The journey of a SME vs. Corporate

The journey of a SME vs. Corporate

We all know that Small and Medium Enterprises (SMEs) play vital role in growth of country’s economy (including India). In India alone, SMEs contribute 45% of the industrial output, 40% of exports, 42 million in employment and create one million jobs every year. Isn’t that fantastic?

SMEs are very agile and have a tendency to grow fast. They can establish themselves well in the market, tweak their business model as and when required to meet the clients’ needs and more importantly be more competitive.

So why do they lose their inherent ability over time and lose their edge?

If you notice the above image, you would see that smaller companies can establish fast and can meet client’s needs as per their expectations. They can control their costs, supply, overheads, resource planning, etc., but in spite of all this, why do they fall apart?

startup-corporate

1. FOCUS: Your edge is nothing but the focus that a startup or a SME has in that space or industry. This is your silver bullet that has given you the kickstart growth in your initial days. If you want to keep growing, stay focused and keep working to grow. Don’t get carried away with the interim success.

In 1997, Apple bought NeXT (founded by Steve Jobs) and brought back Jobs back to the company he had cofounded. In his mission to concentrate Apple’s efforts on returning to profitability, Jobs terminated a number of projects, such as NewtonCyberdog, and OpenDoc. This was to get everyone back onto focusing core technology, especially on Mac OS X, iMac, etc. Rest is history as well all know.

focus

2. CULTURE: Your ability to set up organizational culture is a lot more easier than compared to the biggies. You can only keep growing if your employees share your vision and work towards a common goal. Don’t lose this as you keep growing. Establish a strong sense of ownership and belongingness so that your next in line and the people down below knows the importance of the organization goals.

It is humanly impossible to operate 400 companies on your own. Richard Branson talks about the importance of organization culture. He nailed it.

Organization

This is applicable to the startup community as well as I don’t see any difference between a startup and a SME. Startups Co-Founders work hard to get the right product that meets the needs of their clients. In the process, if they don’t see these pitfalls, all the efforts go waste. The true entrepreneurship is to learn from the mistakes and overcome them – somebody said, “Fail, but fail fast so that you move on quickly.”

I guess some of these thoughts would have encouraged Jim Collins to come up with “Good to Great” 🙂

I agility of small startups combined with the robustness of the big corporate will pave way to super successful companies. Maybe that is what the inventors saw it coming from Steve Jobs, Larry Page and Mark Zuckerberg.

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