The previous two blogs talked about our experience in the areas of on-boarding and mentoring (https://puneinternationalcentre.org/mentoring-social-innovators-towards-sustainability/, https://puneinternationalcentre.org/scale-and-sustain/ ). Mentoring at NCSI is a finite programme. The intense weekly calls during the on-boarding and mentoring phase of six months comes to an end. But a strong relationship continues and the mentee’s journey is not over. It evolves to what we call the post mentoring phase. This article focusses on the post mentoring phase.
After an entity that has been mentored into a steady state of being, it has to be supported to be a going concern. In the mentoring stage, the critical success factor (the idea that is working) has been identified and harnessed. Now the task is to scale and enable a sustainable platform for growth and social impact.
Based on our experiences so far with social enterprises, we see three key challenges in their operations in the post-mentoring phase.
- People: their management and talent acquisition
- Systems and processes
- Fund raising
It’s a cliché that people are the business, even more so in a start-up. As the business grows, we have seen two things happen.
- The original team that started the enterprise tends to break up. Founders who once had a common cause now see things differently and part ways.
- The original team which was able to handle the business in the early days is now unable to have the bandwidth to manage a larger enterprise. The founders need to add talent to the original team and evolve from individual performers to team leaders.
The breakup of the original team is a tough call and an emotional one but necessary in the evolution of the enterprise. The guiding principle here is the alignment of purpose of the core team. All founders must align and if differences run deep, a parting of ways will happen. That is not the end of the world or of the enterprise! Mentors need to handle this gently and provide the needed insights and emotional support to the remaining founders to keep the company on track with the company mission without getting involved in the relationships. Founders have a way of managing. The best teams learn to get on with the business.
Adding talent is very critical. The team is still small and it is critical for the new talent to align to the purpose, more importantly, to have shared values and attitude. It is here that mentors play an important role in ensuring that founders hire for attitude and values and not just for skills.
The other thing that is important is the articulation of the values of the founders. In our experience, founders started the enterprise with values that were well understood amongst the founding team. Now these values have to be out in the open, well-articulated, so that the people joining the team are clear. The team becomes “one” that much more quickly.
Systems and Processes:
The initial days of the enterprise is less about process and more about just getting it off the ground quickly. That is the way it should be. The thrill of the first order or the satisfaction of seeing the first machine being packed for despatch is unmatched.
But founders need to bring in a process and systems mindset into the enterprise before the push to scale up. Our job as mentors is to get the enterprise process ready so that the founders can get on with the job of building the business. We have learnt that it is not easy for founders to let go and get the process to take over. Micromanaging, not delegating, not defining clear roles and not paying enough attention to structure are some of the pitfalls that founders need to be guided on.
On the flip side, process orientation is all about understanding the business in a holistic manner and designing systems that are robust enough to grow with the business.
In our experience, three of the processes that most mentees require to pay attention to are:
- Compliances – legal and statutory
- Accounting and the finance process and
- Sales and all that goes into the front end of the business.
For a social enterprise, survival in the early years is mostly on grants. But now the enterprise is off the ground and looking to scale. Grants are not the way ahead. It’s now about getting investors into the game. The stakes are much higher now. Whether it is angel investors or other types, the founders need to alter their pitch deck considerably. Earlier it was to organizations who were more keener about the founders’ idea and funding an idea that was “socially good” and possibly worth the “CSR” support. Now it’s to investors who are looking to invest in a potentially successful commercial venture.
Suddenly the game changes and we find that our role as mentors is now to guide the mentee / the founders in areas as diverse as:
- The investors’ pitch deck
- Term sheets
- Cash flows, P/L and balance sheets
- Business plans.
It’s not easy raising money and the founders soon find out that rejection hurts and is also normal. They need to be able to “handle” it and move on.
One of the shifts that founders need to get used to is that investors are not as interested in their back story or vision as much as they are in the commercial viability of the enterprise. It is here that mentors come in to help founders strike a balance.
In our experience, the discussions that mentors and founders have around creating a term sheet, help the founders clarify their ideas about what their enterprise is all about and what they are willing to give away and stay with – how to structure the deal.
The question that founders very often ask is “how much money do I actually need?” And the whole aspect of the business plan and cash flow need to be worked out. To many founders, this is a difficult area, understandably so. So far, they have built their small enterprise on the vision of a product or service that is “doing good to society.” Now it is about scale and making it a sustainable enterprise.
And while the formal weekly and monthly meetings come to a close, the mentees do keep in touch and get back with progress reports, asking for advice or seeking help. At NCSI, we believe that while mentoring has a formal end, the relationship endures.
About the Authors:
Mr. Anil Kulkarni
Anil has a wealth of experience in building brands that have deep consumer connect, bringing innovative products to market and in successfully managing and growing an FMCG business. He has worked in blue chip MNCs like Britannia and Unilever and in respected Indian companies like Raymond.
Mr. Ram Iyer
Ram is an experienced Business Strategy Consultant from the prestigious business school Indian Institute of Management, Ahmedabad (IIMA) with a demonstrated track record of over 16 years driving growth, reducing costs, improving operations, and successfully creating solutions for complex business problems.