A few days ago, I was speaking to the Managing Director of a leading family business and he told me “Those that are not investing now to adapt and change things, will find it hard to survive when things pick up”. In a world that is still trying to overcoming the gripping fear of the pandemic, it was so refreshing to meet a business leader who has the right forward looking mindset.
The crisis induced by the Covid-19 pandemic exposed stark differences between different SMEs. Those SMEs that had adequate or a good level of financial reserves and capital have managed to weather the storm much better than cash poor SMEs. This meant that while the overall shock to SMEs has been serious, some have survived, and even thrived. So I believe it is extremely important for those SMEs who have been caught with their pants down when the pandemic kicked in, to learn and adopt the practices that made those SMEs successful even when hit with a tumultuous environment – hence increasing resilience
Study after study, indicate some basic common actions by leadings SMEs that have weathered the storm well. Such SMEs had the financial resilience, organisational capabilities and strategic focus to continue to invest and adapt throughout the crisis. Most notably, they accelerated digitisation – both with regards shifting to online channels and remote or hybrid work and they reorganised things internally to achieve higher operational efficiency and became more agile, increasing the pace of both product and business model innovation. Lets look at these more closely.
Deeper digital capability
The world of business has, of course, been moving online for a while, even before the pandemic. Research shows that in a the pre-pandemic world, more than 80% of SMEs in the U.S. and Europe had a company website, and more than two-thirds had some employees working via mobile devices, according to the European Commission data. With the advent of the pandemic and the need for social distancing,lockdowns and remote deliveries, it catapulted many SMEs much deeper into digital: Cloud-based solutions, video communications, E-shops and online sales….became the norm.
The businesses that have leveraged digital the most where those that already had digital experience. These organisations already had the confidence and capability to go through the often challenging implementation journey. In particular, they had learned that digitisation is not a magic wand — it’s powerful only when integrated with people and processes.
So my advice is that, now that the all SMEs got the external push of the Covid-19 crisis to go digital, now more than ever is the ideal time for SMEs to regroup and identify the areas where digital technology could further boost their business. Now is not the time to lose all the momentum gained.
Balancing remote and real life
Please believe me when I say that my stomach churns whenever I hear or read leading business owners speaking of wanting to go back to the pre-pandemic reality of everyone working from the office. They do so as they allow fear to take over. The fear various losses – the loss of control, loss of culture, loss of collaboration, loss of contribution and loss of connection. All losses that can be handled well with the right dose of flexibility between office work and remote work. Research is indicating that various hybrid models are managing to given various advantages and hugely mitigating any disadvantage from remote working. Hybrid working models like the ones mentioned below seem to be the way forward:-
- The Clubhouse model – A hybrid model where employees visit the office when they need to collaborate and return home to do their focused work. The office serves as a social hub — the place people go to meet, socialise and work together) or the
- Activity-based working model – Employees work from an office but don’t have an assigned desk. Instead, they spend their day moving between a variety of workspaces, such as meeting rooms or hot desks. This means having for example five desks between 10 people, anticipating that many of their employees will be out of the office, working from home a couple of days per week.
Skills transitions and recruiting
SMEs have traditionally faced more challenges than large businesses in attracting the best and most diverse talent. Yet, by implementing the flexibility in the working model and a purpose-driven ethos — smaller companies need not be shy about competing for talent against larger companies. Of course, it’s not enough to recruit talented people: They also need training and development and attractive career paths. Smaller businesses have historically been less predisposed to focus on these practices, but now they need to do so as retaining talent needs to be a priority like never before. Why? Simple – with the demands of the workplace continuing to shift, businesses of all sizes are likely to face skills shortages. So rather than just looking outside to recruit new people, many SMEs would benefit from upskilling their existing staff!
Agility and innovation
Agility has been key to success, or even survival, during the pandemic. Hence finding an operating model that will allow you to quickly scale the business down and up again, or build optionality into your business is very important.
Then comes innovation and expanding the organisation’s innovation capacity. For SMEs, external collaborations are particularly important for building an innovation advantage. Staying close to customers’ experiences, engaging with suppliers, engaging external business advisors, empowering staff and joining local business networks are all powerful sources of new, practical ideas, as well as support.
Despite unprecedented challenges, many SMEs around the world have shown remarkable resilience and capacity to reinvent themselves. Now is the time to take inspiration from businesses that have thrived, to build resilience in your organisation for the future. SMEs that heed the lessons from this crisis are well positioned to weather the next one. At EMCS we have helped various SMEs weather the storm and learn lessons from it, to adapt and become more resilient. Feel free to contact me on firstname.lastname@example.org just to have a chat on your organisation.