JON FOSTER-PEDLEY: Practice not platitudes will build African entrepreneurs

Youth month in SA ended the same way it started, with the country’s young people mostly out in the cold. Despite the rhetoric from just about every sector of society about the importance of the youth generation and what can be done to help them flourish, little changes.

Entrepreneurship is one of the areas that is often held up as the solution, but we are short on details about how to capacitate and equip young people to be entrepreneurs. The Organisation for Economic Co-operation and Development has estimated that less than 55% of South Africans have the correct skills for the current economy, never mind that SA — like the rest of the world — is having to prepare to transition into a brand new economy, which could create an even bigger skills deficit.

Knowing this, we need a new approach to developing entrepreneurs. How do we actually make strong, capable and ambitious entrepreneurs who can set about transforming economies and societies? There is no magic formula, of course, but research and experience points to it being a combination of education, practice and experience.

First, focus on the fundamentals. While the workplace of the future will need people who can think analytically and use and control technology, one of the requirements that is likely to endure will be the need for skilled managers who can bring it all together. Management is the secret juice that makes everything else happen. We love to celebrate leaders, but it is the sheer discipline and capability of trained and seasoned management ability that will grow businesses and economies.

This is not to say managers can’t be leaders — separating the two is a false and dangerous dichotomy. In reality, leadership skills are a part of good management skills. Imagine if we had thousands of leaders who struggle to manage. Then imagine what would happen if we had thousands of good managers for whom leading is part of their skills. Who would you bet on to build business?

But a significant hurdle to building a strong management culture in business is that there is a tendency to assume that management skills are something that can be acquired “on the job” rather being taught and learnt systematically. Nothing could be further from the truth. Management is one of the hardest skills to learn, as those who build businesses will know.

It's a long process needing endurance and commitment. And good managers, as everyone knows from experience, can be exceedingly hard to come by. To build entrepreneurs who can build businesses there can be no substitute for investing in the appropriate management training at scale.

Then, move beyond breathless positivity. It is possible to teach management skills, but it is also not as simple as giving people the theory and then turning them out into the world with hearty good wishes. As any good business school knows, management is an action not a position. We therefore need to treat education and the people we educate maturely, and adults need application, trial, and error — with the appropriate accountability — in order to learn and grow.

It is in this process of learning and applying, failing and trying again, that people can start to build their resilience. This is where the rubber hits the road so to speak. Rather than just generally encouraging people with motivational hype and breathless positivity, we need to give them the ability to actually deal with the challenges they will encounter ahead.

Confidence is vital in business, but it can only be attained through actually successfully overcoming challenges, and becoming honestly familiar with your strengths and weaknesses, not just by hearing words of encouragement. A study in West Africa that took a group of female entrepreneurs, divided them in two, giving one group entrepreneurial skills and the other resilience and psychological skills, showed that the latter group strongly outperformed the entrepreneurial group in their businesses.

Even if we get these first two steps 100% right and turn out thousands of competent and resilient entrepreneurs, the research is showing us that there is another element to take into consideration: if we want this economy to grow, we need middle-aged entrepreneurs as well as young entrepreneurs to be involved.

A landmark US study conducted by MIT Sloan School of Management across 2.7-million company founders between 2007 and 2014 found the average age of those CEOs was 41. A 50-year-old was almost twice as likely to succeed than a 30-year-old, while those in their 20s had the lowest likelihood of success.

It makes sense for younger entrepreneurs to be apprenticed to older entrepreneurs whose businesses are, on average, more likely to succeed, so they can learn these valuable skills and then go off and start their own businesses. It turns out that experience is a competitive advantage, and we need to think creatively about how we can transfer that to younger generations to lift them up and sustain them.

I don’t need to point out that the stakes are high here. By 2050 Africa will hold 25% of the world’s workforce. Whether this is a future of hope and prosperity or not will depend on the extent, quality and relevance of education provided to young Africans and the opportunities we’re able to create for them to rise.

• Foster Pedley is dean and director of Henley Business School Africa. This article was compiled from keynote addresses at the launch of the SA chapter of the WEF New Champions global community, hosted by Risk Insights and Imperial.