The Government wants to create 40,000 online business mentors, but will they deliver the right advice to the right business?
In a new Cambridge Judge Business School podcast Dr Shailendra Vyakarnam, Director of the Centre for Entrepreneurial Learning (CfEL), has spoken of his concerns that a new business mentoring scheme launched by the coalition government may not yet be fit for purpose.
At the launch of Global Entrepreneurship Week, Business Secretary Vince Cable announced a new 40,000 strong network of business mentors and encouraged more new business to join up. But Dr Shai Vyakarnam said such networks are not new and they should have been trialled in certain regions of the UK before being fully launched:
“I can’t imagine a government putting forward a proposal that hasn’t been looked over by the civil servants, but this sounds like a soundbite announcement in global entrepreneurship week. At a headline level I think it is terrific, but at an operational level there are a lot of nightmares to sort out.
“It would have been so much better if they had put this out with a strong pilot in a few regions: low income regions, high unemployment regions, high tech, big city, rural and urban regions to get a feeling of how this thing works and then go national with it.”
He said business networks had a long history in Britain and they should not be seen as a cost cutting measure to create work for the unemployed:
“Business networks are not new, people have reached out to mentors through golf clubs, Rotary, the Chambers of Commerce, and there are global ones too. These things do exist and they go back a long way in time, however, the fact government wants to implement such networks, now that is new.
“All societies want to stimulate start-ups because of the winds of change, cost cutting, and people seeking re-employment. The local enterprise programmes will provide systemic help and support with moving people off unemployment, but this advice needs to be very focused, with one on ones. The point of business mentoring is that often the business advisers don’t have the right experience to advise new entrepreneurs.”
Dr Vyakarnam said matching the right business to the right mentor was a tricky business and while good business mentoring relationships were to be encouraged, bad ones needed to be sifted out:
“I think there is a search for voluntarism in this. The government has called for 40,000 mentors maybe more, and it wants to have them organised by agencies which are not-for- profit organisations that have mentor schemes and business advisor schemes to get them to get mentor and mentee together, linking the inexperienced with the experienced entrepreneur. However, the match-making process is often very complex.
“If you get a good mentor, someone with wisdom and a track record and having started a company like the one you are going to start, they can give you the forecast of the rollercoaster ride you are about to face. They can help you with things like markets, cash flow, customers, sorting out good suppliers from bad suppliers, legal, financial advice, and introductions to bank managers, the really practical stuff. If they are prepared to roll up their sleeves and act as an extra pair of hands in the company, they can do a lot of practical advisory hands on things in a company but you do need to get a good mentor.”
The government scheme will have a new code of conduct too for mentors and mentees to abide by. But Dr Vyakarnam said he doubted whether working online to match mentor to mentee was rigorous enough and that the ‘Frank Sinatra’ school of mentoring was not to be encouraged:
“I do think the devil is in the detail. A mentee-mentor relationship is one of trust, and a warm introduction from a mate usually works better than an online mechanism. That might work for 19 year olds looking for partners in a pub, but whether it will work for the wisdom and track record needed for a business mentor is a different thing. Will serious mentors put themselves online? I can’t see the big names putting themselves up there.
“Matching up the skills and requirement, and making sure the mentor is not running the Frank Sinatra top-down school of mentoring – which is “I did it my way, sonny” – is important. The better ones will be listening and helping the mentee along. The vision is probably exactly right, but trying to get 40,000 mentors to help 40,000 start-ups all over the country that is going to be a challenge.”
Dr Vyakarnam also raised the issue of whether tax breaks would really encourage more mentors to come forward as these appeared to be complex mechanisms:
“It will all be paid for by concessions on the tax bills, but I can’t see how it will work operationally or as an incentive. Just how do I track if the value of my tax concession is given back in the right way?”
He said modern business mentors needed to understand the current operational climate businesses worked in:
“The ideal mentor is somebody who very recently started a company with knowledge of the current economic climate, not someone who did it twenty years ago, they may not understand new forms and ways of doing businesses. The advice would have to come from someone who is much more current and immediate.
“The problem with the scheme is that the online thing might provide transparency but the question is what are the other models available to provide a transparent mechanism, such as evenhandedness, quality control, funding it, inspiration mechanisms. I think there are many other models to look at before they plunge into this fully.”