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SMEs

A Revolutionary Road to Success for Pakistan

Small & Medium Enterprises are backbone for any economy and gained prominence specially after the second World War for economies which were struggling to rebuild from the havocs of war. Current day Pakistan has an ideal opportunity to learn this proven success model and profit from SMEs huge potential. Here I will make an endeavor to explain SME model.

What exactly an SME or Small to Medium Enterprise depends on whos doing the defining. Depending on the country, the size of the enterprise can be categorized based on the number of employees, annual sales, assets, or any combination of these. It may also vary from industry to industry.

SMEs Have a Dominant Share of the Global Economy and same is the case in Pakistan. Below figure depicts the contribution of SMEs in Pakistan economic activity.

No one can deny the importance of SMEs in Pakistan economy. A lot has been written and done to seek attention from Government to pave the ways for SME sectors progress and growth. Without undermining the importance of external factors this article is focused on the way an organization (SME or non SME) may adapt to ensure growth acceleration and sustainability.

The Steps To Implement SMEX In Your Organization

SMEX Framework for Business Excellence is a simplified framework explicitly designed for the SME business. It incorporates five core prerequisites that any SME business must be on top off if they wish to build a high performing business.

The Problem

How do we get from the 5 Prerequisites to an actionable plan?

For most SME business CEOs and their employees, almost all your time is spent IN the business. Whereas to implement SMEX, you and your employees must work ON the business some of the time. Ironically by following the approach, recommended for SMEs the process improvement activities completed free up time, which allows you to spend even more time working ON the business. This feedback loop makes things easier and easier. Therefore, the hardest part is to start and build momentum.

The Four Phases of a SMEX Implementation

Weve identified four distinct stages of implementation. The first 3 lay the foundations to the successful transformation of your business and take place in the first two years. It is our focus at SMEX, to ensure that companies execute these 3 phases.

It all starts with a plan Phase 1: Startup

SME businesses that dont start with a formal strategy have no chance of implementing Business Excellence. SME businesses that DO formulate a strategy but dont follow through ensuring key stakeholders have taken ownership and the proper infrastructure is in place are likely to have it gather dust in a drawer. In every business transformation, the strategy formulation is only part of what must happen in the first six weeks. Here is a snapshot for helping small or medium business owners or CEOs

Points to Ponder Phase 1: Startup

Run your strategy workshop and have a clear roadmap of what youre going to achieve in the next three years, plus the steps to get there! NOTE: You can review that strategy every month, and the SMEX approach expects you to review it formally every year. It can and will change. But thats not an excuse to not do one. Your outputs should include your 1-Page Process model for Running Your Business and your 1-Page Strategy for Changing Your Business.

  1. Ensure your key people have ownership of the Objectives and Key Processes within your business.
  2. Make sure you have the right infrastructure for reporting and knowledge management. Without it, youre going to have to work much harder each month to measure your progress and document your process changes in later phases.
  3. Make sure your action plan is realistic, and your timing matches resource availability. Nothing kills a plan faster than being completely unrealistic.

Rolling up the Sleeves Phase 2: Growth

During this growth phase, the rubber hits the road. You begin to execute your strategy. The driving force behind this is your 7 Key Support process managers. The managers are responsible for running the internal processes of the business.

The Key Support Processes are where the processes that make up the Business Excellence approach reside. This phase is also where youll begin to build momentum. Efficiencies gained through Fast Process Improvement projects will free up time for your staff so they can spend even more time working on the business, freeing up even more time. Exciting Stuff.

Points to Ponder Phase 2: Growth

  1. Your Key Support Process Managers are the engine room for implementing Business Excellence. Train them for success.
  2. 6 FPI (Fast Process Improvement) projects are run in this 10.5 month phase. The return on investment for these projects will be over 5 to 1 and the efficiencies gained will help free up your businesses resources to make further improvements.
  3. Youll undertake your first Major BPR (Business Process Reengineering) project.
  4. Each month a progress meeting will occur to review the Strategy Objectives and Key Processes to determine if youre on track.
  5. Throughout this phase, Strategic Objective actions are executed according to your plan.
  6. At the end of this phase, your strategy is reviewed and rolled forward to reflect any changes required.

Maintain the Momentum Phase 3: Consolidation

Momentum, something so hard to gather initially should now mean your business is flying along. Your employees now have experience implementing FPI and BPR projects; theyre comfortable thinking in processes. Through experience and the extra efficiencies, youve already achieved, you now have even more time to work ON the business. Many experts estimate it takes two years to instil a culture; by this point you should now have a culture of continuous improvement within your business.

Points to Ponder Phase 3: Consolidation

  1. 8 FPI projects can be undertaken in this phase, releasing tremendous efficiencies.
  2. Your second BPR project will likely complete more easily because of your recent experience and your focus on training from the second phase.
  3. This phase is about consolidation. It takes two years to instil a culture. By the end of this year, you will see a culture of continuous improvement flourish within your business.

Keep doing what youre doing Phase 4: A Culture of Continuous Improvement

Phase four is about maintaining what you have. Continue to follow a plan just like your consolidation phase

  • do FPI and BPR projects
  • execute your strategy

The know-how within the business will continue to drive excellence forward. You can now be considered well on the way high Performinng Business, and you’re likely becoming a leader in your industry

Summary

Some might baulk at the 2-year time frame outlined above. However, if you look at the results over those two years

  • Successfully Executing Your Strategy
  • Significant efficiency gains through Fast Process Improvement with an ROI on each project of at least 5 to 1
  • Massive efficiency gains and new capabilities added through Process Reengineering
  • A culture of continuous improvement

Building a high performing business does not happen overnight, but with the systematic, step by step process outlined above you will get there.