Supporting SMEs in India

Supporting SMEs in India

SMEs are great but need help in all countries.

I just came back from our SME Growth Club workshop in Kerala in India. Nine small and medium size enterprises (SMEs) were there to work with us on their management methods and growth plans, and they will continue to participate in a workshop every three months or so for 18 months until they achieve solid growth. Great companies with impressive manufacturing and process skills. And yet, we can really help them in their market understanding, strategic positioning, and alignment of their execution behind their strategy.

SMEs are the backbone of employment and GNP in many countries, both developed and developing. And yet, SMEs account only for a small share of profits and struggle with access to capital, because banks are not lending to opaque entities that they do not understand, and limited in their managerial skills, because it is difficult for them to access talent and education.

As we are helping  start-ups to make their first step to pre-seed investment, we also are beginning to help SMEs who have grown beyond  start-ups and now need to develop the strategy, processes, organisational skills and leadership to make their businesses sustainable. We are running “growth clubs” of about 10 SME CEOs each, whom we prepare to develop a growth strategy and develop the managerial skills of their organisations, with a bit of methodology, coaching, and guided projects directly in their organisations. We do this in Kerala, India, in the UK, and we are currently collecting preparatory data in China, which will lead to a growth club there. The findings will allow us to make comparisons across countries, to document similarities (of which there are quite a few) as well as the differences across cultures and economic structures.

The CEOs of the Kerala club are impressive entrepreneurs with great competence and character. And yet, they are continuously mired in the everyday firefighting of keeping their companies afloat, and they are not used to sometimes stepping back from operations to reflect and develop the strategic direction of their organisation. Nor do they have the resources to pay for executive education at market prices—both in Kerala and the UK, a sponsor subsidises the fees: the Kerala government and Santander in the UK. The SMEs do need to pay some fee, otherwise they don’t take the effort seriously, and the fees cover at least our running costs. We are not aiming for a margin with this initiative, we want to create value and develop knowledge that matters.

This weekend, we worked with the companies to understand their current strategic positions (looking outside-in through the eyes of their customers) and their opportunities and limitations. We also identified short-term sales-stimulation initiatives with them, which they can prioritise to make sales more robust now, in anticipation of strategy adjustments over the next 18 months. Over the next workshops, each CEO will reflect on an appropriate growth target and identify what strategic changes it will take in order to be able to reach for this growth target. With our support, and in dialogue with one another, each company will develop its own growth plan, accompanied by internal managerial development initiatives, which gives it a chance to elevate itself to a higher level.

This is hard work, for the companies and us, but it is also deeply gratifying to see that we are making a difference. Moreover, this creates yet another “lab” (in addition to Accelerate Cambridge and our social ventures accelerator) close to us where our faculty can observe the complicated and messy reality in small companies, with the opportunity to gain insights that can make a difference for management knowledge. It is exciting for CJBS, and for me personally, to be involved in this.

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