Galley Eco Capital Wins CALED Mandate

Financing and Business Model Challenges

Lisa Michelle Galley, Galley Eco Capital’s Managing Principal, has had a long career as a financial services executive and is a nationally-recognized green finance specialist. She spoke about the challenges encountered by groups such as CALED that decide to explore new financing models and products:

“Our experience with regional finance programs and products has shown some typical problems organizations encounter when they troubleshoot their initiatives, so we bring a  unique toolbox and skill set to help them identify the problems and create sustainable finance models.”

Identifying Root Causes

First, many organizations will decide that they have financing problems without knowing the root causes of why money is not flowing through their markets in the way they expect. Without identifying the root causes of the problem, they never know the true minimum requirements that any solution should deliver. As a result, fresh funding might not flow efficiently enough to resolve their financial problems. Galley Eco Capital uses performance technology tools and techniques to identify root causes to finance problems.

Systems Analysis Defines Problems Better

Then the problems should be analyzed within a dynamic system of behavior and interactions. For example, the power dynamics between price makers and price takers within a market has to be understood as part of defining the problem.

Price makers are firms from industries that have pricing dominance — they have the power to obtain their desired pricing within transactions. Healthcare companies are a great example. The markets dictate pricing to price takers, making them weaker actors in any business system. Many hotels and manufacturers find themselves in this group. To create successful regional finance initiatives, organizations have to identify the power dynamics between these groups and make sure mechanisms are in place, which will keep them in balance over time.

Galley Eco Capital applies concepts from system dynamics, analyzing business models within whole financial systems, in order to obtain deeper insights about how these issues might be brought into balance.

In the case of regional economic development, EDC’s may want to simply recruit a successful businesses from another region into their own. Without knowing the dynamics between the new firm and existing firms in their region, EDC’s may inadvertently encourage too many price takers, weakening their region with high unemployment –  price takers usually have no choice except to control profitability through firing personnel. Conversely, having too many price makers may dampen a region’s economic growth — these firms may maximize their profitability unrestrained while externalizing the social costs their actions create.

A sustainable business model will consider the dynamics and interactions between customers and transactions over time, in order to design financial programs and services that truly deliver the economic, social and environmental stability they promise.

New Tools for Financing Program and Product Development

Galley Eco Capital applies decades of experience in financial services, program and product development for investors, government agencies and lenders to assist its network of investors and collaborators. What’s unique about the consultancy and new to green finance is that the firm brings new tools for complex problem-solving and financial program development, such as systems dynamics, performance technology and innovation games to financing problems.

These kinds of tools render deeper insights into problems much more quickly, and help collaborate with clients to develop sustainable finance programs, new business models and other solutions that are better tailored to unique challenges.

For questions or comments about this story, please call Galley Eco Capital at (415) 655-6668 or email lisa@galleyecocapital.com.