Enterprise Development Center

Transcription

1 Case Study Volunteers for Economic Growth Alliance (VEGA) Enterprise Development Center By: Bryan Kurtz The case study is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of VEGA and do not necessarily reflect the views of USAID or the United States Government.

2 Case Study Volunteers for Economic Growth Alliance (VEGA) Enterprise Development Center By: Bryan Kurtz Background and Introduction An outstanding example of scaling innovation in local capacity development (LCD) was demonstrated by VEGA Member Global Business School Network (GBSN) which was incubated in the International Finance Corporation (IFC) arm of the World Bank Group in Its mission has been to find ways for top international business schools to help build capacity in emerging market business schools to adapt and promulgate the management of private and public sector organizations according to international standards of performance. In 2004, the GBSN became the advisory partner of the newly created Enterprise Development Centre (EDC), a highly innovative affiliate of the Lagos Business School in Nigeria. GBSN became an independent NGO in 2003, which was spun off from the IFC in The EDC s mission statement was simple, to build a network of entrepreneurial leaders through commitment, continuous learning, process improvement and business integrity. To do so in a cost-effective manner, however, the EDC had to design an unprecedented model utilizing a faculty blend of professional academics and practicing entrepreneurs to adapt business curricula to the local environment, establish a fee-based certification program, and train additional trainers in order to replicate the networks and programs in other regions of the country. It has scaled up successfully in Nigeria, and the EDC model is being replicated in six universities in Ghana, Kenya, Rwanda and Tanzania. This case study also highlights an extensive impact survey of certified graduates which demonstrates significant productivity increases of participants compared to other entrepreneurs, the growth of several international private-private partnerships that successfully emulated the EDC model, and presents key lessons learned for replication and scaling in other business and governmental local capacity development environments in emerging economies. After spin-off in 2006 from IFC, GBSN expanded upon the EDC model with new initiatives in Sub-Saharan Africa as well as other developing regions. GBSN introduced membership fees in 2009 to further enhance its sustainability. The EDC s mission statement was simple, to build a network of entrepreneurial leaders through commitment, continuous learning, process improvement and business integrity. The vast majority of good business schools are in the developed world what the World Bank calls high-income countries. However, the fastest-growing demand for business education is in the developing world, where an increasing number of business schools and online education providers are struggling to meet that demand. The question often comes up whether curricula and delivery mode existing in developed countries are appropriate to the developing world. 2

3 According to the World Bank s recent World Development Report 2014, people who work for wages and salaries in developed economies represent 85% of total employment. But in the average Sub-Saharan African country, only 17% of employment is for wages and salaries. The remaining 83% work as farmers or in petty services and live off the sale of goods and services they produce. In other words, they are independent small entrepreneurs. If emerging country business schools are to serve societal needs on an expanded scale, they will need to learn how best to train entrepreneurs, in addition to educating corporate leaders and managers. This requires different models with a huge shift toward using practitioners rather than academics, hands-on experiential learning, short modular courses adapted to the needs of small business owners/operators, post-course wrap-around services, and a low-cost business model. In short, a whole new ball game. With its worldwide network of business schools and students, the core concept of GBSN brings to the VEGA Alliance a strategic component for our members to further expand management training and business opportunities for our project beneficiaries. GBSN harnesses the power of a global network of leading business schools to facilitate collaboration and share knowledge, advancing management education that delivers international best practice with local relevance. Volunteer Efforts Drawing from its network of business schools, GBSN designs and implements capacity-building programs for schools in the developing world. GBSN assembles teams for projects that a single top business school would not be able to spare resources for alone. The teams of experts either volunteer some of their time or receive nominal compensation far below the normal rates they would command. In turn, the EDC in Nigeria also has utilized volunteers from the business and academic communities, among other resources, to help design programs and curricula, mentor students, and build the expanding series of related networks in Nigeria. In the view of EDC founder Peter Bamkole, volunteers are positioned as strategic partners to EDC. They are carefully selected, trained and exposed to EDC s ethos. Mr. Bamkole said: We ensure that they are part of our extended family, engaging them formally and informally in all EDC s programs. Because they know so much about EDC, they become our advisors, guiding us on which path to go and helping us to make the right connections. They also become our advocates and a strategic sales team. Through their activities, they let us know where our services are most needed and often will do the ground work for us. When we wanted to expand to Abuja, for weeks, they searched for appropriate location for us, provided transportation to move us around. They are an important part of our ecosystem. Photo: Enterprise Development Center 3

