What a SME can learn from an MNC to scale up
India is undergoing a startup revolution. Every decade is
characterized by unique business revolution and this decade belongs to
ecommerce, fin-tech, startups & VC firms. The business journals and dailies
are busy and never tired of covering news from startups / SME owing to their valuation,
attracting investments, flight of human capital, technological breakthrough and
innovations. This pace of Indian revolution augurs well for the country and it
has come at an important time when successful SME’s are fueling their vision to
become more successful. As an SME grows, it reaches an important intersection
of being successful yet unable to scale up. Many SME go through this phase of
wanting to scale up and they can learn a lot from successful Indian companies
and MNC. “Scaling up” is often referred to replicating the business model
across geographies or introducing more variants in their core product
offering. At this stage, SME would do
well to learn from successful Indian firms, MNC and embrace it thereafter. Successful
companies follow three principles in their journey to becoming successful.
The first principle is to “Invest in the Blue Book”. The
Blue Book captures their operation guidelines and governing principles of the
business. It encompasses “What is their Lead Generation Process, Sales Funnel
and Management Process, Distribution Strength and what makes it strong, how to
manage inventory, Working Capital Rules, Sourcing & Supply Chain, HR,
Talent Management, Policies that govern their operations, Finance, Values etc.”.
This Blue Book captures the collective wisdom of their journey in becoming
successful and is often embellished from time to time to reflect changes. But
this would be the Holy Grail of the company.
The second principle is to “Invest in Automation”. It makes
the business management efficient, process driven and brings in controls and
compliance. The automation would largely be in the areas of Sales Operations,
Finance and Manufacturing / Sourcing.
Once the above two principles are achieved, the third
principle is “Invest in Talent”. This is the third critical piece for scaling
up. Often entrepreneurs from SME overestimate themselves and take up
operations. Being successful as an entrepreneur is different from being
successful in running a company. Entrepreneurship success comes from converting
an idea / untapped demand it into a business opportunity and monetizing
it. However, managing operations is
micro management and has executional excellence as the core operating
principle. Successful companies are run
by professionals with an entrepreneurial mindset and passion, who are empowered
and mentored.
If we analyze successful companies, they would always call
themselves professionally run. This refers to having a process driven approach,
automation to eliminate chaos and a professional culture that nurtures talent
and values empowerment. While there are several other important learnings,
these three are the most common ingredients for scaling up. K. Subramanian
The author is the founder of Management Consulting
firm, Drawing Board Advisory & Consulting Services and is based at
Bengaluru. He can be contacted at subbu@drawing-board.in. The views are
personal
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