The key to success is to prioritize. According to the Organization for Economic Co-operation and Development (OECD), SMEs contribute 99% of the growth of all firms and controls between 50% to 75% of the value proposition, in these markets. This begs the question then, why does only 1 in 5 SME’s survive to reach year 5, while the rest fall by the wayside?
Clearly the opportunities are immense, yet, so are the expectations placed on these businesses to build sustainable employment brands. The evolution of SME’s, has certainly not been a one-day story. It is through prioritization and adaptation to changing market forces, that has paved the way for extraordinary entrepreneurs to create a space for themselves in the global array.
To unlock their secrets, we take a deep dive to understand some of their guiding priorities and how these have contributed to their success. This article focuses on the top 7 priorities of some of the most renowned SMEs around the world, and if you are a young entrepreneur, this can be the insight needed to drive your own success story for 2019.
Priority 1: Client Orientation
SMEs, as a matter of fact, do not have ample resources to begin with, and thus cannot afford the luxury to delay implementation of their strategies. To begin with fixating, the first fixation would require settling with an appropriate audience. So, let us explore the four factors that this entails.
Target audience v/s target market
To illustrate this point, we take a simple scenario of a publisher who wants to sell a story book written for children aged between 5 and 8 years. So, who is the publisher’s target audience? Certainly, the children aged between 5 and 8. But do these children comprise even a small section of his target market? The simple answer is, NO. The target market comprises of parents, grandparents, teachers and guardians of these children. The age gap that separates the target audience and target market in this instance can be two generations, and failing to understand this, can ruin the publisher’s career and yours as well. It is therefore important to clearly visualize, articulate and internalize your target market before you create products or sell your services.
Narrowing to the needs
It’s a fine Sunday afternoon and you intend to make a delicious caramel custard for your family and ask your partner to assist with shopping at the local store. Your partner brings home a turkey, exquisite spices, veggies and everything nice, but nothing that would help you in making the custard. As you begin to assign blame, you take a step back and realize that this is not your partners fault, but your own making. Your lack of clarity around your intentions, and inadequate detail on specific ingredients, is what resulted in the outcome received. Similarly, a lack of specificity in defining your business intentions and service offering can result in a wastage of resources and time and more importantly detract from providing products and services that address your client’s needs.
Without essential foundational research, you certainly cannot plan to penetrate the market, with competitors on the rage. It is vital therefore, to gather relevant and meaningful data, set up appropriate analytics, study competitor’s trends, survey customers and establish priorities with your sales team, to be successful. Once you find your niche, there’s no looking back. Companies that do this well, have clarity around their customer touch points and regularly solicit feedback. They use double learning loops to scan and report on external and internal factors to aid their decision making and refine their offerings.
Understand your competition.
A great person once said, it is smart to learn from your own mistakes, but even more valuable, when you can learn from the mistakes of others. Being effective requires taking a close look at the competition, understanding their priorities, strengths, marketing messages and identifying areas of opportunity. Social media and press releases provide a useful insight on client behaviour and competitor intentions. Experienced CEO’s use these opportunities to listen out for beliefs and value systems, positioning strategies, and to decode intent needed to create their own competitive positions. Equally important, is sharing these messages within your teams and aligning your approach to internal capabilities and your value system. This creates needed momentum, fosters integration and enables you to build internal capabilities.
Priority 2: Generating value and cash flow management
Building fame is not an event, but a journey. When asked the question – do you know who the world’s fastest 100m runner is? You could say this is obvious, it is Usain Bolt! However, when asked the question who is the world’s fastest marathon runner? This may not be so obvious! The reason being, we do not often associate speed with long-distance running. For those still venturing a guess, it is none other than Dennis Kimetto from Kenya.
Growing a business is much the same, we typically seek out paths that provide us with immediate gratification and find it hard to visualize or stay committed to longer-term goals. Breaking longer-term goes in to small milestones, can provide the continuous momentum and gratification necessary to stay the course and build sustainable value in the long-term.
In a similar vein, it is important SME’s seek out opportunities that boost efficiency, mitigate risk and drive additional value and effectiveness across the business. This requires an assertion of the value attached to the goods and services and a clear understanding of operations, procurement, working capital and cash flows. A clear and dynamic budgeting process and RACI framework together with reporting metrics and financial oversight can help navigate this maze.