4 Gender Profile of GBSN and EDC Staff and Students 60% of GBSN core staff is female. In Nigeria, 8 of 13 EDC administrative staff members are female, 3 of 8 EDC Advisory Board members are female, and 5 of 8 EDC faculty members teaching the core Certificate in Enterprise Management (CEM) are female. This is in line with the strong role women play in Nigeria s robust economy as reflected in the percentage of female participants in all EDC programs which steadily exceeds 60%. Photo: Enterprise Development Center IMPACT Results of Survey of EDC s Core Training Program Graduates EDC conducted an impact survey in 2009 of 255 graduates (out of 300 total) of its core CEM training program which focused on the themes of growth, sustainability, and human capital development of Nigerian small and medium enterprises (SMEs). The CEM program was initiated by EDC in 2005 in partnership with GBSN in response to the challenges faced by SMEs in Nigeria especially in the areas of capacity building and enterprise support services. CEM is the flagship of the executive education program at EDC. The focus of CEM is to build the management capacity of Nigeria entrepreneurs. The program aims to change the level of horizon of participants. The participants are able to see beyond what ordinarily they could see. This helps them in their ability to want to grow faster and better than what they can ordinarily do. The participants in the program are helped to establish businesses that are beyond them by helping them put structures in place so that the business can run without them. Above all, the program helps the participants understand that the businesses last better if they are conducted in an environment of trust and ethics. The program is built around the flexibility that the entrepreneurs require. It is modular which means they come to class from between one day and four days in a stretch. Overall it is a 30-day program but spread over five months. On the average, they come to class not more than six days in a month. This helps the participants to plan and more importantly allows them enough time to implement what they have learnt in class. The CEM program has 12-modules, building the management capacity of the participants in the following areas: Introduction to entrepreneurship Building businesses that last Legal and tax Making operations faster, better and cheaper Developing financial records Sales and marketing People make it happen Strategies for growth Customer service Using technology to outperform competition Business ethics Business planning 4

5 After going through the 12 modules and graduating from CEM, participants have the advantage of meeting with EDC experts and partners who provide advisory, counseling and mentoring services. Table 1: Comparing CEM and Control Group (100% increase in assets) The survey focused primarily on impact of the program on the businesses of the participants in terms of growth parameters such as assets, turnover (sales), profit, and staff strength over a three-year period. The CEM graduates were all owners/managers of businesses, all had at least a college degree or its equivalent, and were 52% female. Thirty-three similar business owners/mangers who were yet to attend the program were surveyed as a control group and had characteristics reasonably similar to those of the CEM participants. Table 2: Comparing CEM and Control Group (percentage increase in turnover) The survey revealed continuous growth in all the growth parameters over the three years for both the graduate and control groups. But when compared with those of the control, the growth experienced by CEM graduates was significantly steeper. Tables 1, 2, and 3 demonstrate the bottom line impact on the graduates firms. The growth in assets of over 100% over three years was experienced by a similar percentage of both groups. But more tellingly, significantly more of the CEM graduates experienced turnover (sales) growth over 100%. And most tellingly, 24% of CEM graduates increased profitability over 100% compared to only 7% of the control group. In other words, they produced even greater bottom line returns from their increased sales growth than the control group did. Table 3: Comparison of CEM and Control Group (100% increase in profit) Other indicators of growth in this study looked at enhancement of service offerings and sustainability. Over 41% of the respondents had increased their product lines and/or service offerings. And over 80% had put structures in place that made their management teams able to meet in their absence and make significant financial and other business decisions. 5

