We are missing a major driver in entrepreneurial performance and tackling the SDGs - Resilience
Entrepreneurs are at the cold face of solving social and environmental issues in emerging markets. These economies are characterized by under-resourced capital markets, and undeveloped talent, where millions of underserved people live in poverty with low quality or no public services.
In other words, these environments are tough, and the entrepreneurs trying to solve these issues are under immense pressure, stress and financial insecurity without the privilege of wealthy families and capital support to fulfill their mission. If we are to successfully tackle and accelerate the SDG targets, capital provision and traditional acceleration, incubation and business development services is not sufficient. The well-being and resilience of the founders, management teams and staff are imperative for success.
At the recent ANDE (Aspen Network of Development Entrepreneurs) Annual Conference in Washington DC, I recently moderated a session titled “Unlocking Human Potential - How can the SGB (Small Growing Business) Ecosystem tackle Human Resilience”. ANDE, is a Programme of the Aspen Institute, a global nonpartisan forum for values-based leadership and the exchange of ideas. I’ve been part of this network for 10 years now, having co-founded the South African Chapter alongside Dalberg and AMSCO, and chairing the local steering committee for 5 years until 2015.
On my panel during the session I was joined by:
Joram Mwinamo, Managing Director, Wylde International
Geraldine Hepp , Global Community Director, Amani Institute
Patricia Maina, Partnerships Manager, African Management Initiative
It’s important to remember that ANDE is the largest global membership of organizations of investors, consultants, academics, policy makers and accelerators supporting entrepreneurs in the developing world. These organizations are at the cold face of investing, accelerating and building capacity into Small Growing Businesses across the developing world. Although the group that met was small, and intimate, it was well represented from man countries, and one of the first time any of these organizations had attended a session like this, with this ecosystem. It’s important to remember that many of the ANDE members, and organizations supporting entrepreneurs across the world, are also founders themselves, starting their own ventures, and having to deal their own resilience in markets, where entrepreneurs could not afford their services and they operated in perpetual instability.
When reading the various literature and research performed on attempting to understand and attribute the performance and impact of accelerators globally, very little attention has been given to the resilience of the entrepreneur, and the effectiveness of coaching and personal development modalities available to investors and accelerators. Good corporate governance practices, and the role of boards representing shareholders, the focus is placed on financial success, and ethical behavior outputs, but not necessarily on psycho-emotional inputs required for success. Therefore oversight is quite limited, and in my opinion presents inherent risks, which affect success outputs.
In South Africa, and almost 10 years ago now, a colleague and friend, Gary Graham identified this problem for social entrepreneurs, and designed a program called FutureFit, for this very purpose. It was a very successful intervention, but ran out of funding, and perhaps was ahead of its time. Since then, I’ve seen very little work done in this niche in the developing world, particularly by accelerator programs and large scale funding agencies. This comes in the context of an exploding industry of mindfulness and other personal development modalities finding their way into universities, corporates and modern culture.
From the ANDE session, a few key themes were discussed worth pointing out:
Resilience is an underserved topic in the sector and all ‘entrepreneurial ecosystem and innovation conferences and gatherings’. However, there was a unanimous agreement that founder and management team self worth, attitudes, behaviours, a rested nervous system, critical and creative thinking are major drivers of entrepreneurial success. It really doesn’t matter if the market case, growth strategy, finance plan and availability, or execution to date looks great. If the founder/s value system is not aligned, or their stress is at peak levels, risk of failure increases.
Various degrees of stress and anxiety on a daily basis were a common feature of pretty much every ecosystem actor present in the room that day, and the entrepreneurs they work with. Tackling these issues was important to everyone there. Anxiety around cash flow, our relationship to money (or lack thereof), and feeling safe in the midst of extreme periods of financial instability was a common theme.
Shouldering the responsibility of paying staff salaries on time, during periods of financial instability was talked about in detail. One of the ecosystem actors even spoke about the benefit of sharing that instability and financial risk proportionately with staff, as a means of self regulating stress. This strategy seemingly empowered everyone in the organization to collectively pull the company through tough times, even though it was uncomfortable at first as salaries were part paid proportionally to the cash flow available and the relative size of the salaries. This value system of shared risk and ultra transparency worked for them.
Mission driven entrepreneurs and ecosystem actors from under-resourced developing countries, and working to fix issues of poverty and climate change, anecdotally suffer to a greater degree than ordinary entrepreneurs or organizations based in the global, resourced north, from a privileged background.
