Compendium 2.2.5 Quality standards

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EQUAL COMPENDIUM ON INCLUSIVE ENTREPRENEURSHIP

2.2.5 Quality standards for advisers & programmes

Contents

The challenge

If the opportunity to go into business, and to contribute to Europe’s competitiveness, is to be brought to all Europe’s citizens on an equal footing, then the techniques of promoting inclusive entrepreneurship need to be taken seriously by the relevant institutions, and given high visibility. Quality standards for those working in this field, as well as the programmes they operate, are absolutely crucial in this. Standards are also a powerful tool for forcing continual improvement, as they allow performance to be compared over time and among competing organisations. They inspire confidence among users, and thus increase the number of potential entrepreneurs who are willing to give self-employment a try. Finally they forge an identity, engender pride in the profession, and create career paths that lead to continuity and sustainability.

By adding 'social inclusion' to the quality criteria applied to business services, EQUAL has exposed the need for fundamental changes in certain cherished business support methodologies. For example, more accessible and flexible business planning tools may better reflect the more gradual, organic way in which many businesses are started by women and ethnic minorities. However, to ensure that these methods are not restricted to specialist support services, training packages on diversity have been developed for business advisers and used extensively at a national and at regional level for a broad range of disadvantaged groups.

How EQUAL has approached the issue – examples

A four-stage model

See video of Norbert Kunz explaining the Verbund Enterprise model (in German)

In Germany, Verbund Enterprise’s main achievement has to been to develop a distinctive support methodology that incorporates a number of innovations. At the heart of the new approach is a structured business support pathway made up of four clearly defined stages:

  • profiling (lasting about four weeks)
  • planning (3-12 months)
  • start-up (approximately six months)
  • consolidation and growth (3-5 years)

Each stage involves the provision of a variable menu of services (lifestyle-relevant counselling, modular training and qualification, voluntary mentoring and stabilising coaching plus access to microcredit) which help the entrepreneur to acquire the personal competences, skills and resources that are necessary for success.

Two features stand out:

  • First, during the profiling stage Verbund Enterprise is quite careful to select the entrepreneurs who have the right formal and informal characteristics to become an entrepreneur – above all motivation and commitment. This contrasts with the less selective model used by the Prince's Trust in the UK.
  • Secondly, it is seen as crucial to provide aftercare for a considerable time – up to three years – after start-up. Both these aspects have a major effect on the sustainability of start-ups.

Another methodological contribution has been to change the concept of ‘one-stop-shop’ from that of one organisation trying to do everything under one roof to that of a partnership which orchestrates the inputs of grassroots youth organisations, mainstream business advisers and financial institutions into a tailor-made package of support for young people. During each phase of the support pathway, the Development Partnership pulls in different specialist and mainstream providers to provide specific services.

The model includes individual counselling from personal advisers who supervise the entire itinerary, a pool of expert mentors and various forms of access to start-up capital, including a specially designed microlending fund (for example a loan of up to €5,000 for four years at a 5% rate of interest with no security required). It has been found that the microcredits both attract young people and help to build a longer-term relationship with financial institutions.

To ensure quality along the entire pathway, Verbund Enterprise designed an Enterprise Quality Management Structure (EQS) which covers all four stages of the support system. The design pays attention to both the process and the results. Its key features are:

The right components of support:

  • an induction phase that includes careful profiling
  • training that is relevant to the life situation of the individual entrepreneur and starts from where they are
  • qualifications that are relevant to practical needs
  • back-up from home learning materials (written and online)
  • access to the real world of business, through mentoring from experts in the field
  • aftercare in the form of coaching.

Sourcing different components from the best providers:

  • a support system that is anchored in a local network of actors from the administration, business, associations and community groups

A tool for control, and transparency and portability:

  • The Enterprise Passport (Gründerpass) enables quality control and tracking to be exercised over a tailored support package which bundles together a varied rage of services delivered by a number of different organisations (grassroots youth organisations, mainstream business advisers and financial institutions). It provides a clear and transparent road map of the progress made by the entrepreneur at each stage. A specific internet-based database program is used to display the passport's structure and contents digitally. This enables users to plan, accompany, document and evaluate the start-up process over the four phases on an ongoing basis – independently of time and place. The system can be used to manage communication via mail and e-mail between the various partner organisations, the business starters and other external institutions. It also delivers statistical data on business starters, services taken and the different phases.

A business co-operation option

De Punt, the incubator in Ghent, Belgium, adds an interesting twist to the conventional model of business start-up support. Its model of the start-up process comprises five phases:

  • mission
  • business plan
  • financial plan
  • preparation
  • launch

But De Punt adds an optional sixth phase, that of business co-operation – independent businesses that work together to make themselves stronger. This sometimes arises naturally between entrepreneurs who have worked alongside each other in the Startpunt activity co-operative located on the same site (see business and employment co-operative).

