The level of prosperity attained by any country is directly proportional to the size of entrepreneurial minds it houses. The extent to which entrepreneurial thinking feeds into the overall decision-making processes at the individual, corporate and government levels may be a factor differentiating countries, continents and regions in respect of the well-being they enjoy. An entrepreneurial mindset encourages the search for treasure in the dark with an attendant conviction of eventual success. Through proper coordination of resources, they often end up successful while penalizing those who do not. Much of the outcomes, however, depend on the quality and correctness of adopted strategies. It is this wealth creation process that is the force behind economic well-being. In effect, therefore without significantly increasing the size of the entrepreneurially oriented class, the African continent will be running around in circles.
Unfortunately, this category of people seems to be a highly endangered species. The prohibitive cost of doing business as well as other enterprise-hampering conditions abound across the continent. While these present excellent opportunities for the unique class of entrepreneurs who can take the best advantage of them, they do not permit widespread participation in entrepreneurial success by most economic agents in the continent. Most estimates put the rate of failure of new businesses in the continent at about 60%.
In 2018, the holding intervention program was launched by the GTI Capital Group as a way of enhancing the profitability performance of enterprises on a sustainable basis. The soundness and clarity of the process, as well as the enormous positive testimonies by clients that subscribe to the scheme, has encouraged its proposition for adoption by governments of African countries as a more potent replacement for the counterproductive poverty alleviation programs. The handholding program strengthens entrepreneurs’ capacity to navigate successfully through the challenging business environment in the continent.
From the inadequacy of infrastructure needed for transacting to the regulations of government which overburden the entrepreneur, doing business in Africa is a challenging experience. It is so complicated that it is not easily resolvable merely through enhanced financing windows or the provision of needed public goods. Because of the intertwined nature of the challenges, many of the actors’ buckle. The severity of the situation gets even worse when juxtaposed against the speed of change in a fast-paced globalizing world with stretched competition from different geographies and industries. The confusion is so palpable and suddenly felt not only in the pulse of the entrepreneurs themselves but also the policymakers who should fashion out credible measures for managing the dilemma at the countrywide level. As they say, too many hands spoil the broth. In a panic, the entrepreneur flies to several shapes and forms of consultants for a solution but often ends up deepening the crisis. Consider the typical manifestation of a long-seated problem as a cash flow crisis. The financial asphyxiation consequently induces panic reactions and a rush to the banks for immediate relief which rarely comes as quickly as made. For some, that might be the beginning of the end of their enterprise as they pledge assets and borrow unplanned in panic and often fail to realize the expected margins that would afford repayment in time.
An example of such a doomed journey for a solution starts when the bank or the financial institution requests for a prospective plan showing how the sick company intends to double its efforts and repay the credit. Since it is not the traditional responsibility of the bank to prepare such documents, the customer engages the assistance of an accounting consultant who develops a business plan and an accompanying cash flow for presentation to the bank. The bank accepts the proposal and insists on financing only physical assets and charges the customer to seek the working capital elsewhere. The customer turns to another organization for the working capital. Because the underlying business plan and cash flow were not rigorously thought through in light of its current and future competitive realities but prepared to meet the requirements of the bank, the customer returns to its business-as-usual way of transacting. The inevitable consequence will be another crash: the inability to repay the borrowed facility as at and when due. The company gets into another round of distress. But that is not even the core of the problem. The major problem was the absence of a genuine intervention spirit among all the consultants that provided relief services to the customer. None of them was genuinely concerned about the premises upon which the previous consulting and advisory actions were initiated and taken. All of them, in a way, erected exceedingly high walls between each other. This siloed intervention approach was a significant cause of the repeated strike that the customer suffered.
This kind of disconnect and siloed engagements are commonplace among businesspeople, particularly in Africa. The heart and kernel of the handholding offer revolve around the dislodgment of this problem-creating approach to managing the challenges faced by the African entrepreneur. Four ideological premises, therefore, give meaning to the program. The first is that entrepreneurial success goes beyond the availability of capital. Money for business is worthless in the absence of entrepreneurial agility. It is the latter that gives authentic nature and meaning for the former to exist. Great ideas, a feasible road to profit as well as alertness to new opportunities, have proven countless times that it ranks far ahead of capital in any given business activity.
