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  • JW Hall

An SME Survival Guide – Beginner’s Luck?


Disruption


SME leaders are often told they need to disrupt the market with their business. “Get out there, stir it up and change the dynamics” I read yesterday in an HBR article.


For new start-ups it’s relatively easy to take such advice. That’s often the very reason they decide to go for it in the first place: because they know can do stuff better than the old team – faster, cheaper or offering new value to the customer.


Think Differently


By now, leaders of existing SMEs are screaming at me “it’s not that bloomin’ easy!” They are right; it isn’t. I am certainly not saying you should suddenly behave like a new start-up because you and I both know that you cannot. I am saying that you need to start thinking differently if you really want your business to thrive.


Well established businesses nearly always find achieving meaningful change is really tough. Finding ways to disrupt the market they occupy is difficult to imagine. The existing tail of people, processes and equipment means that they have to complete fundamental internal changes before they can effectively achieve much on the outside.

Moreover, leaders of established businesses have lots of knowledge about their market and they can clearly see the risks and the pitfalls. The newcomer of course, probably doesn’t know and may not even care. To succeed the beginner has to innovate.


Beginner’s Luck?


I’ve always liked this quote from Shunryu Suzuki:

“In the Beginner’s mind there are many possibilities. In the expert’s mind there are few.” (“Zen Mind, Beginner’s Mind”)


Existing SME leaders are the experts. They know the detail and they understand the environment. Start-ups are the beginners. They don’t know and they probably don’t care!


Recession and Change


Disruption of a market is often much easier in a recession than it is under more normal circumstances. When things are going well it’s hard to take big risks. Owners want to take cash from the business, employees and customers are comfortable and enjoying the stability. Improvements become marginal, growth is steady but not spectacular and the appetite for risk is low.


When a good crisis comes along the need to survive forces radical change on all us. The Covid lockdown has created an environment that doesn’t encourage change, it demands it. It’s not surprising that through history a lot of very well-known businesses began during recessions; it’s an established pattern that’s well over a hundred years old. To name just a few, the financial crash of 2009/10 spawned Slack, Whapsapp, Uber, Groupon and Square. There are plenty more. (A list of examples at the bottom of this for those interested by the history.)


What To Do?

The leaders of existing companies cannot suddenly become beginners, forget what they know and start again. But they can help themselves to think differently, simply by opening a child’s eye to their problem and asking as many basic questions as they can think of. All the time, in the background must be the constant reminder:


Does the standard answer that I gave to any of the following questions last year have any relevance at all in the future?


Customer Needs



What will my customers really want from me next year? Has it changed?


Can I deliver against those customer desires with what I have now?


Does my business model need to change in order to meet those desires?


Do my people have the right culture, skills and capacity to do what I need to do?


Do my processes meet the future needs of my customers? Do they get and sustain the right people, deliver the right supplies at the right time and cost, achieve the right quality?


Does my technology work for me? Do I have the right machines, vehicles and software to support my customers.


Customer Happiness


In the end it all comes down to this. Does the business today possess th epeople, processes and equipment that can make the customer of my future happy.


Now bite the bullet and make the changes!



CORPORATIONS THAT GREW FROM RECESSIONS


2008 / 09

Square (payment processing systems)

Whatsapp

Uber

Groupon (consumer deals)

Slack

2007

Airbnb

1980s

CNN

Electronic Arts

Microsoft

1973

FedEx

1958

Trader Joe’s

1957

Hyatt

1953

Burger King

1937 (Great Depression)

Hewlett Packard

1929

Disney

1911

IBM

1908

General Motors

1837 (The Panic)

Procter and Gamble

Finally, in recent times one might also talk about Facebook, Google and Salesforce all of which launched just before major recessions began each of which grew through them by meeting the consumer needs that they exposed.

Samantha Jones, Project Manager

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