6 Figure 1 shows the wide range of economic sectors the CEM graduates represented. Figure 1: Economic sectors represented by CEM graduates EDC Innovation, Scaling and Replicability To accomplish its mission in a cost-effective manner with only modest funding available, the EDC had to design an unprecedented model utilizing a faculty blended with professional academics and practicing entrepreneurs to adapt business curricula to the local environment, establish a fee-based certification program, and train additional trainers in order to replicate the networks and programs in other regions of the country. It has scaled up successfully in Nigeria, and the EDC model is being replicated in six universities in Ghana, Kenya, Rwanda and Tanzania. This section of the case study is based on EDC founder Peter Bamkole s descriptions of several unique ways EDC managed to scale up and replicate its management training programs to help entrepreneurs. Mr. Bamkole says: 1. Replicating EDC s Model Horizontal Scaling A. The EDC model consists of training the entrepreneurs in enterprise management; providing them with various wrap around services after graduation such as advisory services, mentoring, networking, and visits; and making them to be part of an evolving ecosystem where they get to meet and leverage on other entrepreneurs. B. Once well-developed, the model was then shared and replicated in six Universities in four African Countries (Ghana, Kenya, Tanzania and Rwanda). This was supported initially by IFC and subsequently GBSN as a strategic mentoring partner. We consider such replication into other countries as horizontal scaling. C. Additionally, our Certificate in Entrepreneurial Management (CEM) program was replicated in Liberia for the 10,000 Women Program supported by Goldman Sachs Foundation, another strategic partnership. D. After two years of partnering with the Goldman Sachs Foundation on the 10,000 Women Program in Nigeria, they supported our expansion to Abuja to cater for the development of the women entrepreneurs in the northern part of Nigeria. Over the last three years, we have now developed local faculty, some of whom were from 2.A. below. 2. Building a Network of New EDCs within Nigeria Vertical Scaling A. EDC through a federal government of Nigeria project Grooming Enterprise Leaders (GEL) provided for the building of capacity of Enterprise Development Centers across Nigeria. Twenty-four of them in the six geo-political zones of the country were enlisted, trained, and brought into the network. 6

7 B. Through another federal government of Nigeria project YouWIN!, these EDCs were kept active through the joint project, working together, and learning from one another. This led to our convening the 1st Africa Enterprise Educators Conference in Lagos, Nigeria in January The majority of the EDCs attended, including our colleagues from the UK, India, and the U.S. C. Today, it has become a movement in which one of its programs collaborates with Federal Ministry of Trade and Investment, the Small & Medium Enterprise Development Agency of Nigeria (SMEDAN) and Etisalat (a telecoms company), to take mega networking meetings involving over 300 entrepreneurs and 30 big companies to various cities across Nigeria. D. Now we are able to contract and implement national assignments and train across the country working with our various partners in 2.A. & 2.B. above. We give them our curriculum, we teach them our delivery methodology, and we support them. That way, we are able to scale up without physically being the ones in every delivery location. 3. Leveraging Technology The next way we scale up is by leveraging technology. We are now repackaging our curriculum for online and mobile learning. This will radically change our reach and maintain quality. Accessing the internet is largely through mobile phones in Nigeria and we are keying into this. Smart phones are becoming cheaper and smarter. We are already testing this and will launch in the first quarter of We will use video, audio and text in all our delivery including assessment to ensure understanding of whatever we have thought. Photo: Enterprise Development Center 7

8 4. Offering a Certificate Program One critical area for most enterprise development centers is funding. It was GBSN that first suggested that we should develop a formal certificate program. In the first year, we had 12 classes with people each, and we marketed the modules individually, which meant marketing 12 times. But by bringing the modules together in a certificate program, we now only have to market once. On reflection, thanks to GBSN, our team s early exposure to other international business training systems greatly deepened our horizon as we put together our own products and service offerings. The learning point, therefore, for growing centers like ours was for the leadership of such centers to be open and willing to new innovation, and be ready to learn from others but not copy and paste. It goes well beyond writing a business plan. 5. Building a Curriculum and Faculty On reflection, thanks to GBSN, our team s early exposure to other international business training systems greatly deepened our horizon as we put together our own products and service offerings. - EDC Founder Peter Bamkole There were challenges between maintaining quality and ensuring applied knowledge. The small business owners wanted to be in class with someone who understood their challenges from a practical perspective, rather than from an academic point of view only. I also know that you cannot talk about the applied knowledge without understanding the principles behind them. It has to be a careful blend of theory and practice, and it has to be done in a way that it provides value to the recipient. Again, GBSN proved to be a true partner. We realized that technically students may be good at what they are doing, but in many cases they are not good at managing the enterprise. We needed to focus on their entrepreneurial management capacity. We started with four core areas: human resources, operations, finance, and sales and marketing, but today we have 13 modules including leadership, strategy, ICT, etc. When we started developing curriculum to teach them these skills, we realized most of the case studies available were not appropriate. They were good, but the connection with small business was limited. Therefore we had to resort to writing local case studies on small businesses. We wanted them to be local, but also to meet international standards. Through GBSN we were able to source international experts who assisted in the process of writing case studies and meeting international standards. However, in order to differentiate Lagos Business School programs from ours, especially as we were initially teaching under the same roof, we used professionals from the business community rather than business school lecturers to facilitate our programs. That also meant that we did not carry a huge teaching overhead. We paid per delivery which translated the majority of our cost of teaching into a variable cost. Our own faculty members have evolved made largely of owner/ manager professionals working with small businesses. Some of us within EDC teach roughly 30% of the programs. 6. Corporations and Government Get On Board to Scale Impact From the beginning, we were very clear that we wanted to be private-sector driven. But truly you cannot have impact within a society if you do not work with government. That is the reality at the end of the day. 8

