x Abu Dhabi, UAEWednesday 17 January 2018

Vital to keep the spirit alive

The Life: After years of studying what makes business grow, it appears there may just be a secret; they never lose their entreprenurial spirit.

Businesses that grow are those that never lose their entrepreneurial spirit. istockphoto.com
Businesses that grow are those that never lose their entrepreneurial spirit. istockphoto.com

After years of studying what makes business grow, it appears there may just be a secret - they never lose their entrepreneurial spirit. So, if you want to grow your business you need to get your small and medium enterprise (SME) spirit back.

Here are six major actions you need to do to think and act like a SME start-up:

Redefine what growth is

SME start-ups cannot afford to let their growth be defined by other people because for them growth is the means of survival. So to start with, you need to redefine what growth means for you. What does growth mean for an SME? You can wrap it up in one word - bigger. Not incrementally bigger but exponentially bigger.

Find the right catalyst for growth

Common sense tells us that growth generates momentum and this momentum causes more growth. In other words, growth is the fuel for growth. For an SME, energy levels are high and this is driving more and more growth. The factors causing this momentum and growth are market opportunity, increased capital, and market lifecycle stage.

Establish in growth locations

Earlier this year, while waiting for my slot to speak at a global management meeting for a Fortune 100 company, I was listening to their thoughts on growth. The management was working on a typical assignment to propose solutions on how to grow more.

The consensus was to spend more time with their existing customer base and listen to their needs. While this is important, it is clear that this thinking is not how an SME would act. They would be spending their time getting close to where their customers are, not sitting at distant locations in management meetings.

Modify resource allocations

Closely aligned to establishing in growth locations, is the need to modify resource allocations. Many businesses have not put forth the investment to increase their "business carrying capacity" to a significant enough level for growth.

Carrying capacity is the investment that creates the volume of business you can support without a negative impact to the internal business or external environments. For an SME, every dirham is precious so they ensure it is allocated for growth.

Supply the growth

For an SME, supply and demand is a significantly different model, with the fundamental change in supplying growth moving from supply driven to being demand driven. Conventionally speaking, supply and demand is an economic concept describing the market relationship between prospective buyers and sellers while predicting the price that will equalise the quantity demanded and supplied. To be growth oriented, you need to be a demand-driven business.

Separate the operating model

The savviest players are trading their old management practices for leaner, faster, more flexible and regionally collaborative operating models.

They are strengthening their in-country operations while creating, small, fast and entrepreneurial regional leadership teams. Businesses must revamp their corporate structure so that operations in fast growth markets enjoy a high status that is commensurate with its long-term growth potential and have the autonomy needed to achieve significant results.

Many businesses are operating with headquarter-centric models while appearing oblivious to the need to operate like an SME to maximise growth.

Dr Tommy Weir is an authority on fast-growth and emerging-market leadership, author of The CEO Shift and managing director of the Emerging Markets Leadership Center