Here are three key ideas to guide you to success: call on an external consultant to make your thinking more productive; be detached, but don’t ignore the detail; and finally, don’t concern yourself with macroeconomics: the No. 1 advantage of an SME is that it can escape the underlying trends of the market.
SWIM FASTER THAN THE CURRENT
In this article we aren’t going to say anything that’s not been said before. These aren’t patented secrets, or exclusive insider information. You don’t need to be a Californian start-up or a brilliant researcher in economics to take advantage of these basics. It’s just down to you, the Owner/Manager of an SME, to plan for your success.
Ever since I’ve worked in this profession I’ve been struck by how well my clients know their own businesses. However, they lack two essential elements for improvement: firstly a strategy enabling them to exploit their company’s potential and secondly, that « little extra » which might one day push them into action.
Why is this strategy and this « little extra » missing? Because the SME Owner/Manager is preoccupied with day-to-day matters, totally focussed on the business and isolated in their own world. But as Lord Admiral Nelson said, « if one does not know to which port one is sailing, no wind is favourable ». In other words, if you don’t want to be tossed about by events, make sure you swim faster than the current.
In this article, we develop the three key ideas that every SME Owner/Manager should bear in mind if they want their business to prosper. Any of my clients enjoying success today are doing so because they’ve always taken these on board. These were my recommendations, which pointed them in the right direction. But it’s up to you to put them into action.
SEEK THE SUPPORT OF AN EXTERNAL CONSULTANT
Every SME Owner/Manager should be able to turn to a consultant external to the business, with whom they can freely discuss their difficulties, their hopes, their future plans and their questions – things they could never share with a colleague.
This process is particularly useful in the sales arena, in which the Owner/Manager is rarely specialised. More often than not, SMEs have a technical or industrial background, centred around their core business, their product and the best way to produce it. On these issues, any questions arising are tangible, precise and can most often be resolved internally. This is not the case in the sales area, which is more abstract and more difficult to define. It is here that reassurance from outside is most valuable.
Of course, it’s not easy to find an individual in whom you can place your trust. But this should not stop you seeking the services of an « experienced consultant » on an annual basis: it will give you time to assess your supplier.
It doesn’t take much to transform a business: one or two good strategic discussions, a decision based on experience gained elsewhere … If you manage to do even this, you will have moved forward.
And even if the consultant is not entirely satisfactory, I am convinced that the process will have been worth your while, if only because of the « mirror effect », i.e. the feedback that the consultant can give you on the information you provide.
You may also find in this consultant a few unexpected things: a specialist tasked with looking at your business long-term, another company Owner/Manager, a friend who works in another profession … Treat this as a priority, and as with each of the points made in this article, it will help you plan for your success.
What can an external consultant offer?
« They act both as a release mechanism, giving you confidence in your own analysis or opinions and as a means to brainstorm ideas: the discussions will distance you from the day-to-day and highlight the real issues. So what if your day is a bit hectic. So what if the pile of papers on your desk continues to get bigger: you are forced to think about the future. »
Yves Lavorel, LMK
“You need to know how to place yourself in what I call a different context, to ask the questions of the moment, to prioritise them and to reactivate a pool of ideas. In my case, these exchanges helped me resolve, in just 10 minutes, problems that had bothered me for days. You come away with renewed energy.”
Jean-François Berthier, Axes et Sites
“The most important thing is to have someone on board who can see what I no longer see. The second contribution of an external consultant is their ability to analyse, dissect and break down the problems and to arrive at solutions that don’t come straight out of a book or a university or a training course.”
Roger Tondeur, MCI
be detached, but don’t ignore the DeTAIL
The reason I was able to provide insight to my clients was because I was able to look at their business with detachment before looking at it in detail.
In the same way, every Owner/Manager should know how to look at their company by altering their « focus ». The least-used focus setting is the panoramic view, so I recommend you use it first.
For an Owner/Manager, being detached from things should involve things like periodically imposing a half-day away from the company (without a mobile phone!) to ask some fundamental questions, to take a quick scan of the last few months, to imagine the future…
This can also be done when driving, during which the mind wanders easily. I always have a Dictaphone in the glove box, to record any worthwhile thoughts. The car can be a high-productivity place for ideas.
If I were to focus your thinking on a single theme, it would be whether to seek more work from existing clients on the one hand, or go after your prospects and leads on the other. In terms of business activity, most SME Managers focus on the harder task of acquiring new clients, whilst sitting on a gold mine of clients already acquired.
I’ve seen companies spending fortunes on getting new customers only to lose them each year because they don’t follow through correctly! You can understand why their Managing Directors end up no longer believing in the value of sales activity.
This strategic vision should not distance you from the detail. Clients are not always found through the obvious route: the contacts you make, the attention you pay to someone in a chance conversation, the time you devote to a seemingly innocuous topic may bring you a surprising return on investment.
In 2006, I was asked to facilitate a few hours of development courses at a business school for graduate students. I don’t have any individual specific memory of this experience. But I was reminded of it four years later, when I received a phone call from someone introducing themselves as « one of my former students« .
He’d been taken on by an SME with a turnover of £30 Million and wanted to entrust me with a national development campaign, without even putting the contract to competitive tender!
