Two things are going to dominate my conversation during 2022. For me they come hand in hand.
The first and main theme is Smart SMEs (small & medium businesses). Personally I don’t like the term 'enterprises' but hey the acronym sticks!!
In New Zealand, we have continued to lag behind in our productivity and performance of SMEs. It has been this way for decades. There are a number of factors that contribute to this outcome. Indifferent adoption of technology is often quoted and whilst I agree, to a point, my strong held belief that SMEs are owned and led by people who love what they do and they have become successful for the skills they have.
This scenario has been captured in the classic business book ‘The E Myth’. Where the expert may enjoy the idea of owning and running their own business, but it takes a whole different set of skills to achieve success.
This leads into the second theme and possibly my key word of the year “Knowledge”.
How does a SME owner and leader gain the right business knowledge and skills. How do they become aware of the support (formal and informal) available to help them to become a smarter SME. They might already have a really successful SME but losing profit if they are not continuously adapting the way it operates and performs to maximise not only the skills of the team but also the profits which leads onto the long-term sustainability of the business.
To begin the conversation this year, I am going to start with an initial look at what makes a #smartSME.
Let’s start with one of the big topics - technology, yep I am launching into this topic straight up. My thoughts are simple - a Smart SME is far beyond just the use of technology. Too often technology is being the saviour to all things ‘smart’. While there is just about an app for every need, they remain just tools in the business leader’s toolbox. Too often the application of software or technology is poorly thought out and executed. Too often it is a solution looking for a problem. For most small and medium businesses, technology solutions are way too complex for the problems they are trying to solve and results in creating more chaos and frustration. Don’t get me wrong, there are heaps of great tech options out there and they do make an impact, but too often SME owners default this as the main saviour. I wish it was this simple.
I like to take everything back to the human side of the business. Making sure processes are designed with people in mind, making sure the right steps and tasks are allocated to the right staff. That they have the right skills and knowledge to successfully complete the required steps. Achieving this takes patience and while it sounds so simple but this is where many SMEs often struggle. Starting this process takes nothing more than time, a few post-it notes and a willingness to learn from mistakes (the first step in Knowledge). For me a smart business is all about experimenting, learning, exploring from the leader to every person on the team.
Creating a smart SME is as much about establishing a learning culture. Some may consider this one of the human resource factors alongside robust recruitment and training processes. Setting expectations for everyone who is part of the team to want to learn, not just new skills, but exploring different ways they could do a process or task. Creating an environment where it is OK to try different things in the pursuit of getting better. This does not mean radical changes every week, but also one where the saying ‘this is the way we have always done it’ never becomes part of the vernacular.
This is why I strongly believe that a smart SME is a learning SME. A place where everyone has the right information to make smart decisions. Part of this is being able to measure how well you are doing through performance measures. Without this knowledge on how the business is operating, it is impossible to manage effectively. Improvement can be based on gut feel. While this is OK, basing it on real data and information is way more effective. This is why learning takes on such an important role. Learning what works and what doesn’t. Learning new skills or different ways of doing specific tasks. Knowledge isn’t just operational performance. Having a healthy and transparent financial process is equally critical - at the end of the day, someone has to tell the team if there is enough money in the bank! All of this is designed to help the team and business perform better, doing things smarter.
This is why I believe the biggest opportunities for SMEs are based on many human factors involved in a business. If a business culture allows for discovery, enables conversation about trying different approaches, allowing people to even make mistakes and fail - all of this contributes to a business working smarter.
What else contributes to a Smart SME?? Please comment below.