Improving performance of the SME sector by developing business mentoring in international co-operation

The article is based on the Trust Me – Training for Unique Skills and Techniques for Mentoring project (2015-2018) aiming to elaborate a training of future SME mentors in international cooperation. The project was funded by Erasmus+ programme, KA2 Cooperation for Innovation and the Exchange of Good Practices, Strategic partnerships for higher education. The project developed a sophisticated curriculum for mentors and started the development of networks of mentors with the long term objective to create national networks covering regions, countries and whole European regions. The Trust Me Business Mentor Skills Development Programme is aimed for those individuals who support SME owners and CEO’s to grasp business opportunities, solve problems and grow their business using mentoring skills in order to be effective and provide real added value.

Authors: Miika Kuusisto & Ulla Kotonen

Performance of SME sector

According to the SME Performance Review of the European Commission (2017e), SMEs are an important part of the non-financial business economy in Europe, also in Finland, France, Hungary and Romania, the partner countries of the Trust Me (2017) project.

Table 1. Basic facts of enterprises in Finland, France, Hungary and Romania (European Commission 2017a, 2017b, 2017c and 2017d)

Enterprise birth rates in 2014 ranged, among these four countries, from 7.9 % to 10.2 %. The average employment size of newly born enterprises ranged from 1.0 persons to 2.2 persons. In 2013, enterprise death rates were particularly low, between 5.2 % and 11.5 %. The lowest numbers of all rates were in Finland and the highest in Romania. (European Commission 2017f.)

Table 2. Business demography in Finland, France, Hungary and Romania (European Statistics 2017f)

Based on the Small Business Act for Europe (SBA), the EU’s flagship policy initiative to support small and medium-sized enterprises, Finland’s SME sector has one of the most competitive profiles in the EU. The Finnish SME sector surpasses the EU average in seven out of nine SBA principle areas. (2016 SBA Fact Sheet – Finland.) France’s SBA profile is, in most areas, in balance with the EU average, whereas Romania’s SBA profile gives a mixed picture, and Hungary’s SBA profile contains many weaknesses (European Commission 2017a, 2017b, 2017c and 2017d).

Figure 1. SBA profiles of Finland, France, Hungary and Romania compared with EU averages. (European Commission 2017a, 2017b, 2017c and 2017d)

In entrepreneurship, Romania is above the EU average but in internationalisation, environment, and skills and innovation, far behind the EU average. Skills and innovation seems to be the most problematic, less than in other countries. The Hungarian SME sector trails the EU average in six principles.

It is recognised in most countries that SMEs need special help for their growth. Traditionally, help is offered by facilitating the external environment and developing entrepreneurial culture and environment as well as access to finance. Nowadays, strengthening the internal capabilities is often seen as an alternative or supplementary strategy for SME development, and training is recognised as an important tool for developing the internal capabilities of SMEs (Manimala & Kumar 2012).

Training practices in SMEs

Based on the last Continuing vocational training survey by Eurostat (2010), the ratio of training employees seems to increase with the growth of the companies. In Hungary, the training intensity differs significantly between the size-categories. There, small companies invest visibly less in the training of their employees than medium- and large-sized companies or Finnish or French small and medium-sized companies. However, the Hungarian training intensity is higher than Romania, where the training level is much lower than all the other three countries and the average of EU countries.

Table 3. Distribution of companies providing any forms of training to their employees (in % of all companies in 2010) in Finland, France, Hungary and Romania (Eurostat 2010).

In addition to the training of employees, also training and competence development of managers is important in the SMEs. The OECD (2002) has reported a positive correlation between the level of managers’ training and SMEs’ performance. The International Labour Organisation (2014) has assisted governments, employers’ and workers’ organisations, and other institutions in scaling up management training and establishing support systems to address the needs of SMEs. Over the years, development in expertise, networks and supporting organisations, especially for start-ups, micro and small entrepreneurs, has occurred. On the other hand, large companies have their own in-company training programmes, and they invest in the training of managers and leaders. The medium-sized companies and their managers seem to be in some kind of gap when it comes to their own development. The biggest reasons for differences between the training of SMEs and large companies are financial and time resources, as well as efficiency expectations (Doe 2017). First, fewer resources of SMEs typically means less funding for training and limited options to invests in development. Thus, it is also more important to show increased employee and company performance. The limited financial resources are also seen in the use of time and difficulties in balancing working time and training time. SME managers especially have difficulties in finding time for training.

