Driving SME growth through innovation
“If you always do what you always did, you will always get what you always got.” Albert Einstein
Small and medium businesses constantly face a wide range of challenges – some are no more than niggles that with a bit of effort and focus, can be overcome. But others are not, and these are the challenges that will often determine the trajectory of the business. Will it thrive? Will it limp along with a stagnant or shrinking bottom line? Will it fail?
In 2018, the Small Business Administration in USA reported that 80% of small businesses survive the first year, but only about half pass the five-year mark and a third pass the 10-year mark.
In a recent free-to-attend seminar we hosted to support small businesses, we asked the delegates what they considered to be the biggest challenges for SMEs. Their answers were a cry for help. “We dare not think innovatively; we are short-term goal-oriented; we lack vision; no space to think out of the box; we do not have the talent we need; same ideas again and again; we struggle to be organised; attempts at trying new ideas have failed…” And more.
Helping small businesses to grow is in everyone’s best interests, and it certainly is essential for South Africa’s economic development. For me personally, providing support in various forms for SMEs is an intrinsic part of what I consider to be my purpose – to make the most of my time on earth and to influence others for the better. This is also part of the values and offering of the company.
In sharing knowledge and experiences with small businesses to encourage them to use innovation as a springboard to growth, I often introduce the metaphor of endurance hunting by human hunter-gatherers such as the San of old or of African wild dogs. The hunters may be slower than their prey, but using running, walking, and tracking, they pursue their prey until it is exhausted. Giving up is not an option or the family or pack will go hungry.
It’s my conviction that the difference between the impossible and the possible lies in a person’s persistence and perseverance. Perseverance comes from passion and it separates successful entrepreneurs from unsuccessful ones.
But passion and perseverance alone are not enough – skills are essential. To continue the endurance hunting metaphor if the hunters do not have tracking skills, the chances of them achieving their goal and finding their prey are limited.
Failed ideas abound. Many businesses, both small and large, introduce and invest in new ideas and concepts that ultimately do not sell.
The problem with many organisations is that they turn to innovation as a rescue remedy when sales are flagging. A sudden need for innovation is created and pushed from top management, which can fail as the push has no overall buy-in. Innovation is a lifestyle – and therefore a culture that should be instilled while growing your organisation.
Through a lot of experience on the part of our business, we have identified and invested in a concept that has helped many small businesses grow. It is a structured innovation approach to start innovation effectively that combines design thinking and business reality called the FORTH methodology, which allows businesses to foster innovation to ensure overall buy-in and commitment through the entire organisation.
Managing ideas is an important part of the process. The leadershipnow.com website reports that in examining how exemplary leaders think, an approach common to many of them is termed integrative thinking, which is, “The ability to face constructively the tension of opposing ideas and, instead of choosing one at the expense of the other, generate a creative resolution of the tension in the form of a new idea that contains elements of the opposing ideas but is superior to each.” To add to this thought, Linus Pauling, one of the world’s greatest scientists, said, “The best way to get a good idea is to have a lot of ideas.”
To set them on a new path of growth, we have a series of simple yet effective questions for SMEs to answer. The answers, if totally honest, can help to firmly place innovation in the company’s future and success.
Why? (this business and its purpose)
What? (evolutionary or revolutionary market opportunities that exist for the products, services, solutions that your business offers)
Who? (should buy your products/service offering)
Where? (are your products/service offering sold – geographical and channels)
When? (setting your short, medium and long term goals)
Which? (skills do you have and need)
SMEs need to be result-oriented; identifying and analysing problems and developing solutions, and crucially, becoming familiar with and skilled in the relevant new technologies that are exploding into our daily lives – business and private.
I would encourage all small and medium businesses determined to grow, to persevere, to seek support and help when you need it, to manage yourself and your team, to embrace and use the new technologies available, and to accept the valuable role that you play in our economy.
By Coenie Middel, CEO, Middel & Partners
For more information on Middel & Partners, visit www.middel.co.za