Four aspects of the business adviser’s role

The On Target partnership http://www.start-up-support.net/ that continued the work of Verbund Enterprise in the second round of EQUAL comprised members from Germany, Scotland and Spain. They worked on three themes: profiling/outreach, iconic branding and adviser standards. They compared their respective job descriptions and found that the qualities they desired in the ideal adviser were remarkably similar across the four partner regions. The project codified them and then validated the profile against 24 cases they had actually advised, and also surveyed the views of entrepreneurs and advisers. This revealed that Approach and Skills (the more internal competences) scored more highly than Knowledge and Experience. In fact Approach was rated most important and Experience least.

The project defined minimum competences for two different professions, the ‘business informer’ who provide initial orientation and encouragement to intending entrepreneurs, and the ‘business adviser’, who supports them throughout the start-up process.

Now that a common European quality standard has been worked out, the next step is to gain accreditation for it in each national system. Then training courses can be devised to enable people to gain the relevant vocational qualification.

On Target – minimum standard for business advisers

1. Knowledge

  • Access to finance
  • Regional and local environment (institutions, conditions etc.)
  • Cross-sectorial competencies (law, marketing, finance)
  • Methodological knowledge

2. Experience

  • Business experience
  • Working with people and advising experience

3. Skills

  • ICT / information / networking
  • Project management
  • Analytic skills
  • Social competence (empathy, ability to listen, communication, self-reflection, team-working)
  • Business financial planning
  • Pedagogical skills

4. Approach

  • Pro-activeness
  • Personal commitment (self-motivation)
  • Curiosity
  • Open-mindedness (no barriers)
  • Orientation towards customers
  • Congruence with customer
  • Objectivity / honesty / realism
  • Confidence

Business training for women

The Accelerating Women's Enterprise (AWE) EQUAL project in the UK developed a wide range of professional development training programmes in women-friendly business support issues. For example, the “Gender Lens for Business Support” is an intensive and interactive one-day course using a combination of presentation, case study discussion, audience presentation and workbook self assessment. It looks at the issues facing women in business and the way business support organisations, banks, accountants and so on can give them the help they want.

Prowess, part of AWE, developed an accreditation process through which it awards its members ‘flagship’ [1] status. The Prowess flagship award is a best practice quality standard for excellence in women’s enterprise development. This nationally and internationally recognised quality mark has been achieved by organisations all over the UK.

Endorsed by the Department for Business, Enterprise and Regulatory Reform (BERR) and several of the Regional Development Agencies (RDAs) it is proven to enable organisations to: demonstrate expertise to funders, develop high quality services for women and increase their client base. The Flagship Award now incorporates four quality mark standards:

  • The Start-Up Support Standard
  • The Established Business Support Standard
  • The Business Women's Networks Standard
  • ‘Commitment to Flagship’ Status – a development tool for organisations who cannot meet the core Flagship Criteria immediately, but can realistically do this within a set timeframe.

The accreditation process starts with a self-administered checklist, which can be downloaded from the Prowess website. This is assessed, and followed by a one-day site visit. Fees amount to some £1,400 (€2,000). The standards draw on decades of good practice, being the fruit of a sustained collaboration across the country, supported by the national Phoenix Development Programme as well as by EQUAL. The standards are graded, so as to lower the threshold for new organisations. They are supported by an active community of practice made up of the members of the Prowess association.

Community-based business advice

In the wake of EQUAL, quality standards are also under development for business advisers working in minority communities. In the UK, a handbook called How to be a Brilliant Community Based Business Adviser has been published by ACBBA, the Association of Community Based Business Advisers, together with SFEDI. It combines the practical experience of community-based business advisers with the knowledge and skills required to gain an accredited professional qualification. This is one way in which SFEDI is buttressing the inclusiveness of its range of qualifications, which include Business Adviser, Social Enterprise Adviser, Business Mentor, Enterprise Trainer, Skills Broker and Business Link Broker.

Social enterprise adviser standards

EQUAL supported the development by the Social Enterprise Partnership (SEP) [2] in the UK of new formal occupational standards both for managers inside social enterprises and for those advising them externally. The process started with a survey of training and development needs, which showed that what was most in demand was a higher-level qualification for people advising social enterprises, rather than one for managers in the enterprises [3].

The first stage of the work was to develop, national occupational standards (NOSs) for social enterprise managers and advisers respectively, using surveys and focus groups. These standards are functional analyses, statements of what tasks, knowledge and understanding are required to do a job, and can be used in many ways, such as defining job descriptions, as well as qualifications.

To build up the standards, SEP developed seven new units, three of which are specific to the management standards:

  • improve relationships with stakeholders in a social enterprise: this involves identifying different types of stakeholder and how they might be involved; encouraging them to be involved; making sure they understand what they are supposed to be doing; and settling any conflicts of interest.
  • work with a board of directors in a social enterprise: this involves choosing, training and informing directors, clarifying your and their responsibilities, and presenting information well.
  • monitor the social performance of a social enterprise: this involves making sure the social objectives are right; developing new objectives if need be; avoiding conflict between social and commercial objectives; setting up systems to measure and report on social performance; and deciding how to improve social performance in the future.

