Overcoming Obstacles to Growth

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Overcoming Obstacles to Growth

• Jeremy Peckham
• Serial Entrepreneur

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Reaching your potential

• Many SMEs fail to reach their potential
• Dont grow
• Stop growing - hit a ceiling
• Employee management problems
• Not just lack of money

3
Growing a company

• Great idea?
• Charismatic leader?
• Well developed product or market strategy?
• Increasing shareholder value?
• Sufficient finance?

4
What is your company?

• Is it a vehicle for products?
• OR
• Is the product a vehicle for the company?

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Early failures!

• Sony Corp - Masaru Ibuka, 1945
• What to make
• Sweetened bean paste soup, minature golf
  equipment?
• 1st product - Rice cooker, didnt work properly
• Crude heating pads
• Tape recorder failed in marketplace
• Transistor radio (1955), pocket radio (57),
  Videotape Recorder (64), Walkman (79) gtgtgt
  Trinitron TV, Cell Chip - PlayStation 3 (05)

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Early failures!

• 3M
• Corundum mine (1902) - failed
• Sandpaper (1905)
• Masking tape, Scotch tape gtgt post it, etc etc

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Ideology
Core values
What is authentically believed
Purpose
Long term, broad, never fully achieved
At its heart a company needs to know what it
exists for
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Core ideology - Sony

• To experience the shear joy that comes from the
  advancement, application and innovation of
  technology that benefits the general public
• To elevate the Japanese culture national status
• Being a pioneer - not following others, but doing
  the impossible
• Respecting encouraging each individuals
  ability and creativity

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Procter Gamble

• Product excellence
• Continuous self improvement
• Honesty fairness
• Respect concern for the individual

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Merck

• We are in the business of preserving and
  improving human life. All of our actions must be
  measured by our success in achieving this goal
• Honest Integrity
• Science based innovation, not imitation
• Unequivocal excellence in all aspects of the
  company

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IBM

• Give full consideration to the individual
  employee
• Spend a lot of time making customers happy
• Go the last mile to do things right, seek
  superiority in all we undertake

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Core values Purpose

• No set of right core values
• Note often include ethical/moral values
• Integrity
• Honesty
• Fairness
• Care for, valuing people (staff, customers)
• Transparency

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Core Values Purpose

• Do you know what they are?
• Are they clearly defined?
• Does the work force management know what they
  are?
• Do they share them?
• Employees only fit if they believe in them
• Obstacle to growth if no shared values

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More than ideology
planning
Guiding principles
policies
ACTIONS
values purpose
processes
Stability continuity
Goals
Consistent with ideology
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More than ideology
Organisation changes
planning
ORGANISATION BUILDING
Empower employees
ACTIONS
values purpose
policies
Product QC
processes
Excellent customer service
Quality certification
goals
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Organisation building

• Management Organisation issues
• Challenges for growing SMEs
• Stimulating progress
• Some key steps to growth

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Management Issues

• Family business mentality?
• 10-20 people
• Founder manager
• Owner does everything
• Little delegation
• Issues of employee motivation
• Barrier to progress

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Organisation issues

• Transition to larger enterprise
• 10-50 people
• 50-300 people
• Very different dynamic
• Must be managed
• Issues of communication structure
• Ensure core values maintained

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Organisation structure

• Different structures needed
• Delegation
• Accountability
• Clearly defined roles
• Reporting
• Communication Motivation
• Top down
• Consistent messages

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Communication
management forum - influence feedback
Peer groups
Peer group representatives
Groups can deal with core value issues - e.g.
quality
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Stimulating progress

• Goal setting
• Processes
• Strategy
• Business Planning
• Marketing Sales
• Financial control

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Goal setting

• Characteristic of visionary companies
• Setting challenging goals
• Stretching, audacious, breathtaking
• Crystal clear
• Everyone understands
• Stimulates progress

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Goal setting

• Fixed
• Very challenging
• May be long term

• Variable
• Revised routinely
• Keep what works

• Fixed
• Unchanging

STRATEGY
values purpose
Goals
To show Kenya can compete in the world market
with top quality products
Sell packaged coffee
Goals
Quality certification
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Strategy - Business Planning

• Every business needs a BP
• It needs review updating
• Review every qtr
• Update every 12 months
• Monitor progress
• Financial
• Strategic objectives

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Marketing Sales

• Marketing comes 1st
• Product Positioning
• What is your product?
• Do you understand it?
• Is there a need (push or pull)?
• Who needs it (customer profiles)?
• Where are your markets?
• Who are your competition?

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Marketing Sales

• Is product already developed?
• Product development plan
• Resources
• Activities
• Milestones
• Product roadmap
• Next version
• New products
• Customers/Markets

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Marketing Sales

• Need to know product market BEFORE selling
• Appropriate sales force
• Small value product
• Shorter cycle
• Different skills, less steps involved
• Large value product
• Longer cycle
• Different skills, more steps invloved

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Managing sales

• Sales process - do you have one?
• Often lacking
• Too informal
• Do you manage it?
• What is it?
• Monitor pipeline
• Track progress
• Use check list - move along
• Forecast sales

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Obstacles to growth - sales

• Inadequate training
• Inadequate research by sales person
• Selling to the wrong person
• Not the decision maker
• No budget
• Discretionary spend or approval?
• Need not demonstrated
• Poor forecasting

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Obstacles to growth - Sales

• Wrong sales people
• skill set doesnt match selling requirement
• Lack of training
• Product
• Selling technique
• No sales process
• Sales team not monitored or coached
• No qualification, pipeline management
• No forecasting or inaccurate
• No decision - sale drifts

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Obstacles to growth - Mkting

• Poor product - doesnt fulfill need
• No real market - no need
• Incorrect product positioning - wrong customers
  targeted
• Insufficient marketing
• Product needs changing
• Development
• Different product

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Obstacles to growth

• Product quality issues
• Insufficient production capacity
• No customer service
• Poor aftercare

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Finance

• Financial control
• Monthly management accounts
• Budgets
• Forecasting
• Cash flow
• Collecting debts
• Cash is the life blood of the business

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Conclusions

• Running and growing an SME challenging
• Obstacles to growth can develop
• Need to audit company recognise
• Many you can do something about
• Identify issues within your control
• You can overcome
• Some have dependencies
• Raising finance
• Need for external help