“He called a child, whom he put among them, and said, ‘Truly I tell you, unless you change and become like children, you will never enter the kingdom of heaven’.” – Matthew 18:2-3


Albert Einstein has been credited with a definition of insanity as “Doing the same things over and over again and expecting different results”. The implication here is that we have to become “the best change-makers”, if we are going to make sustainable progress.


Enterprise development has been heralded globally as the stimulus that is needed for economic growth. Yet the major catalysts to enterprise development: (1) a sound foundation brought about by good corporate governance; (2) the security of timely and appropriate investment funding; (3) life which can be induced by a creative marketing strategy; (4) sustainability as a result of operational efficiency leading to profitability; and (5) growth which may be brought about by unlocking human potential; are often lacking and inhibit the development of many brilliant ideas and innovations.


The traditional funding instrument may be described as a “loan” which is the primary financial investment instrument offered by commercial banks and other financial institutions. Commercial banks generally are reluctant to lend to start-up enterprises because these enterprises are intrinsically fledgling high business risk entities.


Also, the principals of these start-up enterprises are usually unable to meet one or more of the bank’s traditional loan requirements, e.g. record of repaying debts (no loan experience), independent credit score (no history), hard asset collateral (no accumulation of wealth), solid business planning (no operational experience in the start-up business), and regular repayments (cash flow not yet established).


Why do start-up enterprises fail at an alarming rate thus making them high business risk entities? My experience is that not enough attention is paid to the management of business systems (corporate governance, investment finance, marketing, operations and human resource development).  We need a paradigm shift, we need to become change-makers and introduce the concept of Shepherding which is a management activity involving the amalgam of mind-set, skill-set and cross cultural communication change.


Why is Shepherding important? Because it addresses directly the reduction of business risk and therefore provides a measure of security for the investor allowing the investment to thrive. Shepherding enhances the chances of business success. Shepherding should therefore be very attractive to entrepreneurs in the making, entrepreneurs, investors, board members, prospective shepherds and policy makers.


It is not expected that commercial banks or other traditional financial institutions will depart from their main business of “loans” to accommodate start-up enterprises but there is a major business opportunity waiting to happen for those financial institutions which adopt the principle of “Shepherding as Collateral” as a main plank of their investment platform.


I also think that the language of this new financial investment paradigm has to change and that terms like “loans”, “interest”, “term”, “amortized principal and interest payments” and “risk management” are going to replaced by “working capital investment”, “exit strategy and dividend”, “flexi-term”, “cash flow projection induced payments” and “Shepherding”, respectively. The management of this new financial investment space will have to be specially trained and there will have to be a training of Shepherds programme.


Of course, as the entrepreneurs and their start-up businesses mature they then become prospective clients for the traditional commercial banks and other financial institutions.


I recall the introduction of ATMs in the Caribbean. All banks were reluctant to be the first but as soon as one bank stepped forward, all the others followed suit. I have a vision of the same thing happening for this new investment paradigm.

Let us change and become like children – become change-makers and watch the world of economic growth unfold throughout our region.


(Dr. Basil Springer GCM is Change-Engine Consultant, Caribbean Business Enterprise Trust Inc. – CBET. His email address is basilgf57@gmail.com and his columns may be found at www.cbetmodel.org and www.nothingbeatsbusiness.com.)