Mentoring may be the key to navigating a testing transition

Mentors can make the difference for entrepreneurs at critical junctures, writes Alicia Clegg.

MATTHEW JONES, managing director, is determined to make his father's bespoke picture-framing operation John Jones a world-beater. But last year his ambition for the business, which frames for museums and galleries and numbers David Hockney among its oldest clients, rebounded on his relationship with his family.

"I could see the possibilities," says Mr Jones, who plans to branch out into new areas such as picture conservation, and to lift the firm's turnover from £4.9 million (€6.2 million) to £13 million by 2013. "But I didn't include my father [now chairman] and my brother and sister in my ideas, which created uncertainty and tensions."

Today Mr Jones pays Brian Chernett, founder of the Academy for Chief Executives, to mentor him. Recently, the two worked with Mr Jones's father on a form of corporate governance that gives his eldest son leeway operationally, while confirming the right of other family members, as co-owners, to agree budgets and core strategy. "Being mentored has helped me confront issues in the business and in myself that I needed to confront."

Mr Jones is not unusual in recruiting a mentor to help him navigate a testing transition. Yet, as the experiences of Mr Jones and other mentored entrepreneurs demonstrate, the right mentoring style depends on the personalities involved and the life stage of the business.

"A good mentor challenges you to be critical and pushes you to think things through," says Robert Garvey, professor of mentoring and coaching at Sheffield Hallam University. "But at different times a mentor can also be a listener, a counsellor and someone who offers you access to their networks."

In one view, mentoring is a simple transfer of knowledge from an old hand. In another, a mentor challenges and supports the entrepreneur to find solutions independently, rather than giving answers. In practice, many relationships, such as that between Ben Black and retired contract catering entrepreneur Clive Smith, alternate between the two.

After months of getting nowhere, first-time entrepreneurs Mr Black and his brother Oliver began to doubt that Tinies Childcare, a bankrupt chain of nanny recruitment agencies they had bought in 2000, would ever make money. But neither admitted this. Hiring a mentor who asked awkward questions forced them to recognise the flaws in their business model and devise a viable alternative.

The upshot was that the brothers shut loss-making branches and began supplying childcare professionals to nurseries and creches. In 2005, they launched an employee benefits enterprise, now known as My Family Care, which enables staff in organisations such as the Metropolitan Police and IBM to book emergency child and elder care online. Last year, the two businesses, of which Mr Smith is non-executive chairman, produced combined revenues of £5 million.

"Sometimes it is harder to be completely honest with your siblings," says Mr Black. "Clive made us look at the numbers dispassionately. Once we did, the need to change our strategy became blindingly obvious."

An experienced entrepreneur may require mentoring of a different kind. In 2004, with a £25 million turnover (which rose to £40.7 million in 2007), Miller International was poised for overseas expansion. But operationally the business, which makes attachments for earth-moving equipment, was held back by its dependence on Keith Miller, who had founded it 30 years earlier.

With a background in large corporations, Brian Sweeney, a retired executive on the payroll of The Alchemists, a consultancy, was well-placed to advise Mr Miller on the management structures his business now needed. Mr Sweeney laid out the options, as he saw them. By asking pertinent questions he helped Mr Miller to arrive, independently, at the difficult decision to step down as managing director of his own company.

Today, Mr Miller occupies the role of chairman and has time to plan Miller's expansion systematically. His staff, led by a professional managing director, run daily operations. "Mentoring isn't telling people what to do. It's helping them discover what needs to be done so they can make decisions for themselves," he says.

Should mentors have a personal stake in the business? Doug Richard, the angel investor and former Dragons' Den panellist, argues that the best mentors contribute equity capital as well as their experience: "There's nothing more aligning than putting your money at risk."

But David Clutterbuck, a founder of the European Mentoring and Coaching Council, warns that problems can occur when the mentor's expectations as an investor conflict with the entrepreneur's aspirations. He also has reservations about the trend to appoint mentors to non-executive directorships on the basis that "non-executives are responsible to the business", while a mentor is "responsible to the entrepreneur".

As a non-executive director of Miller International, Mr Sweeney says mentors who double as non-executives need to heed possible conflicts of interest. But there is also, he suggests, a positive benefit from wearing two hats. Mentors who see entrepreneurs in the context of their business and relationships with co-directors are more likely to be useful than those who see only a partial picture, he says.

Mr Miller, for his part, says mentors are hard to pigeonhole. "Mentors, grey-haired daddies, coaches, non-executives: call them what you will. Like everything, it's finding the right people that matters - but if you do, they add a ton of value."