercial BDS provider might be contracted as a second step.

- Therefore, chambers and commercial BDS providers are not competitors but supplement each other: On the one hand the chambers offer such services which are not offered adequately by commercial providers for economic reasons in sufficient quality and quantity. (e. g. counselling). On the other hand chambers follow the rule not to compete with their own members – inclusive BDS providers.

- “What does not cost anything has no value!” Chambers do not provide their services free of charge. The counselling costs are covered by the membership fee. Therefore there are no barriers for the entrepreneurs to use the services offered.