Business mentoring

It is obvious that SME managers also need support and training.  Coaching, and especially mentoring, are seen as cost-efficient and flexible training methods for SME managers’ training. Utrilla & Torraleja’s study (2013) established that mentoring is an important tool for family businesses too. Both coaching and mentoring are “activities of professional and personal development with focus on individuals (and teams) and relying on the client’s own resources to help them to see and test alternative ways for improvement of competence, decision making and enhancement of quality of life. A professional coach or mentor is an expert in establishing a relationship with people in a series of conversations with the purpose of serving the clients to improve their performance or enhance their personal development or both, choosing their own goals and ways of doing it.” (European Mentoring and Couching Council & al. 2011, 3) Coaching is more about facilitating the client’s learning process by using professional methods and techniques, whereas mentoring is more like a development process involving a transfer of skills and knowledge from a more-experienced to a less-experienced person through learning dialogue (European Mentoring and Couching Council & al. 2011). Thus, business mentors should always have professional business competencies and experiences not only the methodological know-how.

In practice, business mentoring services and programmes are offered by a number of different national and regional SME supporting organisations as a part of their services. The mentoring services and programmes offered by the regional organisations of the Federation of Finnish Enterprises, in Finland, the Institute of the Entrepreneurial Mentoring (IME) in France, the Association of Young Entrepreneurs’ (FIVOSZ) and the National Research, Development and Innovation Office in Hungary are examples of this kind of mentoring services. There are also specific non-profit national and international mentoring organisations, such as the Business Mentors Finland (Suomen Yrityskummit), which is the largest nationwide mentoring network (a non-profit association) of experienced entrepreneurs and business managers in Finland and a global mentoring network MicroMentor.

Some of the business mentoring services are sector specific (e.g. ICT specific mentoring by the ACE consortium in several European countries, social enterprise focused mentoring by NESsT and !GEN Social Innovation Agency in Hungary). Respective, some of mentoring programmes, such as the Women business leaders mentoring programme by Finland’s Chamber of Commerce, MentorNet – a network of female mentors by the Foundation for Small Enterprise Economic Development (SEED) in Hungary –  are targeted at certain smaller groups.  In addition to the free-of-charge mentoring services, there are a lot of different private consultancy companies, such as Berater SRL and Integra HR SRL in Romania, the Business Mentoring Network in the UK, and the Management Mentors Europe as a part of the worldwide Management Mentors, Inc.

Mentoring Training Programmes

If you are a good business manager, it does not necessarily mean that you are also a good business mentor.  Respectively, the mentoring skills without business experience are not enough for acting as a business mentor.  In general, there are a huge number of different mentoring training programmes in Europe but only part of them have focused on business mentoring, and even a few of them are accredited by the European Mentoring and Couching Council (EMCC). In August 2017, there were no accredited Finnish mentors in the EMCC European Individual Accreditation (EIA) Holders register (EMCC 2017a) or accredited Finnish mentoring programmes in the EMCC EQA Holders register (EMCC 2017b). At the same time, there were six accredited training programmes in France and two programmes in Hungary. In Romania, there were two individual EIA holders, but no accredited mentoring programmes. In Hungary, there were five EIA accredited and 46 in France.

Also, in Finland, several organisations, also some of the universities, organise/have organised non-accredited mentoring trainings. However, those trainings are not focused on business mentoring, but for example on the mentoring of teachers, students, young talents, immigrants, job-seekers etc. Also, different health care sector-focused mentoring trainings have become more common. One of the latest examples of business mentoring training programmes are Business Mentor –valmennus by Vocational Adult Education Sedu in 2009 and South Savo Vocational College together with regional enterprise organisations and the Finnish Business Mentors Association.

Business Mentors’ Competence Framework

The European Mentoring and Coaching Council (EMCC), which develops, promotes and sets the expectation of best practices in mentoring and coaching in Europe, is a key player in experience sharing of mentors. It has published a mentor’s competence framework in 2009 (EMCC 2015). The competence framework works as an assessment tool by providing a description of a mentor at four distinct levels of development (Foundation, Practitioner, Senior Practitioner, and Master practitioner). It helps mentors understand their level of development and training providers to evaluate the behaviours of a mentor, to categorise the level that the mentor and the level and effectiveness of mentor training programmes.

