TRADE & INDUSTRIAL POLICY STRATEGIES
Supporting Small Business through Mentorship Programmes – an overview of South Africa’s National Mentorship Movement
Compiled by: Sandra Makumbirofa
Editorial inputs: Saul Levin
Supporting Small Business through Mentorship Programmes – an overview of South Africa’s National Mentorship Movement
Small and Micro enterprises (SMEs) have long been recognised as integral to employment creation and economic growth. For example, research conducted by the UK Federation of Small Businesses revealed that 70% of small businesses that are mentored have a five year increase in survival rate, compared to small businesses that are not mentored. In addition, an organisation called Youth Business International (YBI) conducted a survey in 8 different countries (India, Uganda, Poland, Spain, Russia, Chile, Argentina and Sweden) in 2018, which showed that small businesses consistently report that their companies wouldn’t make the progress they do, at the speed they do, without mentoring support.
With this backdrop, providing a supportive ecosystem for small and micro businesses is of critical importance to achieve sustainable job creation and growth. A mentorship programme provides one aspect of a comprehensive support framework for small and medium enterprises. Such a programme would add significant value by helping to reduce key challenges faced by small businesses, including lack of managerial experience, inadequate networks, lack of access to entrepreneurial support as well as limited ability to compete with well-established businesses in terms of scale and quality. This would be achieved by connecting mentees with experienced mentors from big organisations, retired executives and other business people who have experience dealing with the above challenges faced by entrepreneurs.
One such mentorship programme is the National Mentorship Movement which is a non-profit organisation with the goal to support and boost entrepreneurial success in South Africa, and promote business continuity, profit, skills transfer, and employment. This report provides an overview of the National Mentorship Movement and its impact. The report highlights the successes and constraints of NMM relative to its goals and derives some key policy implications.
2 The role of mentorship in small-business support ecosystem
Mentorship is a one-to-one learning relationship between an experienced individual (a mentor) and a less experienced individual (a mentee) with the aim of imparting various developmental functions. Empirical evidence shows that mentorship is effective in facilitating the developmental success of students, business people, and corporate executives. This includes personal aspects such as improvement in career direction, propensity for success, psychosocial development, self-confidence, and job satisfaction; as well as business related aspects such as entrepreneurial self-efficacy, and leadership skills development. Mentorship also improves the tendency to stay in business and increases the ability to recognize entrepreneurial opportunities. Mentorship has also been found to influence entrepreneurial intentions for those who are yet to start a business.
For these benefits to be realised and effective, both the mentor and mentee must be committed to the engagement. This includes the mentor taking an active role in imparting knowledge and expertise, as well listening to the mentee’s responsiveness. Furthermore, the mentor should believe in the mentee’s capabilities and potential and be brutally honest to the mentee. The mentee should be responsive by showing a keen interest and devotion to the learning process, allowing themselves to be vulnerable to the mentor.
3 Overview of the National Mentorship Movement programme
3.1 Background and Approach
The National Mentorship Movement (NMM) is a Non-Profit organisation established in 2015 and registered as a Section 18A Public Benefit Organisation. It was established with the vision to foster a sustainable countrywide mentorship programme that serves all economic sectors. The programme has set itself the goal of connecting 100 000 mentors to 1 million mentees. It uses the tagline Mentorship – the Power of Two, both because of the two people involved in the relationship as well as the doubling effect of the impact of mentorship shown by the research in the introduction.
The organisation’s mentorship model (as shown in Figure 1) is established on a platform that fosters partnerships and programmes. The platform is called Everwise, which is a cloud-based learning management system. Mentors and mentees use this platform to register on the programme, an algorithm collates their offerings and expectations and matches them to suitable mentors or mentees, and the system is used to manage their relationship.
Figure 1: Representation of the NMM model
(Source: NMM Overview Report)
Access to willing mentors is provided through the various partnerships that NMM has fostered through being a partnering organisation. These include companies, non-profit organisations, industry associations, service organisations, business associations, and retiree associations that are willing to give access to their employees and members as volunteer mentors.
