SMEs

A REVOLUTIONARY ROAD TO SUCCESS FOR PAKISTAN

Small & Medium Enterprises are backbone for any economy and gained prominence especially after the second World War for economies which were struggling to rebuild from the havocs of war. Today Pakistan has an ideal opportunity to learn this proven

success model and profit from SMEs' huge potential. Here I will make an effort to explain the SME model. What exactly an SME or Small to Medium Enterprise depends on who’s doing the defining. Depending on the country, the size of the enterprise can be categorised 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 the 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 the Pakistan economy. A lot has been written and done to seek attention from the Government to pave the ways for the SME sector’s progress and growth. Without undermining the importance of external factors this article is focused on the way an organisation (SME or non SME) may adapt to ensure growth acceleration and sustainability.

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 of if they wish to build a high performing business.

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.

We’ve 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.

SME businesses that don’t start with a formal strategy have no chance of implementing Business Excellence. SME businesses that DO formulate a strategy but don’t 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

Run your strategy workshop and have a clear roadmap of what you’re 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 that’s 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, you’re 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 you’ll 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.

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. You’ll 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 you’re 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; they’re comfortable thinking in processes. Through experience and the extra efficiencies, you’ve 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.

1. 8 FPI projects can be undertaken in this phase, releasing tremendous efficiencies.
2. Your second BPR project will likely be completed 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 you’re doing – Phase 4: A Culture of

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 Performing Business, and you’re likely becoming a leader in your industry

Summary

Some might baulk at the 2-year timeframe 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