|Training Entrepreneurs for Small Business Creation: Lessons from Experience (ILO, 1988, 154 p.)|
|3. Organisation and administration|
All effective entrepreneur training programmes for business creation conduct monitoring and performance evaluation. While there are substantial issues with regard to what should be measured and the appropriate methodology, evaluation is an essential tool not only for determining the effectiveness of the training but also for making continuous improvements in training, cost effectiveness, and sponsor support.8
In his survey of entrepreneurship development, Harper contacted over 100 programmes and received replies from 52, of which 33 could supply data on the success of their trainees.
As Patel points out:9
Despite a variety of programmes for diverse target groups, in most countries these are not adequately documented and evaluated. An adequate mechanism to monitor the programmes is missing, and therefore data on how many units are set up, expected to start, and among those which have started, how many are successful, what is their profile, are not available.
Final performance analysis of the enterprises is an important test of any entrepreneurship development programme. Whatever the quality of selection or training, if the units do not survive long enough to face the environment, something is wrong somewhere in effort, and it is in this critical area that most EDP organisations are silent. No judgement therefore can be passed on the effectiveness of their target groups, selection methods, training inputs, follow-up, support system, etc.
But even where such performance measures exist they are usually the result of a co-ordinated package of services such as indicated in the above discussion of infrastructure. This global measure may mask deficiencies in individual components. Comparison of the performance of those trained with those who applied but were not selected is rare, while comparison of performance given various combinations of achievement motivation training, management training, technical training, selection techniques, business planning, financial assistance, and extension services is not much more common.
Furthermore, each component can vary considerably as well. Are programmes which use interview techniques to select applicants more successful than those which use application forms or psychological measurements? Which topics in marketing, production, finance and personnel should be covered in the management training component? Are some combinations more successful than others? Do training programmes of different lengths have different results? Some of these questions were addressed in the Harper research previously cited. But in general insufficient data existed to reach firm conclusions and much research remains to be done on these and other questions.
While occasional examples of such evaluation can be found, much remains to be discovered. Good programmes recognise this need and include rigorous evaluation as an important part of their ongoing activities.
The Bangladesh Management Development Centre programme is an example of a programme which not only uses global measures but also attempts to assess the effectiveness of each of the components.10 While a comparison between those selected and those not selected is not made, other evaluations are conducted. The object of the programme is to have trainees achieve self-employment. The object of the selection and training scheme is to have trainees produce viable proposals for self-employment projects. The selection component is assessed on its ability to differentiate those who will produce a valid project proposal from those who will not; the training programme is assessed on the proportion of trainees producing a project proposal acceptable to the Project Appraisal Committee; and the credit component is assessed on the proportion of valid projects implemented and doing well in practice. Thus:
- 306 youths selected, of which 300 submitted project proposals after training.
- 228 projects approved by Project Appraisal Committee, therefore efficiency of selection + training = (228/306) x 100 = 74.5 per cent.
- 177 doing well in business, therefore efficiency of credit component = (177/228) x 100 = 77 per cent.
- 177 out of 306 selected doing well in business, therefore the efficiency of the programme = (177/306) x 100 = 59 per cent.
No doubt this type of monitoring and critical self-appraisal contributes to a success rate significantly above the average for entrepreneur training and business creation schemes.
Most developers will be familiar with the difficulties of getting business people to keep financial records so that they know how well they are doing and can make decisions on changing what they are doing. They will also be familiar with the next task, which is to get them to set budgets for monitoring future performance. The same thinking should be used by developers themselves and applied to decisions about their programmes. Objectives must be set for each component of the programme, measures of performance should be formulated and performance should be monitored. Just as a successful business will find certain departments not performing up to a standard and take action to make changes, so too must an entrepreneurship development programme be prepared to change, add or delete a component in accordance with a measured analysis of its contribution to the overall objective.
Those entrepreneurship development programmes reviewed in this monograph which have the longest record of success are all characterised by this emphasis on research, performance measurement and the documentation of results. They are prepared to subject their work to critical review and in so doing not only improve their performance but also earn the respect and support of their sponsors and clientele.
1 Patel, V.G.: Entrepreneurship development programme in India and its relevance for developing countries, paper prepared for the Economic Development Institute of the World Bank (Ahmedabad, Entrepreneurship Development Institute of India, 1985).
2 Xavier Institute of Social Services: Training village entrepreneurs: Guidelines for development workers (Ranchi, India, 1980).
3 The Entrepreneurship Forum is used for business opportunity guidance in the programme offered by the Entrepreneurship Institute, Columbus, Ohio, United States.
4 Patel, 1985, op. cit.
5 Hunt, Robert W.: The evaluation of small enterprise programs and projects: Issues in business and community development (Washington, DC, Agency for International Development, Office of Evaluation, 1983); and idem: Approaches to small enterprise development for PLAN International. Draft of a paper prepared at Illinois State University (Illinois State University, 1984).
6 For example: International Centre for Advanced Technical and Vocational Training, Turin, Italy; Entrepreneurship Development Institute, Hyderabad, India; University of the Philippines Institute for Small-Scale Industries, Manila, Philippines; Cranfield School of Management, Cranfield, Bedford, United Kingdom.
7 Harper, Malcolm: Entrepreneurship for the poor (London, Intermediate Technology Publications, 1984).
8 Goldmark, Susan G. and Rosengard, Jay: Evaluating small-scale enterprise promotion: State-of-the-art methodologies and future alternatives (Washington, DC, Development Alternatives, Inc., 1981); and Johnson, Peter and Thomas, Barry: Training means (small) business: An economic evaluation of the new enterprise programme, in Employment Gazette (London), Jan. 1983.
9 Patel, 1985, op. cit.
10 Chowdhury, A. Momin: A behavioral model of entrepreneur-ship development for self-employment of educated unemployed youth in Bangladesh (Dacca, Bangladesh Management Development Centre, 1981).