How SMEs can have global footprint ?
An entrepreneur of a small and medium enterprise (SME) has to possess deep passion and a strong desire to take on the challenges of expansion. No matter what the current size of the organisation is, a huge accumulation of energy is a prerequisite ...
By J P Singh, |
An entrepreneur of a small and medium enterprise (SME) has to possess deep passion and a strong desire to take on the challenges of expansion. Depending on the scale of globalisation the variables and complexities will increase. No matter what the current size of the organisation is, a huge accumulation of energy is a prerequisite to begin the process of expansion.
It is essential that a leader must have the drive and the vision which leads and guides the organisation towards the future. We have examples like Ranbaxy and Dr Reddy���s to name a few. Though not SMEs now, they have certainly shown the way for SME entrepreneurs aspiring to go global. The initial energy has to last in order to ensure that the organisation has ���enough fuel��� at all times. This is what the entrepreneurial drive is all about.
The purpose, mission and values of an organisation also need to have a shared acceptance. Thus the same level of energy needs to flow through all the divisions and subsidiaries of an SME. The Tata Group of companies have demonstrated this time and again in the course of their long history. In the recent past, companies like Microsoft and Google have shown how organisations can successfully embrace globalisation over a relatively short period of time. Thus the scale does
not matter.
However, in the absence of shared purpose and values, the different parts of an organisation will never be able to work as one organisation.
At each stage, the entrepreneur has to be aware of the pulse of the market. He should regularly undertake a risk return assessment. Lakshmi Mittal���s expansion, while balancing and weighing these factors, is a classical example. Moving to adjacent domains, whether in terms of geographies or choosing which products to move with or with how much adaptation, everything should be governed by the principles of adjacency, related and synergistic expansion.
The challenge is to allocate limited resources to satisfy unlimited demands. The strategic choices are then based on
risk-return estimation. Needless to say, the principle of adjacency allows an efficient, effective, productive and low cost option. The more distant the next phase, the more energy and resources it will take. A question that needs to be answered is how much gain and how much cost will be incurred. But the net result has to be positive.
At each stage of expansion, the leader has to be conscious of different people adapting to the organisation���s culture. With the global scale of operations, the human resources as well as local cultures and legislations may not always be in sync. Hence, it is important to match and adjust frequencies to allow resonance. Reading the pulse of the market and recalibrating strategies are needed at all times.
It is essential that a leader must have the drive and the vision which leads and guides the organisation towards the future. We have examples like Ranbaxy and Dr Reddy���s to name a few. Though not SMEs now, they have certainly shown the way for SME entrepreneurs aspiring to go global. The initial energy has to last in order to ensure that the organisation has ���enough fuel��� at all times. This is what the entrepreneurial drive is all about.
The purpose, mission and values of an organisation also need to have a shared acceptance. Thus the same level of energy needs to flow through all the divisions and subsidiaries of an SME. The Tata Group of companies have demonstrated this time and again in the course of their long history. In the recent past, companies like Microsoft and Google have shown how organisations can successfully embrace globalisation over a relatively short period of time. Thus the scale does
not matter.
However, in the absence of shared purpose and values, the different parts of an organisation will never be able to work as one organisation.
At each stage, the entrepreneur has to be aware of the pulse of the market. He should regularly undertake a risk return assessment. Lakshmi Mittal���s expansion, while balancing and weighing these factors, is a classical example. Moving to adjacent domains, whether in terms of geographies or choosing which products to move with or with how much adaptation, everything should be governed by the principles of adjacency, related and synergistic expansion.
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These principles come into play while making decisions on market entry through acquisitions, alliances or the ���greenfield��� route. The challenge is to allocate limited resources to satisfy unlimited demands. The strategic choices are then based on
risk-return estimation. Needless to say, the principle of adjacency allows an efficient, effective, productive and low cost option. The more distant the next phase, the more energy and resources it will take. A question that needs to be answered is how much gain and how much cost will be incurred. But the net result has to be positive.
At each stage of expansion, the leader has to be conscious of different people adapting to the organisation���s culture. With the global scale of operations, the human resources as well as local cultures and legislations may not always be in sync. Hence, it is important to match and adjust frequencies to allow resonance. Reading the pulse of the market and recalibrating strategies are needed at all times.
Skills at managing local teams across a global canvas have to be developed. Local leaders may have to be cultivated at various locations. This will enable the achievement of a high level of operational efficiency with least wastage of energy and resources.
This may be compared to the wave particle duality phenomenon which operates in the universe and is embedded in the laws of nature. If there is no wave engulfing all subsidiaries with a common frequency, they will move away like separate entities, and the corporation will become an agglomeration of particles growing in their own way.
The organisational fabric withers away and the common purpose gets lost. This wave engulfing all subsidiaries with the same frequency is open, candid and continuous communication, leading to alignment of goals, cultivation of trust and clarity of team objectives while maximising benefits of requisite grouping of differentiated knowledge, competence and skills. Group meetings, regular communication and collaborative efforts play an important role in this context.
Organisations get leaders from across the world to meet at offsite destinations, sometimes by rotation across subsidiaries to build this common bond. One finds companies like Infosys, TCS, GE having a certain character, wherever they operate across the world. This wave engulfing the entire organisation helps to preserve the organisational DNA.
To make it all happen the leader has to ensure empowerment, accountability and execution excellence. There must be certain immutable, unquestionable principles and norms of operation of the organisation in place.
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Systems and processes have to be designed accordingly. These ensure that there is disciplined approach and thinking across the organisation, while different entities operate smoothly, with the required autonomy and they are in line with organisational objectives. Measures and rewards should be designed to encourage desired behaviour of collaboration and knowledge sharing. Many Indian SMEs have gone global in the past few years, and are operating as successful multinationals. They have succeeded because they have evolved their values, DNA, culture, character and purpose. These organisations give hope to budding entrepreneurs.
- By J P Singh, Principal Consultant- Leadership in Business Worldwide (LBW) Consulting Pvt. Ltd.
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