Imagine you’re an insurance agent in an emerging market and you've just lost a bulk of your business because the COVID-19 pandemic has pushed all your clients into lockdown. What would you do?
One entrepreneur in Uganda tried surveying his customer base to understand how their priorities had changed. He discovered that they were having difficulty getting food supplies at home.
He decided to temporarily pivot his business, and with the goal of maintaining the strong relationships he’d built with his customers, he launched a food and beverage service during the pandemic.
His business is just one of many that have benefitted from remote coaching via Grow Movement, a UK-based nonprofit that pairs volunteer international business professionals with entrepreneurs in East Africa to help them build their businesses.
The impact of remote coaching on entrepreneurs
Grow Movement partnered with professors Pradeep Chintagunta of Chicago Booth School of Business, Stephen J. Anderson of Stanford Graduate School of Business, and Naufel Vilcassim of the London School of Economics, for a project in Uganda. They were researching the impact of remote coaching, and asked alumni from their respective schools whether they’d participate as volunteer consultants.
The Ugandan field experiment took 930 entrepreneurs from Uganda and split them into two groups. A control group of 400 businesses, and another of 530 businesses that would receive remote coaching. Businesses were taken from every industry and sector. The goal was to boost business performance.
Coaches were randomly assigned a business and conducted weekly, one-hour Skype meetings over the course of six months with their entrepreneur.
The resulting research paper, Stimulating Marketing Strategy Innovation with Entrepreneurs in Uganda: Examining the Impact of Skype-aided Business Coaching on Firm Sales, revealed that on average entrepreneurs who received remote coaching increased monthly sales by 27.6%. They were also 63.3% more likely to have pivoted or shifted their marketing strategy in a new direction.
A subsequent study published in the Journal of Marketing showed that when entrepreneurs worked specifically with marketer coaches, sales increased by 51.7%, profits by 36%, assets by 31%, and paid employees by 24%.
The challenges facing entrepreneurs in emerging markets
Pradeep (pictured right), who is the Joseph T. and Bernice S. Lewis distinguished service professor of marketing at Chicago Booth, explains that the entrepreneurs’ development rested on finding a solution that could be tailored towards their individual business needs.
“The first few sessions focused on trust building,” he says. “In many instances unless you can get past those first couple of interactions it becomes very hard to sustain the program going forward.”
The coach worked with the entrepreneur to get to the bottom of the specific challenges facing their business. In some instances the entrepreneur might have been asked to complete competitor analysis, and in return the coach might have filled in knowledge gaps to do with the local business landscape. Questions around the legal system, for example.
Caroline Grossman, the executive director of the Rustandy Center for Social Sector Innovation—that supported Pradeep’s initial research in Uganda—explains that there are two key barriers to entrepreneurial growth.
“I think the main limitations are time and resources, and so I think that all business disciplines can be helpful, which is why an MBA is the right kind of coach for an emerging entrepreneur,” she says.
The entrepreneurs the coaches worked with were often time poor. Rather than focusing on innovation and growth, they were heavily focused on the day-to-day functioning of their business. “I think the mindset of the entrepreneur to begin with is a big issue,” Pradeep explains, “as well as the inability to perhaps step back and look at the business from outside perspective.
“The successful entrepreneurs were the ones who the coach convinced to do things differently.”
Expanding the project
Entrepreneurial growth in emerging markets is particularly important as it can have a knock on effect further down the line. Top line growth can lead to employee growth, and thus the ability to expand employment opportunities.
Since the Ugandan project, Chicago Booth has trialed a similar pilot in Rwanda, again with the support of Grow Movement. The pilot ran between July and December 2020. 27 MBA alumni worked with 27 Rwandan business owners. Virtual coaching happened every one to two weeks.
Though there are no business results yet, Caroline (pictured right) explains that the Rustandy Center plans to expand the volunteer opportunities for alumni. According to Pradeep there are also plans to implement a similar pilot in the Chicago area, and to hopefully expand across the US to areas where there are a minority of women owned businesses.
It’s clear that the model has the potential to work, and to boost growth among entrepreneurs in emerging markets. Expanding will rely on a fresh supply of volunteers and entrepreneurs, but if that comes then a remote coaching model can drive business expansion and employment where it’s needed most.
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