Priority 3: The Leader’s Evolution
For many businesses experiencing growth, a major challenge faced by its leaders is ensuring they have adequate capacity, capability and competence to stay focused on desired outcomes. Many fall into the trap of taking on more than they can handle resulting in burn-out, overwhelm and lower productivity. While individuals may appear to be doing more, they are often achieving less, and are unable to prioritize or focus efforts towards meaningful and productive outcomes. Victims of their own making, this has a cascading effect on subordinates who also face the added pressure to deliver to higher expectations with limited resources, competence or relevant experience. Left unchecked, this chain reaction can be detrimental, and many organizations have as a result, lost key employees and damaged relationships with clients as a result of a deterioration in service and quality standards. Therefore, what begins as a journey of excitement, discovery and engagement can in environments of significant growth, become triggers for stress, disengagement, service failures and a deterioration of brand equity. Experienced leaders understand the importance of effective resource planning and keeping pace with organization growth. Remember, to achieve sustainable growth, it is not a matter of how fast you can run, but rather how you long you can sustain a desirable speed.
Priority 4: The technological and innovation quotient
With artificial intelligence, real-time information, social media and marketing at the forefront of modern-day business, SME’s are actively seeking out the latest in technology to drive efficiencies and their service agendas. Gone are the days where investment in innovation was only accessible to a few. With advancements in technology, IOT and the ability to integrate off-the-shelf solutions, this has given birth to a new generation of smart SME’s. Technology induced smartness allows companies the ability to realize immediate benefits and speed up the growth process and capture market share.
To quote Darwin, it is a clear depiction of the survival of the technologically and innovatively fittest.
Priority 5: Bench strength & recruitment approach
In contrast to larger companies, SME’s can be limited in experimenting when it comes to recruiting the right people. Talent acquisition and development is therefore a key priority and success factor. Successful SME’s use competency-based recruitment and other modern-day practices to source individuals with potential rather than just technical fit. They adopt psychometric tools and use development centres to provide a holistic candidate perspective. To drive competitive advantage, many focus on recruiting experience and diversity, while others use culture and value fit to select candidates capable of driving intrinsic and extrinsic value for their business. If you are a business seeking growth and change, don’t make the mistake of recruiting more of the same. A different outcome requires a different input, and more of the same, will not get you across the line. Also remember that when embarking on a new journey, recruiting for experience must be a priority. This will minimize your risk and expedite the journey to your desired destination. The right candidate and approach will always yield a multiplier effect for your business.
Priority 6: Governance and Structure
The leading demands of SME’s, especially their data hunger have led the business environment to get legally complicated. Increased policy regulations, varied government restrictions, and amendments in law related to business jurisdictions has led to the development of a legal framework for every SME not only as a matter of priority, but as a mandatory requirement to conduct business.
It is important therefore, to have clarity around your company’s purpose and identity. Effective governance starts with your purpose, mission, beliefs and values. It ensures these represent your identity and carry through to your code of conduct, and define your relationships with clients, suppliers, customers and other employees. Done effectively, good governance can provide a supportive framework from which good business can be carried out.
Priority 7: Optimizing your customer experience
Offering the right client experience can drive profitability and market share. More than promotion expenses, companies must focus on hitting the bull’s eye when it comes to generating exceptional sales and offering a memorable experience, value proposition and after sales service. After all, with a wave of technology induced smartness, this is what differentiates you from the competition. The secret to building an outstanding customer experience, is your ability to create an exceptional employee experience. Great leaders do this well. They use employee experiences as a vehicle to drive desired shits in beliefs, values and behaviours. They understand to sustain such change, employees must be guided by meaningful purpose, provided a conducive environment and these experiences must be embedded across the HR value chain, in systems, policies, communication and processes. It is through repetition, that great habits are then formed.
If you are a business seeking growth or find yourself stuck at a cross road unable to drive needed transformation, contact Talent Multipliers for an obligation free HR risk assessment and 2 complimentary leadership coaching sessions. This is guaranteed to set you on your journey to success.
More about the Author
Dominic Nair, CEO of Talent Multipliers is a people and culture strategist who partners with CEOs and business leaders of SMEs to grow and transform their organisation’s human capital and deliver tangible business results.
After 25 years of experience and holding executive leadership positions across multiple industries in both private and public sector, Dominic knows what truly drives engagement and organisational performance. It is how well an organisation can harness individual potential and drive massive action needed to create desired outcomes.
Over his career, Dominic has developed and led successful people solutions and strategies across 50 organisations in international markets covering small, medium and large businesses. In addition to his extensive experience across HR, compensation and benefits, executive reward, leadership development and M&A, Dominic is also a trained business and executive leadership coach.
For information on how Talent Multipliers can support your business, visit www.tmultipliers.com.au or email email@example.com