Businesses should revisit apprenticeship model for growth, sustainability
Dr Henrietta Onwuegbuzie leads sessions in entrepreneurship on the MBA and Executive programmes at Lagos Business School (LBS), and is currently the Academic Director for the school’s Owner-Manager Programme. In this interview with FEMI ADEKOYA, she talks about her evolving Entrepreneurship Impact Centre (EIC) and other initiatives through which she hopes to start a movement that refuses to accept the norm, and embraces only what adds value to living. Considering the mortality ratio of small businesses in Nigeria, she holds that start-ups should revisit the apprenticeship model for growth and sustainability. Excerpts:
Can you give an insight into the Entrepreneurship Impact Centre; what informed the decision to establish it and what makes it different from others?
The Entrepreneurship Impact Centre is operating under the auspices of Enterprise Development Centre and it was set up with the aim of generating profitable business initiatives that will transform the society. In other words, the business initiatives are geared towards solving problems in a profitable way. It is not the traditional non-profit model; it is a model that would attract investors to put their money in a place where there would get returns while impacting lives and transforming the society. The initiative is motivated by the fact that there is a lot of poverty in Nigeria and it is rising. For anyone who understands the consequences of rising unemployment, it means that we are in a very precarious situation and the backlash of poverty is the social vices we are all now experiencing.These vices are not because people are just being greedy; it is a consequence of a wide gap between the rich and the poor. In an impoverished society, the privileged few are an endangered species. So the world is getting much more dangerous for you and me, and this is not the time to push responsibilities. Research has equally shown that businesses that solve real problems that impact lives tend to make more money than those that focus mainly on making profit for themselves.
There are a lot of people willing to go into entrepreneurship but doing business in the country appears to be difficult. How do you hope to make sure that many start-ups survive in this environment?
It is the way we are trained to start. The traditional way we do entrepreneurship in Nigeria before colonial people came was through apprenticeship. People never failed because you were an apprentice to a master. You work with a master with a pre-defined period of six years and then you gain your freedom and upon freedom, your master is supposed to help you establish your own business either by helping you with the rent or giving you the first set of stock you are going to sell free of charge. From cleaning the store to arranging the stocks, doing inventory stocking to watching the master sell and deal with customers, as well as other activities within the value-chain, you are learning. Of course it gets to a stage where your master gives you increasing responsibilities over the years. By the time you are in your fifth and sixth year, you are already running the business. Hence, by the time you go into your own business, you are more secured and have understood the business. These days however, we go around looking for money, looking for a rich uncle or some relatives or bank that would give us money and we invest a lot in business we don’t know much about. So the reason why many businesses fail today is because even when you have a business plan, you have not taken time to do a feasibility study. You have not had an experience of some sort in the line of business you want to venture or you are not starting small. Many billion-dollar businesses today started in a small garage or apartment. Dell, Microsoft, Apple all started small.
How do you think entrepreneurs can surmount various operational challenges and maximise them to their advantage?
Every problem is a profitable business opportunity. If you look at the richest people in the world, they are the richest because they are solving problems. The more relevant your solution is to more people, the more money you make. Why is Dangote the richest man in Africa whereas Bill Gate is the richest man in the world? Because Dangote’s solutions are for Africans while Bill Gates’ solutions are globally deployed. Unfortunately, we have over time been made to believe that business is not about making money but people need to understand that money comes from providing value. We need to have a rethink because the original goal of business was to serve society and money came as a result but today people are thinking of the money without looking at what value will attract that money to them and that is why most businesses fail.
Looking at the disruptive nature of the Nigerian business environment, how do you think businesses can grow through all of these landmines and still make sure that they are sustainable?
Basically, it starts with starting small. There is no country in the world where businesses are smiling or saying the environment is perfect. We would love government to focus on creating the enabling environment for businesses. However, the point is that you have to deal with your reality. The people in the village have the most difficult environment yet they are not dead. They are still doing business. What people need to do is to understand that the operating environment is constantly changing and any business that fails to adapt itself to the existing environment would change. For instance, we are currently in a recession, yet, while some companies are dying, some are thriving. Why is it so? The ones that are dying are dying because they are still trying to do what they were doing before even when the environment has changed. Those that are thriving have seen that the game has changed and have found a way to do things differently. So, it is time to think differently. People need to understand that businesses need to adapt to the operating environment, which is common sense anyway. One of the reasons why people don’t think about it is because they have the mindset of money making and not providing value for the customer.
There is always the issue of appearance and reality; a difference between training and practice. How do Enterprise Development Centres ensure that they hand-hold these businesses through the whole process?
It depends on how the training is given. There is a lot of poor training being given but if the training is effective or adequate, people wouldn’t fail anyway. For instance, what we do for the MBAs is that they actually start a business. You don’t discuss entrepreneurship, you do it. But there are some basic concepts. For instance if you understand entrepreneurship from owning a business as a means of making money, you will lose it all, but if you understand entrepreneurship as one that involves creating value and continuous improvement, you will be making a lot of money in a sustainable way. If you understand entrepreneurship as meeting needs, solving problems or filling a gap, then you will know that it is only when you are solving a problem that you can continue to have customers because everybody with that problem would come to you for the solution and they will be willing to pay for it. There is a role for formal classroom training but there is still a strong need for practical hands on training. So when they start the business here in the school, they have to come with a report to me every two weeks. We look at the challenges and progress made. It has been a success story so far. Quite a number of them have continued with the business till date and are making a lot of money. The training has to be practical and hands-on, which is what happens with apprenticeship. This is our own way of re-creating apprenticeship. The best I can do is to mentor them through the period. When I teach people business, I emphasise that we must look at their values and teach them personal discipline as well as delayed gratification.
So when is the EIC going to be operational?
The challenge I have now is that it requires funding. I am hoping to find people who understand the vision and are willing to help with the start-up cost. One of the various initiatives we are trying to push is the commercial public toilet initiative. We have done the feasibility study and seen that there is a huge need for clean toilets and we know that if we are able to put clean toilets in market places, motor parks, people are willing to pay. We want to do that. We are talking with Lagos State Government to be able to put that about 100 of such on ground. We hope to scale up and keep replicating, using the franchising models. So we do one or two for ourselves, those would serve as the models and then we would franchise the rest. Quite a number of people have shown interest in owning the franchises. We are trying to operate in a particular way to ensure that we give the public value in terms of better sanitation and cleaner toilets at any point in time. So we are hoping that this will take off soon but what is quite difficult is to attract people who are willing to put down seed funding for us to set up the secretariat and be able to push these initiatives out. Public toilet initiative is just the first of the various initiatives.
The other thing we would like to put up is the structure for a skills training academy and that idea is motivated by the fact that it is very difficult to get a good plumber, carpenter, tiller, bricklayer among other artisans in Nigeria and people who are into property development have to go to neighbouring African countries while our boys are idle. So, if we can have a training academy where these boys can be trained on various skills, then we can have a company that will outsource for companies to manage their facilities. Training our youths and providing access to markets for them, make them financially independent and responsible. It is basically turning current liability into asset. One of the reasons why most training vocational centres have failed is because after the training, they leave the people, and many of them don’t have access to wider markets. So we have to link skills acquisition to access to job and market. That is the only way such training will achieve the desired outcome. People are always talking about funding but I say funding is not the number one or two. If you fund a bad business or idea, the money will waste and if you fund a good idea, if that person doesn’t know how to manage resources or doesn’t know that you need to adapt your strategy to the operating environment, it will still fail. So funding is number three. So if I were to be managing funds for SMEs, I will put them through a mandatory training process before I know whether they ready for funding in order to achieve the desired outcome.
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