Mentees are also found through partner organisations such as Social Solutions, Khulisa, Feenix and Standard Bank’s micro partners. They grow the programme in line with the available financial capacity to scale up.
The programmes are mostly targeted at sectors with the greatest potential to create jobs and assist young people, women, students and entrepreneurs succeed. These include, but are not limited to, the agriculture, tourism and manufacturing industries and the township and creative economies.
Value is fostered through one-to-one, one-to-many and many-to-many peer mentorship programmes, through the following steps:
- The mentee registers on the Everwise platform by providing demographic information, stage of development of their company, years of experience, industry they operate in and their development needs.
- Through an Everwise algorithm, the mentee is matched with an appropriate mentor. The relationship between a mentor and mentee that have been matched together requires a commitment of two to four hours a month in person or digitally.
- The mentorship is managed over a year by monitoring and evaluating the effectiveness of the match through the system, and interventions are made when necessary. This involves the mentor and mentee scheduling meetings through the platform, recording their goals and tracking progress, uploading information, chatting to one another, and participating in communities.
3.2 Governance and Funding of NMM
In terms of governance, the organisation has a board of directors comprised of senior executives in South African corporate companies as well as the Executive Director of the NMM.
NMM’s business model is to be funded by 50% earned funding and 50% donor funding. Recently, NMM has realised almost all of its funding from earned activities rather than from donor funding. Their earned funding is currently from undertaking projects with the Da Vinci Institute on behalf of the Gauteng City Region Academy (GCRA), the Tourism Business Council of SA and the Department of Tourism (on hold due to the pandemic), and Standard Bank,. These projects are costed, and the clients are charged based on time spent and the use of the electronic platform.
The organisation is run cost effectively and currently has an operating budget of below R2 million a year, with the biggest cost being the R550 000 per year for the Everwise platform. There are also the costs of the staff who manage the mentorship relationships, provide training, launch programmes and maintain relationships with their partners. These costs are strictly managed, and are kept low as the CEO is unpaid, the support staff are contracted through the YES programme, and the offices are rent free. Without these cost savings, the budget required would increase to R 3,5 million per year at current levels of activity.
3.3 Businesses Supported
NMM sees itself as providing support to the small business ecosystem and identified mentorship as a missing ingredient in most small businesses’ success. This includes support to entrepreneurs in small and micro enterprises who would not normally have access to business development support, and learners who are still studying in order to prepare them for the business and corporate world. Some of NMM’s ongoing interventions include providing support to:
This mentorship programme has the potential to expand its provision of support for small business and emerging entrepreneurs in South Africa.
4 Impact of the programme
NMM estimates a significant value offering for the economy of South Africa from their intervention through the volunteer mentors and the impact they make on the businesses supported. This includes saved businesses, increased employment, improved business performance and enhanced social cohesion.
A mentor provides the mentee with a sounding board, advice, support and access to networks. The mentor in turn is able to give back to the community by imparting knowledge and expertise to new emerging entrepreneurs and career advice for employees. In addition, since NMM is in a partnership with the International Coach Federation, mentors are exposed to events such as the governance seminar with the Institute of Directors of SA and a weekly fireside chat with an invited guest.
The impact of the programme can be seen in the nature of the mentees and mentors on the programme, feedback from participants on the effectiveness of the programme and the value to cost relationship of the programme.
4.1 Characteristics of the mentees and mentors
Figure 2 shows the progression of number of mentees and mentors registered on the NMM database. In 2016, NMM started off with 47 mentors and 53 mentees. To date, NMM has grown to have 648 mentors and 1 342 mentees, with 1 160 partnerships created since 2016. Currently, they are servicing 609 active partnerships of mentors and mentees.
Figure 2: Successful registrations of mentees, mentors and partnerships
(Source: NMM statistics)
Figure 3 illustrates the demographic composition of the mentors and mentees. To date, 57% of the mentors are male and 43% are female, whereas 52% of the mentees are male and 48% are female. The majority of mentors (44%) are black followed by whites (35%) and either coloured or Indian (19%). The majority of mentees are black (82%), followed by whites (8%), and either coloured or Indian (8%).
