“Isaac planted crops in that land and the same year reaped a hundredfold, because the LORD blessed him. The man became rich, and his wealth continued to grow until he became very wealthy.” – Genesis 26: 12-13
Last week on Wednesday and Friday respectively, I made presentations to audiences at the Rotary Club of Barbados South of which I am a member, and at the Democratic Labour Party’s (DLP) weekly lunch time lecture series event.
The focus at the Rotary club was on the CBET Shepherding Model™ in the context of smart partnerships in sustained enterprise development whereas at the DLP function I proposed the model as a necessary innovation to arrest the rising cost of living.
The traditional consulting model responds to requests to assist the enterprise at specific times in its evolution. In contrast, the CBET model inspires a smart partnership with the enterprise from business concept along the journey to sustainable business success. The 10 factors which are necessary to distinguish between a partnership and a smart partnership are: a shared vision, a code of ethics, networks, equity, trust, cultural diversity, longevity, transparency, fair play and good values.
The CBET model consists of four components: the enterprise (entrepreneur), business systems, financial capital and shepherding, which are promoted as being necessary and sufficient for sustainable business success. The national focus is on developing a family of successful high performance enterprises, one enterprise after another. These businesses may be existing, start-up or even just ideas with the DNA of an elephant.
The business systems necessary to support the enterprises include: local and export marketing, technical operations, human resources management, legal advice, corporate governance, information & communications technology, finance, administration and accounting. The resources to deliver these business systems are consultants, primarily around the Caribbean, who are skilled in these various areas and who would be paid commensurately for their services. As the number of enterprises grows, so will the consulting fraternity. It is useful to note the advent of the Caribbean Institute of Certified Management Consultants (CICMC) a primary role of which is to promote the acquisition by consultants of the international Certified Management Consultant (CMC) designation as the standard for management consulting in the region.
The “shepherding” or “hand holding” or mentoring process will also be provided by consultants, ultimately by CMCs. This is an essential part of the process since it mitigates the risk of business failure and provides a measure of “security” for investors.
The fourth element is the funding of these businesses. In this context it is useful to consider the dichotomy (1) from idea through business plan viability and investor identification and then (2) from business investment to sustainable success. The first element of the dichotomy will be serviced by a quick response revolving seed capital fund which it is proposed will be a smart partnership between CBET and the government. The second element will be a quick response venture capital fund which will be a smart partnership between CBET, the government and the private sector. These proposals are currently evolving and useful feedback is being obtained through formal and informal brainstorming processes.
The seed capital fund will be used for: creating innovative ideas from a “blank sheet”; strategic visioning retreats; massaging ideas into more sturdy concepts; assisting the entrepreneur, with a potentially high performance idea, to survive as the idea is developed; loans to address emergencies; product development; market research; business plan development; and sourcing investment capital. It is proposed that this will be a government financed but private sector managed fund and the economic benefits to government and the populace would be job creation, foreign exchange earnings and savings as well as energy and food security.
The venture capital fund will be used to make an initial investment in the implementation of the business plan which will then attract other equity investment. The initial advance through the seed capital revolving fund, plus a commission, will be repaid by this initial venture capital investment. The venture capital fund will be funded by equity investment from individual investors, trade unions, commercial banks, private sector companies and the Caribbean Diaspora.
It is proposed that the government will provide incentives such as attractive tax credits to encourage private sector investors to participate. Equity agreements will be developed which will include an exit strategy for investors. The benefits to investors and the country as whole will be enterprise development and economic growth. This fund will be managed by a private sector investors’ committee.
The objective of this CBET initiative is to grow the economic cake and increase the net growth rate. In doing this, one would not only reduce the economic divide between Barbados and first world countries but would also provide a solution to the challenge of rising cost of living.
Note the recent quotation from Hon Sir Roger Douglas, founder of ACT, the NZ Liberal Party: “New Zealand’s preoccupation with how to divide up the current economic cake, rather than how to grow it, is one of the major reasons why we have done so poorly in terms of productivity in recent years”.
Note too from Brian Griffith’s “Jewel for Today”, the Will Rogers quote “Even if you are on the right track, you will get run over if you just sit there.” We must ACT NOW and become wealthy!