The competency framework (EMCC 2015) is suitable for all kinds of mentoring, including eight competence categories focusing on personal and interpersonal skills, as well as the mentoring process: 1) Understanding self, 2) Commitment to self-development, 3) Managing the contract, 4) Building the relationship, 5) Enabling insight and learning, 6) Outcome and action orientation, 7) Use of models and techniques, and 8) Evaluation. As a general competence framework for mentors, it does not include any business or professional specific competencies, which are mentioned for example by Clutterbuck (2005) and Clutterbuck & Lane (2005). Based on the above-mentioned competence frameworks of mentoring and the benchmarking of existing mentoring training programmes, a business mentoring competence framework was defined in the Trust Me project. The competence framework consists of 10 business skills, a mentoring process and four soft mentoring skills:

  • Can analyse business environment
  • Can analyse market demand and supply
  • Can analyse, manage and develop business strategies
  • Can analyse, manage and develop production
  • Can analyse, manage and develop financial management
  • Can analyse, manage and develop investments
  • Can analyse, manage and develop human resources
  • Can analyse, manage and develop marketing
  • Can analyse, manage and develop logistics
  • Can analyse, manage and develop research, development and innovation activities
  • Can manage the mentoring process
  • Has self-awareness and behavioural awareness
  • Is able to manage mentoring relationships and communicate with a mentee
  • Is committed to own learning and interested in helping others
  • Is able to identify ethical questions and behave ethically
Trust Me Business Mentoring Training Programmes

Based on the identified competence requirements, a business mentoring training programme was developed in the international cooperation. The trainings are targeted to SME managers and to the master degree students with business entrepreneurship/business experience. Depending on the trainees’ backgrounds and experiences, training stays between levels one (Foundation) and two (Practitioner) in the four-level mentoring accreditation scale. The aim of the mentoring training is to give an understanding of the practice of mentoring and the core skills of mentoring. After the training, the mentoring trainee should be able to work as an internal mentor and carry out small external mentoring processes. The training makes it also possible to increase business know-how. The training consists of three contact days supported by an e-learning package and business simulation game. In an optimal situation, the training will continue with a real business mentoring case.

The training programme was piloted in Finland, France, Hungary and Romania during autumn 2017. The basic structure of the training was same in all of the countries, but the exercises and details were based on national/regional circumstances and the differences of target groups. In Finland, the first mentoring training pilot was 5 ECTS credits; it was offered as an elective study course for master degree students of Lahti UAS but also to regional SME managers and entrepreneurs. The master degree students of the universities of applied sciences are a good target group, because most of them have a long working history. One of the project’s results was also the Trainers’ Handbook, which includes a total of 18 exercises for each phase of the mentoring process:  five for the preparatory phase, six for the negotiating/contracting phase, four for facilitating mentorship, and three for closing the mentoring process.

Future of the Business Mentoring Training Programme

In the future, the project partners as the organisers of the Trust Me Mentoring Training Programme can apply for the European Quality Award (EQA), a quality standard for mentoring programmes, to make training more recognisable. Also, the mentors who completed the Trust Me Mentoring Training Programme can apply for the European Individual Accreditation (EIA), an accreditation system for individual mentors and coaches, after gaining mentoring experiences.


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About the authors

Kuusisto Miika, (Masters of BA), is a Senior Lecturer of logistics at Lahti University of Applied Sciences. He has been a project manager for Trust Me project, which developed a business mentor’s competence framework and training program in an international co-operation. His other competence areas are Supply web and business development, theses supervisions and RDI-activities.

Kotonen Ulla, DSc (Econ and Bus Adm), is an RDI Director of the Smart Business focus area at Lahti University of Applied Sciences. She has previously worked as an RDI Development Manager at Lahti University of Applied Sciences and FUAS – Federation of Universities of Applied Sciences, as well as a professor of accounting at Lappeenranta University of Technology’s School of Business.

Published: 19.12.2017

Illustration: (CC BY-NC-SA)

Reference to this publication

Kuusisto, M. & Kotonen, U. 2017. Improving performance of the SME sector by developing business mentoring in international co-operation. LAMK RDI Journal. [Electronic journal]. [Cited and date of citation]. Available at:

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