The second ideological foundation is a ‘shared journey’ which connotes shared prosperity and shared risks. This ideological pillar raises the level of commitment of the conductor of the intervention to the program without necessarily giving them an equity stake. Being together on a journey means that the conductor of the program can only earn fees when he can create net positive economic value to the firm. By implication, it means that they only enjoy economic benefits when the company is doing well and maybe booted out if the company does not do well. Secondly, it integrates an elevated level of collaboration between the recipient of the intervention and the provider of the program.
The third ideological premise is the un-siloed implementation of the program which means that typical walls that prevent consultants, advisors, financiers and other providers of intervention services from talking to each other and understanding the rationale behind proceeding activity need not exist. By centralizing the ideas generation as well as the intervention’s project management, the conductors of the handholding process can see and manage the entire program end to end. That is why the program reclines on the centralized management of the competencies of consultants. This enterprise view ensures that transitions from one aspect of the program to the other provide the incoming consultants with a full understanding of what the previous group did and why.
The last ideological pillar is the culture of entrepreneurial discipline. Without a, a significant killer of businesses in Africa is the absence of the appropriate level of control expected of entrepreneurs. As a result, the handholding program typically starts by extracting the consent and firm commitment of the Board of Directors or owners of the firm to comply fully with all mutually agreed understanding and implementation approaches. Every aspect of the handholding project stands on binding legal premises. Another aspect of the entrepreneurial discipline culture is the fortnightly assessment and monthly fine-tuning of program implementation. Many entrepreneurs find this demanding. But that is precisely the best way to keep the eyes of the entrepreneur on the bull
There are five implementation steps in the handholding intervention. These steps are powered by explained ideologies and preceded by an eligibility assessment. The eligibility assessment is a self-scoring process where the client firm uses a given grading system to evaluate itself on crucial requirements of organizational success. The passing grade of the evaluation is 80% for onboarding into the handholding process. A skull lower than the passing grade means that the organization must go through a remedial or repackaging process to attain eligibility status. The five implementation phases start with a diagnosis of the health status of the organization. The diagnosis takes place in at least four key areas of the company’s life. These comprise the readiness for transformation and culture change, the financial and administrative status, adequacy of process and manufacturing optimization [for manufacturing companies] and the sales and marketing. Dedicated teams manage each of the four areas. Upon completion, the findings become inputs in designing the strategic pathway to the target success level. This strategy development process is the second phase of the intervention.
Consequently, with a clarified understanding of the goals and targets of the firm as well as its health status, a result yielding a set of activities and programs that will enable the realization of those set targets within a specified period are agreed and mapped out in detail. A full-blown project management program to drive it is also specified. The project management framework also stands on a robust budget that ensures that it succeeds.
Regardless of the rigour expended at the ideation phase, it is nevertheless imperative to test the developed model prior to its full application. The third phase of the handholding model addresses that. It is the accreditation phase. This phase is primarily concerned with testing the developed strategies as well as providing preliminary clean-up of the client organization in readiness for full funding. The accreditation phase typically lasts about six months, in which approximately 15% of the required financing is committed to validating the developed program. If the accreditation phase succeeds, then the full funding of the program is unleashed. The funding and the accompanying advisory services make up the fourth phase. Primarily what happens during the financing phase is the raising of all the funds required for full and successful implementation of the program. Fund disbursement follows project implementation milestones.
The final phase is called drive. The drive is the high point of the performance management system that ensures that handholding delivers as it envisaged from the onset. The drive process ensures that all funding delivers a minimum of 90% of the target expectation.
The essence of this discussion is to sell a model that handles and conquers the typical challenges of the everyday entrepreneur on the continent. The scheme has variants that target organizations of varied sizes. But the essential takeaway is that rather than promoting poverty alleviation programs, governments in African countries can mainstream the handholding program for addressing large-scale failures of businesses. It is the most assured route to the prosperity that we clamour. It is an assured route to growing entrepreneurs at widespread scale within the continent.