In the first post of our two-part series on business mentoring programmes, we provided a bird's eye view of the available evidence on mentoring as a policy tool to support entrepreneurship, business growth and innovation. We also highlighted broad areas where further research was necessary. We devote the second part of the series to discussing the practical issues and design details of such programmes, drawing on examples of past trials and related initiatives, and the IGL team’s experience helping to develop public policy in this space.
There are many moving parts in the design of mentoring programmes aimed at improving business performance, starting with the mentors themselves: who should they be, how best to recruit them, and whether to offer them training and compensation. Mentees might also need nudges to participate in the programme. Then there is the issue of matching mentors and mentees, and structuring their interactions: how often should they meet, for how long, and what topics should they cover. Answers to these questions will likely affect the impact of the programme, and certainly the costs associated with it. It is thus crucial to consider whether a lighter-touch intervention can deliver similar results to a more intense programme with greater resource needs.
We discuss these questions, and the multitude of possible answers, through the lens of four specific trials. Two of them - the study of female micro-entrepreneurs in Kenya by Wyatt Brooks, Kevin Donovan and Terence R Johnson, and the experiment embedded in an online entrepreneurship course by Charles Eesley and Lynn Wu - we covered in the first post. The other two trials, both by World Bank researchers, are special in that they offered mentoring in addition to business training programmes: David McKenzie and Susana Puerto focused on female entrepreneurs in rural Kenya, while Xavier Giné and Ghazala Mansuri worked with microfinance clients in rural Pakistan. Mentoring (on top of the training that trial participants received) did not seem to improve business outcomes in either of these studies.(2)
The ideal mentor
When it comes to selecting mentors, programme designers have several options to consider: from successful local business owners with highly localised information, to professionals trainers with a thorough general knowledge of business and management practices, to volunteers signing up to act as mentors on an online platform. The choice should depend on the type of problems mentee businesses face: in the Brooks et al. study, microenterprise owners benefited from their local mentors’ market-specific knowledge, whereas in the Eesley and Wu study, founders of tech startups needed to tap into their mentors’ diverse networks to get the novel information necessary for pursuing an adaptive strategy. When programme designers envision a structured interaction between mentors and mentees with a formal curriculum, it might make sense to invite business owners with higher education degrees in relevant fields as mentors, as did McKenzie and Puerto.
Recruitment and compensation
Government agencies typically only play a facilitating role in mentoring programmes, but the intensity of the public sector’s involvement in the process can differ. Should they aim to coordinate the supply, to increase the supply, and/or to stimulate the demand for mentoring? In other words, is it enough to provide a platform where potential mentors and mentees can meet, or does the government need to invest in attracting mentees or compensating mentors?
Despite their large potential benefits from participation, mentee firms may need nudges to participate in mentoring programmes. A pilot experiment among UK businesses suggests that the framing of the messages matters: SMEs indicated that they were more inclined to use mentoring if they received positive messages that focused on potential benefits for growth rather than on protecting themselves from risks. However, this research did not measure actual uptake of mentoring, only attitudes.(3)
While many government programmes offer compensation to mentors, there is also evidence that business mentors are often intrinsically motivated. For instance, mentors in Eesley and Wu’s online experiment did not receive any payment, and in the Brooks et al. study, many mentoring relationships continued several months beyond the end of the trial, despite the fact that mentors were no longer compensated.
The matchmaking process
Once potential mentors and mentees have been brought together on the platform, we need to consider the process of matching them. Is it best to let matches form organically, to actively control the matchmaking process, or something in between? Do female- or minority-led businesses miss out in the process without additional support? An ongoing trial that studies ways to support entrepreneurs in finding good mentors on an online matchmaking platform will hopefully provide some insights into these issues.
In our example studies, Eesley and Wu allow potential mentors and mentees to create online profiles with biographic information and work history, and to search for one another using keywords and other profile information. The three other trials all assigned mentees to mentors, matching on gender whenever possible (Giné and Mansuri), and on business sector (Brooks et al.). Although not explicitly matching on age, McKenzie & Puerto made sure that the group of mentors and mentees were of a similar age overall.
Additional questions concern the frequency and content of the mentoring activities. Are small-group sessions as useful as individual meetings? How often should mentoring take place and what topics should be covered? Will the mentor and mentee find the optimal balance, or should mentors’ training include guidelines around these questions? Are there benefits from an overarching organisation attempting to monitor these interactions to ensure that they follow the guidelines?
The trials we cover gave different answers to these questions, from a very formalised method by McKenzie and Puerto (detailed curriculum with well-defined objectives and key outcomes for each 2-hour meeting) to a completely unstructured approach by Brooks et al. (no topics or minimum time specified, only optional prompts provided). It is interesting to observe that the latter light-touch intervention that did not involve any formal training or guidelines for mentors proved quite successful - though its effects faded after the mentoring pairs dissolved. The authors attribute this finding to the ever-changing set of challenges business owners need to deal with in this environment: “While the topics discussed with mentors have an immediate effect of limiting the impact of current shocks faced by the business, they provide less help with future and as of yet un-encountered problems”.
The right approach for the specific question
As our series demonstrates, business mentoring programmes are in general a promising tool for supporting entrepreneurship, but there are many specific questions we need to address before we can design successful programmes on the ground. Some of these answers will be highly context-specific, and will depend on the goal of the particular policy: eg high-growth tech firms or struggling micro-entreprises likely benefit from interaction with different types of mentors, and their ideal mentors will require different types of incentives or training. As such, rather than offering a blanket endorsement to one approach or solution, we advise policymakers to conduct pilot trials among the relevant population of businesses before rolling out a specific programme, in order to identify the best approach for their particular context.
Researchers can contribute to this process by focusing not just on whether, but why an intervention worked. As we have seen from the examples above, uncovering the underlying channels through which mentoring affects business participation or firm performance, and relating them to the characteristics of the population or the programme in question can help extrapolate findings from a single trial to other contexts, and to inform policy more broadly.
We also hope to see more trials that compare the cost-effectiveness of mentoring programmes with other forms of business support policies, like general management training, public advisors, subsidised private-sector consulting, peer-to-peer learning, etc. After all, understanding the relative cost-effectiveness of mentoring programmes compared to other available types of support should be a prerequisite for investing public funds in these programmes.
IGL is keen to work with governments to conduct trials that will fine tune the practical dimensions of each intervention on the basis of actual evidence. If you would like to explore how randomised controlled trials can help you develop more effective mentorship programmes, we would be excited to talk to you.
IGL also supports policy-relevant research through the IGL Grants programme, and by bringing together researchers working on randomised controlled trials in this field through the IGL Research Network. Join us at IGL2019 to learn more about state-of-the-art research on business support programmes, including mentoring, and other topics around entrepreneurship, innovation and business growth. At the conference, we will be hosting a session for policymakers and practitioners interested in scoping, designing and running RCTs to test their interventions; the session will focus on mentoring programmes as a practical example, and participants will have an opportunity to think about how experiments can be used to answer some of the questions raised above.
2. Similar findings emerge from Martín Valdivia’s study involving female business owners in Peru: adding “technical assistance” (individual and group-based coaching) to a general business training program did not lead to long-term differences in business performance between the groups.
3. At the same time, Brooks et al. and McKenzie and Puerto achieved relatively high take-up of their programs without additional nudges or incentives for mentees.