9 Photo: Enterprise Development Center We were working in one location. After a while, a number of our entrepreneurs were coming from the north - so we opened another location in Abuja. That helped us in reaching more people than we would otherwise have done. However, there was no way we could have scaled nationwide with the kind of resources and limitations we faced. So, we thought of scaling up through model franchising. This turned out to be a good lesson learned on what did not work! I am convinced now more than ever, that far reaching impact can only be achieved through appropriate collaboration with government as well as private sector partners. - EDC Founder Peter Bamkole It was at that time we received a grant to implement a national program for the federal government - GEL (Grooming Enterprise Leaders). The program provided us with the opportunity to work in all six geopolitical zones of Nigeria, with 24 other enterprise centers. These centers are not owned by EDC, but we formed a network similar to GBSN; the difference being that instead of members being business schools, they are the enterprise centers. Together, we learned from one another, though EDC became the focal point. We became a platform for any organization that wanted to deliver across the country. Each time there is something interesting happening around enterprise development, I share it with all of them. Everybody is now part of this big family. We come together for the mutual benefit of one another, but most importantly for the entrepreneurs that we serve. The network enabled us to build an enterprise development infrastructure in Nigeria. It took EDC five years to train its first 500 businesses. Meanwhile, on one government project, we trained the same 500 in one year. On the YouWIN! Project - another government supported project - in two years we have trained over 11,000 business owners in the 36 states and the Federal Capital Territory. Only government can provide these kinds of numbers and help us reach more entrepreneurs in such a short period. That is why I am convinced now more than ever, that far reaching impact can only be achieved through appropriate collaboration with government as well as private sector partners. 9

10 LESSONS LEARNED What This Tells Us about Management Education in the Developing World GBSN as a mentoring partner in the growth of local capacity development institutions like the EDC in Nigeria and management training centers in other emerging markets has learned a number of broadly applicable lessons. Integration with the business community is key. If business education is not serving the business community, it will not work. By working closely with business professionals, successful schools find ways to ensure that their students get relevant, applicable information that would help them in very practical ways once they complete their education. In addition, the involvement of the business community is critical to the sustainability of the schools themselves, as without their support the schools would not have students, experienced faculty, or jobs for their graduates. Independence is a primary factor in the ability to innovate. The schools we support are primarily private institutions that work outside of the traditional educational bureaucracies of their countries. This is not a coincidence. Problems abound in developing countries for business schools, including corruption, antiquated ideas about education and degree-granting, resource limitations and red tape. By decoupling education from government, educators can respond more effectively to the market conditions. They can develop curricula that are appropriate to their students and the business community. They can ensure sustainability through financial success as opposed to constantly worrying about government budgeting and the whims of officials. And they can prove new concepts that conservative governments may be reluctant to bet on. Young schools in emerging markets can innovate more easily than established ones. GBSN s experience reveals the importance of a fresh take on the needs and capacities for a particular market. Stale models will not work in a dynamic developing world, so nimble new schools have an advantage. Even some established schools have succeeded by taking a novel approach, providing independence and flexibility to their new business schools to allow them to thrive. Visionary champions breed success. It takes the vision and drive of an entrepreneurial innovator with a passion to make a difference for an effective, sustainable institution to come to fruition. As with EDC s Peter Bamkole working to help struggling entrepreneurs in Nigeria, the evidence shows that it takes a leader with a mission, vision, and personal drive to make success likely. In a very real way, they are part of the growing worldwide movement of social entrepreneurs working at the intersection of service and entrepreneurship as described recently by USAID Administrator Rajiv Shah at Duke University. 10