The next three units are specific to the advice standards:

  • develop opportunities to start social enterprises: this involves promoting social enterprise opportunities, identifying individuals and organisations that might want to be involved, encouraging them to work together, researching what might affect the potential social enterprise, developing a proposal and making sure it is likely to succeed.
  • help to start social enterprises: this involves deciding the purpose, values, principles and objectives of the potential social enterprise; deciding on the right legal and management structure; and developing a business plan.
  • help social enterprises to improve their performance: this involves reviewing social and commercial performance; improving structure and operations; balancing commercial and social objectives; and preparing plans to achieve financial stability and independence.

The final unit – social enterprise – knowledge and understanding of key areas of business – is relevant to both managers and advisers. It covers the meaning of the term social enterprise, the values of social enterprise, the circumstances in which a social enterprise may be started, similarities and differences with other types of organisation and between different types of social enterprise, linking social objectives to commercial objectives and including them in a business plan, legal structures, start-up capital, handling mixed income streams and sources of specialist support.

These standards were developed in partnership with the Small Firms Enterprise Development Initiative (SFEDI), and were then approved by the National Occupational Standards Board. The next stage was to develop a Nationally Recognised Qualification, which involved identifying a suitable approved ‘awarding body’ – in this case the Institute of Leadership & Management (ILM) – and getting it accredited by the Qualifications and Curriculum Authority (QCA).

The end result is a Level 5 Award in Understanding Social Enterprise (USE), rated at six units, which means that students are expected to put in 60 hours of study to obtain it. Units can be built up a few at a time, making it suitable for part-time study. It has no formal entry requirements, and is targeted at practising managers, consultants or business advisers, with several years’ experience and appropriate training and qualifications. It covers:

  • values and purpose of social enterprise
  • organisational and legal structures for social enterprise
  • finance and support for social enterprise
  • case studies in social enterprise

It is assessed through a live case study assignment of 1,500-2,000 words. Holders of the USE qualification can follow it up by following a six-day programme leading to the ILM’s Certificate in Social Enterprise Support.

Franchising advice

CREATE, a project focusing on franchising as a way to open up entrepreneurship, also developed standards for business advisers. These establish a checklist of what business advisers should know, such as helping clients to understand the pros and cons of different structured business formats (SBFs) and preparing clients to meet any entry criteria required by the organisation. These standards are to be integrated into the UK's National Business Adviser standards.

Social enterprise standards

There are also a number of initiatives to develop or adapt appropriate quality management tools for inclusive and social enterprises. In Britain, Social Firms UK (SFUK) launched the Star Social Firm Quality Standard [4] in February 2008. This is based on 22 essential plus four desirable criteria of quality for a social firm (work integration social enterprise). These indicators, piloted under EQUAL, are divided into three categories:

1. Enterprise: legal status and constitution; financial and environmental sustainability; business sustainability.

2. Employment: employment of severely disadvantaged people; employment conditions; clarity of role within the workplace and at board level

3. Empowerment: legal compliance; training and learning; proactive support and development For the token fee of £50 (€70), SFUK will carry out a quality audit. The standard is externally validated by the official standards-setting body, the Small Firms Enterprise Development Initiative, SFEDI.

This quality standard is in fact only one of several that were developed by and for different types of social enterprise under the EQUAL Social Enterprise Partnership DP. These included key performance indicators for co-operatives and an impact evaluator for development trusts. Twenty-two methodologies for assessing quality and impact were compared and contrasted in the online toolkit Proving and improving: a quality and impact toolkit for social enterprise [5] published by the New Economics Foundation.

In Belgium, the Ministry of Sustainable Development and Social Economy has sponsored the adaptation of the EFQM (European Foundation for Quality Management) quality system for use in the second-hand sector. A project is currently under way led by the Koepel van Vlaamse Kringloopcentra (Umbrella Organisation of Recycling Centres) [6].

Recommendations for mainstreaming policies

Advisers surveyed for the British SIED project reported that their jobs required two broad sets of skills – business-related knowledge and skills, such as business planning and finance, and inter-personal skills, those needed to build and manage relations with clients and others who can have an impact upon the adviser-client relationship.[1]

Professional qualifications for business advisers should as a matter of course be built on principles of inclusiveness. But they should be accompanied by specific guidance, based on practical experience, of working with disadvantaged communities.

Qualifications should cover the four aspects of knowledge, experience, skills and approach. Qualifications should be modular, so that advisers can study for them part-time in parallel with their working life.

Qualifications should be formally accredited. This increases advisers’ credibility in their clients’ eyes, improves their confidence, provides a career structure, a measure of achievement and the sense of belonging to a valued profession. As a measure off achievement, it also enhances job mobility. For organisations employing business advisers, having accredited staff is a marketing plus as well as an aid to efficient recruitment. Thirdly, accreditation raises the profile of the business advice profession in the external world.

[1] SIED – Supporting Inclusion in Enterprise Development: Final Report, December 2007

Links to EQUAL case studies

Other useful links

Small Firms Enterprise Development Initiative (UK): http://www.sfedi.co.uk


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