SMEs win by being faster, more innovative and flexible than their bigger competitors.
They have the ability to create the right cultures and work environments to attract great talent. The Entrepreneurs behind them are often fearless in their endeavours, never content sitting still and always looking to improve. Through our efforts helping Irish entrepreneurs grow their businesses we are lucky to meet hundreds of these companies every year. These are some tips around common success factors I believe exist across the best SMEs.
Know your Company’s Why?
For Entrepreneurs and CEOs of SMEs is it vital to have a clearly defined organisational purpose. Can you answer the question – Why does your company exist? A medical device company’s Why may simply be to “help save lives”, a restaurant’s may be “to spoil our customers on their night off”, a newspaper’s goal may be “to bring the right news to the right people quicker”. The Why needs to be real and tangible and everything you do is driven from and aligned to this. If you don’t have clarity around your “Why” then today you have a great opportunity to find it and define it together with your team. If it is not clear challenge yourself to find your “Why”. From coffee shops to multinationals the successful ones have a clear purpose and that’s what their teams buy into it. Make it more than a job.
Would the Real CEO please stand up
Authenticity is the new buzz word of modern business scholars discussing everything from leadership styles to brand positioning. Successful modern leaders have high levels of authenticity. In essence they are themselves, their values are the same on a Monday morning with their staff as a Sunday afternoon with their family. They are comfortable and confident, they are open and honest and what you see is what you get. They have shortcomings and are not afraid to highlight them. People engage better with these leaders and trust them. Don’t expect employees to follow somebody they don’t trust. As a leader, be yourself – the real you is the best you. If you need to change (and we all do) then genuinely work on it, but remember no “faking it till you make it” on this one.
Give your players the Ball and let them play
Great sports teams have clear game plans. Remember 20% of success is in having the right plan, 80% of the success is in the execution of it. Develop an execution culture supporting “less talk and more action”. To achieve this you need to empower your players to stay in their positions and take ownership. Delegation is the key to scaling. Just like a high performing sports team, success requires developing a deep personal responsibility among players to each other. Create the environment where nobody wants to let their teammates down. Does this culture exist in your company? In the past employees were driven by the concept of “delivering for their boss” now the best cultures are driven by employees focused on “delivering for their team”. No longer a responsibility to one, but a responsibility to all.
Invest more in your people
Most SMEs in Ireland have a conscious commitment to people development but fail to invest the necessary time or money in it. This often results in companies “outgrowing” the capability of their staff which creates organisational challenges on lots of levels. People are most companies’ greatest asset. Measure both the financial & time investment in people development and also the benefits. Work as much on developing and scaling the right culture as you do on individual skills. The right culture is the most important asset a growing SME has.
Focus on understanding your growth
Whether it be through organic growth alone or complementing it with acquisitions, great companies usually outgrow the market. With all the debate around economic growth levels in 2017 and beyond, it is important to segment your growth. Know the breakdown between Price and Volume, Market Growth vs. Market Share Growth. Split volume growth between hunting for new customers and farming existing ones. Growth is a net number which can be improved by winning more or losing less. Loss reduction or making a business more “recurring” in nature are both valuable methods of achieving attractive and sustainable growth. Think carefully about how you can achieve growth and be clear where your growth is coming from.
Consider the impact of the “unexpected” on your business.
If you are planning to have a long term sustainable business it must be able to adopt to changes in the external environment. Both domestically and internationally we have seen a lot of political, regulatory, fiscal and FX changes in 2016. As part of your annual budgeting and medium term planning you must stress test your business under different scenarios. It’s amazing what you can learn from this exercise. Work with your team to identify potential changes and ask the “What if” questions.
Consider the impact of the “unexpected” on your competitors
Success and winning is a relative game based on beating the competition. It’s very important to understand how changes impact on your competitors and their competitive position in the market place. You must clearly understand “Why” you are beating your competitors. You must understand all the ingredients of your winning recipe. Assess the criteria your customers use in making the decision to purchase and the path to purchase they take. What do you compete on? Is it quality, innovation, customer service, price, ease of use, guarantee, after sales service, brand, reputation etc. Successful SMEs know a lot about their competitors. In any game you need to know what you are trying to beat.
Be wary of looking at the world through your own lenses
One thing that we all learned from BREXIT and Trump’s surprise victory was that we should be careful making assumptions based on our own thoughts, views and beliefs. Sometimes we do this subconsciously when the opportunity exists to easily gain more independent insights. Ask yourself the simple question – whose view counts most? and how do I get this view? I would advise Entrepreneurs to use independent third parties to gain valuable insights. As the world found out, politically in 2016 getting assumptions marginally wrong can result in materially different outcomes.
Build resilience and a flexibility to change
As a father of four young boys I look to their futures with equal amounts of excitement and fear. The excitement stems from the speed of advancement and innovation in everything from technology to medicine, telecommunications to transportation which provides the ingredients to make the world a better place. My fear stems from research that show that these kids are likely to have over 20 different jobs in their lifetime. How does a father help equip his kids for this level of change? The analogy applies to businesses and I have concluded that the human skills of resilience and flexibility are likely to be the cornerstones of success. The technical skills will continue to change but resilience and flexibility will always be required. How resilient and flexible is your business? If you don’t know, you should ask the question.
Goal setting and visualisation are important when imagining the potential of your business. An interesting technique is to imagine an ultimate end goal or dream before you think about the road or barriers to achieving that goal. When you have a clear vision of the goal it becomes a lot easier to put a plan around achieving it. Make sure your goal is ambitious and challenging enough to ensure you realise your full potential. It doesn’t cost any more to dream big so do it and good luck.