BDS Services: The Nicaragua Approach of Group Consultation Methodology
The point of departure for this approach is the
"Joinville Model" in which 'nucleos' (nuclei) of trades were
introduced as a service of the chamber of industry and trade in Santa
Catarina, Brazil. These nucleos (groups of trades, most of them
SMEs) are based on the principles of moderated group discussions with the
purpose of identifying joint issues and problems as well as the exchange
of experiences (learning by interacting). These processes also
resulted in a more structured demand for commercial business development
services. However, the most important result was the development and
professionalisation of the organisation as a respected counterpart for
government agencies. The chambers expanded their membership considerably
(in particular SMEs) and democratized their structures.
In Nicaragua, the structures of the chamber were too
weak to implement this model. NGOs and service providers had relatively
better structures and more contact with the target group of SMEs.
Therefore, the Joinville experience was introduced as an approach to
develop innovative BDS.
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Trades specific group consultation was also the
point of departure. Moderated meetings of different enterprises (about
10) were the backbone of this service. The aim was to strengthen
entrepreneurial motivation, problem analysis, coaching during the
identification of solutions and decisions, and motivating
communication and interaction.
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The group meetings took place once per month in the
immediate vicinity of the enterprises and did not last longer than 3
hours. The first two meetings had clear structures, after that the
concept was adapted more flexibly to the needs of the group (but there
was always a prepared "script").
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The consultation was complemented by the
entrepreneurs' mutual visits (problem identification and monitoring
during implementation of the improvements) and occasionally individual
advice from the consultants.
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Specific trainings were arranged and conducted in
the group (such as technical or management trainings).
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Trainings were conducted by a local consulting firm
specialised on CEFE, participatory planning, and business consulting.
The enterprises (furniture sector) were in one region
("cluster") and had different sizes, from micro to
medium-sized enterprises. Competition varied, resulting in rivalry and
tensions but also in networking for joint delivery (economies of
scale).
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During the first phase of eight months, the
enterprises paid 20% of the costs for the consulting firm according to
a ratio obliging them to pay the last quota in case they were
satisfied with the service. The firm received a bonus for new entrants
to the group (incentive-oriented subvention).
Methodology
During the first session the issue of goal setting
would be raised: what is an entrepreneurial objective? (challenging,
measurable, tangible etc.; CEFE
exercise MAREAR). Then, entrepreneurs would define their objectives for
the current year considering few objectives but those that had a chance
to be realised (strategy of direct implementation and achievement through
one's own initiative). Objectives were supposed be noted on a flip chart
and hung up visibly in the workshop.
The next step were the mutual visits of the
entrepreneurs. The purpose was to verify the realisation of
entrepreneurial objectives and further exploration of weaknesses and
potentials of the enterprises (methodology: walking through the
business premises, noting and exchanging observations).
Step by step, activities would become more specific,
starting with cleaning up, the rearrangement of machines, rationalisation
of operations, then energy efficiency and better use of raw materials for
cost reduction, market analysis, production techniques, cost calculation,
staff management, on-job-training, etc.
The next sequence of the process was networking to
manage joint delivery or subcontracting. In addition, enterprises would
begin to shape their environment (negotiations with the municipality to
buy a plot of land, using assistance opportunities such as workers'
professional training in the public vocational training institution,
access to credit and exchange of experiences with financial institutions,
technology, export, etc.).
Cost-benefit analysis of the pilot projects was
positive. Further rationalisations will be possible in the case of higher
degree of maturity of the product. Roughly calculated, the consulting
contract cost US$ 10,000 - i.e. US$ 1000 per enterprise for approximately
one year. In most cases, increases in turnover surpassed these costs
easily. Enterprises which could not follow these dynamics (subsistence
enterprises) would usually fail to show up after the first or the second
meeting already, not for cost reasons but due to lack of motivation
(principle of self selection).
Another effect was an increasingly critical assessment
of existing assistance opportunities and a public discussion about this
(on the occasion of round table talks, "encuentros" with
ministers, NGOs, donors etc.).
The effect was also positive with regard to
entrepreneurial self-confidence and initiative. Better market integration
effectively took place.
Formal organisations were not founded. This is a
"red rag" in Nicaragua but is often required by the government
(political control). Practising business oriented cooperation
relationships was one of the biggest successes of this project.
Lessons learnt/Constraints
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Availability of well trained consultants with
enterprise experience and experience in participatory, interactive
methods
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The methodology may be part of organisational
development of associations or a stand-alone Business
Development Service
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The product needs to be marketed, initial commercial
structures in the market for business development services are
required
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In case of success there is a danger of
"appropriation" through government institutions or donors
with the risk of exaggerated support or of undermining the principle
of partial payment
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In principle, sustainability is possible, through
partial subvention the approach functions probably much better with
regard to quality and outreach. Supervision of the consultants is also
expedient (quality, methods, innovation promotion, monitoring and
evaluation)
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Promotion of clusters is not an instrument for
subsistence economy. Qualification methodologies for the informal
sector would be more appropriate in that case. Competition-oriented
business consulting by means of interaction and networking requires
entrepreneurial motivation, a certain degree of differentiation
between enterprises and a potential for specialisation.
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