Mentoring is Corner Stone of Corporate Governance for Early-Stage Companies
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
In the recent years we have seen many instances that amplified the missing links in corporate governance, both at the levels of medium and large corporates. But, when we talk about sound corporate practices,governance we should start from the early-stage companies, which is also topical today in this startup or entrepreneurial decade. Despite having some of the best innovative scalable business models, many startups seem to have lost their sheen due to governance practices. This brings into sharp focus, the necessity of an appropriate framework for assisting start-ups navigate the governance requirement.
One possible route for start-up entrepreneur to meet governance requirements is to have a “mentor” who can act as their friend, philosopher and guide. They may have faltered early, because they did not have a right mentor at the right stage of growth. Being entrepreneurs, it is understandable that they wish they had longer working days to meet your business goals and hence soft areas like corporate governancecould be ignored in number games.
At the initial stage, there are a couple of things that are very critical for an orderly and sustainable growth. First is to have a reasonably clear mid-term strategic objective. Second is to develop an operating plan; and finally, which I’d count as the most critical one, is on-boarding and retaining talent. As companies are pacing on growth they should be hiring experts who can mentor and help retain talent.
A startup grows by bringing in innovation which requires good talent
The biggest challenge for all startups is on-boarding and retaining talented professionals. The advantage of a mentor is that they can help you manage people issues and identify better talent from the available pool of resources. If the basic business model is right, execution needs the commonality of vision between the entrepreneur and the rest of their senior management. But it’sprecisely here, most talented entrepreneurs fail miserably. Together with this is the problem of financial indiscipline. A lot of entrepreneurs do not know how to plan cash flows and they tend to either accelerate or decelerate based on availability of cash.
And here’swhere the role of a mentor assumes greater significance as a vital element at the first stage of growth.Any serious entrepreneur needs a seasoned mentor who can ideally be his corporate director or his chairman who would help him navigate the ship throughgood and bad times.
As entrepreneurs, at different stages of growth, one needsdifferent levels of governance perspective to help them straddle the operating management and governance management. And here is fundamental need of a hands-on mentor who can devote enough time to you. To have such a person, first and foremost, the entrepreneur must realise that governance is a part and parcel of any organisation. Till the company is in embryonic stage of growth, there is need for a mentor who can challenge them by opening their minds to the vicissitude of growth.
Mentoring is a two-way street
Risk attendance for business growth is very critical but the entrepreneur will need an extra pair of eyes for vigilance. However, mentoring is a two-way street— they must be willing to listen, imbibe and walk the talk. Because asentrepreneurstheyare so busy growing the business, many a time theysee mentorship as a needless burden. But the fact is, it isn’t a burden as sustainable growth is extremely critical and without a mentor they will end up committing mistakes makingon-the-job learning all the more difficult.
Then comes the next complication. If one doesn’t have the time and willingness to learn, there are chances of mistakes. The first and foremost mistake is making growth an excel-sheet model wherein you affirm that you will grow in a multiplier effect year after year without break. But what you do not know is, what levers can accelerate and decelerate your growth. Here comes the importance of having a strategic growth plan.A strategic growth plan is putting systems and processes in place so that there's reasonable amount of checks and balances. You achieve thechecks and balancesby delegating powers to two or three trusted senior people.
To sum up, governance has two parts-people issues and business issues. And it’s in tackling the people issues where governance playsthe most critical role. You may have the best of ideas. But for buildinga functional, sustainable, predictable and work-oriented business organization one needs lot more than just greatideas. For an idea to become a valid business model and from there to become a sustainable business model, you need a lot more effort which, many a time as an entrepreneur,you are unable to spot and appreciate. For all these to happen,there is need of a sounding board, you need someone who can guide youas a hands-on mentor.
Does corporate India have enough talent who can be mentors? Though it’s always difficult to get good mentors, we have so many seniors who have put in decades in active management and are now willing to help budding entrepreneurs grow. So, getting a good mentor is not a big challenge.