Figure 3: Demographics of mentors and mentees
** Race does not add to 100% due to “rather not say” and “other”.
(Source: NMM statistics)
The majority of mentors (64%) are over 40 years old in terms of age, whereas the majority of mentees (45%) are younger than 30 years old. In terms of employment status, 54% of the mentors are employed, 36% are entrepreneurs, 3% are retirees, and 2% are studying. The majority of registered mentees (42%) are entrepreneurs, followed by people who are employed (35%), students (14%) and those that are unemployed (7%).
Table 1 gives the distribution of mentors in the NMM pool in terms of qualifications, senior positions and levels of experience as business owners.
Table 1: Level of education, most senior position, and years of experience as business owners
|Mentors: highest education||Mentors: most senior position||Mentors: years of experience as business owner|
|Honors||22%||Director||21%||11 – 20||19%|
|Bachelors||20%||Executive||16%||6 – 10||27%|
|Diploma||10%||Sen Manager||19%||1 – 5||40%|
Over 80% of mentors have a post high school qualification, with the majority (34%) having obtained a Masters or PhD. Mentors are or previously senior in their organisations, ranging from senior manager positions (19%) to CEOs (15%). Finally, 57% of mentors who are entrepreneurs have been in business for longer than 6 years, although a significant number (40%) have only 1 to 5 years of experience.
4.2 Impact survey results
A mentorship satisfaction survey was conducted amongst the mentees to gauge the impact of the programme from their perspective, the results were recorded in Table 2.
Table 2: Results of the impact assessment survey given to mentees
|Exceeded expectation||Met expectation||Did not meet expectation||Total respondents|
|Survey after 1st meeting:
Quality of interpersonal relationships
Effectiveness of platform
|Survey after 1 month:
Quality of the partnership
|Survey after 3, 6, 9 months:
Satisfaction with match
Achievement of goals
Willingness to recommend
(Source: NMM survey results)
The mentees were asked to evaluate the interpersonal relationships, effectiveness of the Everwise online platform, achievement of goals and likelihood of recommending this mentorship programme to others. Mentees voted the quality of interpersonal relationships to have met their expectations (51%). The effectiveness of the Everwise platform was ranked as exceeding expectations by most mentees (56%).
In terms of achievement of the mentorship goals, most mentees voted that it met their expectations (53%) and 32% voted that it exceeded their expectations. Their favourable responses to these questions indicate that the programme is effective in imparting valuable entrepreneurial skills for the mentees. However, the remaining 15% of mentees showed low levels of agreement with this, as they stated that the programme did not meet their expectations. It is significant that this was the highest negative scoring in the survey and had the least number of respondents compared to the two earlier questions.
Overall, these results show that the NMM mentoring programme has been effective in recruiting, and providing mentees with valuable learning outcomes. Although it is clear that further work is required to understand the expectation of the mentees, and whether the programme is able to meet those expectations.
4.3 Cost effective mentorship
NMM provides a very cost-effective model, as the main component of the mentorship support, namely the service of the mentor, is provided for free. As a result, they estimate in the last year that they provided approximately R 12m worth of mentorship value on a cost base of R 2m, and an annual cost per relationship of less than R 5 000 per head.
Because of economies of scale, they estimate that they could reduce the cost per mentor to below R 2 000 per year, and inject over 20 times their cost base of mentorship value into the economy once they get beyond 10 000 relationships.
The research identified constraints in the programme, these include:
5.1 Volunteer mentors
The programme operates through the use of volunteers and a process is required to recruit and train these volunteers to provide appropriate level of support and assistance. In response to the need NMM has gone on a recruitment drive for mentors. They have identified that at least 400 more mentors are required in the immediate future. Part of the recruitment drive is to establish relationships with corporates who are agreeable for their executives and employees to be mentors.
The funding model has been to operate on a low-cost budget and rely on free services, including the free services of the mentors. The limited funding however impacts on the extent to which the programme can be expanded.
