Are Corporate Unions The Way To Go?

We business schools pride ourselves on our commitment to the
promotion of best practices, as well as our rigorous research and ability to
produce tomorrow’s leaders today.

Globally, 81% of corporate recruiters interviewed by the
Graduate Management Admission Council said they planned to hire MBAs.

 The cost of an MBA –
including living fees while studying – is recouped in about three and a half
years thanks to the salary increase it commands.

A nice, celebratory pat on the back all round, then? Not
quite.

Business schools, the centers of innovative thinking and excellence, could offer so much more to the wider economy in South Africa. We need to extend our services to many more people than we currently do.

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If what we do is good, then shouldn’t more people get hold of it? We just need to step into the sunlight out of our ivory towers for a second, and look at what we could be doing to better support those business innovators who don’t have access to funding and educational opportunities right now.

In its 2018 Entrepreneurial Ecosystem Snapshot for Gauteng, the Aspen Network of Development Entrepreneurs identified 255 organizations offering support services to entrepreneurs and small businesses.

Only one of the programs listed is offered by a formal business school, which suggests that either we are not doing anything, or, if we are, what we do might be irrelevant in the wider entrepreneurial ecosystem.

Small businesses are the past, present and future of South Africa’s economy. Today, the Small Business Institute (SBI) reckons 98.5% of all companies in the country are SMEs, the vast majority of which (around two thirds) are micro-enterprises employing fewer than 10 people.

These are not the select few entrepreneurs lucky enough to have the qualifications, capital or funding to enter our program.

They’re not the high-growth startups who’ll be looking for
venture capital investment at some stage in their career. But they need our
help all the same.

According to the National Development Plan, small businesses
are expected to provide 90% of jobs by 2030. Today, however, SBI’s figures
suggest they account for less than a quarter of formal employment – well below
international standards and what might be expected given their proliferation.

The most popular reason for the collapse of a small business
which has been through one of the current business development programs in
South Africa is that the entrepreneur was offered another job – which suggests
that current programs are good at teaching entrepreneurs skills valued by
business, but not the value and reward of building a business themselves.

The second most common reason is the business idea wasn’t
successful, which means we could be helping them understand how to address
problems earlier, understand the root issues and learn more about how to pivot
before it’s too late. And teach them to build better business ideas.

  Any good business model must pass the ‘story test’ and the ‘maths test’. It’s the story test that’s hardest – visualizing how all the components fit together to reinforce themselves to build a viable, feasible, value-creating business.

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Likewise, current programs focus almost exclusively on the person leading the business as the business itself. As a result, many struggle once an organization gets too large for one person to effectively manage.

The process of capacity-building in second tiers of
management is simply not taught in entrepreneur programs today.

However, there’s a twist here. In the big picture, maybe our
measure of ‘success’ is too short-sighted. To become a successful business
owner, learning through trial-and-error is critical, so failing fast forwards
and brings rapid growth of skills into the economy as a whole.

All the big enterprises came from small ones. Oligopolies
and oppressive wealth stifle the energy of creative destruction and the renewal
so needed to freshen our economies and allow great new improvements and the
seeds of great new companies to thrive.

Our business schools need to paint a picture of success through experimentation, rapid marginal improvements –not through a grand, elegant masterplan and the fiction of predictable implementation in complex situations.

On business ethics too, there’s much we can share. Many small businesses, for example, go through specific enterprise development (ED) programs developing products and services for corporates and government agencies.

 If we’re really going to build the people who build the businesses who build Africa, we have to make our collective wisdom accessible to more of the people who count and fast-track their skills growth.

– Jonathan Foster-Pedley, The writer is Dean and Director of Henley Business School Africa.

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