11 Schools need a bold mission. A thread that runs throughout successful local management training centers is a mission to impact the community in some way. Each center has at its heart a mission to make people s lives better by fostering economic development through management education. These stories are not of people looking just to make their fortunes or to promote their name; they are of people driven to help improve their societies by ensuring they have the management and leadership talent they need to generate economic growth and prosperity. They do not think small; they focus instead on bold, transformative goals and go for it. Partnerships matter. Schools can use the pedagogy, reputation, structure, and teaching tools of other more established schools without getting actual funding from them to help them build their capacity and reputation. In fact, every growing school we support owes its success at some level to the support of other institutions. The influence of more established business schools and other pioneers in the field can help new and emerging educators avoid mistakes others have made, guide curricular and administrative decisions, and provide critical mentoring. Attempting to franchise regional EDCs in Nigeria did not work. Apparently a cookie-cutter franchising approach was inefficient due in part to uneven human resources available on the part of other potential trainers. Unlike franchising, which is fairly directive and static, EDC opted for a mini-gbsn approach, i.e., a network at which EDC is the hub and serves as a resource center for spreading best practices in a flexible manner, blending local needs to high standards. 11

12 CONCLUSION As GBSN s founder Guy Pfeffermann has written recently, the global need for scaling-up business and entrepreneurship education will require the innovative use of technology where we encounter a fundamental difference between high-income and emerging countries. In the developed world nearly 80% of households have Internet access at home, but in spite of rapid increases, the proportion in the developing world is under 30%. The contrast sharpens even more when looking at broadband access. In Europe and the U.S., slightly under 30% of the population have broadband subscriptions; in Africa, 0.3%; in India, 1.14%. Conversely, 70% of the Indian population and 63% of the African population have mobile phone subscriptions, of whom one-sixth use smart phones. Unsurprisingly, traditional business schools serve the corporate world, helping students and other participants to find good jobs or rise in the hierarchy. Business schools in the developing world also first and foremost serve their respective countries corporations. However, these schools also face a huge need for basic entrepreneurship education. Consequently many developing country schools and also a growing number of online courses are focusing on self-employed small business owners, many at the base of the pyramid. Ability to pay is of course a major challenge, but innovative, low-cost solutions are being developed. The point here is that the needs for business education in the developing world are quite different from those in industrial countries. The implication for business education is clear. While online education solutions for developed world clients focuses almost entirely on delivery by computers and tablets, scaling-up in the developing world also requires research and development of courses that can be delivered on mobile phones, only a minority of which are smart. Pfeffermann believes that the message is clear: scaling-up business education in the developing world requires curricular emphases and technologies that are different in important respects from those that serve the needs of the developed world. In other words, there is a major need for GBSN and EDC to continue their scaling and other innovations in the years ahead. 12

13 Author: Bryan Kurtz Bryan H. Kurtz is a former USAID Foreign Service Officer, private sector project manager and program designer. At USAID, he was part of the small team that established the Global Development Alliance. He also led the initial implementation of USAID s Threshold Program in conjunction with funding from the Millennium Challenge Corporation (MCC). He is currently an independent inter-agency and civilian-military development advisor, mentor and trainer. With extensive public and private sector experience in strategic planning and commercial banking he has an established track record designing and building innovative programs, new institutions and public-private alliances. His career has focused primarily on international employment generation (job creation), capacity development (training), and/or high level inter-agency program coordination in conflict and post-conflict countries (Afghanistan, Iraq, Bosnia), countries undergoing major transitions in Africa (Botswana, Nigeria), the Middle East (Afghanistan, Iraq, Kuwait), and Eastern Europe (Bosnia, Russia). about the vega alliance The Volunteers for Economic Growth Alliance (VEGA) vegaalliance.org is the world s largest member-directed consortium of nonprofit economic growth organizations that designs and delivers high impact programs, incorporating facebook.com/vegaalliance skilled volunteer professionals into its work with donors, philanthropic institutions, private enterprise, twitter.com/vegaalliance and developing country organizations. VEGA was established as a 501(c)3 organization in 2004 through a United States Agency for International Development s Leader with Associate Award. When it began a decade ago, VEGA was established as a rapid and efficient mechanism that utilized a competitive process to award USAID funding to its member organizations. Now, VEGA continues to champion its model and its alliance members breadth of expertise to other partners. VEGA supported the research and publication of this case study as part of its commitment to knowledge management and sharing lessons learned among its member organizations and the international development community. 13