6 Policy relevance in terms of the support framework for SMEs
South Africa is in need of effective and proven initiatives that can help small and medium enterprises increase their value offering, and survive in the market so as to create employment, reduce poverty, and increase the country’s economic growth.
The NMM model is cost effective and a proven initiative that can help small and medium enterprises survive in the market so as to create employment, reduce poverty, and increase the country’s economic growth. Research has shown that mentorship is an effective mechanism to achieve this. In order to grow mentorship and embed it into the national support programmes available to small businesses, NMM is currently exploring partnerships with government institutions such as the Small Enterprise Development Agency (SEDA), the Municipal Infrastructure Support Agency (MISA), and the Gauteng Department of Economic Development.
NMM is already supporting programmes involving the State, including the GCRA funded Da Vinci programme, the TBCSA funded programme working with the Department of Tourism and the Technology Innovation Agency programme to implement a mentorship platform in the innovation arena, and is exploring a partnership with the Innovation Hub. In addition to this, NMM lends itself to interventions which can increase sustainability, growth and transformation industry by industry, as it is already showing in the tourism and printing industries, and it has also been included in the Furniture Industry Master Plan.
The funding model has been to operate on a low-cost budget and rely on free services, including the free services of the mentors. The limited funding however impacts on the extent to which the programme can be expanded. An interview with DSBD showed awareness of NMM services and general agreement that the value offering was sound. There is room for partnership with DSBD and possible funding would have to be applied from SEFA.
7 Conclusion and Recommendations
The NMM model has a tangible and cost effective value proposition that is relevant for South Africa given the country’s high level of unemployment and low growth. Most entrepreneurs have difficulty in reaching out for assistance, some rarely take external advice, and some do not have access to the relevant people who can help. The increasing number of volunteer mentors confirms the basic premise that South Africans with a significant amount of experience are willing to give their time and experience with no expectation of reward in order to contribute to building a more dynamic economy. The NMM model presents an important component in the solution towards more successful SMEs in South Africa through offering the services of volunteer mentors.
It is recommended that for the programme to be effective mentors need to continue to be objective in their advice to enterprises. This requires NMM to hold mentors to their signed code of conduct to make sure that the mentor does not have a conflict of interest in a mentee’s business, and has the necessary skills set to provide appropriate support. This will allow the mentee to develop confidence and trust in the mentor, which will maximise the value of the mentorship relationship. The mentor plays an important role as a sounding board to mentees and should provide objective and honest advice to the mentee.
A key constraint identified in the research was the NMM funding model, which needs to be resolved in order for the programme to expand. Possible solutions are to follow a growth and expansion strategy that ensures that its objectives are achieved without putting a strain on available resources.
In addition, a vigorous marketing campaign of the mentorship programmes to the government, private companies and organisations, universities, and the public, would go a long way in raising awareness of the programme and its value towards fuelling small businesses. This would attract more funding options and ensure a sustainable financial budget, as well as attract potential mentors from the business community. It is important that public awareness is efficient in reaching all people in South Africa, especially those in vulnerable communities, who will not have access to the internet.
NMM could also work towards creating a saleable offering where NMM sources out business contracts and clients from their corporate partners, as a value offering for the mentees’ enterprises after their mentoring process. This service can then be given at a charge by NMM. Another option could be to provide their partners with the service of running their internal mentorship programme for a fee, provided that the participants mentor in our external programmes
To ensure an efficient program, NMM should continue to solicit qualitative answers from their mentees and mentors on what aspects of the programme fell below mentees’ expectation, measure the change in output compared to their goal and in what other ways the mentorship changed their business (considering that the service was given for free, how does it affect the an objective review). This information would give valuable feedback that will help NMM to provide an effective sustainable programme for the community. This information would give valuable feedback that will help NMM to provide an effective sustainable programme for the community.
Avnimelech, Gil & Rechter, Eyal. Mentorship Processes within Startup Accelerators. Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3361638
 Yitshaki, Ronit & Drori, I. (2018). Understanding mentorship processes. Available: https://www.researchgate.net/publication/331917227_Understanding_mentorship_processes