Investors and accelerators are under-capacitated to deliver resilience / personal development support to their entrepreneurs, even though anecdotally, entrepreneurial performance is largely dependent on psycho-psychical and emotional well-being.
One of the key drivers of entrepreneurial and human resilience is the entrepreneurs relationship and capacity to manage their own pain, stress and anxiety. When this becomes overwhelming, the wheels can fall off.
Deploying capital into founders who are not managing or consciously self regulating their resilience, will not only scales their organizations. But possibly scales their burnout, traumas and psychological wounding too. This additional pressure can put everything at risk, and society quite possibly loses with the solution not succeeding.
So what are some of the potential solutions:(These are my personal opinions)
Diagnose if there is a problem in the first place. A simple survey and set of face to face conversations to scan the scale of the problem with the entrepreneurs we work is the starting place. This means gently seeing if it’s appropriate to cross the ‘perceived’ personal and professional boundary.
Listen deeply. It’s quite possible that the entrepreneurs we serve are further down the line in tackling these personal issues, than the ecosystem actors themselves. They could teach us, and help us support ourselves, and the entrepreneurs we serve.
Take the medicine yourself. If investors, accelerators and BDS providers, are not actively participating in their own personal development, they are unable to provide any depth of support to their entrepreneurs. Psychology degrees and tools matter less here, than experience. However, as an ecosystem we must preserve our unconscious bias of believing that our own experiences are shared by others.
Psychometrics and tools only go so far - our intuition can go further. Have you ever walked into a room, met a founder and something didn’t feel right. It might hit you in the gut, make the hair on your back (goose bumps if you don’t have hair) stand tall, or there is a subtle uncomfortable feeling that you might not be able to work with this entrepreneur. Listen to that feeling. It may be the most important thing you do during a due diligence, before proverbially getting married (taking equity or accelerating them). Entrepreneurial ego and consequent magnetic, founder personalities who know everything is a common feature in the ecosystems we work. These reality bending attributes can be important, but if not in balance, highly destructive.
Test the relationship first. Work (similarly to dating) with entrepreneurs first in a low risk and easy exit basis first. I would test their key capabilities, values, attention to detail, focus, and keeping commitments before committing long term. Entrepreneurs living on little sleep, caffeine enhanced peaks and troughs, are often highly distracted, can lack focus. These are quick measures to raise red flags where risks are inherent. With entrepreneurs I intend to invest in heavily, I would sometimes attend a few personal engagements with them. Meet their friendship circle, or see how they interact with the family and loved ones, and try ascertain to the degree the entrepreneur can manage negative feedback as part of their mentor- ability.
Build the resilience infrastructure into the investment / acceleration management process. I have to admit, that my own firm has not done this sufficiently at all. Even though in my personal capacity I offer this support. But I think building rigorous resilience self assessment tools, and coaching plans can go a long way to support entrepreneurs. However, the entrepreneurs need to firstly self identify with this problem first, and prioritize their own personal development alongside their business’s needs.
Personal development is long and incremental. it’s not the ecosystem’s job to solve this problem for the entrepreneur. The best I believe we can do as an ecosystem, is supporting entrepreneurs to flame the fire for their own personal development. Once an entrepreneur actively takes on on their own inner journey, and becomes increasingly self aware, the job is done. The entrepreneur’s personal development journey is there own. As ecosystem actors, we need a rigorous process to select entrepreneurs we can work with, and manifest success together.
Point the mirror back to the entrepreneur. This is where a value system of radical honesty is important. If there are behaviors, attitudes, and actions by the entrepreneur, which are self defeating and causing harm to you and others, have the courage to gently reflect them back to the entrepreneur. I often do this with three key principles in mind: Is what I’m sharing kind, necessary and true? There are way to discuss thorny issues, which minimize judgement, emotional outbursts and add value to all involved.
Be humble and compassionate. Always remember that humans anywhere, and especially in developing countries, might have suffered traumas which are unimaginable to you. Our role is to always ensure that our ego is in check and we are compassionate when we observe traumas and self defeating behaviors playing out, which affect the business and culture.
Dealing with human trauma requires deep expertise and experience. This is a warning. Because someone might have done a few courses, read a load of personal development books, studied a psychology degree or attended spiritual or personal development retreats, it doesn’t make them qualified to tackle deep seated psychological issues with entrepreneurs. In the new, and exciting digital universe, there are many under-qualified self proclaimed ‘experts’, celebrities, snake oil peddlers and motivational speakers, where there is definitely wisdom, but equally one size fits all advice to life, which can be harmful if context is not included.