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On February 27th, RENEW and the Aspen Network of Development Entrepreneurs (ANDE) co-hosted a panel at SANKALP in Nairobi called “Is Money the Problem or is it Management?”. The panel was moderated by RENEW’s Matthew Davis, and the panel was made up of Nathalie Gogue-Ebo of Open Capital Advisors, Rebecca Harrison of African Management Institute and Paul Breloff of Shortlist.
The goal of the session was to help business owners, investors and the development community get away from thinking that the missing middle gap is just a money problem. At RENEW, we believe that if a stakeholder is ignoring the management gap, it could damage the small and growing business (SGB) impact investing space. The panelists questioned whether anyone would even attend as the venue is known to be a conference for companies to connect with capital. But the fears were unfounded –all the target stakeholders attended, it was standing room only and the panel received great feedback after.
Here are some of the key takeaways and comments from the panelists.
- CEOs are very aware of the management gap.
- Recruiting is broken. Often, men over-glorify their CVs while women downplay them. If you just use CVs to recruit, you'll miss good talent. Using data to drive vetting is a better way.
- Many employees and managers don't know what good looks like. There are not enough good models to point too. What leaders are looking for is people to come in and help them build systems, but if they don’t know what a good finance department, sales department, marketing department, etc. team and systems looks like, how can they build it?
- The pay gap between what people think they should get and what they are getting is a problem. Also, remuneration in sub-Saharan Africa is all over the board. There is as much as a 2.5x distribution for similar positions.
- Companies should look to hire managers that buy into the organization’s mission.
- Listen to a potential employee describe the mission of the company back to you and see if they are excited. Ask what the last books were that they read. Consider compassion in your recruits. This is an overlooked attribute.
- Timing is an issue with companies. If you know you need to hire management and you need to raise capital to do that, fine. Investors in the room agreed that it’s ok to pitch for capital and explain which positions you are hiring for. That will help you.
- As a CEO, if you aren’t investing 40-60% of your time finding and developing your staff, you aren’t focused right.
- The people who recruit the best on small budgets are good at storytelling. Up to a point, it’s money, but after that, it’s not. If your employees don’t feel connected to the vision, they will leave. You also need to get success. People want to feel like they are on a winning team.
- Pay people what they are worth even before they ask!
- We don’t have a shortage of talent, just a shortage of good management practices and models.
- Generally, people hire too fast and fire too slow. The advice of "when should you fire someone? When you first think of it" might not be quite right. Perhaps an employee is in the wrong position. However, you should fire employees as soon as you know they don’t align with your company’s values.
- Fall in love with the problem. Everyone on the panel agreed that entrepreneurs aren’t spending enough time developing human capital. The development community isn’t spending enough investing in the ecosystem. Investors aren’t investing enough in it.
- Companies should consider coaches or advocates for women. Men need to step in to help their partners do more for their careers.
In summary, it is important to first recognize that there is a management gap. If you do, you are ahead of your peers. Recognize that investing in your people and your culture is one of the best investments you can make. To help you, Open Capital Advisors is augmenting to help fill the management gap; Shortlist is redesigning recruiting; and Africa Management Institute is developing world-class management teams. These are three pieces of the puzzle. ANDE, on the other hand, will continue to serve as the leading champion for the SGB sector and work with its members to address some of the key sector challenges including SGB investing, impact management and talent development.
A big thank you to ANDE for co-hosting this event with RENEW. For those of you reading this who aren’t familiar, ANDE is an incredible convener of organizations and practitioners involved in supporting SBGs and entrepreneurship in emerging markets with the purpose of creating jobs, stimulating long-term economic growth, and producing environmental and social benefits. At RENEW, we strongly align with ANDE in believing that SGBs are one of the main drivers that will lift entire countries out of poverty.
For the last 10 years, ANDE has been addressing talent development challenges through their talent learning labs and by providing funding opportunities like the Argidius-ANDE Talent challenge that sought to find highly promising solutions to human capital constraints.
Under their new strategy, ANDE will continue to serve as the leading champion for the SGB sector and work with its members to address some of the key sector challenges including SGB investing, impact management and talent development.
To learn more about becoming a member, visit: www.andeglobal.org.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
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