The Secrets of SME Success

Wednesday, 2 November, 2011

It’s not just sports stars and entertainers that deserve to be applauded for their achievements.

One of the many pleasures of judging business awards is the opportunity to meet the operators of successful, dynamic businesses and over the years I have built up a picture of an award winning SME and its owner-operator.

The businesses themselves vary greatly – from traditional bricks and mortar retailers selling consumer products to business providing services online to other business.

However they share many of the things that make them successful – innovative products and services, a profound understanding of their market, a real and well articulated competitive advantage, a commitment to quality, and efficient systems that deliver accurate, timely information to management.

The operators of these businesses are also diverse, ranging in age from 20's to 60's, with varying levels of education, from tradesmen to PHD's. What is interesting is not how they differ but what they have in common. The first thing is passion – more than just a desire to make money, but a fervent belief in what they are doing; making their industry safer for their staff and customers, providing services to areas that would not otherwise have them; providing employment and training opportunities; improving the quality of the goods and services in their market sector, or simply just doing it better.

Often these award winning business operators will tell you that it is their staff who have made the business successful. But this is a very superficial success factor. It is not by sheer good luck that successful business operators have good staff. It is the ability of these operators to attract, motivate, retain and develop their staff that is the key to success. This comes from a genuine interest in, and care for, people - taking the time to get to know their staff while simultaneously transferring their own enthusiasm and vision for the business to the people who are working in it. Often there will be a profit -sharing arrangement. I know that there are many successful business operators who do no more than is absolutely necessary to maintain their workforce. However the ones that win awards are usually those who have made their people as dedicated and passionate as they are (or just about), and this can't be achieved by simply paying adequate salaries and leaving meaningful communication to annual performance reviews.

Award winning business operators also have a heightened sense of social responsibility. They participate in community and/or industry activities, support charities and/or employ people from disadvantaged backgrounds. And while there may be an element of public relations and brand building strategy in these activities there is also a genuine desire to give back to the community, to share their success and get some genuine value from that success other than personal material gain. There is also the added bonus that these activities make employees feel good about the business they work for.

Award winning business operators are not necessarily profit maximisers – indeed being generous to staff and philanthropic to the community are likely to reduce profits, at least in the short term. That's not to say award winning businesses are not financially successful. They are highly profitable, with strong balance sheets. It's just that profit is not all that they're about.

Award winning business operators don't draw a line between work and life. Many would own up to being workaholics yet not in a way that work keeps them from family and social activities. Rather, the family and social activities often become integrated into the business activities. Many have their families working in the business and their staff become like family.

These business operators never stop their own development – often with an insatiable desire to soak up as much information about business management, technical advances, and industry best practice that they can lay their hands on. Many have mentors and belong to CEO groups – always looking to improve themselves and the business.

Such people are inspired and inspirational. Take the example of Paul Newbound from Australian Pressure Testing Services which recently won the 2011 Telstra Australian Business of the Year. Paul established the business in 2003 as a one-man consultancy with the aim to improve safety and customer satisfaction levels throughout the pressure testing industry. The business now has more than 150 employees servicing large scale projects, including the Otway gas plant in Victoria and Pluto LNG in WA.

Some people disparage business awards, saying they are a flashy distraction from the serious business of being in business. However business awards do serve a number of important purposes. They show what can be done, often with nothing more than vision and energy. They identify the factors that should be present for a business to be successful, especially in the areas of marketing, human resources, innovation, systems and financial management. People who enter awards often report that they learned a lot from the experience to the benefit of their own businesses. Importantly, awards acknowledge and celebrate the contribution that outstanding businesses make to our economy, the welfare of their staff and the community. In a country where the achievement of sportspeople and entertainers is constantly celebrated, it does not hurt to occasionally make heroes out of those who have risked much to create businesses that ultimately provide value to all of us.

Time to have fun

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