Some SMEs, particularly in the service industry, deliberately engage in this type of very long-term prospecting. Their directors and executives speak several times a year in judiciously chosen colleges, devoting a great deal of care to preparing what they say.
The initial remuneration is frequently tiny in view of the time spent, but telephone calls like the one I received will come, even if it is a few years later. A young executive who becomes influential within a business will spontaneously place confidence in a teacher who has been an influence on them.
As a rule, Owner/Managers attach little importance to their network of contacts and tend to prioritise their activities within the business context. But by analysing their client portfolio, and how each of these clients was obtained, they are likely to find new and productive leads.
Doing this analysis for my own account, I realised that 95% of my current business is the result of non-sales approaches, bringing revenue from a variety of sources. For example:
– an excellent interview candidate whom I ultimately hadn’t offered the job, but who called upon my services once he was working for another company: he’d been impressed by the way in which he’d been treated. Appointment time kept to, friendly reception, prompt announcement of the decision, whereas many companies to whom he’d applied had treated him with much less respect.
– a management specialist with whom I’d spent three half-days, helping to set up his business: he then recommended me several times because management and business development issues are often closely linked.
– a friend selling his business who asked me to assist him during an interview with the potential buyer. A few years later, this very same (buyer) became my first customer!
– a company which contacted me about producing written material – something I declined, as it was outside my core skills – but who called me the following year: my refusal had impressed them.
Another general rule in business, where too many people fail to keep their promises: in 95% of cases, a polite and reasoned refusal makes you immediately credible.
These scenarios are obviously specific to my business, and may be different to each company depending on the client portfolio. But they’re worth considering to help you avoid spreading yourself too thin, and to focus on the « details » that deserve your full attention.
DON’T worry about THE MACRO-ECONOMY
« I’m worried » a CEO of a small electrical company once confided in me « I’ve seen a study that’s predicting a 0.5% decline in our sector next year, for France. » My reaction was immediate: « but what’s your current share of this market? » « Oh, no more than 1%, » he replied, « but I’m still worried. »
Owner/Managers should never read studies on the state of their sector. In particular, those who don’t exclusively depend on a handful of major buyers (suppliers to the motor industry, for example), or large retailers. Because it just takes a few bad figures or a reverse in trend, to lower morale. The macro-economy – that of large groups and the multinationals – is not really their concern: they operate at another level which is precisely what makes them strong.
This is demonstrated by the progress made in just a few years by some of the SMEs that WiKane supports on a daily basis.
So, do we still have to worry about the morale of the Nation, the intentions of the purchasing public, or the forecasts of a particular area of activity?
Such figures are all-important for a sector leader, which will automatically suffer from any decline in its market. But SMEs have little dependency on that same market and so will not suffer. Or rather, SMEs are able to free themselves of such a dependency. A sales campaign that is targeted, methodical, repeated and exhaustive will bring a certain dynamic to a business – a certain internal motivation – which enables the Owner/Manager to ignore macroeconomic trends.
Nonetheless, some SMEs continue to attempt to emulate large groups which have much higher budgets and greater clout. This is a mistake which may be all the more damaging because it can lead Managers to be overly cautious, adopting a wait-and-see attitude just as the large groups do. What’s good for the goose (multinational) may not be so for the gander (SME).
To conclude, I want to highlight two other major advantages that the SME has over the big company.
The first is the freedom to carry out ambitious sales campaigns. The steps we have described would be – on the SME scale – big operations requiring significant budgets. However, SMEs don’t need to make a song and dance about it because the tools of direct communication can be low profile and importantly, they rarely provoke a response from the market leaders, who disregard the initiatives of such comparatively lightweight businesses.
Now imagine a multinational launching such a major commercial initiative on a relatively equivalent scale: it would have to use main media (television, advertising hoardings, radio, press), and would automatically provoke a strong response from direct competitors, determined to preserve their market share. Certainly, for a large group, such a policy might constrain them and the decision could not be taken lightly.
Secondly an SME has the advantage of a modest turnover which means that it doesn’t have to acquire hundreds of new customers to experience spectacular growth. Sometimes all that is needed to achieve an annual 30 or 40% increase is three or four new customers.
This is well illustrated by the example of a company I supported a few years ago, which was achieving £6million turnover and was prospecting customers worth several hundred million.
It was not seeking to be the main supplier for these customers – it didn’t have the capacity – but was positioning itself as a backup resource. Its big competitors were therefore not worried. Nonetheless, for this small business to become a secondary supplier to three or four food industry giants doubled its turnover in less than 3 years!
Which multinational would be allowed to campaign on such a comparatively massive scale? Which multinational company could hope to double its turnover from one year to the next? None … Whereas thousands of SMEs and possibly yours, have the capacity to achieve this.
If this observation enables you to look at your company with fresh eyes, with conviction and enthusiasm, you will have taken a decisive step in planning for your success. The philosophy presented in this article requires of course, the time, the means and the methods. But it is mainly down to the confidence of the Owner/Manager and their willingness to act.
So, take the time to reflect, stand back and come up with a plan: the business you’ve created and which you think you know so well, may yet spring a few beautiful surprises.