How to Establish a Mentor Program

Tips for small businesses looking to enhance employee development and performance with formalor informalmentoring

Seasoned entrepreneurs can tick off a list of predictable mistakes that new business owners are likely to stumble into. From overambitious earnings forecasts to a refusal to delegate, common startup missteps (, 4/16/07) can be annoying time wasters or serious enough to doom a new company.

Smart first-time entrepreneurs tap into the knowledge of their more experienced peers by finding mentors (BusinessWeek, Winter, 2007) who can guide and advise them, experts say. They also recognize that mentoring can help develop less-experienced employees into managers and perhaps even partners.

Small business owners often implement mentoring programs for their employees when they realize they need to accelerate the development of top performers, says Florence Stone, an author of two books on mentoring and a spokesperson for the American Management Assn. Other reasons for mentoring programs include helping poor and mediocre performers, revitalizing midcareer executives, and closing skill and ability gaps on the staff, Stone says.

But if you are new to running a business, it's not always easy to identify a successful business owner who is willing to mentor you, let alone one with whom you have natural rapport. And many entrepreneurs have no idea how to establish a mentoring program for employees, let alone how to manage that program so it delivers maximum results.

Go Outside Your Circle

Particularly in small businesses, it may be more difficult to find mentors within the company who are willing to dedicate themselves to working with less-experienced co-workers. "Employees are sometimes more concerned about getting the work done, vs. the talent management aspect," says Jim Concelman, vice-president of leadership development at HR consultancy Development Dimensions International. "And you have a smaller pool of mentors because there are not as many departments" in a small firm.

Concelman says that small business owners and their employees should consider going outside of their usual circles to find mentors. "Usually, mentoring is limited to within the geography of the small business, which is a shame given small business failure rates," says Satya Iluri, CEO of a new online mentoring site,

Small businesses may need to "go outside the company, look to other businesses, and develop mentoring relationships with them," Concelman says. "Doing so would mean more available mentors with greater diversity."

Online Approach

Iluri's new Web business plans to harness online social networking for business mentoring. "We want to give entrepreneurs access to similar people, in similar businesses, but in a different geography—so there's no competitive problem," he says. His site, which went live in January, 2008, uses software to match up mentors with "mentees" and provides a framework for the relationship. While the site is open to anyone looking to mentor or be mentored, it will focus on entrepreneurship as well as career and leadership development.

But why would someone want to invest time and energy to mentor a stranger online? Iluri and his partner, iMantri Chief Technology Officer Srini Iyengar, believe the peer-to-peer nature of their site will lend itself to a fluid model where someone can be a mentor on a certain subject and simultaneously be a mentee in another area. They also hope to appeal to both entrepreneurial vanity and goodwill: "There's some cachet to become an online expert, or being known as an online guru," Iluri says. "Getting a high mentor rating will be ego boosting."

Comfortable Sharing

Concelman says that small business owners who want to start mentoring programs for their employees should not set up a situation where a mentor is directly involved in evaluating a mentee's performance. "The manager is responsible for performance management and developing the employee, but their advice and coaching is usually focused on the current job or role. The mentor is usually a higher-level executive than the manager who has a different area of expertise than the person being mentored," he says.

Stone says that mentoring programs should have specific goals. "For instance, is the purpose to encourage the advancement of high-potential employees, or address the demands of Gen Ys or women or minorities? Or is it to acquaint new hires with the company faster, or to cross-train two departments?" she asks.

Good mentoring programs prepare mentors and mentees by clarifying their roles and defining their time and energy commitments. "Ideally, mentors and mentees write down their goals for the relationship and share these. Every so many weeks, they review progress toward the goals," Stone says. "Mentees have to feel comfortable in sharing their weaknesses with the mentors, and mentors have to be willing to bow out of a relationship that they can't give sufficient time to or aren't able to assist the mentee in the areas he or she needs help with."

Some small companies may choose a more informal mentorship program, where the mentee finds her own mentor, Concelman says. Lack of accountability and structure can be problems for these programs, he notes, but if they work, the mentoring relationship can be powerful.

"The type of mentorship program depends on the goal of the organization as well as how big the organization is. With a very small company, the informal program might make more sense," he says.

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