In the first part of this discussion, I touched on a few things that in my opinion help create the environment of a Smart SME. Why is this so important to all of us? Simply, SMEs (Small and Medium sized Businesses) make up the lion's share of the economy. Just drive around any industrial and commercial space in your town. Most of them are family owned businesses that very rarely exceed 50 people.
We need to not only understand the factors that create a sustainable, growing business, but more critically we all should be encouraging everyone to do something about raising the performance. A big piece of this puzzle is to focus on some of the basics in which SME owners and managers can actually do with minimal cost and maximum benefit. The outcomes for this will be a significant contribution to the overall economic performance of the country.
In this episode, I want to first describe / define what I mean when I use the term ‘Smart SME’. Then go a bit further into another key element - People.
As a Lean guy, I will always start with using Toyota as a benchmark with regards to people. One of the key pillars in the Toyota Production System is the Respect of People. A key element to this is enabling its people to make decisions, improve, think and learn ways to complete their role better.
This leads to the addition of the eighth Waste of Lean - Non Utilised Talent of People.
Smart businesses, and especially the smaller ones who have limited people will maximise the skills, talents, interests of the people in their team. There is a lot of talk and focus on using technology to improve productivity. While this can bring about some benefits, we still need to create a 'system' or simply a work environment that helps identify and maximise your people, their skills and passions.
For example, why have a process that the team is involved in the whole way through, only to have the last step move to the GM for approval or sign off? Empower the team, up-skill individuals to finish the job without unnecessary handover. I see this type of wasted opportunity all the time.
Other ways we are not using our people:
- Pet project time.... give people 5% flexibility to work on a related project that they are passionate about - it may bring massive company benefits
- Skill matrix. Be transparent on the opportunities & expectations of the skills needed so team members can facilitate & drive their own improvement
- Ask them what pisses them off in their job & work together to solve that issue.
Use technology, absolutely. But use it in a way that enables your team to perform better. Use technology to eliminate the stuff that pisses them off. Not sure what might be causing the frustration? Go and spend time on the front line, observing, asking questions. I have discussed how to do this in more detail in a previous blog post. Use technology to complete the repetitive and low skilled tasks, this will enable the team to focus on more complex, challenging parts of the business. Engage your people, get them involved! That is what a Smart SME business owner does as they see the benefits for the individuals and also the company.
Over the past two years, the talent pool has significantly been reduced. Finding the right skill set available is becoming a hunt for the ultimate unicorn. When these rare creatures are found, the costs and incentives to attract them are rising sharply - I have seen this happen more and more. This is why focusing on the people you have and nurturing new staff is a long-term game. Yes you might start on the back foot but pretty quickly you will gain that ground back and then sprint ahead of the competition.
Putting time and effort into engaging your employees goes beyond the christmas BBQ and maybe a small gift in appreciation. This is a 365 a day process. As a business owner or leader, do you have a staff engagement plan? Smart leaders will already be doing this and enjoying the benefits and return on investment already. Don’t see this as a cost, but potentially one of your most valuable income streams - I have calculated this to be worth at least $170,000 per year.
This is why I am so passionate about helping SME leaders understand that the time invested in their people is a smart thing to do. It will not only lead to better business results, but also set you apart from competitors. It isn’t a quick fix option either, this takes time to develop and nurture. As a leader you will learn many things about yourself in the process. As a leader you will be out of your comfort zone many times through this process. Let your team know, be vulnerable - this is OK to be open and transparent.
This can be a big step, but are you ready to take the first step in that journey to become a Smart SME?