Guiding entrepreneurs to the top – Business Daily
Getting a sensible board is a good helpful hand to help one descend to the zone where the business is manageable and the risks are often assessed and quantified. ILLUSTRATION | POOL
So an unintended but good outcome of the Covid-19 downtime was that I joined up with a group of like-minded suckers for pain who get together once a month in the name of hiking. Over the last two years we have literally gone up frigid mountains and down into hellish and scorched earth depths of dry valleys in the never-ending search for adventure.
Our ruddy cheeks have savoured the cold spray of waterfalls nestled deep in mountain forests, where getting to the glorious view requires slipping and sliding on treacherous muddy paths often jealously guarded by furious safari ants. Consequently, more often than not many of the hikes begin with a quiet session on personal existentialism, with each of us asking ourselves what in heavens name got one out of bed four hours past the midnight witching hour to expose oneself to the brutal geographic and climatic elements.
I remembered this monthly self-flagellation in another conversation with a fairly successful entrepreneur. The man remarked that a running joke among many of his friends was that once revenue crosses the billion shilling mark, a good businessman had to start investing in mîgûnda (undeveloped lands) so as to keep his business risks diversified. And this is why setting up a board, no matter how small is a critical growth path for a sustainable business.
If you are in the habit of tabling your strategic initiatives in front of your board, a good set of directors will always ask the most basic question: Why? Why that area of business? Why that particular industry? Why purchase that specific piece of equipment? Why that geographical area for your next round of expansion? In the process of answering that question, an entrepreneur might start to second guess himself if the strategic initiative is incentivised by an emotional gut feel rather than a cool, calculated and research based move.
Many entrepreneurs will tell you that they started their businesses on gut feels, without the wind assistance or the annoying, straitjacketed doubts of a risk averse board of directors. The very thought of having someone question your motives when they have never been with you down in the entrepreneurial hell hole of Suguta valley makes their stomach churn.
Our most recent outing was an attempt to hike to Mackinder Valley up in Mount Kenya. This is supposed to be a five to six hour hike and best started early in the morning so that you get to the viewpoint before the clouds roll in around 11 am. Having hiked over the last two years, some with almost catastrophic consequences, we have learnt to go with a minimum of two guides for difficult hikes.
This allows us to split into groups if someone or some people need to abort the hike for whatever reason. About an hour to the target, with the rocky bluff in view, I personally couldn’t take the conditions any more. We were in a group of nine and two of us decided to throw in the towel. I had been badly afflicted by altitude sickness which apart from infusing my head with a pounding headache, had also infused my mind with an irrational anger. I had to get off the mountain immediately.
There were two options, wait on the sidelines and let the majority of the group go ahead to the target point, or split the group, taking one guide and immediately begin descending which is what two of us did. An entrepreneur’s board provides the same kind of quiet and guided assurance, helping him to scale new heights while pointing out potential pitfalls. It also provides a helping hand as the entrepreneur decides to descend the mountain after going through business difficulties, again providing a welcomed hand holding as he navigates angry creditors and, quite often, a deeply bruised ego.
A good board might be convinced by the entrepreneur to buy that mûgûnda but they will guide him to use his shareholder dividends from the business, rather than diverting operating cash flows that should be used for the company’s working capital needs. Getting a sensible board is a good helpful hand to help one descend to the zone where the business is manageable and the risks are often assessed and quantified.