What small companies can learn from big firms

31 Jul, 2020 - 00:07 0 Views
What small companies  can learn from big firms Grocery shopping in Zimbabwe is not for the faint hearted

eBusiness Weekly

Joseline Sithole

I find grocery shopping one of the most stressful experiences these days. For a “meaningful” basic grocery, one has to part with a couple of thousands of Zimbabwean dollars. My most horrific moment recently was having to leave my much loved herb — garlic because it cost a $700 for a few cloves.

However, though the motivation is to buy cheaper brands in order to save, I find that I have resorted to buying my “old trusted brands”. Why is this? About a month ago I had a rather interesting “altercation” with a new  “kid on the block” in the form of a new fabric softener. Not only did this fabric softener give me a torrid time in trying to dissolve it into water, I had to struggle to rub off the clumps that stuck to my clothes. You have guessed right; I have resorted to using the fabric softener that I have been using though it is much pricier.

This experience was actually the motivating factor for this week’s article. Why do old brands seemingly and timelessly continue to deliver quality to their customers?

The iconic book “Built to Last” by Jim Collins, is very helpful in trying to explain why great companies seemingly transcend time and continue to offer services and products that satisfy their customers even though some of them have existed for more than 100 years. (Citicorp founded in 1812; Proctor and Gamble founded in 1837; Boeing founded in 1915 and Johnson and Johnson founded in 1886). I also recommend that readers read the sequel “Good to Great” by the same author.

Jim Collins, further argues that though, companies might have the same managerial or operational competencies, great organisations have an “X factor” that makes them different from other companies. According to Jim Collins, “Great organisations think of themselves in a “fundamentally different way” than mediocre enterprises.

The author goes on to say that these companies have a guiding philosophy or spirit about them, a reason for being that goes far beyond the mundane or the mercenary”

So what are some these characteristics that should be emulated by SMEs?

Big companies change lives

One thing that fundamentally differentiates these companies from any other enterprises is that, they tend to, measure their impact on how well their products have improved the general condition of the human race. Merck, one of the biggest pharmaceutical companies in the world is in the “business of preserving and improving human life”. Thus the company developed and gave away Mectizan, a drug that is used to cure River Blindness because the people who needed it most could not afford it. SMEs should learn that beyond profiteering there is a need to ensure that at the very least your product brings some sort of satisfaction to your consumers.

Management style

Managerial excellence is very important in driving company success. Jack Welch, the legendary CEO of General Electric is widely regarded “as the leading master of Corporate Change.”

According to Jim Collins, Jack Welch, inherited a company that had been well run since it was founded in 1892. In the same breadth Jack Welch had worked for General Electric for 20 years before becoming CEO. That meant that before assuming the reigns of the company he could relate very well with the heartbeat of the company.

Thus it was easier for him to continue from where his predecessors had left.

The challenge with SMEs is that the owner/manager mentality, is never really relinquished. It is important to ensure that the owner recruits a skills set that will carry the vision of his company forward. In my softener story this company obviously need professionals in Quality and perhaps chemical engineering to check the viscosity of the product. I am always fascinated by the success of Tanganda Tea Company (I should be I come from the East). In a depressed economy such as Zimbabwe, the company still has an enviable export portfolio. This is because the company has invested in human capital who propel the company goals forward. In addition, the company continuously aims to better its standards through being certified by World Certification bodies.

An obsession towards innovation

In a fast changing global economy investing in new technologies is an absolute must. New technologies are faster and more efficient. Going back to my Tanganda example, the company has invested in one of the best tea bag making machines in the country. On the contrary, a deep dive research into the manufacturing processes by SMEs revealed backyard manufacturing processes sometimes done under unhygienic conditions.  With my fabric softener, someone at the company should have tested the product in water and clothes before being sent out into the market. In this day and age simple equipment to mix ingredients is advised.

An obsession towards product improvement

Though their products are well used by consumers, Proctor and Gamble one of the biggest companies in the world, with a net worth of about US230 billion, decided not to “sit on its laurels” and become complacent with their product quality. To this end, the company created a system of internal competition, that allows their products to compete against each other. Motorola used an “innovate or die mechanism” similar to Merck The companies cut off mature product lines that account for significant sales volume in order to create new ones. As a result, the creative and innovative process is constantly active.

In the same breadth, Boeing created a “discomfort for itself ” with a planning process that we can call “eye compare on the enemy” where the company assigns managers the task of developing a strategy as if they worked for a competing company with the aim of obliterating Boeing.

Customer care

According to Small Biz daily .com it is imperative for small businesses to listen to their customers. For example, a big company such as McDonald has feedback forms at all its branches each branch. In addition, the company has set up a specialised Twitter account to accept and respond to feedback that is coming over from their customers. Another website Design news.com, urges small businesses to listen and observe. The website observes that “As a keen listener and outside observer one may notice things that are pain points for the client and these can become opportunities” At the very least Products should have Customer Contact details where Customers can give feedback to the companies.

Focus on employees

According to coxblue.com, “By building a culture that appreciates celebrates and empowers employees you will find you can more easily scale your business because you have a motivated staff that will work hard to take the company to the next level”. SMEs should have processes and procedures of growing their manpower that will in turn grow their company.

In conclusion, SMEs can do well to follow best practices that have proven to work among big companies and improve the performance of their organisations. I will leave you with this quote by Zig Ziglar, “You don’t have to be great at something to start, but you have to start to be great at something”.

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